Tower to Tom: Continue Holding Pattern

                                                                                                                                                                                                                                                             The Target House has been on the market for 22 days now and it feels like I am in some kinda weird holding pattern. No landing, no taking off, just holding course. As soon as this house sells we are moving back to Sunny San Diego so I don’t want to start any new rehabs while we wait.  We are sooo excited to move back we can hardly stand it, so its hard not to focus on this sale because there’s so much hanging on the line although its the last thing real estate investors wanna do. House Flipping is in my blood, if I’m not renovating something and using my creative skills I go crazy. To keep busy now we’re working smaller deals while we wait such as the Wholetail House which is due to close on December 15. The San Antonio Real Estate Market stays pretty good all summer but as soon as school starts in September things really slow down. Just like in San Diego, once the holidays start nobody really wants to move so you can easily be stuck waiting for January if your listings don’t sell. Although I totally anticipated this, it seemed we might have got lucky again when several potential buyers returned for multiple showings the first week but we haven’t seen any offers from them yet. The showings were better than average up until last week but now it seems to be tapering off a bit.  I’m holding advertised open houses and even hung up Christmas lights so we’re working all the angles. San Antonio MLS has a neat feature where you can perform a “reverse prospecting” search. This allows you to see which Realtors are emailing your listing out and then their clients response if they are interested. As long as I see it getting emailed out, and clients checking interested, we’ll continue to get showings. This wouldn’t be the time to start panicking and dropping your price since there’s way less traffic this time of year anyway but I’ve got some new marketing ideas planned for next weekend that should heat things up.

San Antonio Resale Homes are down 20% when compared to Q3 2009, similar to what’s happening to the San Diego Real Estate Market right now. A lot of this is due to the tax credit which pulled alot of sales forward but I sense a little slowing in general here in Military City USA. The good news is that for this same period prices are up about 8% whereas in San Diego they’ve lost about 2 points. There are 3 factors we’re dealing with right now with the sale of the Target House; the tax credit theft of Fall sales, the usual buying seasonality factor and last but not least the fact that we have a specialty property that’s above the median home price in which the most activity occurs. I always say I only need 1 buyer, cross your fingers that we get him during the holidays and don’t have to wait until spring 2011, after all half of this business is total luck!

Back Online!

Sorry for the lack of updates, I’ve been a baaaaaaad blogger… but after moving we didn’t have internet service for over a week.  I’m back online now and back in action! Although I’ve been distracted with the personal house sale and move, we’ve still managed to keep the momentum up on the Target House. I’ve got the millwork package ordered and it’ll arrive by the end of this month so that prompted me to get right on the interior paint and tile so I’m ready when it shows up. After alot more prep inside we finally got everything primered and then I sprayed 2 coats of semi-gloss on all my new trims, no brush marks baby, first class all the way. For the walls I chose a medium warm grey for the whole house with the exception of the dining room which as you can see is red. The grey probably wouldn’t be too safe for most homes but with all the natural light I have coming in and the abundance of white trim it really doesn’t make it dark or feel small. The red for the dining room ties into the stained glass windows in the living room and we planned to pull that same red down onto the new tile for the fireplace hearth.

The kitchen cabinets will be white shaker style again that will pop good on the grey walls. I’ve chosen black granite counters that will contrast the cabinets as well and then we are going light on the hardwood floor stain. It’s going to look incredible, definitely the best renovation we’ve done to date. Also this week I had my mason come in and re-mortar the fireplace brick and firebox, now there will be no cracks and it’s back to good as new condition. Thankfully I got the A/C on just in time for all this inside final stuff, it’s sure nice to work in the coolness after what seemed like months of humid 100 degree heat. For the first time in my life I hired a pro to do my tile, this guy is really good and its nice to see it getting handled perfectly and without taking 2 weeks of my personal time to do it. I picked up $2500.00 worth of various sizes of white ceramic, mostly 3X5 subway tiles that we are putting in a brick pattern. For the hall bath I am using white ceramic hexagon floor tile with black dots and as you can see they’ve almost got the tub surround completed with the 6×6 and subway pattern combo. I opted not to do a decorative liner in this bath to keep it clean as we’ll have plenty of stuff going on with the floor pattern.

