Which cities will and won’t recover fastest -- Austin at the top, AGAIN!

WASHINGTON - The three most important things in real estate: location, location, location.

It's true for recovery from a real estate bubble too. Overall, many economists expect the national economy to return to growth later in 2009, perhaps as soon as this summer. But that won't be the case everywhere. While some cities are poised for a quick rebound, others face a slog to recovery that could take years.

Poised for swift recovery are many Texas cities, such as Austin, San Antonio, Dallas and McAllen. These areas did not see the massive real estate bubble that formed in states like California, Nevada and Florida. The economy is diverse, with heavy growth coming from education and health care in recent years.

Many of the cities with the longest road to recovery are California cities, where home prices rocketed out of control, and entire economies were supported largely by a real estate bubble. Fresno, Modesto, Salinas, Bakersfield, Stockton and Los Angeles all saw home prices soar to unsustainable levels and then begin their inevitable plunge. The collapse of the housing markets pushed unemployment rates in these cities above 10 percent.

Even as a flood of foreclosures makes home prices look affordable again, a sign that some of the worst real estate markets may be finding their bottom, it will still take years for unemployment rates as high as 16.8 percent in Modesto or 15.5 percent in Fresno to return to healthy levels.

To find the 10 cities that look best poised for recovery (and the 10 cities likely looking at the longest climb back), we examined estimates from data provider Moody's Economy.com of the projected gross domestic product of metropolitan areas across the U.S., as well as unemployment figures from the Bureau of Labor Statistics and home prices, incomes and affordability data from the National Association of Home Builders. Because, in general, healthy cities were not victims of as severe a housing collapse, home prices were not used in ranking the cities poised for recovery.

The analysis also shows the importance of a city's economic make-up. Manufacturing has been battered by the recession, leaving cities like Detroit and Flint, Mich., or Youngstown, Ohio, with bad unemployment and a changing economy that's unlikely to replace the lost jobs. Moody's projects the economy in Flint, for example, will decrease by 16 percent from the start of recession to the end of 2010. (One commonly cited rule of thumb for depression is a decline of 10 percent.) Flint might never return to its original size.

New York City, too, once the capital of finance, is now saddled with Wall Street-induced unemployment and homes that are completely unaffordable for most of the region's residents. The NAHB's Housing Opportunity Index reports that only 14 percent of homes in the New York-White Plains-Wayne area are affordable on the area's median income — by far the least affordable region measured by NAHB.

Cities with robust technology sectors are poised for stronger recoveries than manufacturing or finance centers. Cities with high-tech capabilities like Seattle, Huntsville, Ala., or Boulder, Colo., could see quick recovery in coming months.

© 2009 Forbes.com
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How To Fight Your Property Taxes! I did it and so can you...

My husband and I own a lovely home in the city of Lakeway, Texas. Every April I pay an enormous amount of money in property taxes. This year I decided to fight my taxes because I had noticed some discrepancies in my charges and finally decided that this was the year to do it. This is my experience.

I arrived 15 minutes early and entered the Appraisal District building on the opposite side of Austin from where I live. I walked up the stairs to check in by the sign that says “check in here”. I asked the receptionist if my hearing will be on time and I she giggled as she listened to a question that I am sure she hears a hundred times a day, which implies the answer, “No.” As I am sitting in one of the plastic chairs in a hall I feel like I am waiting to go into the principal’s office-and wonder why I did not prepare more.

There are 9 rooms where the appraisal review board panels convene. Some rooms are as big as a doctor’s exam room and others are twice the size. I watch a cute couple, probably 90 years old, go into a room. I wonder again if I could have prepared more. I hear laughing from the room and think, “OK, maybe laughter will help me.”

There is a break room on the floor where you can pay for a soda or water or even a snack. Note to self: bring enough provisions for 2 hours next time, do not skip lunch to be early. More laughter, “OK, maybe I CAN do this.”

