Dallas Home Prices Down 3.1 Percent

So reports the Dallas Business Journal. And Back Talk Preston Hollow, where Jeff Siegel brings up his voyage to Chicago where the market is just plain God awful. I was in California last week where there are a lot of homes on the market, record foreclosures up 261% from a year ago. Yes, I said 261%. But the Peninsula area near San Francisco is still pretty insulated, folks there told me. I think the bottom line in this Real Estate story 2008 is that people with plenty of money who are either buying or selling are smelling like roses. They don’t have to worry about sales prices because they sold a company and live on non-earned income of $56,000 a month. OK, maybe the CPA will eventually suggest they chop a hundred thou off the price of a $4.5 million home. Tinkling in the ocean. This is the buyer every high-end spec builder in town is killing to have. No, the people hurting are those who over-shopped and who used home equity in one home to finance others. They bought into some experts’ advice — hey, I read those books too— for a moment I thought I could be Donald Trump. I heard lots of these stories in CA: one guy borrowed 90% against his home and bought not one but two homes out of state as investment props. (Idaho seems to be where everyone is buying investment props.) When he went to flip, the market had turned and he couldn’t sell them. Then the value of the home he had the 90% loan against declined — he had taken out the loan at the peak of the boom. Now he had two inflated loans on two props declining in value — not selling — plus the 90% loan on his home. What could he do? He walked, lost his equity. Just a few years back in Texas we could not take out loans against our homesteads because back in the wild west, men were gambling away the ranch at the poker table.

My, how times have changed.

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