 In the gorgeous master bath I’m running subway all the way up inside and outside of the shower and the tub box as well. I’ve picked out a real neat liner for the shower that’s super clean and linear to go with all the sharp lines. No glass accent tiles in this home, we are moving on to newer materials now. Having an account at Dal Tile is key, they do they not sell retail to the public. Their stuff is a little expensive even at my contractor discount but they’ve got the best of the best with new materials to choose from. Picking materials like tile, fixtures, etc. at Home Depot or Lowe’s will make your rehab look like everyone else’s. Nothing worse than walking into someone’s project and recognizing all the fixtures and tile from a big box store!

The San Antonio real estate market is feeling some post tax credit blues as is most of the Nation, home sales were 25% down in July as compared to last year but 6% up for the year. Median and average prices were up in July due to the higher number of home sales above the 500k mark, which have previously been getting hammered. As I’ve been saying, we’ve definately pulled some demand forward so this Fall should be interesting. Stay tuned and thanks for coming back, it’s all hands back on deck now.

New Concrete & SA Slippage

Over at our historical renovation, The Target House, we took care of the new concrete driveway and garage foundation this week. My contractor is charging around $3.00/s.f. for a job like this including demo and haul off, we poured 2000 s.f.  The concrete was an important part of this project, the original 1923 driveway width was more suitable for a Model T rather than a soccer mom SUV. Additionally, since our lot is sloped and I excavated such a deep cavity under the room addition for the peir and beam foundation it was imperative to prevent any water from entering the crawl space so the new driveway & curb will divert all rain and roof run off down the driveway. You’ll also notice in the video we are rough sanding the hardwood floors even before we hang drywall. This is a little trick I learned in cases where there are bad stains and smells. Sanding the wood takes the finish off and opens the pores in the wood so it can breathe and dry out. We’ll start bleaching out any stains and then once we are ready to refinish the floors possible do a bit more patching in any areas that still need it. Since my plan on this house is to go light with the floors I wont be able to hide anything with the dark stain. The last thing I want to do is go all dark on my brand new wood floors just to try and hide 4-5 stains up front on the existing portion of the house. We passed framing inspection and the insulation is now hung. Once we pass insulation inspection Monday we’ll be free to finally hang the drywall so I’ve got a delivery for 180 12′ sheets on Monday.

The May San Antonio real estate market stats were released this week and although activity was up nearly 20% the median price dropped almost 4% from last year. I normally don’t put a lot of weight on median prices anyway but there were certainly more less-expensive homes selling due to the buyer bait program. The higher transactions were also obviously a result thereof. After 2 consecutive months of low foreclosure numbers, SA now jumped up by 34% for the July auction and is on track for a record high 2010 number. I think the market will be slowing as Summer settles in, let’s hope home prices don’t continue to slip.

Hot & Cold

It was nice to get in a full week on the project now that the other house sold. I finished up the front porch by making new stairs and replacing the siding skirt where needed. We got a comment from Mike asking what I was going to do about the column base overhanging the porch floor, I’ll just have to live with it as its only over by a few inches and doesn’t strike me as really looking that odd since they overhang the top too. The posts that hold up the porch are existing 6X6’s. Their placement was really far out to the corners so in order form me to have the tapered columns I had to have the bases hang over the floor a bit. If I had gone back with just square posts I don’t think it would look as cool so I’ll live with it.  The 16 degree flare on the skirt looks real cool with the 117 siding.

My firebox arrived this week as well so I got to install it. Of course the dimensions I got online for the rough-in framing hole didn’t work out so I had to reconfigure this wall a bit on the fly. It’s a double sided see-thru gas fireplace that I’ve put between the jacuzzi tub in the master bath and the master bedroom. Locally you’d spend $5,000-$8,000 for something like this even at a wholesale builders supply so I was excited to find them online for $1295.00 from Ebay/Discount Fireplace Outlet. With the vent pipe and everything you need, the total including tax and delivery was about $1800.00. It’s easy to put in, once you have the box framed in there’s just one gas line that I’ve got coming in underneath and then the vent through the roof. The unit doesn’t need electrical as there’s an ignitor and low voltage switch that you mount on the wall. This is a real cool feature for what I spent, we’ve designed the whole master suite around it, can’t wait to see it with all the tile around it and the 6′ tub in.

