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Austin Real Estate Stats - The Wise Assessment for Dec 2009 Austin Real Estate Market Conditions

February 4th, 2010

The Market Jumped 10% in One Month - Or Did It?

Single Family Monthly Graphs

Note to readers: The Wise Assessment is posted every month. We post our stats later that other real estate companies because we want the most accurate numbers available…and this makes them worth waiting for! Other agents simply copy and paste graphs that they get from other sources and offer no opinions to the marketplace conditions. We track data in house and compare the market on a whole to what we produce internally in order to produce an opinion of the data and give our thoughts of what we are personally experiencing as a top company in Austin.

Austin Home Sales Prices Closed Home Sales in Austin, TX

Active Homes for Sale in Austin Sold to List Price on Austin Homes for Sale

Overall Market Summary Report

Property Type	Sales	% Change Year Ago	Dollar Volume	% Change Year Ago	Average Price	% Change Year Ago
Single Family	1,373	5%	$358,863,756	11%	$261,372	6%
Townhouse/Condominium	151	31%	$25,483,515	35%	$168,765	3%
Farm/Ranches	30	15%	$8,052,150	-30%	$268,405	-40%
Multifamily	37	61%	$6,963,474	58%	$188,202	-2%
Lots	84	27%	$10,953,264	95%	$130,396	53%
Commercial	22	69%	$7,959,974	81%	$361,817	7%
Lease	1,064	12%	$1,312,976	9%	$1,234	-2%
Commercial Lease	11	0%	$17,985	-9%	$1,635	-9%

The Wise Assessment

SELLERS: The number of single-family homes that were available for sale took a nose-dive at the end of 2009. The average sales price sky-rocketed to a never-before seen level of $261,000. While this may seem to be an excellent indicator of a recovering market and proof that now is a great time to sell for a very high price, we must first investigate the finer details and statistics before making interpretations. See the Average Sales Price graph and narrative below for our Wise Assessment on this phenomenon.

Is This A Good Time To Sell? We are meeting with clients on a daily basis who are asking this specific question. A general rule to follow when determining if now is a good time to sell:

Move-up: if you are selling a home and looking to ‘move-up’ or buy a more expensive home, the very best time to do this is when the market is down (like now)
Move-down: if you are selling a home and looking to ‘move-down’ or buy a less expensive home, the very best time to do this is when the market is hot (not now)

While this is a good general rule to follow, your specific circumstances and needs must be considered before making a decision.

BUYERS:

Interest rates remain low.

Home prices remain low.

Therefore, your monthly payment will be lower now than when either or both interest rates and home prices increase.

I assess that, even though it appears that home prices are increasing (see the interpretation below), the reality is that this is still a very good time to buy…especially before prices and interest rates begin to creep up.

Average Sales Price

“WOW! My home is now worth $50,000 more than it was last month!” While the graph alone would indicate your home is worth 10% more now than it was in November, this is not the whole story. Let’s examine:

This past fall the government offered 8,000 reasons (in dollars) for first-time home buyers (property virgins) to buy homes before December
This incentive prompted a large number of virgins to buy homes, which drove the average price down while, at the same time, supply and demand increased
In December, there was a significant decline in the number of virgin buyers, which drove prices back up
Also in December, there was a higher percentage of homes sold in the $300K-$1M price range than in previous months

These facts would indicate that we have experienced an anomoly in the market, and your home is likely not worth more today than in November. But, this begs the question:

Is your home worth more now? The only way to make an assessment of value for your home is to investigate your specific home and see how it compares and competes in the current market.

Sales Closed by Month (Demand)

The number of sales in December followed the seasonal cycle of sales in Real Estate in Austin. While we did experience an unusual number of home sales in September and October of 2009 because of the Virgin tax credit, the market returned to its normal operating procedures once the original credit was scheduled to expire. Barring any disaster, the number of sales in Austin should coincide with the temperature increases….stay tuned and check that weather report!

Active Listings (Supply)

Again, we are following the cyclical trend of there being fewer homes available for sale in the fall and winter than in the spring and summer. We did notice, however, that the number of home sales increased in the fall over the previous years, which caused the supply to remain low.

We are anticipating the inventory to increase drastically in early 2010, as the graph reflects for the previous years, so be on the look out for a greater number of homes on the market in the coming months.

Offers of Help

What Is My Home Worth? Want to get a good idea of what your home is worth … and find out right now online? Check out our Market Snapshot for an analysis of the value of your Austin home.
What Is That Home Worth? “Stop the car, honey … look at that house. I wonder what it’s worth?!?” Does this ever happen to you? Ever wonder what that house is worth? Find out the value of that Austin neighborhood or home.
What do I need to know before I sell? Typically when a home does not sell, there is one reason…and it isn’t price. We invite you to look at several key factors to consider before selling your home. Visit One Reason for more information.

BTW, We do have very specific data for every price range and area of town. Want specific data pertaining to your neighborhood or your own home? We have it! Please let us know if you would like a neighborhood-specific analysis by emailing us at experience@goodlifeteam.com or calling us at 512.892.9473.

The data provided to create these graphs are available to you by FREE subscription to our monthly update service. Please email us experience@goodlifeteam.com to receive your monthly update. Or, catch the wave and follow @GoodLifeTeam on Twitter.

experience@goodlifeteam.com| 512.892.9473 | www.goodlifeteam.com

Tags: Market Statistics
Posted in Market Statistics | No Comments »

Austin’s 3rd Annual Modern Home Tour

January 28th, 2010

This Saturday, January 30^th, 2010 is the 3^rd Annual Austin Modern Home Tour. The tour was created by Krisstina Wise in 2008 to promote progressive, responsible urban growth in Austin and features unique and modern homes designed by local Architects & Designers and marketed by local Real Estate Professionals.

This year’s Austin Modern Home Tour consists of a driving tour of 16 modern homes in the Austin area followed by a cocktail reception and architect panel at Truluck’s downtown.

In addition to several articles in the Austin American Statesman, the tour is being covered by several of the major news stations, including this piece by Fox News, a live interview with Krisstina Wise:

Learn more about the tour, see the homes, and purchase your tickets at http://glt.bz/mht2010.

Posted in Living in Austin | 3 Comments »

Austin Real Estate Stats - The Wise Assessment for Nov 2009 Austin Real Estate Market Conditions

January 13th, 2010

Austin Real Estate Statistics - Is The Market Turning?!

Single Family Monthly Graphs

Note to readers: The Wise Assessment is posted on the first day of every month. We post our stats later that other real estate companies because we want the most accurate numbers available…and this makes them worth waiting for! Other agents simply copy and paste graphs that they get from other sources and offer no opinions to the marketplace conditions. We track data in house and compare the market on a whole to what we produce internally in order to produce an opinion of the data and give our thoughts of what we are personally experiencing as a top company in Austin.

Keep reading for the written Wise Assessment and/or listen to our interpretations on our latest VLOG:

Overall Market Summary Report

Property Type	Sales	% Change Year Ago	Dollar Volume	% Change Year Ago	Average Price	% Change Year Ago
Single Family	1,576	58%	$377,603,296	62%	$239,596	2%
Townhouse/Condominium	169	84%	$28,389,296	61%	$167,984	-13%
Farm/Ranches	24	9%	$13,064,976	98%	$544,374	81%
Multifamily	47	57%	$9,143,333	58%	$194,539	1%
Lots	71	16%	$5,895,414	21%	$83,034	4%
Commercial	13	-24%	$4,497,298	-17%	$345,946	9%
Lease	946	8%	$1,133,308	3%	$1,198	-4%
Commercial Lease	11	57%	$11,473	41%	$1,043	-10%

The Wise Assessment

WARNING: These statistics are BORING! Nothing is on fire, nothing has flooded, and the Austin Housing Market is behaving like it should. This is GREAT news. What this means is that the Austin Real Estate Market is beginning to stabilize, and the drastic shifts in the graphs from Q4 of 2008 and Q1 of 2009 seem to finally be history.

The number of single family Sales in November were 58% higher than November 2008….not terribly surprising since the market was in a tailspin in November 2008 and dipped lower than it has been in over 5 years. Does this mean the market has fully recovered and we are in for a great 2010? In my opinion, 2010 will be a slow and steady year building a stronger foundation for a stronger economy - both overall and specifically in real estate.

SELLERS: The supply (Active Listings) of Austin homes for sale hit an annual low in November, providing fewer homes for buyers to choose from … and less competition for sellers in the market! This trend is not surprising, and easily predictable. As we note from the historical graph, November and December provide the fewest number of homes on the market, and this year is no different. What IS different is the unusually high number of home sales for the fall. Typically, the falling inventory coincides with the falling sales, and ultimately keeps the average sales price relatively steady. However, this year, we have had the decline in inventory and yet the sales have remained steady. If all homes in Austin were the same and priced equally, then this would trigger an increase in the average sales price. So why did the average sales price drop? The Government. In 2009, our government offered a tax rebate for first time homebuyers (virgins). This, plus the abundance of lower-priced homes skewed the average downward, ultimately lowering the average sales price. Therefore, we have been studying the influx of first-time home buyers in the market. Why are they buying right now?

