The Heart of Austin

Prepare Your Home for Arctic Air to Hit Austin

 The weather forecasters predict 20 degree temperatures and possible snow and ice to hit Austin later this week. Prepare your home to prevent damage to water pipes and landscaping.

Drip all indoor and outdoor faucets before the cold snap hits. Wrap exposed pipes. Open the door to utitlity rooms that have an exterior wall so that the heat of the house keeps connections from freezing. Turn thermostats to the 60's in buildings that are vacant.

Water lawns and flower beds thoroughly before the temperatures fall. Watering will help protect the plants from freezing. Add some protective mulch around bedding plants. A protective covering that resembles cloth can be purchased from Home Depot to cover sensitive plants. Plastic will not give the protection delicate plants need. Secure the covering with rocks or stakes since most of the fronts come in with strong winds. Taking a little precautionary action can protect your home and your garden.

Thursday, the overnight temperature at Camp Mabry is predicted to hit 21 degrees in West Austin and as low as 19 degrees at Bergstrom airport. This is supposed to be some of the coldest weather that we have had for two years. Highs on Friday are expected to remain in the low 30's. The weather service predicts that January will have below average temperatures this year.  So, bundle up, light a fire and read that new book that you got over the holidays!

Considering selling your home this Winter? That’s a great Idea!

We’ve been talking to a lot of sellers lately that are in the mindset that it is better to wait for the spring market to list their homes. These sellers are correct in knowing that more homes are sold in the Spring than any other time of the year. Over 30% of homes sell in May, June and July.

The Fall and Winter can also be a great time to put your home on the market. For one, the competition for buyers is a lot lower. If you look at the chart below, you will notice that there are always more homes on the market in the Spring and less in the Fall leading into the Winter months. This unneeded competition in the Spring can end up hurting the value of your home.

Another upside to listing right now is that you will be dealing with serious and motivated buyers only. A look-loo will not waste your time looking during the Winter months. Buyer’s looking right now are typically have-to buyers. The majority of corporate relocations happen in January. This means they are more than likely looking to buy during November and December. And buyers have an extra incentive to buy right now that they won’t have in the Spring—the extended and expanded tax credit.

All first time home buyers will still receive up to an $8,000 tax credit when they purchase a home. Now, any buyer who has not bought a home in the last 5 years will receive a tax credit up to $6,500. This offer ends April 30^th, 2010. Remember, if you plan to take advantage of this offer, the purchase must be a primary residence.

Another great benefit to selling right now is that your home will be automatically staged. Having holiday decorations out always creates a sense warmth and welcome. Buying a home is definitely an emotional purchase—nothing evokes the feeling of home more than the holidays. Remember, HOME is the second most emotional word in the English language.

Speaking of home, many people travel during the Winter months visiting family and friends. If you are thinking of selling right now, but don’t want to have to worry about having your home on the market at the same time---we understand. We always work with sellers to block out dates they don’t want buyer’s coming through their home. We also help negotiate favorable moving timelines and possession dates in our contracts that won’t interfere with your holiday plans.

We hope you enjoy this holiday season and want you to know that we are here to help with all your real estate needs. Feel free to call or email us anytime.

We can be reached at (512) 345-1252 or via email at homes@westaustin.com. Follow us on twitter: @westaustinprop.

Austin Real Estate Market – A Look at the First 3 Quarters of 2009

Everyone in town has been raving about our small real estate victory in Austin this past week. The big news is that month-over-month single family home sales for September increased from this year over last for the first time since May of 2007. That means we have been in a declining market for 28 months straight and this is the first sign that Austin may be in a recovery. See the chart below for more details.

 

Keep in mind that this only pertains to number of homes sold in Austin. This does not take into consideration the sales price of the homes, the number of days it takes to sale, where these home sales take place in Austin, etc., etc. We will get to that in a bit.