I found a new HVAC guy last week who’s already got started roughing-in my new 5 ton central air/heat system. It’s a horizontal gas furnace of course (electrical is not smart energy) with a A-coil like I always use. Since this house is so long we’ve got a real long supply trunk line with 11 drops and 3 return air grills. Yellow Page retail prices in San Antonio for a total new install like this would run over $2,000/ton, or $10,000. My regular sub-contractor was bidding $6,500.00 for this house which equates to $1,300/ton. Like I’ve mentioned before, it’s common to experience price creep with subs, you always have to keep hammering them or switching because they slowly raise their prices on you. So here’s the good part; my new guy is only charging me $4400.00 complete. That’s only $880.00 per ton my friends! I’ve already turned him on to another investor friend of mine, this guy is hungry for work and I saved over $2k by shopping around and walking away from old faithful. In my business any savings along the way goes straight to the bottome line.

San Antonio Home Sales of single family residences were up 20% in April when compared to the same month in 2009. Great news but undoubtedly this is directly reflective of the Federal Tax Credit that’s now expired. In typical cheerleader fashion, the San Antonio Board of Realtors has come out to predict “these home sale increases should hold through the Summer” although I have different thoughts..especially knowing that mortgage applications are taking a dive in May.

Plumbing Passed, Pendings Up

We passed plumbing rough-in and top out inspections this week at Target House and have now got started on the electrical. My electrician is getting a slow start so I am kind of disappointed but its par for the course here in Land of Manana, especially when you are getting great prices. I am going to stay on his ass all week and try for an inspection Friday. On the exterior I am completely done with all the siding and window trims on the new portion of the house and have started working my way forward replacing various sections on the original siding where I moved windows or there was damage. There will be alot of changes once I get up front rebuilding the porch, porte cochere and columns so that’s exciting. On the new back porch ceiling I used authentic 1×4 tongue and groove bead board, sweet!

The San Antonio housing market certainly showed signs of Tax Credit fever while everyone scrambled last week for the handout. I’ve been tracking the Pending sales and as you can see they rose by about 100 houses for each week in April all the way up until the cut off of Friday. It will be interesting to see 2 things from here, if the Pending sale growth continues and how many pendings actually close and turn into solds. The San Antonio Spring buying season typically is just now heating up, we’ll see how bad the tax credit affected future demand shortly. There are currently 11,455 homes for sale, down from 11,697 last weekend.

Week                          # Pendings

Mar 29-April4                    246

April 5-April 11                 363

April 12-April 18               430

April 19-April 25              456

April 26-May 2                  556

Last Call… Sellers Beware!

This is the last big weekend before the Federal Tax Credit expires on next Friday, April 30 so we are now in what I consider Last Call for this years hottest real estate sales period.  Undoubtedly we are pulling future demand forward as everyone looking to make a purchase this year will try and have something under contract by next Friday. As many folks work during the week , today and tomorrow will be the last chance to get out and find something. The question remains though, what will happen to the real estate market after this credit expires? San Antonio will be o.k. but I’m not sure about less stable markets.

Sellers should be extremely cautious accepting offers this week as many buyers out there are simply not qualified, even if they are waving a “pre-approval” letter, as I personally found out several weeks ago.  To get the $8000 back you just have to purchase an $80,000 house so we arent talking about the strongest buyers out there anyway. Couple that with a buyer going FHA and asking the seller to contribute 6k in closing costs sends up a red flag to me that they don’t even have the 3% to put down. Buyers not having any skin in the game simply shouldn’t be allowed to purchase a house in my opinion. It’s been said that some buyers are even tying up several properties at a time to make sure they get one that sticks so they get their free government handout. In this case the other sellers will get left out to dry with their properties going back on the market after the tax credit expires and in what could be the slower summer months. How many of these tax credit sales will wind up being next years foreclosures?

Neighbor’s House is under contract again, we had a back up offer so when the last buyer couldn’t arrange financing we went to plan b. Maybe 3rd time will be a charm, someones eventually going to be the lucky homeowner with the Coolest house in Mahncke Park.

Framing and TV Deal

After some last minute on-the-fly floorplan changes Thursday night from our architect Morgan at Dewitt, we finally got our material delivery Friday afternoon and my new framing crew got started. We really cut it close as she actually showed up to the jobsite with the new plans just hours before the framing started. These guys are very detail oriented and even cheaper than my last guy so I’m pretty stoked I found them. Framing in San Antonio goes for about $3.00-3.50 per square foot for new construction if you deal directly with a sub contractor, in case you are wondering we negotiated $2.71 per foot for this project. In a day and a half they got the floor system done and all the walls up, all that’s left for Monday are the ceiling joists, rafters and decking. The master has a cathedral ceiling and we are also doing a double-sided gas fireplace between the spa tub and master bedroom which are both new for us so its exciting. I’ll get the roofers over as soon as framing is done so we’ll be all “dried in” and then i can get started on the siding myself. 

