Texas Real Estate Daily

Freddie Mac today announced it is ordering servicers to suspend all foreclosure sales on properties with Freddie Mac-owned mortgages in the federally declared disaster areas caused by Hurricane Ike in Texas and Louisiana. Freddie Mac is one of the nation’s largest investors in residential mortgages.

“Freddie Mac is taking this step because the extensive damage Hurricane Ike caused has made it difficult for our servicers to get the information they need to make case-by-case decisions about forbearance or other workout options,” said Ingrid Beckles, vice president of servicing and asset management at Freddie Mac.

The suspension will extend from October 8 to December 31, 2008 and include mortgages that were in default prior to Hurricane Ike.

Servicers will be required after the suspension ends to consider individual circumstances in determining whether additional foreclosure relief should be extended or whether to proceed with foreclosure.

Today’s announcement only applies to properties with Freddie Mac-owned mortgages in Texas or Louisiana counties, municipalities or parishes that were declared federal disaster areas and where federal aid in the form of individual assistance is available.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac raises capital on Wall Street and throughout the world’s capital markets to finance mortgages for families across America. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Credits: Au.Sys.Con

Homeowners were able to hold steady on the sales price they sought their property in North Texas in September, which put the area ahead of most in the country, according to research released Wednesday from Real IQ and Altos Research.

Asking prices for homes in Dallas-Fort Worth had no change in September from the previous month and increased 0.3 percent from three months ago, according to the figures.

The research found that listing prices in 21 of 26 metro areas surveyed declined from the previous month.

The inventory of homes in North Texas has fallen 3.8 percent in the past month and 9.2 percent in the past three months.

The homes are staying on the market longer. The average number of days a North Texas home stayed on the market in September was 96, an increase of 9.9 percent over the past three months. The figures show that 19 of the 26 metro areas average 100 days or more.

A composite index of 10 metro areas studied showed that asking prices dropped 1.4 percent in a month and 2.9 percent since July.

Las Vegas had the largest drop in asking prices, with a 3.5 percent decline in September. In the past year, asking prices there have fallen more than 30 percent.

Credits: Star Telegram

As it struggles through the housing crisis, home builder D.R. Horton Inc. is unloading land across California at big discounts.

Horton, the nation’s largest home builder by unit volume, is jettisoning thousands of house lots in far-flung areas, partly to reap the tax benefits from selling property at a loss.

D.R. Horton recently sold this undeveloped parcel in Chino Hills, Calif., a hard-hit housing market east of Los Angeles.

As builders try to survive one of the worst housing downturns in U.S. history, land buyers and brokers expect more such tax-motivated fire sales of undeveloped land this year. That could set a new low for land prices in California and other troubled housing markets. The sales also could indicate a shift for big builders: from developing huge swaths of land in the exurbs, to building smaller developments closer to metropolitan areas.

Horton two weeks ago sold about 2,000 house lots in Desert Hot Springs, a blue-collar community in the far reaches of Southern California’s Inland Empire, for $7.8 million, according to county records. William Shopoff, a land investor who bid unsuccessfully for the property, estimates Horton paid about $110 million for the land before spending to prepare the property for development by grading and installing infrastructure such as sewers.

Horton also recently sold a four-acre parcel in Escondido, near San Diego, for $4.4 million, about 25% of what it paid for the property in 2005, according to the county assessor.

Horton, based in Fort Worth, Texas, declined to comment for this article.

Buyers of some of Horton’s land in Southern California include a venture between Foremost Communities Inc. and Starwood Capital Group LLC, which together bought 250 house lots from the builder, according to a person familiar with the matter. The investors plan to hold the lots until the market recovers, this person said. A spokesperson for the venture didn’t return a call.

As new-home sales sank to a 17-year low, builders can no longer count on doubling their investments by buying undeveloped parcels, preparing the property and selling the homes on it. Horton, which built nearly 53,000 homes at the peak of the housing boom in 2006, has posted quarterly losses since the April-June quarter of last year.

