From the Midwest to the Pacific, job seekers are heading to Texas

From the Midwest to the Pacific, job seekers are heading to Texas

'If you had to ride out this downturn, there is no better place than Texas. The declines here have been nothing compared to other states.’

By STEVE CAMPBELL

sfcampbell@star-telegram.com

Across the nation, unemployment is sky-high, the housing market is sucking wind and recessionary fears have frozen Americans in place.

Just don’t tell that to a stream of new residents who are "voting with their feet" that Texas is the safest place to ride out the storm and the place to be when the economy recovers.

Even in the midst of a recession, economists, demographers and relocation experts believe the Lone Star State is on the cusp of becoming The New California.

Or maybe it already is.

For people seeking economic opportunity, Texas is becoming what California has been since the Great Depression, says Los Angeles urbanist and author Joel Kotkin. Texas recently "ran the table" in a recent list of "Best Cities for Jobs" prepared by Kotkin for New Geography and Forbes. Austin, Houston, San Antonio, Fort Worth and Dallas were ranked as the top five large metro areas in the country to find a job. If that weren’t enough to get the moving van loaded, McAllen and Odessa top the mid-sized and small city categories, respectively. Among 333 metropolitan areas, Texas has a remarkable 20 in the top 100.

Relocation surveys show that Texas remains a top destination for people leaving other states. Its automobile registrations continue to climb, and the Texas housing market has avoided the double-digit declines other fast-growing states have seen. While the unemployment rate has risen in Texas, it’s nowhere near as high as most of the country, underscoring the state’s economic resiliency even as the downturn deals out its lumps.

Kotkin, a professor at Chapman University in Orange, Calif., who analyzed U.S. Labor Department statistics for his report, says Texas’ dominance at the top of the jobs list is unprecedented.

"Part of it is a function of the economic collapse of Florida, Phoenix and California. The collapse is still important in Texas, but Texas has had more balanced growth and that’s more sustainable," he said in a telephone interview while navigating an L.A. freeway.

"Part is the nature of Texas: People don’t move there for climate and scenery," Kotkin said. "They move to Texas for jobs and affordable housing. People make economic decisions to go to these places. They don’t go for perfect weather where you can surf one day and ski the next."

Selling "everything but the deer head" and leaving the Detroit area for Texas was simple math for Rodger Benton after Hewlett Packard laid him off.

"It was pretty much a no-brainer to make the move," he said. "The unemployment rate in Michigan is really high. Things are really tough up there. There’s just more opportunity here."

Jobs beget growth

Steve Murdock, who was the Texas state demographer for 25 years and director of the U.S. Census Bureau during the last year of the George W. Bush administration, says jobs attract new residents, and Texas has been driving fast for several years.

"Very few of us say, 'I think I’ll go there because there are not as many " he said. jobs and they pay less,’

Murdock, now a sociology professor at Rice University, says Texas’ growth in the last decade has "been simply phenomenal."

According to the latest Census figures released in March, Dallas-Fort Worth-Arlington added 146,500 people between July 2007 and July 2008 — more than any metropolitan area in the nation. Houston-Sugar Land-Baytown added 130,000 for the No. 2 spot, and Texas had 10 of the top 25 counties with the biggest numerical gains.

Texas has lost jobs in the recession, with the unemployment rate at 6.7 percent in March, the highest mark since January 2004, according to the Texas Workforce Commission.

But that still looks good compared with Michigan (12.6 percent unemployment), Oregon (12.1), South Carolina (11.4), California (11.2) or North Carolina (10.4).

"If you had to ride out this downturn, there is no better place than Texas. The declines here have been nothing compared to other states," said Richard Froeshle, deputy director of Texas Workforce Commission.

Moving out

As the economy has soured, many people are moving to Texas for a new start.

In 2008 and the first quarter of 2009, 14.3 percent of the people leaving the once Golden State were bound for the Lone Star State, according to Relocation.com, which tracks moving trends. Other states with sizable outflows to Texas included Florida (7.9 percent), Illinois (4.7), Michigan (4.6) and New York (4.3).

Another indicator of moving patterns is U-Haul truck rentals.

