My Sis

[petiepanzer]

Folks,
Trust me on this one. Foreclosures and bank owned properties are up considerably in this town from last year and it is going to get much worse before it gets better. In fact, there are going to be many more foreclosures coming up within the next 2 to 3 years because too many people bit off more than they can chew over the last few years and got into houses they couldn't really afford through some 'creative financing'. Every time a home is foreclosed upon within a couple of blocks around your house, your home loses 10% of its value. I see the large volume of REO properties currently on the market, I worked as a lender before I went into venture capital, and I still know all the tricks of the trade. It will not hurt people's property value that plan on staying in their homes long-term, but it needs to be at least another 5 years. Now, Amarillo may not see the drop that other areas have seen, but it has nothing to do with the economy here. The average household income in Amarillo is less than $40 k a year, and that places it right on the cusp of the bottom 1/3 of the 300 largest metropolitan areas in the United States, making Amarillo a pretty poor town. Rather, it is more likely going to be due to Texas's restrictive lending laws regarding cash-out refi's that prohibit a homeowner from taking out more than 80% ltv for things like debt consolidation, business development, home improvement, and various other items. Other states allow a homeowner to take out at least 100% of their equity and some even allow more than 125%.

Look for the late-20's, early-30's first time homeowners that are acting like $30K millionaires. You know, the people that have new trucks worth more than $30K in their driveways and a house in Sleepy Hollow, but work at some place like Gold's Gym or the big spenders that end up going through a divorce after experiencing the 7 year itch. Financial problems tend to follow personal problems.

[mustakister]

The fact is none of us can predict the future. You just have to make the best deal you can given the current conditions. If you have a gut feeling, or strong evidence that leads you to a conclusion, thats great... Obviously, if rates are on the rise there will be an increase in foreclosures due to ARM's and other factors. But, there are always foreclosures in any market. I don't agree that if your neighbor gets foreclosed on you lose 10% value. That sounds like an over-generalization to me. I understand that a foreclosure sometimes results in the home sellling for less than market value ( I know cuz I invest in these type of properties) but, there have been lots of foreclosures in Amarillo over the past 5 years and our home prices have gone up double-digits. That lower comp is more than offset by other factors. If foreclosures go up a LOT, then that could become a major factor, but still can be offset by other things like: 1. Amarillo is currently at / near an all-time low unemployment at around 3% or less ( www.economagic.com/em-cgi/data.exe/blsla/lauMT48111003 ) 2. Our home prices are already priced well below national average (which already reflects our lower incomes) We have the benefit of being extremely stable when it comes to prices / income, etc. www.housingtracker.net/affordability/texas/amarillo

The bottom line is that Amarillo RE is currently very strong and in a great position to a) appreciate b) maintain value despite potential economic challenges.

[habiba]

Amarillo probably has one of the most stable realestate markets in the country. We have the lowest level of subprime lending in the country. Our population is growing, we have low unemployment and wages are increasing. Currently rent price in Amarillo is high compared to home value so it is currently cheaper to buy then rent. There are very few place in the U.S where that is true at this time. The price of house here is in line with income, both being below national average. We have about 4 month of housing inventory which is sellers market. Currently homes in SW in good condition, especially newer one, below $150K are in very high demand. Expensive home over $300K takes longer to sell, but this is always the case here. Last year Tradewind was the only area in town that had a glut of homes. As people can not find newer home in SW Amarillo they are looking in SE and Tradewinds is even now seeing very strong sales, something like 70 home in April. Homes in low income neighboorhood have trouble because of first time buyer and low income people have trouble to get credit. Some fall victum to preditor lender but in Amarillo this activity is low. We have some owner finace scam that takes place where the seller finaces the property to usualy first time buyer immigrant and the property is sold for more than it should. I see this happen occasionaly in the NE area but compared to other towns this is minimal. We can thank ANB for giving many people a good deal with straight forward terms. Anyone that buys a home in Amarillo to live in or rent for long term with positive cash flow is making a good decision. Fortunaly the get rich flipper that destroyed Florida housing market will not come here because our appretiation is about 1-5% per year typically. Since construction cost and rents are going up this will make us have 3-5% in ther next few year, of course this is just my guess. Unless we have some major employers like Bell and Tyson completly shut down we will see a healthy and stable market.

[horribilis]

Check out Southlawn.

[horribilis]

Folks,
Trust me on this one. Foreclosures and bank owned properties are up considerably in this town from last year and it is going to get much worse before it gets better. In fact, there are going to be many more foreclosures coming up within the next 2 to 3 years because too many people bit off more than they can chew over the last few years and got into houses they couldn't really afford through some 'creative financing'.