The fire sales are a silver lining in those clouds. Tax law allows companies to apply losses from land and other asset sales to past profits and reap a tax refund. More sales are expected soon because the companies can apply losses only to profits earned as far back as two years and 2006 was the last profitable full year for most builders.

Horton told investors in June that it expects to receive a tax refund of $519 million over the next two years. At the end of last year, Lennar Corp. pocketed a $200 million tax refund after taking a 60% discount on its sale of 11,100 house lots to a joint venture it formed with Morgan Stanley.

“There’s going to be a rash of builders shedding assets,” said Tom Reimers, executive vice president of O’Donnell/Atkins, a real-estate advisory firm in Irvine, Calif. “It’s all tax-motivated.”

By dumping land, builders are chasing cash that allows them to keep current with lenders and pay overhead expenses.

Horton had $851.2 million in cash on hand at the end of its fiscal third quarter, June 30, up from $270 million at the end of last year, according to research firm Zelman & Associates. Horton owes about $210 million in annual interest payments, according to Zelman.

So far, most publicly traded home builders have managed to muddle through the housing mess. One reason is the builders’ financing arrangements. Many such large companies have long-term corporate debt that doesn’t come due for another year or two, giving them breathing room amid the credit crunch. The builders typically don’t need lender approval to keep building as long as they honor certain debt agreements at a corporate level.

Most closely held builders, on the other hand, use project-specific financing, in which they need a bank’s approval to start each new development. Lenders have completely cut off credit to most small builders, forcing many to file for bankruptcy protection. Analysts expect more than half of the nation’s small and midsize builders will fold during the housing downturn, which has already forced such private companies as Levitt & Sons of Fort Lauderdale, Fla., and Kimball Hill Homes of Rolling Meadows, Ill., to file for bankruptcy.

Still, big builders like Horton aren’t out of the woods. Horton has $585 million in debt that needs to be paid off in 2009, $362 million due in 2010 and $450 million in 2011, according to Zelman.

Horton’s recent land sales also could reflect an industry shift. Over the next few years, builders will likely build smaller developments closer to large metro areas, where house prices are expected to recover faster than in the far-flung regions. That contrasts with 2005, when builders bought massive parcels in California’s exurbs and earned big profits as land values skyrocketed during the housing boom.

Horton, for example, is interested in buying 50- to 150-lot parcels that are already developed and closer to certain cities in the San Francisco Bay area, says a person familiar with the company’s thinking.

“The builders are going to build in the better locations for the next few years, and live to see another day,” said Steve Reilly, a land broker with Prudential Realty in Danville, Calif. “The downside is they are never going to see the kind of margins when lots were doubling and tripling in value in the time it took to build a house.”

Credits: WSJ

There is a move afoot by my state senator, Mike Jackson and others to push local taxing authorities to reappraise properties that were damaged during Hurricane Ike.

“Existing law authorizes local officials in a disaster area to proceed with a reappraisal process so folks who lose their homes or suffer significant damage pay a fair property tax for the portion of the year after their homes were damaged or destroyed,” added Senator Jackson. “It is simple and fair, and is not too much to ask for our homeowners.”

As usual, Mike is straight and to the point. This is simple and fair. Problem is, it is not going to happen because the very nature of relying heavily upon property taxes is complex, unfair and local taxing entities were also damaged and have increased costs due to the storm. Although it would be simple and fair, it is unrealistic to expect it.

Which is why Sen. Dan Patrick’s views on this issue continue to stress the need to change the corrupt system we currently use. Here is his latest press release on the issue.

Current Reappraisal Crisis Illustrates Important Lesson

Senator Patrick renews his promise to move Texas away from property tax reliance.

Yesterday was the first day that homeowners began receiving their property tax bills and those affected by the hurricane are not exempt.

Senator Dan Patrick applauds the efforts of Senator Jackson and Representative Zerwas, as well as Senate District 17 candidate Austen Furse, to push for a reappraisal of property affected by Hurricane Ike.

“I join these leaders in pushing for a reappraisal and I hope that it can be accomplished,” said Senate Patrick, “but this situation is only a symptom of our bigger problem: Texas’ over dependence on property taxes.”