First, I would like to look at the sales for the first three quarters in comparison to the first three quarters of the past decade. This, in my humble opinion, is a better gauge of where we are as a real estate market. As you can see from the chart below, what we have been referring to as normal growth from 2002-2006, was more like a bubble than anything else. What we have been experiencing for the past year is a soft landing, as opposed to a thud. And, can also be considered the natural cycle of a real estate market.

Home Prices

Despite the drop in sales in the market, we have experienced steady average and median home prices. From the chart below you will see that prices are actually up slightly from last year. We have discussed this at length to try and figure out how this is possible with sales being down almost 25% from last year at this time. The only logical reasoning that we can agree on, is that prices have not reached their lowest point. The first time homebuyers rushing into the market really picked up the slack last month, but with the $8,000 tax credit expiring on November 30^th, we may see prices begin to decline.

Day on Market

For those of you in a hurry to sell your home, you may want to pay close attention to the next two charts. The first chart below is the average days on market for the entire year. As you can see, it is taking right around 76 days to sell a home. We haven’t experienced anything like this since the dot-com bust at the turn of the century.

The majority of homes that sit on the market for an extended period of time are still pricing their home as if the market is still moving up. Right now, to sell a home you have to win a beauty contest and a pricing war. In years past you could win one or the other and we are just not seeing much of that anymore.

 

The good news can be found in the following chart. It goes into more detail about when the best time of the year is to sale your home in the shortest amount of time. In previous years, the trend has been the same—sell during the summer. The interesting phenomenon is happening this year, where the average days on the market has dropped almost every month since November of last year.

Home Sales by Price Band, Year-to-Date

In the past we have discussed what sales were doing by price band for a single month. The chart below takes into consideration all sales from the beginning of the year through September.

As you can see, homes priced under $200,000 are still selling at a rather quick pace. With an inventory lasting less than 5 month’s, homes priced under $200,000 are considered to be in a seller’s market.

Homes priced between $200,000 and $400,000 are selling at a decent pace as well. With an inventory lasting between 5-7 month’s, homes priced between $200,000 and $400,000 are considered to be in a balanced market.

Homes priced over $400,000 are having a hard time on the market. With an inventory lasting over 7 month’s, homes priced over $400,000 are considered in a buyer’s market.

Home Sales by Region, Year-to-Date

To break down the market even further, we have divided Austin and the surrounding cities into very distinct regions. From the chart below you can see how well sales are doing across Central Texas, including the average prices and days on market. The region experiencing the best market right now is Southwest Austin. The region experiencing the worst of the down market is Northwest Travis County. This region includes many properties on Lake Travis, which has been severely hurt by the two-year long drought. Hopefully, with the rain coming down in buckets, the market will be on its way to recovery.

 

This is a lot to take in and a lot to process. If you are considering selling your home in the near future, the best way to gauge the value of your home is to have an experienced Realtor visit your property and take into consideration all the factors that may affect the value of your home.

If you aren’t quite ready for that step, you can always sign up for our Market Snapshot program. It is an amazing tool that you can read more about here: http://budurl.com/zaqk

Patrick Birdsong is a Realtor with West Austin Properties. He is a second generation Realtor with over 7 years of experience in the Austin Real Estate Market. He can be reached at (512) 345-1252 or via email at patrick@westaustin.com.

The Austin Condo Market – September Sales by Price Band

When a market starts to turn south, the first sales to dip are in the condo market. While condos can be a cheaper alternative to buying a home, they also attract a smaller buying pool than homes. The 180 condo sales in Austin represent about 10% of all residential sales during the month of September. Historically, condo sales represent closer to 7-8% of all sales in Austin. This could point to a small trend of homeowners reconsidering how much they are budgeting for their primary residence and choosing a condo as a more economical option. 

As you can see from the chart above, about 96% of condo sales happen below $400,000; whereas only 87% of single family homes sales occurred below $400,000. The month’s of inventory report on the far right of the chart is showing that the lower price ranges are still selling well and overall, we have a balanced market. Buyers in the $200,000 and up range have more selection than they have ever had in the past. 

The portion of the Austin condominium market that is still receiving the most attention right now is the Downtown market. 