I really do question the wisdom, if not the sanity of mortgage lenders in the formulas they use to grant credit. There can be a huge difference in how much payment you can afford and how much debt you can afford. It is the lenders who really only look at how much payment you can afford. It is up to the borrower to work with a professional advisor to know how much debt you can afford.

A young working couple raising a couple of kids applied for a loan. They both worked and had a comfortable combined income, but I was flabbergasted that the bank qualified them for $325,000. The husband was working a lot of overtime, but that wasn't going to last. Fortunately for them the scaled way back on ther plans. I advised them to buy a house they could afford if they suffered a 50% reduction in income. They were thankful they heeded my advice when the overtime stopped and the wife went to part time hours. They are still living in the house, if they had maxed themselves out they would have certainly had to sell the house or give it back to the bank.

[habiba]

I think the numbers speak for themselves in this article in Globe News today The market is currentl stable and healthy. No one has the crystal ball but all indicator says this will continue in Amarillo.

amarillo.com/stories/071607/new_7956761.shtml

[zebrarick]

petiepanzer said:

Folks,
Trust me on this one. Foreclosures and bank owned properties are up considerably in this town from last year and it is going to get much worse before it gets better. In fact, there are going to be many more foreclosures coming up within the next 2 to 3 years because too many people bit off more than they can chew over the last few years and got into houses they couldn't really afford through some 'creative financing'. Every time a home is foreclosed upon within a couple of blocks around your house, your home loses 10% of its value. I see the large volume of REO properties currently on the market, I worked as a lender before I went into venture capital, and I still know all the tricks of the trade. It will not hurt people's property value that plan on staying in their homes long-term, but it needs to be at least another 5 years. Now, Amarillo may not see the drop that other areas have seen, but it has nothing to do with the economy here. The average household income in Amarillo is less than $40 k a year, and that places it right on the cusp of the bottom 1/3 of the 300 largest metropolitan areas in the United States, making Amarillo a pretty poor town. Rather, it is more likely going to be due to Texas's restrictive lending laws regarding cash-out refi's that prohibit a homeowner from taking out more than 80% ltv for things like debt consolidation, business development, home improvement, and various other items. Other states allow a homeowner to take out at least 100% of their equity and some even allow more than 125%.

Look for the late-20's, early-30's first time homeowners that are acting like $30K millionaires. You know, the people that have new trucks worth more than $30K in their driveways and a house in Sleepy Hollow, but work at some place like Gold's Gym or the big spenders that end up going through a divorce after experiencing the 7 year itch. Financial problems tend to follow personal problems.

Is this the truth. I see this all around me. Folks on my street that could not handle what they got into.

[petiepanzer]

habiba said:

Amarillo probably has one of the most stable realestate markets in the country. We have the lowest level of subprime lending in the country. Our population is growing, we have low unemployment and wages are increasing. Currently rent price in Amarillo is high compared to home value so it is currently cheaper to buy then rent. There are very few place in the U.S where that is true at this time. The price of house here is in line with income, both being below national average. We have about 4 month of housing inventory which is sellers market. Currently homes in SW in good condition, especially newer one, below $150K are in very high demand. Expensive home over $300K takes longer to sell, but this is always the case here. Last year Tradewind was the only area in town that had a glut of homes. As people can not find newer home in SW Amarillo they are looking in SE and Tradewinds is even now seeing very strong sales, something like 70 home in April. Homes in low income neighboorhood have trouble because of first time buyer and low income people have trouble to get credit. Some fall victum to preditor lender but in Amarillo this activity is low. We have some owner finace scam that takes place where the seller finaces the property to usualy first time buyer immigrant and the property is sold for more than it should. I see this happen occasionaly in the NE area but compared to other towns this is minimal. We can thank ANB for giving many people a good deal with straight forward terms. Anyone that buys a home in Amarillo to live in or rent for long term with positive cash flow is making a good decision. Fortunaly the get rich flipper that destroyed Florida housing market will not come here because our appretiation is about 1-5% per year typically. Since construction cost and rents are going up this will make us have 3-5% in ther next few year, of course this is just my guess. Unless we have some major employers like Bell and Tyson completly shut down we will see a healthy and stable market.

Habib,
Bah Bah Bah Bah!!! Perhaps we should speak in sheeplish, because, although you seem to lack a full command of the English language, you seem to be a master in the native tongue of the sheeple. BTW, an ESL refresher course might be advantageous for you.