To rent a 26-foot moving truck today from Los Angeles to Fort Worth would cost $2,141. Renting that truck for a Fort Worth-to-L.A. run would only cost $557. Nearly the same prices apply for moves from Detroit to Fort Worth and vice versa.

That means far more people are moving to Texas than going in the other direction, a U-Haul employee in Fort Worth said.

Julie and William Taylor of Flower Mound made that jump just before California’s housing bubble burst.

Fed up with William’s three-hour round-trip commute and the state’s declining economy, they unloaded their home in Santa Clarita in 2006 after it had doubled 1/2 years."We thought, 'We better do it now while we can.’ I had in value in 3 never even come to Texas, but we knew there were jobs here," said Julie, a stay-at-home mom with two small children. "We knew it was going to be easier for my husband to find a job [in the transportation industry]. And it was true. We feel so blessed to have gotten out when we did."

'The place to go’

Tory Gattis, who runs a software company and writes Houston Strategies, an urban issues blog, is convinced that Texas will be the "focal point" of the nation’s next historic migration trend.

"During the Dust Bowl, during the Great Depression, California was the place to go. Texas is the place to go now," Gattis said. "Sure, we are clearly losing some jobs but people are still moving here. I can see it anecdotally in the license plates around town. I see a lot of Michigan plates, California license plates, I see them from all over."

That’s playing out across the state, according to the Texas Department of Transportation, which tracks motor vehicle registrations.

In 2000, there were 17,962,300 registered vehicles in Texas and that number soared more than 3 million to 21,185,173 by the end of last year, the department reports.

"Vehicle registrations continue to climb by the hundreds of thousands in Texas despite a decline in vehicle sales," department spokeswoman Kim Sue Lia Perkes said. "This may be one indicator that Texas continues to experience a steady stream of transplants from other states despite the national economic downturn."

John McLendon sees the economy where all that rubber meets the road.

No Vacancy signs were the norm at his Oak Creek RV Park near Weatherford for years as migratory workers flocked to the drilling fields of the Barnett Shale, he said. Most of them cleared out late last year, when natural gas prices cratered and companies mothballed rigs.

Now he’s seeing a different trend. People from states hit hard by the recession are coming here in search of jobs. "I’ve seen some from Florida, Utah, Colorado, Montana — they’re from everywhere," McLendon said.

Jo Ann Royer, director of relocations for Williams & Trew real estate, say inquiries about moving to Fort Worth are coming from across the country.

"We’re seeing the whole spectrum of medical industry employees. They are coming from everywhere because the hospitals here are expanding," Royer said. "We’ve had, believe it or not in this economy, banking personnel coming in because there is a new bank on every corner in Fort Worth."

'Zone of sanity’

Jim Gaines, a research economist at Texas A&M University, says that the recession has slowed overall growth but that there are good reasons why people continue to come to Texas.

"Why do people move? Generally, jobs," Gaines said. "Right now, Texas will probably be the only state in the Union that reports more jobs than the year before — by a total of close to 154,000 [in 2008]."Those numbers will be reduced this year. But if you are an entrepreneur or want to start a business, this is the best place to do it because of the pro-business attitude of the state."

Eventually, when distressed housing markets across the country stabilize, Gaines predicts that skittish homeowners will be weighing their options. In those places, "as soon as you can finally sell, you’re going to get the hell out of Dodge," Gaines said.

Jason Saving, a senior economist at the Federal Reserve Bank of Dallas, also believes that Texas has some "fundamental advantages" that are spurring growth, even in a recession.

First is a "very favorable business climate," and second is affordable real estate.

"These things make the state attractive to businesses and residents alike," Saving said. "I think that’s why, if you look at the migration data within the U.S., that you see so many people moving from other states to Texas."

Gattis says Texas’ cost of living is a key to its attractiveness.

"It’s not everything," he said, "but when you have more discretionary income you can buy a better house, a better car, you can spend it at restaurants. That’s income that leads to a better quality of life. "

Texas State Demographer Karl Eschbach says in tough times, people "move to where they think they can survive."

"You might move back home where you have family and a support network, or you move to where you can get a job," Eschbach said. "If I’d left Texas and then lost my job, I would be back in a quarter-second."