Current law requires each taxing entity to request a reappraisal before their tax levy can be reduced. The likelihood of the 500 taxing entities in Harris County making that request is low because it will basically lower their revenue. Even if the reappraisal does occur, the tax levy will only be reduced for the time period after the hurricane to the end of the year.

“Our continued reliance on property taxes and the legislature’s failure to protect voters from unfair property appraisal is going to result in tax bills arriving in mailboxes at homes that no longer exist,” lamented Patrick. This injustice will be most keenly felt in Galveston which has yet to seek or administer a reappraisal. However, the damage is not just limited to the coastal areas. Homes from Clear Lake to Tomball have lost significant value due to hurricane damage.

Texas is ranked 27 by the nonpartisan Tax Foundation, which compares the property tax burden levied on the citizens of each state. “Texas is a low tax state except for property taxes, which is the worst of all taxes to depend upon,” said Patrick. “Discouraging home ownership through a bewildering labyrinth of tax provisions is rapidly leading Texans to revolt.”

Senator Patrick is currently working with other state legislators to develop a strategy that will lower property taxes by reforming sales taxes. Sales tax is the most transparent, broad-based and fair tax system available. Senator Patrick’s goal is to develop a property/sales tax swap that will guarantee long term property tax relief without negatively impacting Texans’ wallet.

Once again, Sen. Patrick is correct. We MUST change this corrupt system. It will take time and energy but we MUST keep pushing for this change.

In the meantime, you can support Sen. Jackson’s effort by clicking here: Ike Tax Relief. For the last two weeks, I’ve had my hands full trying to restore my home to livable conditions. Sen. Jackson’s home, just down the street, was devastated, with flood waters reaching 5-6 feet inside.

Does anyone seriously think our homes are worth the already overinflated HCAD appraisals? If so, give me a call, I’ll sell today for that appraised amount. As is.

Credits: Lone Star Times

The application was filed Sept. 25 in Jefferson County District Court.

The original loan was for $53,680. The amount owing is $52,400.83.

The lender is represented by the Balcom Law Firm.

Case No. A182-442

# Nationstar Mortgage LLC has filed an application to foreclose on the property of Jeanette Simmons, located at 7025 Limerick Drive, Beaumont, Texas 77706.

The application was filed Sept. 29 in Jefferson County District Court.

The amount owing on the loan is $179,397.63.

The lender is represented by the Baxter & Schwartz law firm.

Case No. B182-461

# Deutsche Bank National Trust Co. has filed an application to foreclose on the property of Linda Rout, located at 5555 Pine Burr Blvd., Beaumont, Texas 77708.

The application was filed Sept. 29 in Jefferson County District Court.

The lender is represented by attorney Brad Kitchens

Case No. A182-465

# Nationstar Mortgage LLC has filed an application to foreclose on the property of Jeanette Simmons, located at 7025 Limerick Drive, Beaumont, Texas 77706.

The application was filed Sept. 29 in Jefferson County District Court.

The amount owing on the loan is $179,397.63.

The lender is represented by the Baxter & Schwartz law firm.

Case No. B182-461

# Wells Fargo Bank has filed an application to foreclose on the property of Stacy and Donald Martin, located at 1519 Ithaca Street, Nederland, Texas 77627.

The application was filed Sept. 30 in Jefferson County District Court.

The original loan was for $41,250. The amount owing is $40,319.06.

The lender is represented by the Mann & Stevens law firm.

Credits: SE Texas Record

Uncertainty in the market has spread across all sectors and all states. Texas leaders have been boasting about the state’s economic strength even during these troubled times, but financial advisors say Texas won’t be able to avoid a hit.

With all the talk about “Main Street,” Congress Avenue — known as the Main Street of Texas — seemed strangely quiet as the American economy took a deep dive.

“Everybody’s sitting there — like a deer in the headlights. Even financial advisors, as you probably talked to today, are panicked to some degree. If you look at history, this is what the bottom looks like,” said Carlos Lowenberg, Austin-based financial advisor.

He says without a government bailout plan, the already weak economy will get worse.