A Major TV production company in Hollywood that does all the good reality shows on TLC Network and HGTV contacted us this week about doing a reality show about house flipping. They found out about us evidently through our YouTube channel and got to my website. It would be real cool to get our own show but unfortunately they are looking for someone doing a minimum of 10 houses per year, probably so they can film enough episodes. Theres been a real lack of good flip shows on TV lately, we really enjoy Flipping Out because Jeff Lewis does the larger spec deals like us and Property Ladder was always good because Kirsten Kemp the host is great and they also featured such a wide variety of different investors from pro to novice.  As far as the new Flip This House crews, Rudy in LA isnt really doing it for us and the New Haven crew seems to be more focused now on selling courses online like Montelongo. It’s pretty flattering nonetheless to get approached anyway, maybe there will be a Property Ladder episode in our future? 

We are still getting good showings at The Neighbor’s House and I feel the Spring buyers are just now getting out there now that we have great weather. In San Antonio, sales are off 4% year to date when compared to last year and inventories are slowly rising this year by about 100 houses per month. After a closer MLS search for our general area, its apparent that there are tons more sales that are AO (under contract) or Pending right now so this figure should be improving for March.

Lucky 13? Neighbor’s House Under Contract

It’s a good thing I’m not superstitious because good things have been happening to us lately with the number 13. Recently we purchased our newest rehab the Target House on a Friday the 13th. Finish LineNow, after 13 days on the market and 13 showings; we have accepted an offer for the Neighbor’s House, which bears the address of 319, all multiples of 1 and 3. The culmination of this project also ends a 13th month stint that I’ve spent on this block rehabbing two houses next door to each other. Weeeeeird! Right? Of course we never call it “sold” until it closes but this buyer is strong, so as long as we get past the inspection and appraisal we should be good to go. (knock on wood). The average market time for San Antonio is close to 100 days so we are pretty stoked. Inventories have been decreasing this year but still higher than 2009. There is currently 6 months of inventory on the market in San Antonio so it’s pretty balanced between a buyers and sellers market.

Let’s take a closer look at the real estate market in our little farm area of Mahncke Park. It has still higher inventory levels with 10 homes on the market currently whereas last year there were never more than 2 or 3. This sounds low but keep in mind the size of our farm is only roughly 6 square blocks. In the last year there were 13 homes sold (yes, I know, another 13) with an average market time of 80 days and price of $240,000. With our recent sales prices around $340,000 we are getting roughly 100k higher than the average and selling our houses in an eighth of the time. It’s purely speculation because removing our sales comps, nobody would even guess what we are doing is possible. In fact we’ve heard local realtors scoff at our asking prices then say that we are the talk of the town when they sell. How are we doing this you ask? Simply by buying low, doing the construction ourselves to control costs and offering a product that you can’t find otherwise nor replace for the same price. Sure, there are some “updated” houses we compete with but nothing that’s been totally gutted, added onto and all new from scratch. It’s also gratifying to know that we are doing a good thing for the area and actually creating organic inventory for buyers by turning these otherwise uninhabitable homes into great new places for new families to live. Here’s to Lucky 13.

Still Painting and San Antonio Ranks #1 Strongest Metro Economy

Even though we were plagued with more rainout days this week, I still managed to get the exterior paint 95% complete. This is probably the most labor-intensive paint job I’ve done as it’s 6 colors and it entailed a lot of detail brushwork on the trims. So far I’ve put up over 60 gallons on the exterior! Keep in mind there’s a big 2-story guesthouse in the rear and I also sprayed 2 coats of everything including primer. As you read in my last post, I picked up a guy from Lowe’s parking lot to help me paint so it’s gone really fast. This guy is actually a great painter, he was making fun of me for using economy brushes so I broke down and bought a Purdy brush, man this thing practically paints by itself. Well worth the $14 bucks.

Front

Because I was so happy with my historic craftsman style replica window screens on the last project, Hat Trick House, I decided to make them again for this house. I changed the design a bit so they wouldn’t look exactly the same, especially since the other house is right next door. I designed the center mullion placement to minimize the visability of the white vinyl and this new design came out great. I won’t stretch them with screen, although the future owner can if desired. My new double pane windows have screens already so these frames are basically just a cosmetic design feature that also plays an important part in the color blocking of our paint job. The historic replica screen hangers are also still available from Stanley. This extra little finishing touch really gives the house the historic look that I need for our neighborhood.