First, let's define what constitutes a true 'subprime' borrower. By the industry's standard, this is generally any person that has a mid-score fico below 620 on a tri-merged cbr. Now, there is some purchase activity in the subprime market, but their bread and butter has always been and will always be in the refi market, like at least 90% of it. This is because people with bad credit tend to have a great deal of unattached debt due to poor spending habits. They are 'living la vida loca' on a janitor's salary. What debt consolidation offers them is the opportunity to reduce their monthly payments by paying off their credit cards, their installment loans, and often their ridiculous car notes, among many other things. It also allows them to write a portion of that debt off of their taxes where they would not be allowed to do so otherwise. It can often save these people who find themselves a great deal of money by doing so, some times more than $1,000 a month. The reason that Amarillo doesn't have a lot of sub-prime loans is because a) the state of Texas has the most restrictive lending laws in the nation, permitting only 80% ltv on cash-out refi's instead of the 125% allowed in every other state; and b) this law, combined with the realtively low property values in Amarillo make it less than advantageous to look at such a small market. Few people have enough equity in their homes here to make such a refinance worthwhile. That is why you don't see companies like Ameriquest and Household finance operating in this market. Now, there are several others, like Citifinancial, Beneficial, and WF Financial, but they mostly deal with installment loans here or smaller second mortgages, unlike their out of state brethren. It has nothing to do with benevolent ANB taking care of all the little serfs living in Amarillo, so feel free to stop blowing the Ware brothers any time now.

Second, there are a ton of Alt-A loans sitting out there right now, in both Amarillo and nationwide. In 2001, the fed started dropping interest rates after the attacks on the WTC in an attempt to keep the nation's economy from going down the drain. As a result, banks were able to charge other financial institutions less money, which eventually led to lower mortgage rates offered to personal borrowers. From 2001 to 2004, the Fed dropped rates an unprecedented number of times. What this allowed was for more people to be able to qualify for more home, and for people to finally be able to afford a home, when before they could not do so. Lenders, seeing the money rolling in, quickly mobilized and began to offer loans to an increasingly wider range of qualifiers. Now, as I stated earlier, lending institutions have a formula for their DIR qualifications, so they offered many new things instead of the traditional 30 yr. fixed mortgage. The most popular was either the 3/1 or the 5/1 ARM. They also offered a stated income verification option, an interest-only option on these same ARMS, reduced down payment qualifications and even 100% financing, combo loans to avoid paying PMI, and a slick little invention called an option-arm that could potentially place negative amortization on a person's loan balance if the person was not knowledgable enough to understand its' workings. That is how you often see advertisements for something like a $300K loan with a payment of something like $600 a month. Now, this was all fine and dandy when the real estate was increasing at a rate of 10-20% a year, but the market has now hit saturation and the fed has increased rates considerably over the last couple of years. Now, these loans' rates change after the preset period by a formula involving a pre-set number and a variable based upon one of 3 standards used by the industry: the treasury, the libor, or the MTA. I don't feel like explaining the difference, but feel free to use google if you need more clarification. Now, the lion's share of these loans in this country, Amarillo included, were made from 2003-2005. A little quick math should be able to tell you when the fixed period is going to be up. Having a payment that could potentially double is going to hurt somebody that possibly indulged a little bit on their income figures, went through a divorce, or just were plain struggling because they bit off more than they could chew. For instance, say a person had a house payment on a 5/1 ARM with a $550 PI, $300 taxes, and $100 insurance for a grand total of $950. Well, the mortgage readjusts after 5 years and all of a sudden, the total payment is now $1450. As previously noted, the average household income in Amarillo is about $39,000 a year, or we'll just round up and say $3,500 a month. Now, after withholdings, that number is going to drop down to at least $2,700, probably less. Take out $1450 for the mortgage, and that number drops to $1250. Take out another $400 for a car payment(s), $350 for cc's and other various finance agreements, an excel bill at $150, a gas bill at $50, 40 gallons of gasoline a month at $120, and that is going to leave $180 for the entire month. That breaks down to $45 a week and is supposed to include any type of cell phone bills, cable or satellite television, groceries, entertainment, and possible expenses related to child rearing. I hope the kids like top ramen, because that is what they are going to eat for a while. It doesn't take a 'crystal ball' to figure out what is going to happen when these loans begin to adjust.