Interest rates - rates remain extremely low and allows otherwise unqualified buyers to purchase homes in this market
Prices - prices are extremely affordable and lower than they have been in years
Tax credit - the governmental intervention and tax credit has incentivized buyers and made it possible for some buyers to have the necessary cash funds to purchase homes

Are you interested in selling your home right now? With more and more buyers entering the market because of the extended and expanded tax credit, demand continues to increase … and supply is still on the decline. What this means is that there are MORE buyers wanting homes and LESS homes from which to choose (i.e., less competition when selling to even more buyers!).

NOTE: While this is great news for most of our sellers, we must also keep in mind that the overall market is still down over the past few years. So, if you bought your Austin home in the past few years and are selling it today, your home is most likely worth less than what you paid for it - not worth more. That means you will not be selling for a profit but for a loss. To learn more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.

What Is My Home Worth? Want to get a good idea of what your home is worth … and find out right now online? Check out our Market Snapshot for an analysis of the value of your home.

BUYERS: Interest rates remain low. Pricing remains affordable. Sellers who have their homes on the market right now are REAL sellers (why else would anyone put their home on the market when the grass is dead, it is 20 degrees outside, and the holidays and new year capture us all?). Are you interested in buying and taking advantage of the Housing V? Take these steps to own the home you are dreaming of:

Choose a highly-qualified and accomplished real estate professional: Call 512.892.9473 to learn how to choose your Austin real estate agent
Learn about your Buying Power: Call us at 512.892.9473 so we can put you in touch with our mortgage banker, Kristin Carroll.
Begin touring homes with your GoodLife agent and choose your new dream home!

“Stop the car, honey … look at that house. I wonder what it’s worth?!?” Does this ever happen to you? Ever wonder what that house is worth? Find out now: What’s That Home Is Worth.

Sales Closed by Month (Demand)

After the blip on the screen for fall 2009, we return to your regularly programmed graph. As we note, the number of sales per month has returned (at least momentarily) to the historical seasonal decline. If our graph and buyers’ behaviors mimick history, December should prove to increase sales a bit over November.

Active Listings (Supply)

Shocking! No, wait. This is completely predictable. Inventory falls as the leaves do. Once all the leaves have stopped falling, so does inventory. What does this mean? If you are thinking of selling in the next 12 months, you may want to consider now as a perfect time to put your home on the market. You will have less competition and more demand for your home … just make sure you get expert help from qualified real estate professionals to design a thorough strategy to get the most amount of money in the least amount of time.

Average Sales Price

It appears that the average sales price has leveled off after a very exciting and turbulant ride earlier in 2009. We continue to hover around $240,000 as an average sales price, and barring any new legistlation, natural disasters, or single-digit temperatures (almost got there in January), prices should remain relatively stable moving into the new year.

Simple Summary

Want to sell your house more quickly than your competitor?

Get really good help from proven professionals

and

Price your house accordingly.

Tags: Market Statistics
Posted in Market Statistics | No Comments »

The Real Estate Brokerage of the Future

December 17th, 2009

In January I will be flying to New York to speak about The Real Estate Brokerage of the Future at the Inman News’ bi-annual Technology Conference. Being recognized as one of the few in the industry who is building a model to take care of the expectations of the new tech-savvy real estate customer, I will be sharing with a national audience what we are innovating here at The GoodLife Team in terms of inventing new tools and implementing cloud-based technologies that are not yet understood by others in the industry.

My message is one that I think is critically important to Brokers, agents and consumers alike. For all, real estate of the future will look much different than real estate of the past. Beyond the change in the economy - there has been a fundamental shift in consumer buyer behavior and how we, as consumers, make choices. And this shift will fundamentally change the way that you interact with your Austin real estate agent. The good news - I see the real estate brokerage of the future putting you, the consumer, squarely back in the center of the transaction.

Technology-Centric & Customer-Obsessed

What do I mean by that? Well, as I mention in my recent interview with Inman News, Real estate is not immune to the fundamental shift in consumer behaviors and expectations. If real estate agents and brokers are going to thrive in this new market, they must be technology-centric and customer-obsessed. Brokers must offer their agents leading technologies, fundamental and specific marketing technology-based strategies and execution, back-end support, quality control and performance measurement in order that the real estate agent has the means to offer you what you should expect in today’s web-based market place. Sadly, most brokers, and their agents, are neither technology-savvy nor customer obsessed. As a result, most buyers and sellers today do not think they are getting an equivalent value for the price they pay their agent and the agent’s broker. Yes, it’s time to demand more from your real estate agent. Marketing and selling your Austin home requires exposure beyond just the MLS. Finding your Austin home requires knowledge beyond being able to search up a 3 bedroom/2 bath in South Austin.

All Agents are not the same

Keep in mind, if you are thinking about buying or selling in the near future, who you hire matters. ALL AGENTS ARE NOT THE SAME…and the gap is getting even wider. Choose wisely. If it isn’t the GoodLife Team, make sure that your Austin real estate agent is technology-centric and customer-obsessed. And that they can demonstrate both. Look at their website. Do they blog? vlog? Are they using social media to assist you in selling your home? How? Do they answer their phone or do you have to leave a message? How long does it take them to call you back? These are just a few questions to help you start noticing the differences in agents.

Helping you, the customer, is a privilege

I am grateful, daily, for the trust you put in me and my company to help you with your most important asset. It is a privilege to be able to serve you. As I told Inman, ‘I see that people at the top of this industry are so far removed from the public and their needs, as well as the needs of their agents.’ This ultimately causes them to lose sight of you, the customer, and trickles down through the organization. It’s too easy for these big box brokers (as I like to call them) to treat you like a dollar sign. Moving into the future, I do not think you will tolerate this. I invite you to read my interview with Inman News in it’s entirety at http://glt.bz/inman. I will continue to lead the charge in building the GoodLife Team to be the Real Estate Brokerage of the Future and NEVER LOSE SIGHT that I do it all for you, my customers.

As an end to this blog-I would like to ask …. As we move into the real estate world of the future, what would like to see differently in terms of what we as an industry offer you, a home buyer and/or seller?

Tags: Real Estate
Posted in Future of Real Estate | No Comments »

The Real Estate Brokerage of the Future - Claim 1

December 3rd, 2009

The Real Estate Brokerage of the Future: Play Now | Play in Popup | Download

Posted in Recruiting | No Comments »

Austin Real Estate Stats - The Wise Assessment for October 2009 Austin Real Estate Market Conditions

December 1st, 2009

Austin Real Estate Statistics - Is The Market Turning?!

Single Family Monthly Graphs

Keep reading for the written Wise Assessment and/or listen to our interpretations on our latest VLOG:

Austin Real Estate Sales Closed by Month Active Austin Real Estate for Sale

Average Sales Price for Austin Homes for Sale Sold to List Price for Austin Homes for Sale

Overall Market Summary Report

Property Type	Sales	% Change Year Ago	Dollar Volume	% Change Year Ago	Average Price	% Change Year Ago
Single Family	1,823	38%	$434,975,092	35%	$238,604	-2%
Townhouse/Condo	170	39%	$31,440,310	30%	$184,943	-6%
Farm/Ranches	21	-30%	$5,624,976	-47%	$267,856	-24%
Multifamily	36	0%	$6,633,108	1%	$184,253	1%
Lots	86	-30%	$9,973,936	-51%	$115,976	-30%
Commercial	15	-25%	$5,370,900	-53%	$358,060	-37%
Lease	1,080	1%	$1,362,960	1%	$1,262	0%
Commercial Lease	13	18%	$103,545	217%	$7,965	168%

The Wise Assessment

SELLERS: Supply (Active Listings) is decreasing, at a much slower rate than in recent months/years, and sales are increasing at an unprecedented rate - we are rapidly approaching the sales levels of the ‘good ole days’ of 2005 and 2006. With all else being equal, these two indicators suggest that sales price should also increase (demand increases, supply decreases, and price must increase). However, we have experienced yet another monthly fall in prices … why? What force would cause the fundamental laws of economics to seemingly betray itself?? One force that we have been studying is the influx of first-time home buyers in the market due to three specific factors:

Interest rates - rates remain extremely low which allows otherwise unqualified buyers to purchase homes in this market
Prices - prices are extremely affordable and lower than they have been in years
$8,000 tax credit - the governmental intervention and tax credit has incentivized buyers and made it possible for some buyers to have the necessary cash funds to purchase homes

With more and more buyers entering the market because of the extended and expanded tax credit, demand continues to increase … and supply is still on the decline. What this means is that there are MORE buyers wanting homes and LESS homes to choose from, reducing the amount of competition. If you have been thinking about selling your home, now might just be the best time.

NOTE: While this is great news for most of our sellers, we must also keep in mind that the overall market is still down over the past few years. So, if you bought your Austin home in the past few years and are selling it today, your home is most likely worth less than what you paid for it - not worth more. That means you will not be selling for a profit but for a loss. To learn more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.