If you compare the overall market chart and downtown specific charts above, you will see a few similarities. For the most part, downtown resales over $400,000 have slowed to an inconsistent trickle. The main contributor is competition with the new condo projects. The Austonian (www.theaustonian.com), The Four Seasons Residences (residences.fourseasons.com) and The W Residences (www.block21residences.com) all have about 50% availability. Prices for these condos start in the mid $400’s and go well into the multi-million dollar range. If you are thinking of putting your condo on the resale market, do not make the mistake of ignoring these projects as competition with your condo. All three of these projects will be completed next year and will be more aggressive in their sales approach once they are complete. 

If you are concerned about the value of your condo, sign up for our Market Snapshot program. It is an amazing tool that you can read more about here: http://budurl.com/zaqk 

Look for a complete overview of the Austin real estate market, as well as a complete overview of the Austin condo market in the near future.

Patrick Birdsong, West Austin Properties, (512) 345-1252, patrick@westaustin.com

Austin Home Sales By Price Band for July, 2009

 

While sales in many areas of the country are slow and prices have dropped significantly, the Austin real estate market continues to be a relatively balanced market with an average of 5 months of inventory in price ranges below $400,000. This segment of the market represented 87% of the home sales last month.  Homes priced over $400,000 saw a significant increase in the absorption rate.

Several key factors are contributing to these numbers. The up to $8000 tax credit that the government is giving to first time homebuyers (or buyers that have not owned a home for the past 3 years) has driven sales in the $100,000-300,000 price range significantly. This buyer credit ends November 31, 2009, so buyers have been racing to get these homes contracted and closed before that deadline. 

Also, interest rates still remain at a very appealing rate between 5 and 6% for buyers with good credit. In many cases, Austin tenants are finding that they can own a home and pay at or below what they were paying in rent, and receive a deduction for mortgage interest as an added bonus. Why pay rent when you can buy?  With sellers contributing to closing costs, a buyer can still purchase a home with very little downpayment and enjoy all of the privileges of home ownership. 

Homes priced above $400,000 may require borrowers to find a non-conforming loan for financing. Loan amounts that exceed $417,000 require borrowers to meet different underwriting standards and buyers usually pay higher interest rates. New appraisal guidelines are increasing the challenge to get these homes sold. Appraisers must substantiate value with three comparable sales in the area in the last 90 days. Unique properties or those that have unique intangible features, such as a killer view, are finding the process difficult and sometimes unsatisfactory when the appraiser can't find comparables and then loans are denied due to their inability to meet underwriting guidelines with the lender. 

If you are selling a home in the price range above $400,000, you may need to consider offering to finance the property or carry a 2nd mortgage to get your home sold.

The next few months should remain a great time to purchase a home in Austin, Texas. If you know someone who is renting, and could own a home, please refer them to us.  There has never been a better time to buy real estate.

Laura Duggan, West Austin Properties, 512-345-1252, Laura@WestAustin.com

Austin Real Estate Market Snapshot

Tax valuations are up in the Austin area even though homeowners feel that their home values have dropped. Many Austin homeowners have called us over the past few weeks to get market statistics for the purpose of protesting their tax evaluations. We have all of the current market data for every neighborhood in Austin and are happy to assist homeowners by pulling a report of the sold information for any time period. We can also provide detailed information about each sold property so that you are prepared to compare your property with the sold data and identify points of difference in the protest hearing, something you likely will be asked to do.

However, if you want to keep track of the home values in your neighborhood in real time, we have a proprietary tool that we call Market Snapshot that will provide you with information about homes for sale and those that have sold in you neighborhood. To subscribe to the data, go to our website at www.WestAustin.com and click on the Market Snapshot icon. You can set the parameters of the snapshot to include homes in your particular neighborhood and designate how often you would like to receive the report. It comes automatically into your inbox complete with photos of each home.

Staying on top of home values and being prepared is your best defense when valuation time rolls around. The service is free and easy to subscribe and unsubscribe should your interest change.

