In times of fear, the courageous get wealthy. We're seeing smart money get invested in this economy, including in real estate. Don't get me wrong - there are a million ways to screw it up (that's why you need an expert broker/adviser). But the underlying dynamics are getting more solid with each new economic report.

Square footage is the most common driver of a comparables approach to market valuation of real estate. For example #SF x average comparable sale price per square foot = market value assessment. There are other methods of valuation, but this is most common. It's also laden with complexity. 

From The Washington Post, FHA delinquencies dropped significantly in February after several months of increasing. Definitely good news. Now we need more investors to get back in this market, the good signs keep coming.

Disregard my grammar, I know it should be "to whom you listen." Sounds weird. More importantly, in comments released by Treasury moments ago about Sec. Geithner's statement today on financial reform to the American Enterprise Institute. Let's hope his words are heeded by Chris Dodd and congress more broadly. Words meet action, please...

This is welcome news, courtesy of MIT Professor Simon Johnson, a notice that Sen. Ted Kaufman (Delaware) is set to lay down a few tenets that underscore the nation's financial situation. And he's spot on.

Jonathan Stempel of Reuters wrote yesterday that Berkshire Hathaway's "oracle" Warren Buffett sees the housing crisis as mostly behind us, as do we at our firm. Writes Stempel:

The inestimable Dawn Kopecki of Bloomberg posts this headline yesterday about some possible White House moves to ban some foreclosures -- at least for people under review for permanent loan modification. Right now, foreclosures are still allowed even while homeowners are under review for a loan modification program. Apparently the action under consideration at The White House would now allow foreclosure during that period. This would help. It would help homeowners acting in good faith to keep their homes - and it would help communities who suffer high foreclosure rates, which affect, at least for now, property values.

Many people want to know about the relationship between a county assessed value of their home versus the "true" market value of their home. Boy does this issue change over the years back and forth.

1. Remember Texas is a no-income-tax state. So the primary tax revenue vessel is property tax. So when business taxes and sales taxes are down, the state needs money elsewhere, and by "state," I mean taxing authorities allowed by law to tax your property. You can see that list by going to your county property county appraisal district website and searching for your property. I.e., for Harris Co (Houston), you go to hcad.org and on your property sheet under "Jurisdictions," (click to see example of a public property) you will see a list of taxing entities and their little piece of your overall tax rate -- the entities range from hospital districts to school district to municipal water district (if you're in one) to emergency service district, etc. When you add up all the pieces, you get your total property tax rate. The other part of the tax revenue equation is what your property value is assessed at.

Rate x Assessed Vaue = Annual Tax Revenue to the Great State of Texas and its municipalities, school districts, highway patrols, etc.

2. Most people are sensitive to tax RATES and feel that RATE hikes are tax hikes, but when their home values are raised by assessors' offices, they don't think of that as a tax hike as much. They still protest when their home assessments are raised because many homeowners feel the impact, but a) they have to argue that their home is worth less (which isn't a good feeling for a lot of people), and b) with the past several "plush" years when appraisal districts could afford to regularly under-assess property values, they now have room to push those assessments up and stay within "market value" reason, and a majority of property owners don't have much of an argument given how property values are generally holding in major Texas metro areas -- this is what we think we're seeing.

3. But to answer the issue question directly: No, assessments by tax workers are not de-facto fair market value. They are merely a derivative of data that professionals like real estate brokers and appraisers actually have and use to render professional and I'd argue far more accurate judgments of real market value, plus you can talk through the numbers with these professionals if you hire one of these professionals instead of just looking at a number some bureaucrat has plopped out for purposes OTHER than for selling your home.

Hope this helps or entertains or otherwise takes your mind off something...

Not every city requires that you live close to work. I have always lived close to work and I have lived in several cities from Texas to multiple cities on the east coast including New York, Boston, and DC. But a carefully planned commute can give home buyers surprising new options in their home search in large well-planned cities such as Houston. There are survivable and livable commutes.

Houston and its outlying areas are built for "sprawl" - and I mean that in a positive sense - in the sense that residents have many good options and can live in almost any part of town (relatively) that fits their lifestyle and they can have a reasonable commute if they have a professional job and any degree of flexibility at all. We have the best highway infrastructure in the world here in the 4th largest city in the United States, and for example the med center in particular (including the burgeoning "satellite" centers) are built exactly off of those satellite rings and spokes so to speak, as are other professional centers.

So buyers working in these "hubs" can study the specific communities in which they might be interested. An affordable budget will buy you a respectable home in a respectable community and it should make you a happy buyer in a happy home in a happy, safe community. There are many pitfalls, make no mistake, so don't take with whom you work lightly when it comes to mortgage or real estate brokering, even if you decide to buy "new" -- but you can find it! (We recommend you use a REALTOR(r) even if you buy from a new home builder so your interests are represented.)

You do NOT need to live "near" your workplace to live comfortably in Houston. There are several commute patterns that could work for you where you could live in the neighborhood where you want to live, such as in Cypress or Clear Lake, or on the desirable north side in Spring or The Woodlands as many do (The Hardy Toll Rd is the Houston Autobahn) -- be open to the possibilities and above all else -- work with someone who knows the possibilities and can help you with them. Best wishes to all buyers and keep reaching out for advice. Some of your best advice may come from a broad survey of your coworkers and friends, too! Good luck.

Nick Will is the Managing Broker of Lelda Will Properties, the private real estate practice of brokers Lelda Will and Nick Will, and also of the forthcoming Will & Allen REALTORS(r), the separate brand under which their agents will practice, to launch in the new year 2010.