What Is My Austin Home Worth? Want to get a good idea of what your home is worth … and find out right now online? Check out our Market Snapshot for an analysis of the value of your home.

BUYERS: Interest rates have just taken another dip, sales prices remain low, and this means that your mortgage payments will be lower now than in the past. Buyers should definitely take heed of the message above to sellers: there are more buyers looking to buy fewer homes. What this means to you is that you must be pre-approved with a mortgage banker before you start looking for homes and be prepared to write an offer. Homes are staying on the market for shorter durations and we are experiencing many multiple offers on our most desired Austin homes for sale. Need an accomplished and trusted mortgage banker to help find you a loan? Contact us to get in touch with Kristin Carroll, our partner in the home lending business.

“Stop the car, honey … look at that house. I wonder what it’s worth?!?” Does this ever happen to you? Ever wonder what that house is worth? Find out now What That Home Is Worth.

Property Virgins (aka First-time Homebuyers): Did you miss the great opportunity to take advantage of the $8,000 tax credit? GREAT NEWS: The tax credit has been extended … so you didn’t miss this unique opportunity to take advantage of your very own stimulus package! Want to learn more about the extension and what it means to you? Read Krisstina’s article about The First Time Home Buyer Extension or click here to chat online with one of our specialists now.

Austin Real Estate Sales Closed by Month

Sales Closed by Month (Demand)

This has never happened … at least in the 12 years I have been in real estate. We are living in a time that sales are increasing in the fall; historically we see the sharpest decline of sales all year during this time. As noted above, there are 3 factors we are attributing to this:

Interest rates - rates remain extremely low and allow otherwise unqualified buyers to purchase homes in this market
Prices - prices are extremely affordable and lower than they have been in years
$8,000 tax credit - the governmental intervention and tax credit has incentivized buyers and made it possible for some buyers to have the necessary cash funds to purchase homes

Austin Homes for Sale - Active Listings

Active Listings (Supply)

We are entering a season when demand for homes traditionally decline to an annual low, so sellers decide to wait for spring to put their home on the market. However, sales are way up. Inventory is being absorbed at an increasing rate by the increase of buyers in the market. Supply is declining. If you are thinking of selling in the next 12 months, you may want to consider now as a perfect time to put your Austin home on the market. You will have less competition and more demand. That being said, you will still want to obtain expert help from a qualified real estate professional who can design a thorough strategy to get you the most amount of money in the least amount of time.

Austin Real Estate Sales Prices

Average Sales Price

If we worked and lived in a vacuum where there was only one product, current supply and demand would force the sales price to increase. However, since we have a very broad range of product (low-income housing to lakefront mansions) the rate of sale of the different products affects the average sales price. Since we have had a government incentive for first time homebuyers, lower priced homes have sold very rapidly this fall. Because of this, the average sales price has declined.

In fact, last month we sold 3 homes for full price with multiple offers…before they ever hit the market! Interestingly, they all were between $150,000 and $225,000.

Simple Summary

Want to sell your house more quickly than your competitor?

Get really good help from proven professionals

and

Price your house accordingly.

Tags: Market Statistics
Posted in Market Statistics, Market Statistics | No Comments »

The First Time Homebuyer Extension has been signed into law!

November 6th, 2009

The First Time Homebuyer Extension has been signed into law!

Great News for Virgins who held out for their first time

If you haven’t owned a home in the last 3 years, you are still eligible for the $8,000 tax credit. Just approved by the President, the Credit will extend through April 30^th to contract on a home. You will have through June 30^th to close on it.

The new tax credit is no-longer Virgin exclusive. The credit has been expanded to non-first time homebuyers as well, giving some move-up buyers $6500 of more purchasing power. The caveat is that you must have owned your current home as your primary residence 5 out of the past 8 years.

Other details

The income limits were raised from $75,000/$150,000 (single/married) to $125,000/$225,000.
Where there was no maximum home price in the first bill, the maximum purchase price is now $800,000
For purchases made in 2010, you would be able to claim the credit on your 2009 income tax return
You must remain in this home as a primary residence for 3 years after you purchase it
An Anti-fraud rule has now been attached - you must attach documentation of purchase to the tax return
The tax credit limits for single filers are: $4,000 for the First-Timer and $3,250 for the Move-Upper

Creative Ways to Use the Credit:

There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:

The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence - you could live in one unit and rent out the others.
If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit (Note: in the case of married couples, both spouses must qualify for the credit).
The credit applies even if you have co-signers on your mortgage loan

Will YOU take advantage of this new legislation?

We would love to know what you think. Please share your thoughts.

Do you think this is a good move by our government?

Do you think extending the credit during the slowest buying months of the year will have the intended impact?

Do you plan to take advantage of this incentive? If no, why not?

More details from our preferred lender

Check out the following two pdf’s from our preferred lender, Kristin Carroll, for answers to frequently asked questions:

First Time Home Buyer 2009-2010 Tax Credit FAQ

Repeat Buyer 2009-2010 Tax Credit FAQ

Wait, there’s more…Other ways to reduce your 2009 tax debt

In addition to the $8,000 tax break for first-time home buyers and the newly expanded tax credit that includes move-up buyers, new tax-relief bills passed in 2008 provide for a number of other tax breaks that may lower your 2009 tax debt. Plan now and review these breaks with your accountant to see if they could help reduce your tax liability in 2009 and beyond:

•Payroll Tax Credit. For 2009 and 2010, Congress gave workers a 6.2% credit on earned income, applied as lower income tax withholding (there are caps based on income). Recipients of Social Security, Railroad Retirement benefits or Supplemental Security Income, some federal workers, and veterans with disability pensions will get a one-time $250 check. Self-employed workers may be able to reduce quarterly estimated payments to get advance benefits.

•Larger Personal Exemptions. For 2009, each personal exemption you can claim is worth $3,650-up by $150 over 2008.

•Higher Standard Deductions. The standard deduction for married couples filing jointly rises to $11,400 up by $500 from 2008. For singles, the amount increases to $5,700-up by $250 over last year, and heads of households can claim $8,350, a jump of $350.

•Tax Credit for College Tuition. For 2009 and 2010, the Hope credit is replaced by a new credit of up to $2,500 per student a year for four years of college, not just the first two years. It now also covers the cost of books, but begins to phase out based on higher incomes.

•Child Tax Credit. If the credit exceeds the filer’s tax liability, all or part of the credit will be refunded if the filer earns more than $3,000 - down from $12,550 in 2008. (Also, for families with three or more children, the maximum earned income tax credit for 2009 and 2010 rises by $628.50)

Other changes that could affect you include higher income limits for deductible IRAs and Roth IRAs, higher estate tax and gift tax exemptions, credit for energy-saving home improvements, and partial exclusion of unemployment benefits.

To understand how the new tax breaks could save you money, consult with your financial advisor or post your questions on this blog.

Tags: Property Virgins, Tax Benefits
Posted in Market Overview | 1 Comment »

Austin Real Estate Stats - The Wise Assessment for September 2009 Austin Real Estate Market Conditions

November 2nd, 2009

Note to readers: The Wise Assessment is posted on the first day of every month. We post our stats later than other real estate companies because we want the most accurate numbers available…and this makes them worth waiting for! Other agents simply copy and paste graphs that they get from other sources and offer no opinions to the marketplace conditions. We track data in–house and compare the market on a whole to what we produce internally in order to produce an opinion of the data and give our thoughts of what we are personally experiencing as a top company in Austin.

Keep reading for the written Wise Assessment and/or listen to our interpretations on our latest VLOG:

Single Family Monthly Graphs

Overall Market Summary Report

Property Type	Sales	% Change Year Ago	Dollar Volume	% Change Year Ago	Average Price	% Change Year Ago
Single Family	1,780	6%	$431,530,740	7%	$242,433	0%
Townhouse/Condo	194	24%	$34,920,194	7%	$180,001	-14%
Farm/Ranches	30	-14%	$9,589,800	-51%	$319,660	-43%
Multifamily	30	-32%	$6,468,840	-25%	$215,628	10%
Lots	102	-20%	$8,590,950	-45%	$84,225	-32%
Commercial	11	-52%	$3,390,002	-64%	$308,182	-25%
Lease	1,112	12%	$1,401,120	10%	$1,260	-2%
Commercial Lease	14	40%	$21,812	30%	$1,558	-7%

The Wise Assessment

SELLERS: The supply (Active Listings) continues the seasonal decline but has an additional thrust behind it…demand (Sales) has leveled off and may actually climb next month. As we approach the holidays and the traditional seasonal decline in supply continues, while demand remains the same; we can anticipate the sales price to remain relatively steady or even begin to tick upwards (whereas we traditionally experience a decrease in prices).Are you interested in selling your home right now? Well, we have very good news for you: for the first time all year, the number of sales (demand) is more now than it was just 1 year ago. What this means is that more homes are selling right now than last year, and we are even experiencing very rapid sales cycles (homes are selling quickly) and our sellers are receiving multiple offers on many of our properties within the $125,000 - $250,000 price range. Additionally, if you are selling a home and buying a more expensive home (aka a Move-Up), this is a perfect time to make a move! Read Krisstina’s Housing V conversation for details.While this is great news for most of our sellers, we must also keep in mind that the overall market is still down over the past few years. So, if you bought your Austin home in the past few years and are selling it today, your home is most likely worth less than what you paid for it - not worth more. That means you will not be selling for a profit but for a loss. To learn more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.What Is My Home Worth? Want to find out now what your home is worth in today’s market? Check out our Market Snapshot.