“Real estate businesses start to fold up first. And that’s what you’ll see here in Austin if this really spreads. Real estate folds up first, other business like automobile dealerships they start to fold up because they are dependent on credit for their businesses,” he said.

The Texas economy remained strong in recent months, bringing in new development and jobs. Even as other states face huge deficits, Texas sits on a nearly $12 billion surplus. But experts say Texas will eventually feel the economic slump — with or without a bailout.

“Texas is holding up really well, but we are going to start seeing some effects,” Lowenberg said.

Lowenberg says the Main Streets of Texas will start seeing the slowdown in six to 12 months.

Most of Texas’ House members in Washington voted against the current bailout plan. But congressional leaders hope to bring it back for a vote later this week.

Credits: KVUE

The decision by the federal government to take over Freddie Mac and Fannie Mae has created some buzz in the local housing industry on how it could help stabilize the mortgage industry and ultimately stimulate sales.

Since the announcement, interest rates for 30-year fixed-rate mortgages have dropped, and the government’s actions are expected to make it easier for buyers to obtain a mortgage in the coming months.

“The lowering of interest rates is always a good thing to attract buyers,” says Tom McCormick, president of Astoria Homes. “I think people are awfully nervous about the economy and sensitive to the opportunities that are out there. It’s one of those deals that if you were considering buying a home, it will be hard not to look because I think this will be the best time people will ever see.”

The local housing market has been picking up, and this will make it even better, McCormick says.

New-home closings have remained weak with only one month so far this year in which there were more than 1,000 sales. The existing-home market has picked up considerably this year: In August sales were 93 percent greater than they were in August 2007, according to the Greater Las Vegas Association of Realtors.

“If you look at the past six months, I think we are moving in the right direction,” McCormick says. “And I see nothing but good going forward. I think you are going to have much better interest rates and better affordability. The federal government can borrow at the cheapest rates of anybody.”

Before the takeover, Fannie Mae and Freddie Mac had been government-sponsored enterprises that owned or guaranteed about half of all U.S. mortgages.

Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, says it’s unfortunate that it had reached the point where the government had to step in, but her industry sees some positives coming out of it.

“It is going to increase the liquidity in mortgage markets and going to restore confidence in the financial markets,” Caruso says. “I believe it is a step in the right direction for the continued recovery in the financial markets.”

That is important to homebuilders who are trying to maintain their financial arrangements with lenders and enable them to move forward with projects, Caruso says. Lending standards have tightened, which was necessary to restore confidence, but some of those standards will likely be loosened, she says.

“I believe it is going to reduce inventory (of existing homes) by making money available to legitimate buyers,” Caruso says.

She says she doesn’t expect new-home construction to pick up significantly in the next six months, not until the supply of resale homes is whittled further. According to the Realtors group, 22,710 existing homes were for sale at the end of August.

Much of the home construction is taking place because buyers want new homes instead of purchasing existing homes, Caruso says. But there is plenty of pent-up demand from aging Baby Boomers who want to upgrade, but can’t do so until they can sell their homes.

“That is one of the stumbling blocks we face,” Caruso says. “They are in our sales office, and hopefully everything that is going on will help that.”

Steve Bottfeld, executive vice president of Marketing Solutions, agreed the short-term benefits for the housing market could be positive with lower interest rates and increased confidence among lenders, but he has questions about the government’s ability to run the entities over the long run.

Bottfeld also says he is concerned that speculators will be bailed out, and that the nation’s debt will continue to increase.

“The problem we have with nationalizing Fannie Mae and Freddie Mac is the same problem we have with Iraq,” Bottfeld says. “We have no exit strategy.”

The government had no choice but to act because since both enterprises handle about 50 percent of the mortgages in the country, their failure would have been devastating for the economy, Bottfeld says.

“If either of them failed, we would have a depression in 20 minutes,” Bottfeld says. “But all it is putting a Band Aid on cancer. They have to look at the way loans are done. They have not gone after the root cause.”

That means going after the appraisal industry for falsifying appraisals and Wall Street investment bankers who sold the loans to investors knowing what would happen, Bottfeld says.

