Sha ke- out
The area housing market is showing the effects of a small worker migration, creating a market that is a boon for buyers but a bust for sellers.
With over 1,000 jobs lost in the past two years in the county of 25,000, the economic shake-out of fewer paychecks is still being felt. And with supplemental pay on the wane, this pattern may continue.
The effect on appraisals has yet to be seen, though Milam Chief Appraiser Pat Moraw said letters will be mailed the first week of May with preliminary values.
“I’m still in the process of assessing it myself,” said Moraw, who wouldn’t venture a guess as to the percent of change in valuations.
But most local realtors think appraisals will take a hit, thanks to some foreclosures and quick sales in the area. Appraisers will base new figures on comparable sales, or “comps,” that show sales prices of similar and/or neighboring properties.
“They (MCAD) want comps within six months to a year,” said Judith Matula, long-time real estate dealer with Pud Owens-Judith Matula Realty. “When property values go down, appraisers might not put the value on it as they did as little as 15 months ago. And as houses sell cheaply, our market dives.”
Adding to the mix are bank foreclosures, which realtor Carol Worley says there were five on the Multiple Listing Service, an aggregate website for real estate listings. She said it remains to be seen if more will be added.
“The severance pay (for laid- off A lcoans) w ill end, so we’ll see what happens,” said Worley, another longtime realtor with Carol Worley-Jim Currey Realty. “I think most people will stay in their home, but we’re hoping they get more jobs that allow them to.”
Worley said she was staying busy, adding that many buyers were looking to get a contract before the April 30 deadline for the $8,000 home-buyer credit, offered by the federal government as part of the stimulus package.
A fall in valuations, which is likely, will mean the area’s taxing entities — the county, cities and school districts — will be forced to raise taxes or adjust budgets.
A five-percent drop in Milam County’s $1.7 billion in valuations would mean a drop of $85 million in taxable values.
Rockdale ISD has values of $1.03 billion and a five-percent drop would mean a loss of $51 million in taxable value.
Tight credit market
The slowdown is affecting other realtors. Elaine Gerren, who is a partner with Cathy Czajkowski in Integrity Real Estate, said the duo is managing about one contract a month, “which is pretty good considering the market is really bad right now,” she said.
“We probably got in at t he worst time,” she said of opening in 2006.
“That’s why we didn’t do the bed and breakfast,” she said, referring to plans for the historic home at the corner of Bell and Green streets.
Charles Derek Caffey of Caffey Real Estate was more blunt in his assessment: “It sucks right now, no doubt about it.”
Caffey also said the national housing crunch could still hit Texas, which has weathered the storm better than most. “Housing cycles always affect Texas last and, it’s just my opinion, but price reductions are coming,” he said.
Caffey said he had one raw land contract for $5,000 an acre, and that is the last one he expects to see at that level for some time.
“I think we’ll see a 15 to 20-percent reduction in pricing,” he said. “Raw land and housing prices got pretty high here.”
He added that a buyer’s market is good, if the buyer has cash and good credit.
“Loans are tighter now, and it is a good time to buy, but unless you have a lot of cash and clean credit, a buyer can’t take advantage,” he said.