BUYERS: What are you waiting for? This is NOT a rhetorical question! To buy or not to buy…now THAT is the question! Do I buy just to take advantage of the first-time homebuyer credit, or do I wait for my 401-K to recover fully? Have we hit the bottom yet? These are all great questions and ones that we hear from buyers on a daily basis. While everyone’s specific situation differs and we highly recommend a personal consultation to address your specific concerns, the fact remains that we are in the midst of The Perfect Storm for buying a home. Interest rates and housing prices remain low … and this means that mortgage payments are lower now than they have been in years. What are you waiting for?”Stop the car, honey … look at that house. I wonder what it’s worth?!?” Does this ever happen to you? Ever wonder what that house is worth? Find out now What That Home Is Worth.

Property Virgins (aka First-time Homebuyers): Did you miss the great opportunity to take advantage of the $8,000 tax credit? Is that the ONLY reason you would be buying right now? Coupling The Perfect Storm with This Limited Time Offer certainly offered many buyers an opportunity to buy a home when they would have otherwise been confined to living in an apartment. However, there are other ways to gain access to $8,000 through negotiating terms with sellers who are motivated to sell. If you are interested in buying but not quite sure if you can afford to venture into the Storm, call a highly-qualified and accomplished real estate professional to discuss your options. Click here to chat online with one of our specialists now.

Sales Closed by Month (Demand)

Imagine this: it is 108 degrees outside, we are in the middle of one of the worst droughts in history, and you are thinking of buying a house…as long as you don’t have to go outside! I don’t care how much you love your Austin real estate agent or how nice their car is; when it is miserable outside, you do not want to leave the air conditioning. Couple that with an uncertain stock market and doom and gloom in the national media and what you get is a slow summer buying season. Now imagine the weather cooling down, your portfolio recovering, an unprecedented $8,000 tax credit coming to maturity and the national media focusing on balloon boy. And wait, there’s more – interest rates and housing prices remain low. What is the outcome? See the chart above for yourself and you will notice that demand actually increased in September. And if the activity at The GoodLife Team is any indication of the market trend, October will be very strong as well.

Active Listings (Supply)

We are entering a season when demand for homes traditionally decline to an annual low, so sellers decide to wait for spring to put the home on the market. However, sales are up. Inventory is being absorbed at an increasing rate by the increase of buyers in the market. Supply is declining. If you are thinking of selling in the next 12 months, you may want to consider now as a perfect time to put your home on the market. You will have less competition and more demand for your home … just make sure you get expert help from qualified real estate professionals to design a thorough strategy to get the most amount of money in the least amount of time.

Average Sales Price

As the demand for homes in the market has increased and supply continues to decline, the prices of homes, on average, have leveled off. Prices may actually increase if we continue to experience increasing demand and falling supply. In fact, we are beginning to help many sellers navigate their way through multiple offers! What this means is that we are generating so much demand for Austin homes for sale between $125,000 and $250,000 that multiple buyers are submitting offers to purchase the home. … and we are quite often getting our sellers more than our asking price.

Want specific data pertaining to your neighborhood or your own home? We have it! Please let us know if you would like a neighborhood-specific analysis by emailing us at experience@goodlifeteam.com or calling us at 512.892.9473.

Simple Summary

Want to sell your house more quickly than your competitor?

Get really good help from proven professionals

and

Price your house accordingly.

Tags: Market Statistics
Posted in Market Statistics, Market Statistics | No Comments »

City of Austin Property Taxes & Utility Bills Increase

October 28th, 2009

Q: What do a $31.7 million budget gap and the City of Austin have in common and what does this connection mean for Austin residents?

A: Yep, you got it…higher property taxes and higher utility bills for the 2009/2010 fiscal year that started October 1^st for homeowners within the City of Austin.

What do the changes look like?

Let’s start with property taxes:

If you own a home within the City of Austin, historically a portion of your tax rate was figured by charging 40.12 cents per $100 of assessed property value.

The 2009/2010 City of Austin property tax rate increased to 42.09 cents per $100 of assessed property value.

That’s a 4.9% increase in your City of Austin property taxes. For example, if your home is valued at $250,000, $1003 of your total property tax bill was going to the City of Austin. With the changes, $1052 of your total tax bill will go to the City of Austin.

Moving right along to your utility bills:

The average resident will now pay about $3.78 more per month on utility bills due to water and wastewater increases.
Those using 90-gallon garbage carts will be charged an additional 65 cents per month, a move the city hopes will promote switching to smaller carts and encourage more recycling.

So, where does all the money go?

Taxes and utility rates are increasing, so is there a silver lining for Austinites? Yes!

The City of Austin has actively pursued involvement from taxpayers through multiple interactions over the course of the past year. Austin is the first large U.S. city to involve the public on this level. The following are the methods used to involve Austin residents:

The city budgeters held 30 meetings with boards and commissions.
Six employee focus groups and five public town hall meetings were held.
Employees of the city were polled for budget-reduction ideas.
A hot line and e-mail accounts were created for budgetary comments.
The city completed a citizen survey.

It’s an empowering concept to have public involvement in the governmental process in a large city such as Austin. It certainly feels more democratic when the people we elect poll us for our opinions over the course of a budget or legislative process.

We ask you, Austin Homeowners…how do you feel about these changes? Is there a better solution? Were you involved in the town hall meetings or did you provide any feedback to the city? Please share your comments and stories below, your opinion matters.

Posted in Living in Austin | No Comments »

Austin Real Estate Stats - The Wise Assessment for August 2009 Austin Real Estate Market Conditions

September 30th, 2009

Note to readers: The Wise Assessment is posted on the first day of every month. We post our stats later than other real estate companies because we want the most accurate numbers available…and this makes them worth waiting for! Other agents simply copy and paste graphs that they get from other sources and offer no opinions to the marketplace conditions. We track data in house and compare the market on a whole to what we produce internally in order to produce an opinion of the data and give our thoughts of what we are personally experiencing as a top Austin Real Estate Brokerage.

Keep reading for the written Wise Assessment and/or listen to our interpretations on our latest VLOG:

Single Family Monthly Graphs

This month, I decided to mix things up a bit. I have been receiving a lot of responses via email and phone from readers that they love the stats, but want to look at the pretty pictures first. You ask, you receive. Additionally, I am including an overall market summary report below so you can have a full review of the entire Austin market before we get to my interpretations of the data.

Overall Market Summary Report

Property Type	Sales	% Change Year Ago	Dollar Volume	% Change Year Ago	Average Price	% Change Year Ago
Single Family	1,793	-10%	$437,228,429	-14%	$243,853	-5%
Townhouse/Condo	203	-8%	$33,986,057	-19%	$167,419	-12%
Farm/Ranch	33	-31%	$9,978,111	-32%	$302,367	-1%
Multifamily	25	-40%	$4,637,400	-53%	$185,496	-21%
Lots	105	-14%	$9,792,405	-43%	$93,261	-34%
Commercial	18	-28%	$5,684,778	-40%	$315,821	-16%
Lease	1,703	23%	$2,244,554	21%	$1,318	-2%
Commercial Lease	14	17%	$20,468	58%	$1,462	36%

The Wise Assessment

SELLERS: The supply (Active Listings) is on a seasonal decline right now, which means if you are interested in selling, you will have less competition. However, demand is declining at the same time. If you want to sell, you will need to have the very best house for the money (we call this value) so you can attract the ever-decreasing number of buyers.The good news: if demand and supply are declining at the same rate, prices will not be affected much. Why is this? As supply and demand remain evenly matched, prices will neither rise nor fall…rather, they will stay fairly consistent. So, you can expect to get the same amount of money for your Austin home that you would have last month, but there are fewer buyers looking so it could take longer and you need to be the BEST house in your price range and price to SELL.If you bought your Austin home in the past few years and are selling it today, your home is most likely worth less than what you paid for it - not worth more. Please see the statistics above that show the average sales price is 5% less now than just 1 year ago. That means you will not be selling for a profit but for a loss. To learn more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.