Mark Lowther moved fast when that happened to him.

The Texas native was a marketing manager in Seattle for Washington Mutual, the failed savings and loan which was bought by JPMorgan Chase.

His job ended May 1, and he and his wife, Michelle, a disaster contingency consultant, "jumped" at the chance to come to Fort Worth so he could join Southwest Bank as a senior vice president and marketing director.

"The real estate market here is stronger and more affordable," Mather said as movers were unloading the couple’s belongings. "You can buy a comparable house here for close to half the price what you can get on the West Coast."

Kotkin, the L.A. author, says Texas is benefitting by being in what he calls "the zone of sanity," a swath of the nation’s midsection where housing prices stayed stable.

The twin lures of jobs and affordable housing are important to young professionals planning to raise a family or start a business, he said.

That’s what Lance Marshall and Elizabeth Peirce have in mind. The 25-year-old high school sweethearts from North Texas moved to Chicago in 2005 to pursue careers after graduating from college.

Marshall managed a specialty wine store and Peirce worked for a nonprofit and then turned to waiting tables before working as a media coordinator for a fashion boutique.

"I was underemployed and I never stopped looking for a job," Peirce said. "In Chicago, the competition was incredibly fierce and the economy wasn’t very good and then it really declined last year."

When they got engaged, coming back home looked like the safe bet. In February, they moved in with her parents in Grapevine, which has "been fun and mortifying at the same time," she said.

She’s now working as a sales consultant at a bridal shop. It’s not the job in communications that she wants, but it’s a start, and she’s still hunting. Marshall is working for a wine distribution company and dreaming of owning his own business.

"I can see a lot of optimistic growth here" he said. "I want to be a 50-year-in-the-same-house kind of guy, and when I was thinking of the places to do it — it was D-FW."

Open for business

Texas’ business climate of low taxes and a low regulatory burden draws companies and workers, Saving said.

"There is something inherently entrepreneurial about Texas. It’s the nature of the state from its formation, Texas was built by people who were looking to better themselves, and that has continued ever since," he said.

Kotkin says tight business regulation is hurting California. But not Texas. "Whether you are GOP or Democrat, you can’t imagine Texas becoming anti-business," he said.

Seguin Mayor Betty Ann Matthies says that mind-set is part of the reason Caterpillar is building a 850,000-square-feet diesel-engine plant that will employ 1,400 in her town of 25,091 east of San Antonio.

"I think that Texas is known right now for trying to encourage industry to come here," Matthies said.

The city and state’s "willingness to help," along with a location with easy access to interstates and major ports were key factors in Caterpillar’s decision, spokeswoman Kate Kenny said.

"It was a good decision all around, the location, the people, the timing," she said.

An economic refuge

No one argues that the recession hasn’t bruised Texas, too.

But for people like Benton from Clinton Township, Mich., Texas feels like an economic safe zone by comparison.

When Benton, a 45-year-old staff sergeant in the Army National Guard, was notified that he was losing his job as a computer systems operator, he also learned he was going to be redeployed.

He was at Fort Hood in Texas when he was on active duty in the 1990s and he liked it. "People are friendly here," he said.

So he leapt at a chance to be stationed in San Antonio and work as a liaison in the Wounded Warrior program helping injured soldiers. "This is rewarding. I don’t plan on going back to Michigan," he said.

The auto industry’s woes stretch from Michigan into Dayton, Ohio, where Dione Kennedy, 48, was the president and CEO of a theater association. Since January, she’s held the same title at Bass Hall in Fort Worth.

"Things are very tough in Ohio," she said "Dayton is a big GM town, and a lot of industry was built around that and it has been hit hard."

And the real estate market here seemed healthy by comparison.

"Prices for homes in Ohio have been rapidly dropping and in the communities here there was no apparent downturn," Kennedy said.

She and husband Daniel, a stay-at-home dad for their young daughter, have noticed another difference.

"It seems like every time my husband talks to someone in Dayton, it’s another concern about someone about to lose a job or has a lost a job. We don’t hear that here."

The U.S. Census Bureau recently reported that because of the recession, Americans are moving at some of the lowest rates in 50 years.

But Saving, the Fed economist, believes people "will vote with their feet" and keep heading to Texas.