Front

There was a new BusinessWeek article this week that ranked San Antonio #1 for the top National economy. The measurements used were job growth, economic growth, employment and home prices. Texas seems to be the clear winner with San Antonio in the lead and five other metros in the top 10. While we are still seeing signs of the recession here and I’m always quick to say we are late to the party, this study shows that we are still fairing extremely well compared to the rest of the country. We’ve seen the housing market here drastically slow down in the last 2 years, but homes are still selling and people are still moving here everyday from other states so we have to be thankful that when coming from California, we picked a winner with San Antonio.

In Living Color

Things finally started to dry out after all the rain we had, so I got the texture crew in last weekend and as luck would have it, pouring rain again all day. Geesh. It took 3 days for the texture to dry with 90% humidity. It finally dried and looks incredible so I proceeded with spraying a good primer coat and ceiling paint throughout. I was at Lowe’s buying the exterior primer and met this guy in the parking lot asking for work, I’ve had him helping me everyday to speed things up and he’s actually turning out to be a great helper. We spent 4 days just caulking, scraping and filling holes on the house in preparation for the paint job. The weather cooperated at weeks end so we made a huge impact with spraying the entire house in a day. We got 2 coats on the soffits and body of the house, accounting for 2 of the 6 colors planned. I still have all the time consuming trim brushwork to do, which is really going to be the important part of this color scheme. Our façade designer for this project Morgan Penix at DeWitt Architects really picked some unique colors, which I initially had a hard time grasping, but now I’m finally starting to see her vision and am loving how it’s looking. The dark rich columns with rust accents will make a bold statement against the soothing earth tones on the body of the house, all done in historically correct flavor.

Exterior

Arch

The 9th Annual Mahncke Park Home Tour was today so my wife and I had the chance to mingle with some neighbors and enjoy a diverse mix of 6 inspirational and eclectic residences. We saw some great gardens, tons of personality and very cool historic craftsman bungalows. Adorned with unique features, incorporated artwork, bright colors and highly personalized, these homes offered something we never get to do in our designs with resale in mind. We saw green painted hardwood floors, claw foot tubs, blooming esperanzas, purple staircases, garden borders made from Skyy Vodka bottles and mosaic tile galore. Three of these unique homes belong to artists and included studios, fun workshops and galleries. The tour was a great success and Mahncke Park proved again why it’s THE coolest and most hip place to live in San Antonio for the artistic urbanite.

Flower

Interestingly though all of the homes on the tour this year are currently for sale where in past years it was not allowed for any of the participating homeowners to use the tour to promote the sale of their homes. Is this a sign of the times or what? Seems even in our small niche neighborhood we are not immune to the higher inventory levels and general real estate market slow down that finally caught up with San Antonio last year. At any given time last summer in Mahncke Park there were only 2-3 homes for sale and now there are currently 10 on the market.

Raining Hard, SA Housing Market Slowing

 

I had my framing inspection Monday and he passed me on the room addition but failed the new front porch because I had trimmed it out already and he couldn’t see how it was framed…oops. He said he would pass it with a letter from an engineer so I had to pay 300 bucks to have my engineer crawl in the attic to verify my framing was done correctly and draw up a certificate on it. I went straight into hanging all the insulation and called in for the insulation inspection Tuesday. The same inspector showed up the following day and passed me on that. Meanwhile I had all the drywall delivered. It turned out to be 150 sheets for the room addition, kitchen and existing bath. Man, prices on drywall have come down; I only paid 6.50 per sheet for 12 footers. My drywall crew hung it in a day and went straight into tape and float over the weekend. It’s coming out really nice as it’s always a cool stage to get to when you can see it all sealed up and smelling new. My drywall crew charges 10 bucks/sheet to hang, tape and float and texture. Since the existing bedrooms were not demo’ed I am retexturing the whole house so it will match. These guys are real pro; they do mostly new construction so the seams come out great. For texturing they don’t mix in a hopper, a truck with a mixing machine actually shows up and they spray the whole house with one batch so it turns out consistent. Drywall finishes and textures can make it or break it when it comes down to your final product so it’s important to get pros to do this part. In the past I’ve done small rooms myself but now that we are on a larger level I always sub this out. I also got all the wood floor patching done which included all new wood in the kitchen and I also ran it into the addition. I even put the wood floors into the master bath, which will be new for me this time and should be a real dramatic touch. With all the rain lately (6 inches in 1 night) I feel lucky that at least I’m making progress inside the house. After being in a record drought all summer now we get hammered with flooding, crazy weather here in Texas.