BUYERS: Is it time to get off the proverbial fence? Is the market stabilizing, and is my investment protected against further declines? Anyone telling you that we have fully recovered and are in the clear must have a magic 8 ball that works better than mine! The only way we will be able to definitively say that we have reached the recovery zone is this: we study history (the past) and make interpretations of what has already happened. We cannot predict the future; otherwise we would all be rich and retired.Has the market rebounded? My assessment is that it is too soon to tell. This in no way should detract you from investigating the purchase of an Austin home today. However, I recommend you either find a really good magic 8 ball (let me know if you find one) or seek professional help from experts in the industry; otherwise you may pay too much for your home.Thinking of buying, but not quite sure if now is a good time? Check out The Perfect Storm by Krisstina Wise in her most recent article, “Here Come Higher Interest Rates“. In a time when interest rates are at a historic low, coupled with very low home prices, we all get to take advantage of low mortgage payments. Please refer to the article for a brief, simple and thorough description of this situation and what it really means to you.

Property Virgins (aka First-time Homebuyers): Time is short, and you must buy now to take advantage of Uncle Sam’s $8,000 tax credit. The deadline to close on your home is November 30…and this means that you must be under contract this week to qualify for this unprecedented stimulus. Interest Rates are Low AND Prices are lower than they have been in years. Do you really think you will find a better time to buy your first home? Click on the link for more Info on This Limited Time Offer from the government.

Sales Closed by Month (Demand)

As you will note from the details of the graph, we are tracking the seasonality of residential real estate sales. Granted, the bold green line is shifted downward, but we continue to track the historical movements of sales, year after year. In June of this year, we experienced a steep incline in the number of transactions which was a launchpad to help us begin tracking very closely to last year’s summer months. Normally I would predict that we will continue to track last year’s sales very closely. However, we have noticed a spike in activity for September and anticipate an unseasonable, atypical number of sales for the month. Look forward to next month to see if we overtake the dark green line from 2008!

Active Listings (Supply)

Currently there are 9,500 homes for sale in Austin. This is 8% less homes than were on the market just 1 year ago. How did that happen, and what does it mean? As you will note from the sales graph, we had a significant increase in sales over the past 3 months which helped absorb our inventory..thereby reducing active listings. Also, there have been fewer homeowners putting their homes on the market this summer (who wanted to sell a house when it was 108 degrees outside, the grass was browner than the dirt of west Texas, and Austinites stayed indoors). But what drove buyers to endure the heat when sellers would have none of it? The Perfect Storm. Interest rates remained low all year, prices have remained low, and mortgage payments are now a fraction of what they would have been just a couple of years ago. Ergo, The Perfect Storm.

Austin Real Estate Average Sales Price

Average Sales Price

This graph is the child of the first two graphs I create for you. Prices are driven by supply and demand and are completely predictable. As we noticed the supply remaining relatively flat in May and demand increased, the only outcome that could be produced for pricing is indicated in the graph above: they increased. This fall, if supply continues to fall and demand follows suit, we can anticipate that our average sales price will remain relatively flat. However, if supply of homes for sale level out and demand continues to decline with the seasonality, our average sales price will decline as well. Let’s watch this evolve and study the different possibilities as fall continues to bring better weather and rain for our aquifers!

Want specific data pertaining to your neighborhood? We have it! Please let us know if you would like a neighborhood-specific analysis by emailing us at experience@goodlifeteam.com or calling us at 512.892.9473.

Simple Summary

Want to sell your house more quickly than your competitor?

Get really good help from proven professionals

and

Price your house accordingly.

The data provided to create these graphs are available to you by FREE subscription to our monthly update service. Please email us experience@goodlifeteam.com to receive your monthly update. Or, catch the wave and follow @GoodLifeTeam on Twitter.

Tags: Market Statistics
Posted in Market Statistics, Market Statistics | 2 Comments »

Property Virgins Hurry, Your First-Time Stimulus is Running Out!

September 1st, 2009

Property Virgins - Hurry, your first-time stimulus is running out!

Alright virgins, it’s great to wait for the right one your first time, but wait no more. You are running out of time to take advantage of a rare first-time homebuyer opportunity - an $8000 tax credit available only to you virgins. Sadly, non-virgins need not apply. The $8000 incentive offered by Uncle Sam to encourage Property Virgins to experience their first time ends December 1, 2009. That means if you haven’t already started searching for your first home love, you need to begin the process now and close on your new love before November 30^th!

The old adage “Time is running out” is in full affect!

In today’s climate, it is taking 45 days, on average, to obtain financing and close on your new home. Factor in the Thanksgiving Holiday and a few days of buffer for unexpected hurdles, and we say plan for 60. Working backwards, that means you would need to write a contract by end of September, early October at the latest, in order to ensure you can close on time to qualify for the tax credit. Today, we are at the beginning of September which means you have the next 30-45 days to begin the process of buying and contracting on your first home. Don’t wait. The old adage “Time is running out” is in full affect!

THE PERFECT STORM: Low home prices, historically low interest rates, $8k virgin credit

Also, please note, that in addition to the $8k credit, home prices and interest rates are at an all time low. This is what we call The Perfect Storm. Those that wait will likely and sadly regret it once the $8k credit is gone and home prices and interest rates rebound. To learn more about The Perfect Storm, listen to my VLOG.

What are you waiting for?

So, what are you waiting for? Perhaps you have one of the following questions or concerns:

1. “Am I a property Virgin?”

I know this sounds like a rhetorical question in that one usually knows if they are a virgin or not, but with Uncle Sam it is possible to be born again. You are considered a ‘first-timer’ if you have not owned a home within the last 3 years.

2. “I don’t have a down payment”

The good news here is that with an FHA loan, you can obtain a gift from a family member covering the full amount of your down payment. Assuming you qualify for the $8000 tax credit, you can amend your 2008 taxes, collect your refund check in the mail and, if you choose to, pay your family member back. Now that’s cool.

3. “I don’t understand the tax credit”

Read our full blog that explains the tax credit in detail-it’s actually pretty simple. Also, feel free to call our office to learn more. We are happy to explain the program and help you determine if buying now makes sense for you, or not.

4. “I’ve heard that the tax credit incentive will be extended”

As far as we know, this is only a rumor. We are closely plugged into real estate changes and we are not aware of any real legislation working to extend the program. Sure, our Uncle Sam could very well change the terms of the program at any minute, but why take that chance and effectively lose this rare opportunity for free money. Yes, I said free money!

5. “I’ve heard that the tax credit incentive will be increased to $15,000″

Again, as far as we know, this is only a rumor. We are not aware of any real legislation that says this is real. If we hear otherwise, we promise, you will be the first to know!

Posted in Market Overview | 5 Comments »

The GoodLife Team focuses on Austin Condos

August 24th, 2009

If you haven’t figured out from our website, we are your Austin Condo experts. We live, love and play in downtown Austin. No one knows it better. Call us first for cutting-edge information on Austin condos and high-rises in downtown, central or east Austin. Let our team of motivated, accountable and tech-savvy Austin Texas real estate agents take you out on the town. In no time at all you’ll understand why we call it the Good Life.

Tags: Austin Condos
Posted in Austin Condos | No Comments »

How Do I Know When We Hit Bottom…June Austin Real Estate Stats

July 31st, 2009

June Austin Real Estate stats are out - let’s take a look…

The market In a Nut Shell:

Austin’s Average Sales Price of single family residences in June ($251,982) decreased by .34% over last month’s average sales price ($252,834), but is UP 8.56% over the average sales price of January ($230,423).
The number of single family Sales in June was 2,135 which is a 22% increase over the number of sales in May (1,666 homes) and is a 60% increase over the 839 sales that closed in January.

SELLERS: The Average Sales Prices in Austin have increased this year from a low of $230,000 which was tracking the average prices we experienced in 2006. Since April, the prices have increased to numbers that are more similar to the 2007 and 2008 sales prices and have stabilized around the $250,000 price point. As noted in previous articles, these increasing prices indicated that we were heading for a healthy summer selling season….and that has indeed happened. Why does this happen like this, and why was this predictable? The fundamental laws of economics state that as demand increases and supply either remains the same or decreases, prices MUST rise. This will be further discussed with the graphs below, but our overall message here remains the same as it has all year: This is good news in that perhaps we have seen the bottom and prices will only go up from here -but it also means that if you bought your Austin home in the past few years but are selling it today, your home is most likely worth less than what you paid for it - not worth more. That means you will not be selling for a profit but for a loss. To read more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.

BUYERS: Has the market rebounded, and should you buy a home? If we simply review the factual statistics and believe the graphs will continue at an ever-increasing rate, we would all state that we have begun the recovery in the market, and it is time to throw caution to the wind…yet that is not what you will hear me saying! We have been studying the marketplace for a long time, and what we are noticing is either a beginning of a recovery or an artificial spike in activity. The artificial spike may be indicative of a flood of buyers entering the market after sitting on the fence for so long. This could very well be the explanation for the increase in number of sales (DEMAND), the flattening of the active listings (SUPPLY), and the overall result of an increase in PRICE.My assessment is that it is too soon to tell…but this in no way should detract anyone from investigating purchasing a home in the market today, which is aptly described as The Perfect Storm by Krisstina Wise in her most recent article, “Here Come Higher Interest Rates“. In a time when interest rates are at a historic low, coupled with very low home prices, we all get to take advantage of low mortgage payments. Please refer to the article for a brief, simple and thorough description of this situation and what it really means to you.