Third, you are quoting an article that was published in the Amarillo Globe-Advertiser whose only source of information was who? Economists, no, that wasn't it. Oh yeah, it was only quoting realtors. Let me tell you something about realtors: they are born liars. deep within the heart of every realtor beats the heart of a used car salesman and they are not much different than the girls that work on various ranches in the state of Nevada, if you catch my drift. Of course, they are going to say that everything is hunky-dory. These people have a financial interest in having people purchase real estate here, so they are naturally going to try to paint a picture of a market that will prove to be a smart financial decision. Do you honestly think they would come out and be completely objective? Did you believe the tobacco companies when they claimed cigarrettes were harmless? I loved how they said that foreclosures were "low". Low compared to what? Other parts of the country, perhaps. This time last year, absolutely not. That little article in the AGA was just a little nugget to an industry that has given that paper a lot of advertising money. Pay no attention to the man behind the curtain, Habib!!! I am the mighty and powerful OZ!!!

I am not just blowing mud out of my rear, Habib. Between 2000 and 2005, I made almost $500,000 on 2 houses in 2 other cities, all tax free. People thought I was nuts then because I saw a lot of the same things happening in those markets that are now happening here in Amarillo. Who's laughing now? In addition, I orchestrated a deal for my mother that means she will never have to worry about money again. Today, I am 33 and own a house completely mortgage free on your beloved southwest side of town, down the street from Amarillo High that has about 2,500 s.f. I do free lance work in the field of Venture Capital, but business gets a little slow here in Amarillo, so I play the market a lot on e-trade. Through the first 6 months of this year, I have made more than $60k, and most of that has come from shorting various stocks. I know how to tell when something has become too bloated and when it is time to sell.

[habiba]

Petiepanzer, First I would take more ESL but English is my 4th language and AC doesn't offer E4L. I speak Arabic, French English and an ethinic dialec. I did not try to bother and read all you jumble numbers. I guess I am just immigrant dummy because I never finish high school. I own three home free and clear by the way. I figure you are one of thoes greedy criminal that make bad loans and sleezy realestate deal and then skip out before things colapse. I hope you can sleep while a young family somewhere gets thrown in the street because they get loan from sleeze bag like you.

I appologize to Ms. Jackson that her very important post is high jacked by this Peterpan. This person apparently does not want you to see your dream of owning a home. Amarillo is a conservative family community and all I have to say is our market is stable, enjoy your home.

[mustakister]

petiepanzer said:

habiba said:

I am not just blowing mud out of my rear, Habib. Between 2000 and 2005, I made almost $500,000 on 2 houses in 2 other cities, all tax free. People thought I was nuts then because I saw a lot of the same things happening in those markets that are now happening here in Amarillo. Who's laughing now? In addition, I orchestrated a deal for my mother that means she will never have to worry about money again. Today, I am 33 and own a house completely mortgage free on your beloved southwest side of town, down the street from Amarillo High that has about 2,500 s.f. I do free lance work in the field of Venture Capital, but business gets a little slow here in Amarillo, so I play the market a lot on e-trade. Through the first 6 months of this year, I have made more than $60k, and most of that has come from shorting various stocks. I know how to tell when something has become too bloated and when it is time to sell.

Dude - you've got to be kidding me!!! After struggling through the 1st half of your wannabe RE lecture, I skipped to the last paragraph where you proceed to tell us all how much money you have made. All I have to say in response is:

L-O-S-E-R

Good thing you're conveniently located close to Cassidy's there in your Puckett "Estate" --- at least they will act interested when you tell them how much you allegedly have earned this year.

[petiepanzer]

Habib,
The reason I recommended esl for you is that you seem to either have trouble processing information or you lack the ability to critically analyze information. On more than one occcasion, you have completely over reacted when I was just expressing an opinion. As far as being "one of thoes greedy criminal that make bad loans and sleezy realestate deal and then skip out before things colapse.", I think that is a pretty foolish statement on your part. That would make about as much sense as saying, "Since Habib is an arab, I bet he supports Al Qaeda and that he has raised his children to be Jihadists In fact, I bet he has trained with Osama bin Laden." I was never actually interacting with borrowers, but I did work for a large lender at the corporate level. Let's leave it at that. It was my first job out of college and I have been out of that industry since 2002.