"Moving is costly, and it’s a hassle. It’s not something people want to do . and looking long-term, I think it’s . . unless they see a better opportunity clear that Texas is a favorable place to be from an economic point of view."

Distressed Properties and First-Time Home Buyers - The Recipe for Real Estate Recovery?

Distressed Properties and First-Time Home Buyers - The Recipe for Real Estate Recovery?
By Mary Ellen Podmolik Print Article
RISMEDIA, May 19, 2009-(MCT)-Value-conscious, first-time buyers have become key to the housing market’s recovery, and they are snapping up priced-right foreclosures despite the warts-and-all, sold-as-is condition of the properties. Half of the sales made in the year’s first quarter were to first-time buyers and almost half of all these sales were distressed properties, the National Association of Realtors reported. Distressed properties include foreclosures and short sales, which are private transactions in which a homeowner sells the property for less than the amount owed on a mortgage.

The glut of foreclosures has pushed down home values, so heightened interest in buying them benefits the immediate neighborhood and the overall housing market.

“It’s a very good first step,” said Lance Ramella, a principal at RW Real Estate Advisors in Oakbrook Terrace. “The first step is selling the most value-conscious units and those are the foreclosures. We’re not going to see any real sustainable price appreciation until we move the foreclosures off the inventory list.”

Moving homes off the foreclosure inventory list may take a while though. With the lapse of several industrywide foreclosure moratoriums, lenders nationwide are initiating foreclosure proceedings again. Government-led efforts to refinance or modify troubled loans can’t help the rising number of people unable to pay their mortgages because they’ve lost their jobs.

In Illinois, more than 7,300 homes became bank-owned during the year’s first quarter, according to RealtyTrac. It’s impossible to determine how many of them are listed for sale, or sold, at any one time because the area’s real estate listing service doesn’t require a property to be listed as a foreclosure.

To capture new interest in home sales thanks to lower interest rates and a first-time-buyer tax credit, a growing number of lenders and asset management companies that own foreclosed homes now appear more willing to drop prices. Banks used to hold fast on pricing and held back properties so they didn’t flood the market, but that has changed, said Susan Sirles Fidler, an agent at Re/Max 10 in Oak Lawn who works with lenders.

Attractive pricing is causing a noticeable increase in multiple offers. In just the past two weeks, a two-bedroom, two-bath Lincoln Park condo listed at $289,000 garnered 60 showings in two days and 20 offers; it sold for just over $330,000. A vandalized East Village penthouse that needed at least $80,000 in repairs was listed at $159,000 and sold for $245,000. In Northbrook, a foreclosed home listed at $719,000 received multiple offers and sold for $730,000.

A bidding battle on a foreclosure with potential “is not the exception,” said Henry Torn, a buyer’s agent at Chicago Realty Partners.

The uptick in interest is encouraging to lenders as well. “That’s what gives us hope,” said Sanjiv Das, chief executive of CitiMortgage. “It’s positive, healthy activity. We’re actively lending to that end of the market, the owner-occupant.”

Finding diamonds in the rough can be a test of stamina, determination and an ability to hold one’s breath. There can be evidence of vandalism, water damage, multicolor mold and squatters who didn’t have access to bathroom facilities because the plumbing fixtures were stolen.

“This is not for the faint of heart,” said Marki Lemons, an agent with Rubloff Residential Properties, who carries a flashlight into properties and keeps paper masks in her car. “You have to be patient, be non-judgmental and have some vision. You have to decide if you can stomach this.”

Others are in decidedly better shape, in part either because companies are offering departing homeowners cash for keys and a clean property or they are sprucing up the properties before they put them on the market.

“These asset managers are at a point where they’re writing checks and trusting the Realtor to get the work done and put it on the market,” said Dean Rouso, owner of Prime Property Partners in La Grange. “We’re helping the neighborhoods because instead of having this comparable property out there for $99,000, we now have a comp for $150,000.”

Not all buyers, however, find themselves on the winning end of foreclosure deals, and that is causing them to look for value in the traditional market.

