Mixed Signals: Amid depressed housing market, glimmers of growth gain ground

McALLEN - The plumbing and roof are new. The price tag is $10,000 lower than what she originally asked for, but after seven months on the market, Tina Osborne can't sell her home.

Meanwhile, four miles to Mission from her one-story abode at 608 N. 36th St., 85 luxury condominiums at a still-under-construction four-story complex have already sold out.

The Rio Grande Valley real estate market is strengthening, sales are up and so is the median price of existing homes, but with banks still reluctant to lend and waves of foreclosures entering the market monthly, the recession-era blues continue.

When her son Aaron graduates from high school in a few weeks, Osborne will move to Akron, Ohio, where Lockheed Martin Corporation transferred her husband to in October from his former job at the company's Starr County facility. She can't even find renters to take over the home that she spent about $20,000 to renovate when she leaves.

"We chose very carefully when we moved in," she said. "We didn't want a new one. We wanted a fixer-upper, but we wanted to be able to sell it quickly, because (my husband) gets transferred quickly. And it didn't happen."

If Osborne is lucky, she'll find an investor to scoop up the property. Across Hidalgo County, real estate agents said investors have begun purchasing homes that on average are worth 24 percent less this March than they were during the peak year in March 2007, according to data from the Real Estate Center at Texas A&M University.

Investors, mostly from Mexico, bought the condos at the Vantage Luxury Hotel Condos at $189,000 apiece mere months after Infinity Global Development Group began development, said Claudia Delgado, property manager. The second phase of development, another building with 135 units, has already begun.

"The owners are probably going to rent it or they just wanted to have something here in the Valley," Delgado said. Some properties will be rented on a nightly basis, functioning essentially like a hotel.

The influx of investor money caused a 3.8 percent rise in the median sales prices of homes, about $3,500, during the first quarter of 2009. Overall sales, however, are 19 percent lower than last year's, according to the center.

"I don't know if I would call it a recovery, but maybe we've bottomed or we're bouncing around the bottom," said Jim Gaines, a researcher with the real estate center. "Hopefully by now we're beginning to stop the free fall."

Foreclosures, however, continue to mount, making an outright recovery seem far away. Prices are depressed and the supply of homes on the market remains high. At the current rate of sales, it would take 12.8 months to empty the excess. Still, Realtors are encouraged because that number is down from the more than 15 months excess in May 2008.

"We have such a larger amount of listings compared to the amount of buyers," said Roxanne Rydell, owner of McAllen-based Celebrity Realtors. "We haven't reached the bottom of the trough. We've got to go through that inventory."

Contemplating that bottom is a luxury afforded to Valley Realtors and few other places. The National Association of Realtors reported earlier this week that median sales prices of existing homes declined in 134 out of 152 metropolitan areas during the first quarter. Prices rose in only 18 cities included in the study.

But the resilience of Valley real estate makes Osborne's difficulty selling her home perplexing.

"Really and truly I have no idea," she said. "I can't believe it hasn't sold."

Sean Gaffney covers business, the economy and general assignments for The Monitor. He can be reached at (956) 683-4434.