Posted by Laura Duggan, West Austin Properties, on June 8, 2009. For detailed information about any homes in the Austin area or to learn about our other marketing tools, contact us at homes@westausitn.com

 

New Austin Energy Ordinance Begins June 1st

   The City of Austin and Austin Energy Utility customers will be required beginning June 1st, 2009 to have a home energy audit performed by a certified energy auditor before they can close on the sale of their homes. This new ordinance, the City of Austin Energy Conservation Audit and Disclosure Ordinance, applies to all homes 10 years old or older at the time of sale. Sellers have to have the audit done prior to closing even if the property was listed prior to June 1st.

Sellers who have had energy audits and made at least three energy efficiency improvements or who have received rebates totaling $500 or more through the current energy efficiency program offered by the City of Austin and Austin Energy in the last 10 years are exempt. Some other exemptions apply relating to estate properties, foreclosures and such.

The audit among other things will examine the insulation, duct work and air conditioning systems in the property. Deficiencies will be noted and recorded for disclosure to the buyer. The seller is not required to make repairs or remediate the property, only to disclose the report regarding the home's energy efficiency. The cost of the audit is approximately $400-500.

For more information about the new ordinance and to watch a licensed auditor explain the process, go to our website and click on the Austin Energy Audit button on the bottom left side. If you are thinking of selling your home, we can arrange the audit with a licensed auditor and supervise the process for you as part of our service.

This entry was posted on Tuesday, May 19th, by Laura Duggan, Broker/Owner of West Austin Properties. For more information about this topic or any real estate related topic, call us at 512.750.2425 or email homes@westaustin.com

Buying a Home Just Got Easier for First Time Home Buyers

First time home buyers, or those who have not owned a home in the past three years, can now receive a 10% of the purchase price credit up to $8000 toward the purchase of a home at closing as a down payment.  Shaun Donovan, Secretary of the US Housing and Urban Development made the announcement yesterday at the Real Estate Summit: Advancing the US Economy here in Washington, DC in conjunction with the National Association of Realtors May meetings. Several thousand Realtors and I applauded the move to stabilize and energize the housing market while providing an opportunity to homebuyers to realize the American dream of home ownership and all of the benefits it affords.

The Federal Housing Administration is going to permit its lenders to allow home buyers to use this credit as a down payment. Donovan said, "We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment."   The president of the National Association of Realtors, Texan Charles McMillan, championed the role Realtors are playing in promoting stability in the housing market and the U.S. economy. A group of distinguished panelists discussed the housing market, the economy and the role of the federal government in the recovery and as well as its reponsibility to the taxpayer

With interest rates still hovering around 5% and this added incentive to purchase, there has never been a better time to purchase a home. While my daughter saw a 30% drop in her investment account a few months ago, she was able to sell her home this week and net over $12,000 in less than two years of homeownership. Not every market is going to return those kinds of results, but right now prices are low and it is a great time in any market to get into a home, not only for the enjoyability of owning a home, but the opportunity to build wealth through equity. Search for homes in the Austin area at our website, www.westaustin.com  We are happy to help you realize your dreams!

Posted by Laura Duggan, West Austin Properties, May 14th in Washington, D.C.

Austinites Can Avoid Foreclosure

There are a number of reasons that a property and its homeowner can fall into a distress situation with foreclosure looming on the horizon. The inability for a homeowner to make their payment once it has "adjusted" to a higher interest rate is certainly at the top or the list.

Subprime mortgage loans and less than ethical loan officers lured unsuspecting and sometimes marginally qualified buyers into the housing market with introductory mortgage rates considerably below the prevailing interest rates. Now, thousands of homeowners can't make their mortgage payments and many are facing imminent foreclosure.

These loans came in all varieties with adjustments in interest rates tied to a volatile index. A once "affordable" property climbed out of reach as the mortgage rate "reset". Complicated and complex, it is not unusual to find mortgage payments that have increased dramatically leaving these homeowners with little capacity to keep making them. Some homeowners have seen their mortgage payments more than double and in some cases triple the original amount. Once a mortgage payment is missed, the lender begins the process of foreclosing on the property. In Texas, foreclosure can happen very quickly unless a homeowner acts fast to stop the process.