Property Virgins (aka First-time Homebuyers): BUY NOW! THERE WILL LIKELY NEVER BE A BETTER TIME TO BUY! Uncle Sam is basically gifting you $8,000, Interest Rates are Low AND Prices are lower than they have been in years. Do you really think you will find a better time to buy your first home? Click on the link for more Info on the First-Time Homebuyer Credit and don’t miss the Housing V conversation with Here Come Higher Interest Rates!

Sales Closed by Month (Demand)

It’s beginning to look a lot like 2006….or at least the spike in activity is very similar to what happened then. Since the beginning of the year, 8,714 homes have sold in Austin. In the last month alone, we experienced a 22% increase in the number of homes sold. Clearly, demand has skyrocketed…which is typical of the season, but rare that we would have such a significant increase. As noted in the graph, we can anticipate similar sales for July and August with a decline in the later months of the year.

Even though demand for existing homes is high, we must revisit the reality that the real estate market has changed forever. What this means is that sellers must be very competitive in marketing and sales strategies. These strategies can include tactics like: professionally staging the home, upgrading and/or improving the condition of the home to outpace the competition, and pricing the home to be a competitive and seductive opportunity for buyers.

Oh, and don’t forget the marketing piece of the strategy … hire only the very best Austin real estate team to take care of your home marketing and sales. In a competitive market like this, you must hire the best. Who is the best and how can you tell? Accomplishments. Period. Find out how the real estate team has performed in the past 12 months, and you will quickly learn who is selling Austin homes in a difficult market.

Active Listings (Supply)

Currently there are just over 10,000 Austin homes for sale. This is the second-highest number of homes we have seen on the market in the last 5 years, and demand has yet to reach a point that all the homes are being absorbed. In other words, if no other homes were placed on the market for sale and the demand (number of buyers purchasing homes) remains the same, most of the homes on the market would be sold in just under 5 months. What does this mean? When the absorption rate for the available homes on the market is 5-7 months, this means that we are in a balanced market. We are not in a buyer’s market any longer and we are not in a seller’s market. If you are buying a home in the current market, the best ‘deals’ can be negotiated by a very skilled and knowledgeable agent through finding the terms and conditions in a contract that are most beneficial to you. If you are selling a home, we are consistent with our message: be very competitive and hire the most knowledgeable professionals to help you.

Average Sales Price

As demand spiked, so did the average sales price. Since the supply (listings) did not increase this summer like it did in 2008, the prices had to increase to satisfy the laws of economics. If we experience a significant increase in the supply and demand falls off this fall, we can anticipate the average sales price to level back off. However, if supply remains flat and the demand falls off slightly like it has historically, the sales price will likely maintain an average between $240,000 and $250,000.

It has been requested in the past that I provide data and my interpretations of what is happening in specific price ranges or areas of Austin. If you are interested in the data, please make the request in your response to the article below or call us at 512.892.9473.

Simple Summary

Want to sell your house more quickly than your competitor?

Get really good help from proven professionals

and

Price your house accordingly.

The data provided to create these graphs are available to you by subscription to our monthly update service. Please email us info@goodlifeteam.com to receive your monthly update. Or, catch the wave and follow @GoodLifeTeam on Twitter.

Posted in Market Statistics | No Comments »

Here Come Higher Interest Rates

July 21st, 2009

On the fence?

If I said that Interest Rates were going to increase tomorrow?
If I said home prices were going to increase tomorrow?
And if I said that both interest rates and home prices were going to increase tomorrow?

What would you do?

I wonder why people today are on the fence. The question is somewhat rhetorical because I’m pretty sure that it is because they are waiting for prices to hit bottom - but really - are we still kidding ourselves to think we can time the market? Even expert investors are kicking themselves for failing to spot the bubbles in both the housing and stock markets — Isn’t that indicator enough that we cannot?

So if we are on the fence because we are waiting for bottom - that begs the question of:

“What is the Bottom?”

I think that most people think of “The Bottom” as housing prices hitting bottom before they begin their upward climb. But, if we agree that we can’t time the market, then really, how do we assess a good time to buy? How do we know the bottom when we can’t predict the bottom?

To answer this question I use the “Housing V”

The V shows us that the “Bottom” is not solely determined by home prices hitting “Bottom”, which is what I think most people think the “Bottom” is. The V shows that the “Bottom” is where both Interest Rates & Home Prices are at, well, the bottom (of the V). So let’s take a look:

To explain, let’s look at 3 different situations.

Situation 1: 1980s:

Where were IR’s?
Where were prices?
Where was your mortgage payment?

In the market crash of the 80s, prices were at an all time low. That was the good news if you were a qualified buyer. The bad news was that the Interest Rates (IR’s) were at a record high (18%).

So, despite prices being low, High IR’s limited your buying power.

Situation 2: 2000s:

Where were IR’s?
Where were prices?
Where was your mortgage payment?

In the mid 2000’s, before our recent crash, IR’s were historically low, BUT prices were at record highs. Yet, buyers flooded the market pushing prices even higher.

So, despite IR’s being low, high prices limited your buying power. Most buyers could only buy because of sub-prime loan deals.

Situation 3: 2009!:

Historically low interest rates AND Low home prices

Right now, we are in what I like to call the ‘Buying Zone’. Interest rates are at historical lows. AND, Austin home prices are lower than they have been in years. This combination of low rates and prices produces the perfect storm for buyers. Never, in my career, have we experienced this situation. I have only ever seen either one or the other of the two previous situations.

So let me ask you, do you really think interest rates will continue to go lower?

Do you really think prices are going to drop much more? Really?

How likely do you think it is that both dots will drop lower on the graph?

And, what happens if either dot jumps higher on the graph?

The Buying Zone

My interpretation and speculation: we are at a bottom. We are, in this moment, in a time where we can take advantage of both low interest rates and low prices meaning the ideal ‘buying zone’. What is important to note is that inflation equals higher IR’s. Interest rates are artificially low because the Fed is holding them down in order to stimulate the sluggish economy. Once the artificial hold is released, interest rates will climb. It is a matter of fundamental economics.

In addition to the perfect storm of a buying zone, in Austin we have noticed spikes in sales activity, higher asking prices, multiple offers, shorter marketing times, more construction starts, and fewer incentives. Yes, in my interpretation, now is a time to buy and if you wait much longer - you may have missed one of the best buying opportunities we have seen in a long time. Waiting will mean a higher mortgage payment. Even if prices were to drop a little more, if interest rates spike, you will have waited too long. Another instance of “bad timing”.

Here come higher interest rates … if that is true … what will you do?

Posted in Conversations with Krisstina, Market Overview | 6 Comments »

Have you experienced the Home Valuation Code of Conduct (Middle-man Appraisal Mgt Companies) to help or hurt the housing crisis?

June 29th, 2009

I posted this question yesterday on Facebook and Twitter. I was amazed at the number of responses I received to my question during the span of only a couple of minutes.

Instantly Realtors®, homeowners, appraisers and lenders began to share their real stories, opinions and outrage at the new rules (many in 140 characters or less!). Although I have read several articles of late reporting and speculating about the new legislation, what I have not seen, prior to my Facebook post, are real stories of how people are being affected due to this, in my opinion, ridiculous regulation. Therefore, because of the many real stories appearing on my Facebook Wall, as a result of simply posing what I thought a benign question , I thought I would produce a ‘space’ for all to share their stories as to how this new legislation is affecting the already suffering real estate industry fighting for a market recovery.

UPDATE 6/30: We managed to get local TV coverage of this important issue affecting home buyers and sellers. To view the coverage, see KVUE’s webcast of the story.

What is the Home Valuation Code of Conduct (HVCC)? HVCC is a new rule put into effect by Fannie Mae and Freddie Mac on May 1 that prohibits lenders from ordering appraisals directly from the appraiser. All appraisals now must be ordered using third-party appraisal management companies. Can you say ‘middle man’?

So, why such a bad idea? Many of these appraisers are not even local which means they know little to nothing of the local markets, don’t have access to MLS and certainly are not able to identify value based on the idiosyncrasies of different neighborhoods. This means they tend to deliver flawed valuations that cause transactions to fall apart. In addition, the new rule has spiked the cost of an appraisal to the consumer -the middle man management company needs their share of the fee for assigning an appraiser to a property — and has significantly increased mortgage processing time. While these factual impacts illustrate the negative impact HVCC is having on our market, nothing tells the story as well as real stories from homeowners, Realtors®, Lenders and Appraisers. If you, your client or your business has been negatively impacted by HVCC, please post your story. I will add mine in the mix as well.

