Texas Real Estate Daily

As Wall Street reeled and global markets plunged, President Bush on Monday said the U.S. economy is going to be “just fine” in the long run. But he cautioned that the massive rescue plan will take time to work.

On another jittery day in the financial markets, the president made two rounds of unscheduled comments on the economy — first after meeting with small-business owners in San Antonio, and then at the top of a speech in Cincinnati about judicial nominees.

In both cases, he defended the $700 billion economic bailout plan as one that won’t just help Wall Street, but everyday workers and businesses, too.

“I believe that in the long run, this economy is going to be just fine,” Bush said. In the short term, he said the Treasury Department must go about enacting its plan to buy up troubled assets from financial firms so that credit will start flowing again to consumers.

Recognizing the scope of the government’s intervention, Bush to reassure his audiences that taxpayer money will not be wasted.

The president added that the country has been through rough times before, and “we’re going to come through just fine.”

Earlier, in Texas, Bush emphasized that the program must be effectively designed and not rushed into action.

“It’s going to take awhile to restore confidence in the financial system,” he said. “But one thing people can be certain of is that the bill I signed is a big step toward solving this problem.”

Bush signed the bill into law after Congress approved it last week.

On Monday, the Dow fell as much as 800 points at one point.

The catalyst for the selling was the growing realization that the Bush administration’s $700 billion rescue plan and steps taken by other governments won’t work quickly to unfreeze the credit markets. Global banks, hobbled by wrong-way bets on mortgage securities, remain starved for cash as credit has dried up.

The president, after a weekend at his ranch in Crawford, Texas, met with small business owners at an old-fashioned soda shop in San Antonio. He said he understands why so many people are frustrated about why they were suddenly “helping Wall Street.”

“The answer is because had we not done anything, people like the folks behind me would be a lot worse off,” Bush said as the business owners stood with him. “We’ll make sure, as time goes on, this doesn’t happen again.”

Bush’s comments came as his top economic advisers pledged to work with their counterparts around the world to restore confidence and stability to financial markets roiled by tight credit and worries about a global economic slowdown.

To that end, the administration was expected to announce shortly that it had tapped a 35-year-old former Goldman Sachs executive, Neel Kashkari, to head the government’s rescue effort on an interim basis, according to an official who asked not to be named.

Credits: Associated Press

Graford Independent School District has again received a “superior achievement” in its accountability rating under Texas Schools FIRST financial accountability rating system, as noted at the Board of Trustee’s first public hearing on the matter last week.

The rating is the state’s highest.

In other business, Palo Pinto Chief Appraiser Donna Rhodes briefed the board on appraisal district issues and how it affects the school district.

“Some of the law suits question the methodology using comparable sales,” said GISD Superintendent Chance Welch.

“That keeps us near comparable values with the comptroller.”

Welch said the Texas Comptroller value for property was around $518 million with the comparable sales methodology. If the law suits result in changes of the appraisal method to an equity system, based upon lease value, the overall value would drop to around $400 million, Welch explained.

Credits: Lake Country Sun

Fresh off his electoral victory in May, Mayor Vicente Garza Jr. has embarked on a quixotic project, betting against long odds that a casino could secure the future of this indebted town of 485 residents.

Founded in 1767, but not incorporated until 1993, Granjeno clings to a sharp curve in the road a mile from the Rio Grande. It has a single city employee, a beer joint is its only business and most residents are kin.

But things are happening.

The border fence that put Granjeno in the spotlight last year when plans had it running through yards and homes is taking shape instead just behind property lines on the south side of town. A new international bridge to Reynosa, Mexico is underway to the west.

And Garza, at 24 years old, is the eldest of a new leadership triumvirate striving to pay off debts and make Granjeno self-sufficient.

“We’re surrounded; we have no economic development,” said Garza, a county corrections officer, who sports the high and tight haircut favored by military and law enforcement ranks and does not try to hide his enthusiasm for the casino idea.

“We’re really looking forward to it,” Garza said, adding, with no pun intended, “it’s like a gamble; it’s something out of the box.”

On a recent morning, Garza met in city hall with the consultants who began researching the idea after he threw it out in an impromptu brainstorming session on how the city might capitalize on the traffic generated by the new international bridge.

Antonio Fernandez III of Mission-based South Texas Consulting propped a large writing pad on a chair and unfolded a newsprint-size page of the $37.7-million 2009 budget of the Comanche Nation in Oklahoma. Fernandez highlighted the long list of community improvement projects funded by the Indian casino, suggesting a similar jackpot could await Granjeno.

He outlined the various incentives that Granjeno could tap to help lure casino investors and for good measure, threw in “what would stop us from going to look for money in Dubai?”

As Fernandez began to sketch a rough casino floorplan and talk of multiple restaurants and an auditorium, Garza asked if it would be possible to have a sliding floor that could be converted for football games. He also wants it to be “green” or environment friendly.

“Let’s get an architect,” Garza suggested.

While Garza is focused on his hometown, Fernandez, a tattooed retired Marine who describes himself as a born-again Christian, envisions Granjeno’s “community charity casino” as only a pilot project for a broader goal of opening similar moneymakers in all of Texas’ economically distressed counties. The casino would anchor larger community venues with entertainment and shopping. Public-private partnerships would funnel the bounty to community infrastructure projects.

“What was (Las) Vegas when it started out?” Fernandez said. “A bus stop with a slot machine.”