The next question is what effect the takeover will have on the ongoing foreclosure crisis. Fannie Mae and Freddie Mac have increased payments to loan servers as a way to encourage them to help more borrowers avoid foreclosure.

Bottfeld says he expects short sales will take less time to process and foreclosures should be reduced because homeowners can get refinancing. Banks want to get rid of potential foreclosures because they have a lot of nonperforming assets on their books, Bottfeld says.

Resale home inventory

For the second week in a row, the number of resale homes posted on the Multiple Listing Service remained below 22,000, according to Applied Analysis. Sixty-five percent of the homes on the market are either vacant or occupied by a renter. Owners are living in only 35 percent of the homes.

The number of listings is down 24 percent from a year ago. Much of the drop is attributed to fewer listings of owners who live in their units. There were 7,320 homes under contract with 3,050 pending to close.

Crystal Ball housing seminar

One question haunting members of the Las Vegas real estate community on a daily basis is how to cope with hard times. That’s the theme of the Oct. 23 Crystal Ball seminar looking at the valley’s housing market.

Guest speakers will include Frederick Chin, president of Atalon Group, the takeover group that is managing financially troubled Lake Las Vegas. Other speakers are Mary Connelly, president of William Lyon Homes, Astoria’s McCormick and Mark Stark, president of Prudential Americana Realtors. Larry Murphy will focus on third-quarter housing statistics.

“Our goal was to look at problems facing all of us from the perspective of a private builder, public builder, a major developer and major Realtor,” say Bottfeld, who will moderate the event. “How these people deal with their problems teaches us how to better manage our own.”

Credits: In Business Las Vegas

Shrimpers and oystermen are dredging their boats from the muck. Tourist areas on the coast that should be bustling at the start of convention season are flattened. Lingering power outages are keeping offices empty and restaurants closed from Texas through the Midwest.

It will take months or more to tally Hurricane Ike’s financial toll, but one thing is clear: Almost nobody in its path escaped unscathed.

“Every industry has been impacted by this storm,” said Jeff Sjostrom, president of the Galveston Economic Development Partnership.

The storm carried hurricane-force winds as far north as Kentucky — which suffered its widest power outage in history — and driving rain clear into New England.

Risk Management Assessment Inc., which quantifies risks for insurance companies, estimated Ike’s impact would land in the low end of the $6 billion to $16 billion in insured losses that the firm initially predicted.

In Houston, where the booming energy industry has kept the nation’s fourth-largest city economically stable in a nationwide slump, the outlook was downright positive. The city’s port survived with minimal damage, and the Gulf of Mexico’s oil and gas production barely took a dent.

“I’d rather be in Houston right now than Wall Street,” said Leo Linbeck III, a Rice University professor.

Ike crashed ashore last weekend near the mouth of Galveston Bay, which produces about 15 million pounds of seafood each year. Shrimpers and oystermen there will practically have to start over. Even those who can salvage their trawlers will have to cope with the carpet of debris Ike dumped on the floor of the Gulf of Mexico.

Seafood wholesalers were hit hard, too. Ike destroyed the docks owned by Prestige Oysters Inc., one of the biggest harvesters in the Gulf, and slid its shrimp houses off their slabs. Owner Lisa Halili is wondering what to do with an arriving flock of immigrant fishermen who hold work visas but no longer have jobs.

More than half the oysters sold in the eastern U.S. come from Louisiana and Texas. But Ike killed oyster reefs with waves of shocking saltwater, and officials say Ike’s march through Galveston Bay will be catastrophic to an industry that generates more than $100 million annually.

“This storm, nobody realizes, has totally wiped out the industry,” Halili said. “You can’t buy an oyster reef. It takes hundreds of years to get them back.”

Representatives of Louisiana’s $2.6 billion seafood industry are asking the state’s congressional delegation for federal relief. Early estimates indicate the industry sustained up to $300 million in economic losses to Hurricanes Gustav and Ike.

Cattle ranchers lost entire herds in some Texas counties, and animals not among the 4,000 killed right away may still die from eating the grass or drinking water tainted by salt.

