My Lubbock TX Real Estate Blog

From the Lubbock Avalanche Journal (February 17, 2008)

www.LubbockOnline.com

Chris Van Wagenen

"Now here's the good news: You live in Lubbock. It may not be the sexiest place or win any beauty pageants, but boy does it have it all.

Our unemployment level is always the second- or thirdlowest in the state.

Our job creation per capita (4,500) was among the best in the state in 2007.

Our existing home sales for the year were up 3.3 percent for the year.

Our battered apartment market? Occupancy levels are already approaching 90 percent in an industry many predicted would take four years to recover.

Holiday retail sales? They were up a whopping 5.86 percent in December and a solid 3 percent for the season.

Cotton? This could be a tough year, but boy what a 2007 farmers had.

Home inventory? By the end of 2007, local real estate agents had managed to whittle down an unsettling number back to 2006 levels.

Commercial construction? It's on a tear. From Overton Park, where work is now under way on a $66 million high-rise hotel and a $35 million apartment complex, to Canyon West and Raider Ranch - two huge development now under way off Milwaukee Avenue. Not much to complain about there.

Cattle, grain and oil prices are high, but as they say, what's good for the region is good for Lubbock, because a lot of our neighbors shop here.

Then there's the Lubbock Business Park, where work is now under way on a massive distribution center that will be operated by O'Reilly Automotive Inc. and will employ nearly 400 workers.

On its heels is a new Department of Public Safety regional headquarters, and Standard Bag Manufacturing is getting ever closer to breaking ground on a new plant that will employ 100.

Yes, you can spend the day listening to the gathering gloom or wake up and count your lucky stars you're living here.

As Lubbock prepares to celebrate its 100th birthday, here's something you can count on - this city is going places That's more than you can say about a lot of other towns."

Find out what else is happening in local business on Chris VanWagenen's blog Open for Business at www.lubbockonline.com.

West Texas Home Builder's

2008 Home & Garden Show

Fact Sheet

• The 2008 West Texas Home Builders Home and Garden Show will be held February 29 through March 2 at the Lubbock Memorial Civic Center.
• Admission for adults is $5 and $2 for children 2 to 12 years of age (under 2 there is no charge).
• Show hours are Friday 4PM-8 PM, Saturday 9AM-6 PM and Sunday 12PM-6PM
• Sponsors include the City of Lubbock and the Lubbock Avalanche-Journal. The benefiting charity is Children’s Miracle Network.
• The theme for the 2008 Home & Garden Show is “Living Green and Clean.”
• Local businesses were encouraged to showcase environmentally friendly products and services for our homes.
• The show provides a “one-stop shopping” venue for everything consumers need in order to become aware of the latest trends and ideas on gardening and home improvement.
• The 3-day event is a source of entertainment for people of all ages from the Lubbock Community and surrounding areas.
• Seminars by the City of Lubbock and Lowe’s Home Improvement will be given throughout the weekend
• Lowes Home Improvement will be conducting several hands-on Kid’s Clinics over the weekend.
• All attendees 18 and over are eligible to register for a chance to win an amazing prize including a 9-piece bedroom suite provided by Ashley Furniture and a vacation getaway for two including round trip airfare from Lubbock to an all-inclusive resort in Mexico donated by National Travel Systems.
• For more information please contact Gena Godinez, Executive Officer of the West Texas Home Builders Association, at (806) 798-1616 or visit the Web site at www.wthba.com.

RISMEDIA, Feb. 23, 2008-(MCT)-With today’s turmoil in the housing market, hitting up mom and dad for a down payment may be a young buyer’s best route to homeownership. It’s hard for the younger generation to become first-time home buyers today as they try to juggle numerous financial responsibilities, experts say.”Stakes are higher,” says Carrie Schwab Pomerantz, chief strategist of consumer education with Charles Schwab & Co. “Today, young people are solely responsible for their retirement. A lot of young people are coming out of college with high levels of debt.”

Here are three ways parents can help their children buy homes:

1. Cash is Clean and Easy: Experts say simply giving adult children cash for a down payment is one of the smoothest ways to help them buy a home. For parents with the means, gifting can avoid intergenerational squabbles and misunderstandings.