‘Making Home Affordable’ Program Delivers Much-Needed Relief to Homeowners

‘Making Home Affordable’ Program Delivers Much-Needed Relief to Homeowners

RISMEDIA, May 18, 2009-With the Making Home Affordable (MHA) program delivering much-needed relief to homeowners and to our economy just over two months after the release of program guidelines, Treasury Secretary Tim Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan provided an update on the program’s impact on stemming the housing crisis and keeping families in their homes and announced new options for homeowners facing foreclosure.

“In just over two months, the Making Home Affordable program is up and running, helping our economy recover and making a difference in the lives and livelihoods of thousands of American homeowners. Historically low interest rates are allowing Americans to refinance and save money, and modifications are helping homeowners avoid foreclosure,” said Secretary Geithner. “We are announcing a new program component to help homeowners obtain modifications in areas suffering from home price declines. If a modification is not possible, we are also announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future. These are critical steps in stemming the foreclosure crisis and stabilizing the housing market, both of which are critical to our economic recovery.”

“I can’t stress enough how important our HUD-approved counseling agencies are to the success of the Making Home Affordable program, and ultimately, to helping keep American families in their homes,” Secretary Donovan said. “That’s why HUD has requested a $100 million investment in our Housing Counseling Assistance Program for fiscal year 2010, a $35 million increase from our 2009 budget. This investment will help further support the work of our 2,600 HUD-approved housing counselors across the nation, just like those at NCRC, who play a key role in ensuring that borrowers can take part in the modification and refinancing options made available through Making Home Affordable.”

The new details on the Making Home Affordable program include:

-Foreclosure Alternatives provide incentives for servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a MHA modification but does not qualify or is unable to complete the process, which helps prevent costly foreclosures and minimizes the damage that foreclosures impose on borrowers, financial institutions and communities. The new details will simplify and streamline the process of pursuing short sales and deeds-in-lieu, which will facilitate the ability of more servicers and borrowers to utilize the program. The program provides a standard process flow, minimum performance timeframes and standard documentation, and it offers financial incentives to servicers and borrowers to pursue these alternatives to foreclosure.

-Home Price Decline Protection Incentives (HPDP) will provide lenders additional incentives for modifications where home price declines have been most severe and lenders fear these declines may persist. To encourage the modification of more mortgages and enable more families to keep their homes, the Administration, building on insights pioneered by Chairman Bair and the FDIC, has developed an innovative payment that provides compensation based on recent home price declines. Together, the incentive payments on all modified homes will help cover the incremental collateral loss on those modifications that do not succeed. HPDP payments will be linked to the rate of recent home price decline in a local housing market, as well as the average cost of a home in that market.

Since the launch of Making Home Affordable, more than one million Americans have now refinanced, due to historically low interest rates, and thousands of underwater borrowers have refinanced under the Home Affordable Refinance Program. Fannie Mae has had over 233,000 eligible refinance applications through its refinancing program, with more than 51,000 of these having loan-to-value ratios between 80% and 105%. More than 55,000 Home Affordable Modification offers have been extended to qualifying borrowers. Additionally, servicers have mailed more than 300,000 letters to homeowners who are potential candidates for the program. The refinance application volumes and modifications underway make clear the desire of homeowners to take advantage of the Administration’s program.

Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. The three part program includes aggressive measures to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac; a Home Affordable Refinance Program, which will provide new access to refinancing for up to 4 to 5 million homeowners; and a Home Affordable Modification Program, which will reduce monthly payments on existing first lien mortgages for up to 3 to 4 million at-risk homeowners. Two weeks later, the Administration published detailed guidelines for the Home Affordable Modification Program and authorized servicers to begin modifications under the plan immediately. Fourteen servicers, including the five largest, have now signed contracts and begun modifications under the program. Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac, Home Affordable Modification participants now account for more than 75% of all loans in the country.

For more information, visit www.financialstability.gov.

Thinking about moving to Texas? See why everyone else is moving here!

This video shows the growth and opportunity here in Texas. The stats are real and Texas is not only the perfect place to live but the perfect place to have a job. With times as they are we as real estate agents are seeing more and more out of state home buyers who are relocating to either find new jobs or their actual headquarters moved to Texas. That says a lot. We hope you enjoy this video. Click here if you have any questions.