More than 11,000 workers have filed unemployment insurance claims in the wake of Ike, according to the Texas Workforce Commission.

The longer it takes to reopen schools and businesses, the greater the risk that Galveston’s best workers will be snapped up by other areas.

Downtown on Galveston’s historic Strand, Eddie Ferre, whose father owns Luigi’s restaurant, said it will be December before they can gut their flooded restaurant and reopen. All their waiters moved to Dallas and Corpus Christi to find new jobs, he said.

Even if Luigi’s could reopen sooner, Ferre’s mother, Martha, wondered who would come. Their upper-tier clientele comes from the big beach houses on the hard-hit western end of the island.

In the short term, the area will benefit from the huge influx of government recovery spending and insurance money, said Galveston County Judge Jim Yarbrough, the county’s highest-ranking elected official. But the recovery will be uneven.

“Property values are probably going to take a punch in the stomach,” and many people will initially be afraid to rebuild, Yarbrough said.

Most of Galveston’s workforce is stuck off the island, which will remain closed to residents for at least another week. The city decided its water, sewer and electrical infrastructure was too badly damaged to support its population of nearly 60,000.

At the same time, out-of-state recovery crews stream onto the island every day, snapping up business that local companies need to stay afloat.

“Why can’t we get our own people here?” asked Patricia Bolton-Legg, who runs Competitive Electric with her husband. “We get all of these out-of-towners here. They’re going to take our business.”

Ike slammed Galveston in the midst of a nearly decade-long economic renaissance. About $2.5 billion of new construction was under way when Ike swamped the narrow island, Sjostrom said. About 80 percent of the island’s structures are still standing, so Galveston will not be starting from scratch.

Mayor Lyda Ann Thomas said she is optimistic that crowds could pack the city’s downtown again as soon as late October.

“We’ve had a lot of storms here,” she said. “People will come back.”

Credits: Associated Press

Rescuers uncovered obliterated neighborhoods in hard-to-reach areas of the U.S. Gulf Coast today, and feared they would find more victims than survivors of Hurricane Ike, the storm responsible for the deaths of at least 34 people across nine states and the evacuation of thousands from south Texas.

Many of those killed lived far to the north of the Gulf Coast as the storm slogged across the U.S. midsection, leaving a trail of flooding and destruction. The storm claimed more than 80 lives in the Caribbean before reaching Texas.

Houston, littered with glass from skyscrapers, was placed under a weeklong curfew and millions of people in the storm’s path remained in the dark. Tensions were rising among more than 1,000 who had spent several nights at the city’s George R. Brown Convention Center. They complained that they couldn’t get information about how to get food and clean clothes.

A massive effort was under way across Texas to get food, water and ice to people who had no power. It could be weeks until the more than 2 million without power have their lights turned on again. Lines snaked for blocks down side streets at gas stations that had little fuel to pump, and thousands packed shelters looking for dry places to sleep.

A Texas helicopter task force flew 115 rescuers onto the heavily damaged resort barrier island of Bolivar Peninsula, just east of the hard-hit city of Galveston. Task force leader Chuck Jones said they were the first rescuers to reach the area.

“They had a lot of devastation over there,” Jones said. “It took a direct hit.”

Some subdivisions in the area are completely gone, he said.

Beginning cleanup was still a distant thought as rescue teams continued going door-to-door to look for survivors and bring them to shelters. Crews had no idea what they would find on the peninsula, which from the air, revealed house after shattered house.

Relief workers were hoping to make it back from Bolivar to Galveston tonight, but they were packing for an overnight stay just in case.

Snapshots of damage were emerging everywhere: In Galveston, oil was coating the water and beaches with a sheen, and residents were ordered off the beach. Dozens of cement vaults popped up out of the water-swollen ground, many disgorging their coffins. Several came to rest against a chain link fence, choked with garbage and trinkets left behind by mourners.

Rescuers said they had saved nearly 2,000 people from waterlogged streets and splintered houses by Sunday afternoon. Many had ignored evacuation orders and tried to ride out the storm. Now they were boarding buses for indefinite stays at shelters in San Antonio and Austin.