Mustakister,
For some reason, you took it upon yourself to call me names and level personal attacks at me. I am assuming it was because you do not possess the intellectual firepower to actually contradict any of the information I have provided in my post. I guess I am confused by your actions. Earlier in this thread, you were raving about Puckett because of the apartment you lived in there twice *snicker* and the great school district. Then, you made a condescending remark about it being too close to Cassidy's. So which is it? If you are trying to insinuate that it is overrated, then I would agree with you. Of course, I think the entire SW side of town is overrated. I'm just not into the little cookie cutter tract houses they throw up over here. If I stay in Amarillo, I will probably end up purchasing something closer to down town. I like the classic architecture, a front porch, and wouldn't mind having an apartment above my garage to rent. Anyhow, If you have something to add that is not a personal insult, I would be happy to listen. Otherwise, I will assume that you are not intelligent enough to mount a counterpoint and will take either a personal attack or your silence as confirmation of ignorance on your part. I am beginning to suspect that you are a realtor, which would explain a great deal to me.

Both of you need to take off your 'yellow colored glasses', quit drinking the yellow Kool-Aid, and step outside of your little bubbles. I get the distinct feeling, for some reason, that both of you think that this is an attack on the city of Amarillo. I can assure you that it is not intended as such. The entire nation is going to experience problems over the next 2 years as these loans that were done through 'creative financing' are going to fan out. Last month, the average LIBOR rate was about 5.41%. Now, the new rate for a great deal of these loans is going to be 2.9% + whatever the LIBOR rate happens to be at the time. In 2002-2004, they were giving people initial rates as low as 4.75% on some ARM loans. It is really that difficult to imagine that somebody might possibly have problems if their interest rate happened to double? That is what is likely going to happen because the LIBOR rate is going to get up to 6% within the next year, along with both of the other index rates. In 2000, it got as high as 7.22% at one point.

To everyone else, I do not have any type of agenda here. I know I often present a counter point of view that may no be popular, but I am just being honest. I see problems happening within the next couple of years. Honestly, is it better to pretend that everything is hunky dory, and then have reality come crashing down, or is it better to at least meet the challenges head on and prepare for trouble that is looming on the horizon?

[fjackson]

It is clear that I will not be getting any additional relevant information from this post so I declaring it closed. I would like to thank those that provided me with useful information (Habib, mustkister, hornbills, just to name a few). I have a very scary picture in my head of a disturbed 33 year old that doesn't have a real job and sits in the house all day on the computer hating immigrants and spreading doom about realstate. Hopefully we do not see this individual on the news going to jail for pretending to be a venture capitalist and swindling some old lady out of her hard earned money. I will not mention any names but I do hope this individual gets out a little more, meets some people and learns to love life. I believe that deep down this individual is a wonderful person with a lot of potential, they just need to see a little more of the world.

[zebrarick]

I think its rather amusing that you folks become all holier than thou and start throwing stones. At what point did petie say he lent money to anyone? You trash talkers make it look like he alone has the capablity to do what you say he does. Seriously! Mortgage compaines and sub prime lenders are their own worst problem. No one goes looking to loan money to have to go through forecloser. They do make poor judgements on who they lend to. He is right about ARM's. Dang read the papers and news. Mine went up 3 years straight and I re-fi to a fixed. Never should have done the ARM in the 1st place.

Before you worry so much about petie worry about the next car deal you try and work in Amarillo and some Realtors out there. Notice I said some.

Mucous kisser throwing out loser bombs and some horrible argument about Cassidys being in the area his house is weak. Might as well name that same arguement for Ridgecrest, Belmar, the Bonham area etc. All about same distance. Mucous you also apparently did not skip the last part of the lecture since you qouted it. Who is the loser now?

One last point, unless you can prove he has not done what he has 100 percent you have no right to cast stones. Sounds like a hell of a lot of jealousy.


Fjackson, you will not find much 70k in SW Amarillo. Period. Southlawn is a good place to look but worth with a good realtor and they can help or just check MLS and map the homes. I really hope this works out for you.

[mustakister]

I'm not debating sweetiepetie in regards to the notion that the RE market is vulnerable. Of course it is. Everything is cyclical. We have been on an upswing for years and that will certainly level off or reverse. You don't have to be a former lender to know that.

I think my Cassidy's remark was misunderstood. I was merely stating that it is good to know that sweetiepetie has an outlet nearby in which to impress someone with his story of personal financial fortune.

It is lame and absolutely pathetic to come on here and tell everyone how much you make. I mean, come on dude. Get a life.

I grew up in Puckett and I just bought a house there. It is a wonderful neighborhood. And, no I'm not a realtor, but that's the only personal information I'll disclose on a public forum. I'll save my W-2 for those who need to know.

[kitterbone]

Well if you grew up in Puckett and bought a home in Puckett you have no business on this thread. The topic of the thread was help finding a house for 60,000 to 70,000. Your dog houses cost that much rich boy.