Wednesday, February 20, 2008
Don't Buy a Home in the Burbs
The New York Times does a pretty good job of explaining why using Lavon, TX as an example. Unfortunately Lavon is not alone. Rowlett, Murphy, Wylie, Lucas, parts of Frisco, McKinney, Allen and Little Elm are all feeling the pinch from a combination of rising foreclosures, rising resale inventory, buyer paralysis and building cutbacks. Places like Anna and Van Alstyne were only small Dairy Queen towns where I would get speeding tickets driving home from Austin College (in Sherman) during the Holidays. But now you can buy new homes there for less than $100,000.
What makes North Texas real estate stable is also our suburbs worst nightmare. New development never stops because we are not geographically bound by water or mountains like California and Florida. We will simply keep building until we hit the Red River to the North and Louisiana to the East which keeps land and home prices down. This puts home owners trying to sell their home in a tough situation. Even if they have lived in the home for 8 or 9 years there will still be new developments going up right around the corner. And why would someone buy your 9 year old home when they can buy new? And don't kid yourself if you think the newer homes are going to be substantially more expensive than your preowned home because they won't be. And therein lies the curse of buying in the burbs but is also the saving grace of North Texas real estate.