President George W. Bush made plans to visit the Gulf Coast on Tuesday. He said the hurricane had constricted the nation’s energy supply, driving up prices and frustration. After a briefing on hurricane recovery efforts, the president said he was concerned about the “upward pressure” on prices for consumers.

Bush also said restoring power is an extremely high priority and urged power companies to “please recruit out-of-state people to come and help you do this.”

There were still at least 37,000 evacuees seeking temporary shelter in the state’s 284 facilities, officials said Monday.

Canned goods and thawing meat were helping Susie Griffin feed her husband, 24-year-old daughter and 2-year-old grandson in a home with no water. But the Orange resident did not know how long that would last — she is running out, and was first in line to get food, water and ice from a National Guard supply station Sunday.

“Once it defrosts, you’re in trouble,” she said of the small amount of meat she has in her freezer. “I don’t think anything is open. You have to go to Louisiana, but you’ve gotta have gas to go there.”

Ike was downgraded to a tropical depression as it moved north. Roads were closed in Kentucky because of high winds. As far north as Chicago, dozens of people in a suburb had to be evacuated by boat. Two million people were without power in Texas, Arkansas and Louisiana.

Credits: Boston Herald

Historic buildings in Galveston sustained flood damage in Hurricane Ike, though wind damage was less than feared and some structures are virtually unscathed, a historic foundation official said Monday.

Some 19th-century buildings took on 8 or more feet of water, said Galveston Historical Foundation executive director Dwayne Jones. Among them were the 1861 U.S. Custom House that serves as the foundation’s headquarters.

Galveston’s city historic preservation officer and building officials were examining historic structures Monday to further assess damage, Jones said. He repeated the warning from local authorities that those who own island property should not immediately return.

“This is not a time to be there. This is not a time to go to the island,” Jones said. His staff is operating temporarily from the Preservation Texas office in Austin and doesn’t expect to be back on the island until after this week, he said.

Of the approximately 7,000 documented historic island properties, Jones estimated as many as 1,500 were seriously damaged by the weekend storm. Some buildings date to the 1830s, but a large number were built in the 1870s to 1890s.

“We have some of the largest collections of historic buildings in Texas and in the country,” Jones said. “We really were very much the gateway to Texas as the many immigrants and people who came to settle the state and country came through Galveston. … We have a very rich history.”

He said the 17-foot Galveston seawall — erected after the infamous 1900 hurricane that killed thousands and remains the subject of island lore — helped protect historic island sites.

Based on reports from foundation staff members and others who remained on the island, Jones gave a rundown of how notable Galveston structures appeared to have fared.

The 1859 Italianate mansion Ashton Villa lost windows on its second floor and had up to 18 inches of flooding, which likely caused extensive first-floor furniture damage.

The popular Bishop’s Palace — the 1889 Gresham House that is the most visited historic building in Galveston — appears to have sustained little damage. The home did experience flooding on its bottom floor, which is slightly below ground level and is used for a ticket counter and offices.

The famous 1877 ship Elissa lost several sails but seemed to ride out the hurricane well, Jones said, adding that the Elissa sails every spring and should be able to make her annual March voyage. The vessel is attached to the shore through large steel pipes driven into the harbor bottom.

“We’re very pleased that the Elissa has survived this storm, as she has many other hurricanes before,” Jones said. “She’s very seaworthy and very strong.”

Galveston officials say they have been preparing for this type of direct hit by a hurricane.

Ike was a Category 2 storm, and had it been a Category 3 with stronger winds it would have been devastating for the old buildings, Jones said.

“It certainly could have been worse,” he said. “But it’s certainly not good.”

Preservation officials have an extensive digital photo catalog of historic buildings to work from for repairing and restoring the structures, Jones said.

Larry Oaks, executive director of the Texas Historical Commission, encouraged those interested in information on or donating to historic preservation efforts in the hurricane-damaged region to visit the commission’s Web site.

The Galveston Historical Foundation is working with other historic preservation groups and lining up recovery team volunteers for when a return to the island is possible, Jones said.

“We’re all geared up and ready to go back on the island and get to work,” he said.

Credits: Chron