“Helping with cash is pretty clean, pretty easy,” says Jack Guttentag, an emeritus finance professor at the Wharton School of the University of Pennsylvania.

Guttentag helped his adult son buy a house in Venice Beach, Calif., about 15 years ago. Prices were high, so Guttentag ponied up for the down payment, while his son had enough income to carry the mortgage.

“It turned out well,” Guttentag says.

To avoid triggering a taxable event, Guttentag spaced out his gift over two years. An individual can give $12,000 a year to a recipient without having to pay a tax on the gift. Therefore, a couple could give an adult child and the child’s spouse a total of $48,000 in one year.

Yet gifting can become complicated when lender institutions have rules that limit the size of a gift. From a lender’s point of view, a debt obligation-even a gift from parent to child-could weaken the security of the mortgage, Guttentag says.

“When lenders assess someone’s qualification for carrying a mortgage, they take into account their other debt payments,” he says.

Some lenders can be concerned that reported gifts aren’t really gifts at all, and may require borrowers and parents to sign an affidavit that no repayment is expected, Guttentag says. To avoid too much scrutiny by a lender, Guttentag suggests giving your adult child a down payment well in advance of applying for a mortgage.

2. Cosign a Loan or Invest in a House: Some parents may have limited resources as home equity has come under pressure. Others may need their investments for retirement.

Yet they can still help their adult children by cosigning a loan. Cosigning can help make a lender feel more comfortable with extending a mortgage to an adult child, says Adele Brady Bolson, a certified public accountant in Washington state.

However, if payments aren’t made, the mortgage company will go back to the parents, she says. And the parents’ credit can be affected.

Investing in a home can also work for parents that want to be paid back.

Families must be careful planners and good record keepers over time to avoid confusion and intergenerational quarrels. All parties should understand how their respective shares in the equity of the house would be divided and change over time. As children make the mortgage payments, their share of the equity in the house will increase.

“The investment has the potential for conflict because of changes that occur over time,” Guttentag says. “If both parties agree on what the rules are and keep accurate records, there isn’t going to be any conflict.”

And parents may face hard choices if they invest in a child’s home through a loan or by co-signing a mortgage.

“I’ve seen all sorts of really unfortunate things happen,” Bolson says. “Don’t make promises that you cannot keep. Whatever promises you’ve made should be put down in writing.”

3. The Gift of Knowledge: Schwab Pomerantz says the “gift of knowledge” is a good option for parents without the means to contribute cash or invest in a child’s home.

“Very few families have frequent conversations about money and investing,” she says. “So you’re already starting at a deficit in terms of families who talk about finances.”

The lack of conversation is not a socioeconomic issue-families across the wealth spectrum are missing out on these important talks, Schwab Pomerantz says. She suggests “helping kids weed through the various mortgage alternatives to avoid these scandalous offerings that are inappropriate for them.”

Adult children should understand the importance of borrowing within the limit of what they can actually afford, rather than becoming overly indebted to a home.

“It’s never worth it to be house poor. … It limits you from doing so many other things,” Schwab Pomerantz says.

Current turmoil in the mortgage market magnifies the importance of ensuring that all parties understand the terms of a mortgage before buying a home, says Bolson.

“If I’m going to be giving money to my child I need to make sure that my husband is OK with it,” she says. “All parties need to agree.”

Bolson also recommends that a first home for adult children should cost no more that the average for the community, especially when parents are helping financially.

“You want to be cautious about whether this is just the beginning of kids wanting parents to buy what they themselves can’t afford,” she says. She added that in most circumstances parents “should only help with the first home. When (adult children) are ready for the dream home they can trade up to it.”

© 2008, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

According to the February 10, 2007 edition of the Lubbock Avalanche Journal, the occupancy rates for Lubbock apartment complexes continues to rise.  The overall occupancy rate has risen an amazing 8% since it's historic low in June 2006.

This news is certainly good for apartment owners & managers, but not so good for apartment dwellers.  If occupancy rates continue to rise, we'll probably continue to see a reduction in move-in specials as well as an increase in rent over the next 12-24 months.

Rising rent for apartment dwelling could certainly make buying a home for college students a better financial option during their college tenure.

For the complete Lubbock AJ article, Click Here.