Thank you,

Krisstina

UPDATE 08/19: The latest news coverage on the HVCC and the appraisal management company takes an insightful look at what led to the code and it’s impact on the economy: http://www.nytimes.com/2009/08/19/business/19appraise.html

UPDATE 07/24: HVCC Clarification from Fannie Mae and Freddie Mac: http://varbuzz.com/hvcc-clarification-from-fannie-and-freddie/

UPDATE 07/10: ***Potentially $1.7 Trillion in equity has been lost due to HVCC.*** Check out the latest video from Think Big Work Small http://www.thinkbigworksmall.com/mypage/player/tbws/11895 /1029714 and SIGN THE PETITION at http://hvccpetition.com.

UPDATE 07/01: The guys at Think Big Work Small launched a petition for the reconsideration of HVCC. Check out their video, discussion and petition at http://www.thinkbigworksmall.com/mypage/player/tbws/10777/1029714

UPDATE 07/01: The President of the National Association of Realtors (NAR) emailed all Realtors to express NAR’s concerns and the steps they are taking to resolve the problems that have been created by HVCC. On June 29th, the President traveled to New York and on the 30th he traveled to DC. We will keep you posted on the results of his efforts. In addition, NAR VP & Liaison to Committees Steve Brown shared his experiences with HVCC in his recent blog: http://narblog1.realtors.org/mvtype/president/2009/06/all_is_not_quiet_on_the_midwes.html

UPDATE 07/01: There is a bill on the table asking for an 18 month moratorium on the HVCC. Read and then write your congressman: http://www.mortgageorb.com/e107_plugins/content/content.php?content.3794

Posted in Conversations with Krisstina, Conversations with Krisstina | 28 Comments »

Austin Texas Real Estate Stats & Graphs - In a Recovery?

June 19th, 2009

Is the Austin Housing Market in a Recovery? May Austin Real Estate stats are out - let’s take a look…

The market In a Nut Shell:

The average sales price of single family residences is currently tracking last year’s numbers but is lagging by 3.6%. In other words, the average sales price right now is 96.4% of what the average sales price was in May of 2008.

SELLERS: The Average sales price indicates that we are headed for a healthy summer selling season. As noted in the graphs, the highest average sales price occurs in June, July and August. The reason this happens is directly related to the fundamental laws of economics … supply and demand. During the summer, more buyers are in the market looking for homes (demand) and although there are more homes on the market (supply), there have historically been more buyers than sellers and prices increase due to the laws of supply and demand.Our message to sellers remains the same as it has all year: This is good news in that perhaps we have seen the bottom and prices will only go up from here -but it also means that if you bought your Austin home in the past few years and are selling it today, your home is most likely worth less than what you paid for it - not worth more. That means you will not be selling for a profit but for a loss. To read more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.

BUYERS: At first glance, we could say that the market has stabilized. There has been a nice correction in the graphs, we are tracking a more healthy market and our prices are not declining. However, we are cautious when stating that we have entered a recovery zone. I say this because we are not sure that the indicated recovery in the Austin real estate market is a long-term indication. This could be a false correction based on the possibility that there have been an abundance of buyers sitting on the fence waiting for the market to hit rock bottom. Those buyers, thinking it likely that we have hit bottom, began buying up the existing inventory (see the current listings graph) thus driving the average sales price up. Is this a true recovery or an artificial one? Without the use of my magic 8-ball, I can only continue to study the market and note in my future articles what the facts are. Again, our message here remains true: with stable prices, unless a home is grossly overpriced (which plenty still are) don’t expect to get a steal in the Austin real estate market! For overpriced homes - you may have to walk-away. Sellers who still have their homes grossly overpriced are not in touch with reality and your justifiable low ball offer most likely won’t help them get there.

Property Virgins (aka First-time Homebuyers): BUY NOW! THERE WILL LIKELY NEVER BE A BETTER TIME TO BUY! Uncle Sam is basically gifting you $8,000, Interest Rates are Low AND Prices are lower than they have been in years. Do you really think you will find a better time to buy your first home in Austin? For more Info on the First-Time Homebuyer Credit click here.

Sales Closed by Month (Demand)

Right now, Austin is tracking the number of single-family home sales very closely… except we are lagging by 20%. In other words, 1,707 homes were sold in May 2009 compared to 2,154 homes in May 2008. If we continue to follow our annual bell curve, we anticipate that the highest number of sales in Austin will occur in June, July and August. If you are planning on selling this year and want to compete in a market during a time when the most number of buyers are wanting to move, now is the time. Keep in mind that the real estate market has changed forever, and sellers must be very competitive in marketing and sales strategies. This includes professionally staging the homes for sale, improving the condition of the home to outpace the competition, and pricing the home to be the best option for buyers. Oh, and don’t forget the marketing piece of the strategy … hire only the very best Austin real estate team to take care of your home marketing and sales. In a competitive market like this, you must hire the best. Who is the best and how can you tell? Accomplishments. Period. Find out how the real estate team has performed in the past 12 months, and you will quickly learn who is selling Austin homes in a difficult market.

Active Listings (Supply)

The number of homes currently available for sale is 9,939. This is down a bit from the 10,577 homes from last year, and we are now seeing the graph level off instead of the historical increase of availability. What is causing this? As we study the Sales Closed By Month graph (demand) and note that there is an increase in the number of homes sold month over month for the year, we can conclude that the current supply of homes are being absorbed by the buyers in the market, and sellers are replenishing the supply of homes at the current rate that they are being sold (hence the flattening of the graph above). What this means is if we continue to have an increasing number of buyers over the summer and sellers keep the supply steady, we will continue to experience an increase in the average sales price. As supply stays steady and demand increases, prices must increase.

Average Sales Price

If all we do is look at the average sales price graph, we would expect the market to be a very healthy one in a full recovery and life is happy. But, that does not tell the full story. To truly understand what is going on with the prices in Austin, we must study all of the graphs included in this article. The prices in Austin are a reflection of supply (active listings) and demand (sales). As noted in my narrative of the Active Listings graph, the average sales price must increase. What does this really mean? Supply is level, Demand is increasing, and prices must increase as well. However, this is not a full story of the entire marketplace. We are using a complete aggregate of data across the entire market … but as I study the raw data that I use to create my graphs, I study the different price ranges in Austin and notice that different price ranges are selling at vastly different time frames and are experiencing different consequences because of different supply and demand within said ranges. Now that is a mouthfull! Basically, if you are interested in what is happening in specific price ranges or areas of Austin, email me and I will provide you with the data, graphs, and a specific narrative for your specific situation.

Sold to List Price

I was perhaps a bit overly ambitious in hoping that sellers were really beginning to get realistic about their prices and started pricing their homes more appropriately to the market … and then we flattened out in May. What this graph says to us is that sellers are marketing their homes for about 105% of what buyers are willing to pay for them. In other words, sellers are overpricing their homes in today’s market by about 4.5%. For example, if you are selling a $300,000 house in the market today, you can expect to sell your Austin home for about $285,000. As we continue to see the market recover, I anticipate that sellers will continue to overprice their homes in ‘hopes’ that a buyer will pay what the seller wants to get for the house. However, we know that this does not work in a normal market. Sellers do not set market value of a home, or any other commodity for that matter. What is market value? Market value is what a buyer is willing and able to pay for a product. In other words, only buyers will determine what your house is worth, and right now buyers are saying that your house is worth 95.5% of what you are asking for it.

Want to sell your house more quickly than your competitor?

Get really good help from proven professionals

and

price your house accordingly.

Posted in Market Statistics | No Comments »

Fannie Mae and Freddie Mac strategize to kill condo developers….or at least bankrupt them!

June 8th, 2009

In a shocking move last week, Freddie Mac made a move to bankrupt condo developers. Freddie announced that they are going to increase the pre-sold requirement for condos in new developments from 51% to 70%. This means that if you want to purchase a new condominium and need to get a loan, the condominium development must NOW be over 70% pre-sold or sold to others whom will be occupying the condo (no investors are allowed in this percentage requirement).

This is not the first time that these agencies…err…I mean companies have increased the percentage required under this ruling. In fact, just last year, the two companies increased requirements from 51% to 75%, and it ceased the sales of all of the Austin condominiums in our developers’ portfolios. Developers could not find any lenders to provide loans for home buyers under these restrictions. So, earlier this year, Freddie Mac reduced their requirement from 75% to 51%….sales began again and developers sighed relief. Qualified buyers were able to purchase the condos they wanted and developers could now sell them. Life was good, right? Apparently not.

Now, developers must have over 70% of their new condos sold to resident-owners before Freddie Mac will buy the loans, which reminds me of the old chicken and the egg story. Which one really comes first in this situation? How can we sell 70% of the condos to buyers before we get them loans? What does this REALLY mean?

THIS MEANS:

developers will not be able to sell any of the condos
you will not be able to buy a new condo
new condo developments will sit vacant for the foreseeable future gathering dust
developers will either continue to bleed money or have the entire development foreclosed on
the marketplace can be saturated with foreclosure or heavily discounted condos
other like properties in the vicinity will be devaluated by the lower sales prices

or … fortunate developers may be able to find alternative financing options for their buyers.

Just when the market begins to recover, it gets undermined by the lending institutions who could have the most to gain and certainly the most to recover from.

Who really wins in this situation?

