The housing recession is not over and other myth-defying truths from national real estate experts

A full recovery of the nation’s real estate markets will not occur until 2013, but Texas will fare better than most places.

That was the broad consensus from economists, analysts and experts at the National Association of Real Estate Editors 44th Annual Real Estate Journalism Conference in Austin.

“We think the market will be flat for three to five years,” said Stan Humphries, chief economist for the Zillow realty firm. “We’re not going to hit bottom and see a V-shaped recovery.”

Houston may be starting to pull out of the doldrums, but the rest of the nation is still struggling with foreclosures and declines. Humphries told the NAREE real estate journalists that consumers are hoping for a quick rebound, but that belief is a myth that will leave many disappointed.

 “The bottom will be long and flat,” Humphries said. “Most consumers tend to be overly optimistic about what the future holds.”

Humphries listed his four “myths” about the housing market:

1. The housing recession is over.

It’s not. Home prices are continuing to fall in some places and the market won’t hit bottom until the third quarter of 2010.

2. The first-time home buyer tax credits saved the market.

Wrong, Humphries said. Research shows that only one in five of the buyers that took the tax credit bought a home they would not have purchased anyway.

3. The foreclosure problem is going away.

Actually, foreclosures are still increasing and they will plague the market for awhile, Humphries said.

4. Home appreciation will begin again after the market hits bottom.

Not hardly. Home values will not rise significantly for quite some time, Humphries said.

Douglas Duncan, chief economist for Fannie Mae, added more sobering thoughts. The federal tax credits for home buying, which expired this spring, may have robbed future sales, he said. In other words, people who normally would have bought homes this summer bought homes earlier in the year to get the tax credits and therefore there will be fewer home sales as 2010 wears on. Sales of the future have been cannibalized.

The real estate markets are dependent on healthy job creation and the numbers have been disappointing, said economist Bob Bach of Grubb & Ellis. This is particularly true in the market for commercial office space. Bach said the nation’s office vacancy rate is bad and getting worse and it will soon reach its highest vacancy in 20 years.

The good news for Texas is that the Lone Star State is one of the best places in the nation for job growth, the commercial and residential markets did not get woefully overbuilt and Texas did not have the wild appreciation and speculative boom that led to big crashes in other states.

Journalism Ventures

The NAREE conference attracted journalists from around the nation. Many of the attendees were editors, reporters and columnists from major newspapers such as the Los Angeles Times, Washington Post and Wall Street Journal and smaller regional publications, such as the Sarasota Herald-Tribune in Florida.

So with all of the newspaper people there was intense focus on the sessions that dealt with the future of media.

Clifford Pugh, editor-in-chief of CultureMap, was a speaker on a panel entitled: “New Journalism Lifeforms: Life After Newspapers.” CultureMap, which launched in November, is attracting readers with its blend of covering arts and entertainment, fashion and style, food, travel, the social scene and real estate, Pugh said. CultureMap.com’s coverage of city government news and politics has been very popular also.

“We are certainly in a lot of different areas for readership,” Pugh said. “We all are at the beginning of a very exciting revolution here.”

Evan Smith, editor-in-chief of TexasTribune.org, which started in 2009, said his Web site is a nonprofit publication focused primarily on government and politics. In recent years, some important topics have not received sufficient in-depth coverage because of newspaper staff cuts and the shrinkage of pages devoted to news, he said. TexasTribune also provides detailed information about elected officials and the salaries of state employees.

“We are trying to provide not just news but knowledge, not just journalism but information,” Evan Smith said.

Glenn Smith, editor of the recently launched Austin-based DogCanyon.org, said his publication is aimed at filling some of the gaps in the watchdog role that traditional journalists took on in the past. Smith said another aim of DogCanyon is nurturing young writers. Years ago, Glenn Smith was a political reporter for the Houston Post and the Houston Chronicle.

The moderator of the media panel was Ben Johnson, founder of the new OKCREview.com, a site that focused on real estate news in Oklahoma. The session made it clear that new journalism websites are flourishing and traditional media models are facing some stiff challenges.

Austin Completes Tallest Condo Tower in Texas

The newest high-rise in Texas was the subject of a field trip by the NAREE real estate journalists. NAREE toured The Austonian, a 56-story residential tower in the heart of downtown Austin at Second Street and Congress Avenue.

The first homeowners begin moving into the Austonian this month. It’s a slender tower, but much taller than anything else in town. In fact, it’s the tallest condo tower west of the Mississippi River. Houston architect Scott Ziegler of Ziegler Cooper Architects designed the project.

In a speech from the club level at the top of the Austonian, Ziegler told the NAREE journalists that the building includes the latest in energy efficiency measures. But being green goes beyond reasonable electric bills for the Austonian and other high-rise residences, Ziegler said. High-rise residential towers stacked on one acre or less in the urban core are more efficient use of our land and water resources than a suburban development of single-family homes, he said.

A single-family development of 200 homes might chew up 100 acres in the suburbs, require a good deal of road and infrastructure construction, and mean that a lot of land will be paved with concrete and put more pressure on storm drainage systems. A more efficient use of land would be for residents to be stacked in a single high-rise building, perhaps in a downtown location where residents can walk to work.

Downtown Austin is adding a significant amount of new residential units. Just a few blocks from The Austonian, construction is well underway on the Four Seasons Residences near Lady Bird Lake and The W condos are rising on Second Street.

Austin’s downtown is an active real estate market that’s already generating a lot of news coverage from the journalists visiting for the NAREE conference. NAREE, a nonprofit association founded in 1929, selects interesting cities and hot real estate markets as sites for its annual conferences. Austin was an excellent conference location.

Ralph Bivins, former president of the National Association of Real Estate Editors, is editor-in-chief of realtynewsreport.com and was a chief organizer of the NAREE conference.

• Austonian, CultureMap, DogCanyon, Fannie Mae, Grubb & Ellis, National Assocition of Real Estate Editors, Real Estate Journalism Conference, Texas Tribune, Ziegler Cooper, Zillow
• Bob Bach, Clifford Pugh, Douglas Duncan, Evan Smith, Glenn Smith, Scott Ziegler, Stan Humphries

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