The local San Antonio real estate market continues to slow. So far this year we’ve had only 13,185 homes sold compared to the same period last year of 14,724 and 17,981 for 2007. Last year was the big slow down here when a lot of Realtors went starving. Things picked up a little this summer mainly due to the $8000 first time buyer tax credit so it will be interesting to see what happens to the real estate market if they let it expire. There’s a bill in Congress to raise the credit to $15,000 and open it to non-owner occupied buyers which would be great for investors and definitely clean up some inventory, but I’m not sure how we could pay for it. Foreclosures at the courthouse steps here in SA are also still rising, I ran across a Realtor friends’ house while reviewing the auction list for this month. Ouch, now that’s hitting close to home. Our strategy for this market is as always be extra careful on location, buy extremely right and offer a high quality renovation and unique product for the price level. Even with the slower market there are a lot of people continuing to move here to San Antonio and we only need one buyer.

Tile and SA Market Stats

It took 4 days but I got all of the tile done minus the white grout which I’ll do Monday. I went to Daltile and opened a wholesale account to get the Arctic White ceramic because they don’t sell retail to the public. You can find white ceramic at the big box stores but they don’t have all the special bull nosed corners necessary to do the job right. There are also 5 different shades of white ceramic tile so be careful if you are mixing pieces from Lowes and Home Depot. I used 6”square up to the glass liner then 3×6 subway tile on top. For the floors in both baths I used 18” travertine. I spent about $900 for ceramic and $350 for the travertine for both bathrooms. We generally budget $3500 for a complete high-end bath remodel so we are in line here with this expensive tile. I think the classic white ceramic mixed with the modern travertine and glass achieves a good balance of old and new. The cabinets are also now officially ordered with a 12-day turn around out of Dallas.

Hall Bath Tile

Master Bath Tile

We had several new, interested parties contact us this week including a realtor representing a buyer whom had heard of us through a lady 3 blocks over. She knows the area extremely well and didn’t flinch when we had told her our plan on listing in the 300k range and in fact she also was aware of the recent price increases in the area including the 2/1 that’s under contract for 249k without major upgrades. There is virtually no inventory in our area and it’s also helping push prices up. We spoke about why Mahncke Park is seeing such good appreciation while for the most part the rest of San Antonio is staying flat. She felt its partly because it’s the second best choice for a historical neighborhood to King William/Monte Vista where prices are substantially higher. I still feel strongly it’s mostly due to the San Antonio Riverwalk extension to Witte Museum and all the Broadway revitalization. Additionally, M.P. was just under priced for its location for a long time and is now just catching up. San Antonio Board of Realtors put out a press release regarding March 2009 real estate sales statistics and first quarter trends. It said sales activity had dropped by 25% but prices remain stable. From talking to struggling agents on the front line it seems to me that activity has slowed a bit more but as one agent just told me the other day “There are just too many agents in San Antonio, all hanging on after the boom years when Californians were buying 3-4 houses sight unseen.” Those days are gone now because investors in California and other bubble markets can get cash flowing properties closer to home and be better positioned for the next upcycle in real estate prices.

Why Is Texas Bucking the National Economic Trend?

Everyone always asks us why we decided on moving to Texas from San Diego to invest in Real Estate. Our plan was to pick a stable city to go to and flip houses while we wait out the California price freefall and then go back to invest in more rental houses at the bottom of the next cycle. We could have picked any state in the US but for us it was an easy choice (and not to mention I am originally from Houston). In the face of National headlines delivering nothing but grim economic news, Texas is a Lone Star shining bright, a beacon of stability, growth and prosperity. With the projected growth around the metro areas and added commerce, jobs and real estate opportunities, there will soon be a Lone Star Boom. Let’s see why everyone is talking about Texas:

  • If Texas was a country, it would be the 10 largest in the world.
  • If Texas was a country it would be the 5th largest based on oil and gas production.
  • If Texas was a country it would have the 12th largest economy based on GDP.
  • In the last year ½ of all jobs created in US were in Texas.
  • Texas has largest population growth in US.
  • 82% of Texas population is in metro areas Houston, Dallas, San Antonio and Austin.
  • 3 out of the top 10 largest cities in US are in Texas.
  • Texas is home to more fortune 500 companies than any other state.
  • CNBC recently rated Texas #1 state for doing business.
  • Forbes recent article picks San Antonio as #2 for “Best Bang for your Buck”.