Do you think Fannie Mae and Freddie Mac should kill the condo developers?

Posted in Austin Condos | No Comments »

Selling Austin homes just got more expensive and a little more complicated

June 1st, 2009

As of today (Monday, June 1^st), the mandated Energy Audit, required on the sale of any home within the Austin City limits that is more than 10 years old, takes effect.

This means that any home that is on the market for sale, built in 1998 or earlier, must have an Energy Audit by the owners of the home before the home is sold and closed. Although the City is not requiring that any updates to the house be made as a result of the audit findings, the seller must provide a copy of the audit to the buyer as well as send a copy to Austin Energy for filing within 30 days of the inspection.

Selling an Austin home just got more expensive.
The cost to the seller to conduct an audit will range, on average, between $250-$500 depending on the size of the home.

Selling an Austin home just got more complicated.
For starters, as part of ‘preparing their home for the market’ sellers will have to order and coordinate an audit which, on average, will take a few hours. In addition, a seller will likely engage in additional negotiations with buyers who will NOW demand for more updates and repairs on the home they are buying.

Yes, there are variances and exemptions - If you are curious - read more here.

Let us know if you have any questions about the audit or wish for the names of auditors that we recommend. If you are thinking of selling your home in the near future, we recommend that you complete the audit now. You will have more leverage by knowing the energy efficiency of your home sooner rather than later.

For some cool Energy Facts, more information and a list of currently approved auditors, click here.

Tags: green, mandatory energy audit
Posted in Real Estate Tips | No Comments »

Austin Texas Real Estate Stats & Graphs - Has Real Estate Stabilized

May 28th, 2009

Wondering if the Austin real estate market has stabilized?

April Austin Real Estate stats are out - let’s take a look…

The market In a Nut Shell:

The average sales price of single family residences is now holding steady after the 7% drop from the height of the market 22 months ago.

SELLERS: Since prices have dropped from the height of the market in 2007 it appears that prices are finally holding steady. This is good news in that perhaps we have seen the bottom and prices will only go up from here -but it also means that if you bought your Austin home in the past few years but are selling it today, your home is most likely worth less than what you paid for it - not worth more. That means you will not be selling for a profit but for a loss. To read more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.

BUYERS: The market appears to be stabilizing. That means that prices do not appear to be dropping more which means it may be likely that we have hit the bottom. If this is true, that means that prices will only go up from here. So what that means, is that if you waiting to buy, you may pay more for a home by waiting until tomorrow than today. With interest rates being low and prices having dropped from market heights buy likely stabilizing, now would be a good bet for best time to buy. With stable prices, unless a home is grossly overpriced (which plenty still are) don’t expect to get a steal in the Austin market! For the overpriced homes - it is likely that you will have to walk-away. Sellers who still have their homes grossly overpriced just are not in touch with reality and your justifiable low ball offer most likely won’t help them get there

Property Virgins (aka First-time Homebuyers): BUY NOW! THERE WILL LIKELY NEVER BE A BETTER TIME TO BUY! Uncle Sam is basically gifting you $8,000, Interest Rates are Low AND Prices are lower than they have been in years. Do you really think you will find a better time to buy your first home? For more Info on the First-Time Homebuyer Credit click here.

Now on to the Graphs:

Sales Closed by Month

In April of this year, we experienced a 16% decrease in the number of sales of single family homes compared to April 2008 (that’s 308 less homes). This is also a 46% drop in the number of homes sold compared to the high tracked in my graphs…June 2006. You can also notice that we are tracking a curve that is consistent with the past years, although we have not really experienced any dips in the curve compared to history. In fact, we are consistently tracking a 12% increase in Austin home sales on a monthly basis.

What does this mean to you?

If we continue to track at this pace until the traditional peak in June, we can anticipate to peak with about 2,000 home sales in that month alone. Granted, this is far off from the hay day of 2006, but certainly will get us back on track to a healthy real estate recovery. As a seller, this means buyer activity has increased and as a result, more homes on the market are selling, leading us to speculate a market recovery. As a buyer, this means that if number of sales continue to go up, bringing listing inventory down, prices will go up. Now is the time to buy.

Active Listings

As you notice in the graph above, we started this year with a spike in the number of homes for sale in Austin (inventory), but that spike quickly leveled off and we currently have 145 less homes on the market now than we did last year. The number of active homes for sale in April was 9,889 while the number of homes sold was just 1,601.

What does this mean to you?

At our current pace, we have 6 months of available inventory in the market. In other words, if not a single more home was put up for sale, we would sell out of the homes that are currently available in 6 months … and then there would be no more homes for sale! While that brings a frown to my face, the reality is that sellers will continue to sell and more buyers will enter the market to absorb the inventory. According to the National Association of Realtors, a balanced market exists when the absorption rate (or how long it will take to sell the current inventory of homes) equals 6 months. Congratulations, Austin … we are balanced (at least in real estate!). What is your house worth??? Find out here.

Average Sales Price

Wow … that graph above seems to have flipped upside down! In February of this year, the average sales price was $241,655 and in April it was $232,403 which was 3.8% less than the average sales price for April 2008.

What does this mean to you?

Simply put: the sky is not falling. Stop listening to the media hype of a ‘national’ real estate market that screams of a market of homes being valued at 40%-50% of the values of just 2 years ago. This is not our reality. The reality is that Austin homes are selling for an average of 93% of what they sold for just 2 years ago. That’s a 7% drop in value over the past 2 years, not a 50% or 60% drop! Buyers: there are NO steals in Austin. In fact, the Today show recently ran an interview talking about cities on the verge of recovery. Austin was one of five. WATCH THE VIDEO

Sold to list price

This month, the sold to list price (the percentage of the asking price that the home sold for) ended up at 95.6% from an all-time low of 94.2%. The all-time high was in the buying frenzy of June 2006 and peaked at 97.7%. We are currently increasing at an average of .5% each month, which should place us at 96.7% in June of this year.

What does this mean to you?

Sellers took some time to realize that buyers determine the market value of their homes, the buyers were not willing to pay what the buyers were asking, and sellers sold their homes for a bit less than what they were asking for their homes. As this graph (and EVERY other graph and factual statistical data herein) supports, we have likely seen the bottom of the market and we are emerging to experience a balanced market … one where it takes a city-wide average of 6 months to sell a house. The steals are gone. Great deals can still be had … as always … but it takes knowledgeable help in the market to find, negotiate, secure, and purchase them.

Who is in your corner?

What are you waiting for?

Posted in Market Statistics | No Comments »

Are you a Property Virgin? - 8,000 reasons to buy your first home today!

May 12th, 2009

No joke. The 8,000 reasons to buy today are quantified in terms of real dollars - $8,000! That’s right. As part of the stimulus package, Uncle Sam is offering “First-Time Homebuyers” (Let’s call you Property Virgins) up to $8,000 in the form of a tax credit…and now a down payment…for purchasing a home in 2009.

And, as if this is not enough….the Secretary of the US Department of Housing and Urban Development (HUD) just announced that the FHA is going to allow lenders to let you, our Virgins, use the $8,000 as a down payment. What this means is that you will be GIVEN up to $8,000 to use as a cash down payment that lenders can monetize through a short-term bridge loan . So, if you have been on the fence because of a lack of cash to buy a house, it is time to hop down and leave that Virgin fence behind!

What is it? As part of the Stimulus package, a Property Virgin who purchases in 2009 is eligible to receive up to 10% of the cost of the house -up to $8,000- in the form of a tax credit on their tax return or cash for a down payment (did we just use stimulus and virgin in the same sentence?). A tax credit means that the $8,000 is a dollar for dollar reduction in what you owe in taxes. This means that if you owed $8,000 in income taxes and you received the $8,000 tax credit, you would owe nothing to the IRS. If you are owed a refund of $1,000, after the credit you would receive a refund of $9,000! And no, you don’t have to pay it back if you live in your new home for at least 3 years.

When is it? You have a short window of opportunity. You must purchase a home as a primary residence (new or resale) between January 1 and December 1 of 2009. The clock is ticking! The great news is that you can deduct the $8,000 on your 2008 or 2009 tax return. That’s right, you can buy a home this year and use the credit on last year’s tax return. If you have already filed, you can amend and still receive the credit.

Am I a Property Virgin? Well, maybe not according to you BUT according to the government, you are a ‘first-timer’ if you have not owned a home within the last 3 years. When else do you get to declare yourself as a born-again virgin?

Don’t wait. Really. We may never see this chance again. Historically low home prices, historically low interest rates and free money for buying a home. What is there to think about? And why are you waiting? Don’t sit on the fence any longer. When the government offers you a tax break or cash for down payment, TAKE IT!

For more detailed information on how to take advantage of this credit contact The GoodLife Team today. Click here to peruse FAQs.

It’s a good life,
Krisstina

In fact, you will be kicking yourself if you don’t. It is very likely that this opportunity is a once in a lifetime chance to receive real help in buying your first home.

Posted in Conversations with Krisstina, Mortgage, Real Estate Tips | 4 Comments »

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