A police office walks down the hall – opens a door and asks if the panel members are OK, then I think maybe the panel has a button that they can push if they feel they are in trouble. I take out my soothing lavender stick and rub it on my wrists…calming down.

A man is walking down the hall asking people how they prepared and the man next to me said he didn’t. His house is on the market for less than the assessed value so he thinks it’s a slam dunk. I think, and I hope, too, as I am in the same situation.

Another man walks up the stairs, sees more than 20 people in the hall and says “Oh Man”-I think “I’ve been here 40 minutes already.”

The happy couple comes out; they are playing the name game as they leave. I wonder-should you dress up or down in this situation. I see men in suits and men in shorts. Women are definitely the minority. Will the panel now talk about the couple’s property or do they make that determination while all together in the room? They leave the door open, and I doubt they will talk about it, so on to the next tax payer. I hope it’s me…nope, but this woman looks well organized. Another panel calls a name from down the hall “Ok,” I think, “Maybe we are in the groove, the lunch break paid off.” Oh shoot, now I get a hot flash; go buy another pop from the lunch room.

Soon my mind is floating with thoughts such as “Should I tell them I a realtor? Would that make a difference? Would he help or hurt?” Zap! Back to reality, my name is called. As I enter I am instructed to sit in front a computer monitor. The panel is to my left and the appraiser is to my right. They introduce themselves and I am sworn in. I begin my testimony with a presentation of my listing agreement, CMA, my MLS sheet and sold data. I had made 4 copies and handed it out to all. My tax assessed value was $50,000 more than what I have it on the market for. Also it has not yet sold at that price and I discuss the reasons why it probably will not sell for this price because of upgrades that need to be made to compete in the market. The panel and appraiser flipped though the paper and looked at photos I provided. They asked if I am finished presenting and let me know I will have a chance to comment after the appraiser comments. I mentioned that I am a Realtor and it seems it did not matter.

The appraiser brought up a default grid of properties that have sold that closely match my property. The grid looks much like the appraiser’s grid of comparable properties when you buy a house. The base price is shown and then adjustments are made for differences in the properties. He states that my data is not accurate because the sold data needs to be for the time period of 1/1/08 to 2/2/09 as this is the time that my home was assessed in. “It have been nice to have known that in advance,” I think… “I don’t think that was in the packet of information I received.” Then up pops homes that I have not researched so I am fumbling around now. I ask where the grid takes into account the extras, like pool, golf course, etc. I see that line and move across the grid to see what types of adjustments were made. The data does show about a $40,000 price decrease, close to what I have it on the market for, so I am feeling a bit better.

Next the appraiser brought up an equity grid. This is not based on sales, but shows your property’s taxes compared to the properties’ taxes near you. Then I noticed on the form that the line that shows the price for mine and my neighbors’ lots had a discrepancy. While our lot size was similar the price for my lot was much higher. The panel soon discovers that our home has been assessed based on a lake view scale which we do not have. I got $25,000 taken off the value there. Yippee!

I also note that the square footage has not been adjusted and last year we sent an appraisal report that showed that we had less sq footage than what the tax man had assessed. The home had been added onto and the square footage that the permits said was simply not accurate. It sounded from the conversation amongst the panel that normally any amount under 10% would not change in the tax records, but upon further review of the correspondence among the district and I it was stated it would be changed. So my square footage was adjusted and in total my assessed value was reduced $106,024! From my calculations I will be saving $200 a month! I am pretty happy at this point. I said my good byes and will be looking for my letter in the mail stating what transpired in our meeting.

In conclusion, here is my advice if you are ever in this situation: bring provisions and a book and plan to stay for at least 2 hours. Your goal is to provide evidence of market value so consider researching and bringing all of the items on the list that they suggest in the packet they will send ahead of time. The biggest thing to remember is to bring comparative research for the time period of 1/1/08 to 2/2/09 (if you are going in this year) and to check the data for your property to see if there are any quick fixes like incorrect square footage or land adjustments that are incorrect.


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