Plumbing Inspection: Passed; Mechanical: Failed

We passed plumbing this week but failed A/C inspection yesterday due to some minor details overlooked by my sub-contractor, which have already been addressed. Second mechanical inspection is set for Monday. After passing plumbing I went ahead and installed the new plywood sub floor and set the tub in the hall bath and shower pan in the master bath.

Tub

Shower Pan

As soon as we pass the mechanical inspection I can call for the framing inspection. It seems odd and out of order the way San Antonio does it, they inspect framing after all the tradesmen have finished. If something were incorrect you would have to rip out all those sub contractors new work, weird. So the schedule is: pass mechanical Monday. Call in framing inspection for Tuesday. Pass framing Tuesday and schedule the insulation inspection for Wednesday. Once we pass the insulation inspection we can hang all the drywall. My drywall crew is chomping at the bit and ready to get started. I am going to have it delivered Thursday, 225 sheets to do the whole 1930 s.f. house, 5/8” for the ceilings and 1/2” on the walls.

Kitchen Plumbing

Take one last look inside these walls, next time you see the house it will be all sealed up. This is always a huge milestone for me; to see the house with all new drywall really shows how it will look. It blocks out all the “old house” smell and it’s all downhill from there, baby.

New Back Door

We’ve been monitoring sales activity a little closer lately and I ran some interesting reports out of MLS last night. In our little “area” there were only 9 sales in 2008, (2 of which were ours) and avg. price was 206k. In Q1 08 there were no transactions, so far this year we have 6 pending or sold. Average price on these 6 is 257k. That’s an increase in sales activity of 600% and an avg. price increase of 19% Y.O.Y. Currently there are only 4 months of inventory making it essentially a sellers market. While the overall market has slowed down in San Antonio our area seems to be a bright spot. The Craftsman Bungalow sold for $174/s.f. last year setting a record for high comp based on $/s.f. The avg. price per s.f. is closer to $155.00 so with Hat Trick being 1930 s.f. and the level of rehab we plan on listing it for around $289k –$299k. The only thing better than setting a high comp for a neighborhood is getting to come back and use that comp in your next sale!

2009 Forecast, Will San Antonio get Spurred while San Diego Charges?

The SABOR 2009 Housing Forecast was recently presented. They do it every year and hold it downtown in the fancy Omni Hotel conference room. All the bigwig Realtors and Builders give their spiel on the San Antonio Real estate market. Remember, these are Realtors painting this picture for us so take it with a grain of salt as with anything coming out of the NAR. They stated the following in their presentation, which I have posted here on my site. Sales were down 18% in 2008 compared to 2007. Down 23% from peak in 2006. A bright note they claim is that inventory is not however growing. This seems odd to me because as I drive around all I see are For Sale signs. Fewer sales but less homes being listed for sale with 17,359 units sold in 2008. Months of supply are up at around 8 but only due to the fewer sales. The average days on the market for 2008 was up to 87 and that number doubles when you get north outside loop 1604. Foreclosures were up 23% compared to 2007. The median sales price stayed flat at around 155k. According to the head honcho’s San Antonio Prices are now stable and expected to stay stable through 2009. The percentage price change per neighborhood can be found on the .pdf file presentation but most neighborhoods saw about 2% appreciation rate for 2008. There were reports in another earlier that SA was down 4% but that was comparing November 07 to November 08.

In a recent article from Yahoo titled 2009 Real Estate Forecast: Troubles Spread it states that some Texas cities could now also be in trouble like the rest of the US. It forecasts that Houston could drop 8.5% and San Antonio could see price drops of up to 10% in 2009. The article then goes on to explain how severely damaged markets such as Boston, Orange County and our hometown San Diego could be reaching affordability levels seen before the boom and may level off. My wife ran across a thread on City-Data that asked all the California transplants how many of them would consider moving back now that homes were affordable and back down to 2001 prices. Honey, pack the bags and I’ll load up the tools in the truck!

 As always, Location, Quality and Price will be key for our rehabs through the New Year.