The only hitch is that the sort of gambling Fernandez and Garza ultimately envision with slots and poker tournaments is illegal in Texas.

Just last year, well-funded casino interests unsuccessfully pushed a bill sponsored by two prominent senators that would have allowed 12 resort-style casinos in Texas and video slot machines at horse and dog tracks. Two Indian tribes are still fighting to re-open casinos the state shut down in 2002. And a bill sponsored by Rep. Ismael “Kino” Flores, whose district includes Granjeno, that would have allowed slots at racetracks and Indian reservations, died.

Garza signed a letter last month requesting an opinion from Attorney General Greg Abbott, who has taken a narrow view of the state’s gambling laws previously, and hopes Flores will pass it on.

Flores said he has not met with Granjeno officials yet but hopes to get a better understanding of their proposal.

“If it’s something that they need, I’m going to help all I can,” Flores said. But knowing the state’s gambling laws and Abbott’s earlier opinions, Flores said the odds would be against them.

“I think it’s slim and not only because it’s Granjeno,” he said. “First we have to get it (gambling legislation) passed.”

But the casino isn’t the only thing on the mind of Garza, whose father was Granjeno’s first mayor. He is working on ways to pay off the city’s debt — a chunk of which is owed to the IRS — in the short term, build a long-awaited park and keep a fledging community watch program going until casino proceeds can one day fund a Granjeno Police Department.

Granjeno’s residents seem willing to give their ambitious new mayor the benefit of the doubt on the casino idea.

Garza said that while there are skeptics, he has not heard any outright opposition since the local newspaper reported the idea recently.

Taking his daily walk north out of town one recent afternoon, Manuel Olivares, who was born, raised and has lived all his life — except a stint in the Army that took him to Vietnam — in Granjeno, said the city was in dire need of help.

A share of the revenue generated by the new international bridge could still be years off and crime is up.

Olivares, 64, opposed Granjeno’s incorporation in 1993, which he said was aimed at grabbing a piece of the bridge proceeds. Now that it is a city, he wants Granjeno to have its own police and fire protection, but that will be tough on an annual city budget of about $77,000.

Olivares hopes the idea pans out, but said he was skeptical Garza would get permission.

“If it will help Granjeno, fine and dandy,” Olivares said before conceding with a grin, “I go to Vegas once or twice a year.”

Credits: Chron

More small buyers are investing in undeveloped land.

“There is a really attractive market emerging for the small investor,” says Eric O’Keefe, editor-in-chief of Land Report magazine. “With credit tightening, what you’re seeing in essence is some of the air being let out of the bubble that was driving prices up.”

Buying land is no slam-dunk. An investor must be able to judge which land is most apt to deliver a profit down the road and be able to hold onto the property long enough to benefit.

Also, variations in prices make these kinds of investments painful for the faint of heart. For instance, the Texas real estate commission reported that land prices went up by 20 percent in 2007. But land values in Southern California have tumbled at least 50 percent along the coast and as high as 90 percent. inland, investors say.

Plus, ownership can be expensive. Besides high borrowing costs, there are property taxes and liability insurance costs to pay.

Nevertheless, some investors are convinced now is the time. “It’s a delicate business, but it’s just about bad enough to be good again,” says William Shopoff, chief executive of Shopoff Group, a real estate investment firm in Irvine, Calif.

Credits: Waldo Village Group

Charlene Zeman spent more than a decade in the housing business, including the last three years selling homes.

But the housing slowdown – the worst nationally in a generation – sent her, like thousands of other agents, looking for a new career.

“I had to have a more steady income,” Ms. Zeman said. “I had to know when the next paycheck was coming. And they were getting fewer and farther between.”

With home sales in North Texas down almost 30 percent since the peak in mid-2006, real estate agents are feeling the pinch of smaller commission checks and less business.

No wonder many agents in the Dallas area and across the country are switching to a new line of work.

The National Association of Realtors, the Washington, D.C.-based trade association, dropped by more than 100,000 members from the end of 2006 to this March.

Even in Texas, which has escaped the worst of the housing depression, the number of licensed sales agents and brokers is down about 3,000 from last summer. And the number of new sales agent applications is off about 30 percent from a year ago.

“The fall-off would be expected as the market slows down,” said Dr. James Gaines, an economist with Texas A&M University’s Real Estate Center.

But he said it’s impossible to draw a direct correlation between the slowdown in home sales and the decline in agents.

“And since they often pay a two-year fee, the license numbers don’t vary as quickly from year to year,” Dr. Gaines said.

Ms. Zeman didn’t need a university study to tell her it was time to get out of the home sales business.

“I was in it when it was great, in it when it was good and in it when it wasn’t so good,” said Ms. Zeman, who is now working in sales for telecommunications giant AT&T.

“I love it,” she said. “It’s been very successful. I’ve been in the top 10 since I got here in February.”

Christian Walker spent almost two years in Dallas residential sales before deciding to change direction.

“At the time, I sensed that the Dallas market was going to contract some and that this, combined with the saturation of agents, made it a good time to consider other options,” said Mr. Walker, who has gone back to school while working at a Fort Worth architectural firm.

He’s just started working full time on a master’s degree in architecture at the University of Texas at Arlington.

Mr. Walker said he “saw an opportunity to put the experience and awareness of customer needs that I had acquired to move into a related field, architecture.”

“Endless showings and open houses also gave me a perspective about customer needs and expectations that I feel will be invaluable for an architect.”

Credits: Dallas News