Saturday, May 17, 2008

Sign O' The Times

I just noticed a realtor putting up a "House for Lease" sign next door. This has become the norm in my neighborhood. Today our subdivision held it's semi-annual garage sale. As I drove through my subdivision looking for bargains, I couldn't help but notice all the "For Sale" signs on the houses. They are hard to miss as my neighborhood is littered with these signs. On one block, there were three houses for sale right next to each other.

I live in a master-planned neighborhood in Katy, Texas. Our house is four years old. They are still building new homes on our block. The oldest homes in our community were built in 1998. All around Katy, there are signs of development. Two major hospitals will be built in Katy within the next two years and more and more businesses are moving here. Home foreclosures did not hit Texas as hard as it hit the rest of the country. Last week they debuted 31 model homes in nearby Cinco Ranch, which is the largest master-planned community in our area.

What does all of the "For Sale" signs say about the viability of our sub-division? Why is everyone moving out? One reason could be our taxes. Katy, Texas has one of the highest property tax rates in Texas. Another reason are the oil companies. Houston has more oil companies than any other cities. Recently, ranked Houston as one of America's top ten "recession-proof cities". They cited the oil companies, an increase in manufacturing companies and a relatively low level of unemployment. Many of the residents in my neighborhood work for oil companies. Many of these oil execs have to move every three to four years. The house across from me was built in 2005 and has been on the market twice.

What to make of all of this? My gut feeling is that the abundance of houses on the market is attributed to today's unstable economy. The Houston Business Journal ran an article back in February titled "Population plus Job Growth equals Prosperity in Lone Star State." As much as the authors may tout Texas as the fastest growing state, no where is recession-proof. Home prices in my neighborhood range from 150K to 600K. This is relatively lower than many parts of the United States. However, like the rest of the United States, the price of gas and groceries have steadily increased. Most of the residents in my neighborhood are made up of families with small children. The cost of childcare alone can equal to a separate mortgage bill each month. Property taxes have risen at an exponential rate. This year our property was appraised at $30K more than it was last year. Unfortunately, wages have not caught up with the higher cost of living, thus forcing more and more families to move out. Looking around me at all the houses for sale, I wonder if this is just the sign of the times.

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