One remedy for this situation is to refinance the subprime loan. However, many homeowners with these types of loans find that they cannot refinance them for typically two reasons. They are not qualified now under the lending guidelines for the mortgage amount of their current loan or their property value has decreased since they purchased the property, and they now owe more than their property is worth. In either case, they are "short" whether they try to refinance or sell the property.

The Distressed Property Institute is teaching real estate professionals across the country to counsel these homeowners to avoid foreclosure. Through negotiations with the homeowner's lender, these real estate professionals who have been designated as Certified Distressed Property Experts are helping lenders and homeowners avoid foreclosure, a costly proposition for both parties. Through a negotiated "short sale" the CDPE agent is able to find a buyer for the property and work with the bank to accept an offer. In a short sale, the lender accepts less than the distressed homeowner owes and many times does so without recourse. While a foreclosure becomes a permanent record for the homeowner and damages their credit for years to come, a short sale allows the homeowner to resolve the debt and get on with their lives. For homeowners that have a security clearance necessary for their employment, foreclosure can jeopardize their security clearance resulting in difficult finding or keeping a job.

As a designated Certified Distressed Property Expert, I am uniquely qualified and committed to helping Austin homeowners who find they can't make their payments because of mortgage payment increase, loss of job, divorce or any other hardship to avoid foreclosure. Please call me if you know someone who could benefit from my expertise. All consultations will be kept stricltly confidential.  I can be reached by email at Laura@WestAustin.com or by phone at 512-750-2425.

Posted by Laura Duggan, CDPE, West Austin Properties, Austin, Texas, on February 23, 2009.

 

Home Buyers Benefit from New Restrictions

The federal government recently passed some major reforms to the settlement, or "closing" rules for home purchases which will make it much easier for consumers to compare costs between the Good Faith Estimate that a buyer receives from their lender at loan application and the Hud-1, Settlement Statement that itemizes their expenses at closing. Aimed at making the yield spread premiums that are paid to a mortgage broker and the actual closing costs more transparent, there is now less likelihood that there will be large discrepencies between what was provided in the Good Faith Estimate and what is actually being charged on the Settlement Statement at closing. 

By January 1, 2010, a new three page Good Faith Estimate will replace the current two pager and requires lenders to calculate and disclose yield-spread premiums, extra money that the lender can pocket if the interest rate changes, as part of their origination fee. Known as "playing the market" these premiums benefitted lenders when the rate dropped and the mortgage broker pocketed the difference, sometimes thousands of dollars. While not all lenders compensated themselves with this undisclosed bonus, many did requiring a change in the guidelines to protect the consumer. A lender with the buyer's best interest at heart should pass the "savings" along to the buyer.

While the current changes in the law are important and will help consumers, choosing an honest lender is fundamental.  If you have wisely employed a buyer's representative, a real estate broker that represents you in the purchase of a home, he or she has a fiduciary duty to help you, the client, select a lender that will treat you with honesty and integrity and provide financing that is in your best interest rather than that of the lender. The loan program that the lender recommends should be determined by your best interest and not by how much the lender is going to make off of your loan. Ask your broker to provide you the name of an honest and reputable lender that puts your interests first not theirs when you are making a home purchase. The lender we recommend to our clients at West Austin Properties has a proven track record with our clients and has been saving our clients thousands of dollars for years because he puts their needs first.

On January 16, 2009, the RESPA reform law also required builders to quit steering buyers to loan companies and title companies that the builder owned in exchange for " builder concessions" or rebates. This is good news also for the consumer who can now get the same builder benefits and choose the service providers, lender and title company that provides the best rates and services rather than being locked in to one that had an affiliated business relationship with the builder.  

This article by Laura Duggan,
West Austin Properties, January 25, 2009.

Happy Birthday to daughter, Kerry, who is celebrating her 25th birthday today!