Austin Real Estate

This was emailed to me today & I thought it was a great read.  Rent has been steadily increasing & rental inventory has been steadily declining for the past year.  I think we’ll see this trend continue, and believe we will be in a real housing shortage by 2012.

By: David Tandy, CEO
Gracy Title, a Stewart company
As published on Realty Line Magazine 8/2010

While the Austin MSA continues its rapid population growth rate, single family and multi-family construction has gone through a dramatic slow-down. Will this slow-down in new construction cause a housing shortage?

In June, Austin was the fastest growing market (year-over-year) in the U.S with a 1.3% annual growth rate. Although our population growth has slowed from its hyper-growth rate in 2006 and 2007, we are still projected to grow between 40,000 to 50,000 in 2010. We have averaged over 55,000 per year for the last 5 years. According to the City of Austin Household and Population analysis, one household is created for every two and 1/2 new Austin residents; therefore, we will be adding about 20,000 new households per year to the Austin area based on our population growth. Looking forward over the next decade, those projections show we will add between 500,000 and 600,000 new residents: the equivalent of the entire population of Austin in 1980.

So the question is: Will Austin have sufficient housing options for these new residents?

It’s doubtful multi-family options will meet Austin’s housing needs. For the Second Quarter of 2010 the Austin Planning Commission showed only 975 multi-family units in projects with site plans under review and 8,885 units in projects with site plans approved. Since it takes at least a year to obtain planning commission approval and a year to build and there are only 975 units currently under review, it seems likely that a shortage of apartment units over the next several years will begin to develop. Real Estate developers would already be building more projects but for the challenges of securing commercial financing.

The Texas A&M Real Estate Center projects there will only be about 2,500 units completed this year and we could have as few as 1,000 building permits issued for multi-family units. This would compare to about 8,000 multi-family building permits in 2006 and 2007. Add the additional single family new construction and it’s still hard to imagine how Austin’s housing needs will be addressed. There were 6,678 Residential (single family) building permits issued in 2009 and we are on track to issue about 7,000 for 2010. By comparison, there were 17,600 permits issued in 2006.

To summarize, if Austin’s population continues to grow at its historical rate, in 2010 we will create about 20,000 new households but will create fewer than 10,000 new single and multi-family units combined. These were about the same number of units created for 2009. Due to the difficulty in financing new subdivisions and new apartment projects, we should see a similar deficit in new housing units in 2011 and 2012. At some point, Austin will have a noticeable shortage of new housing units which will impact resale inventories and home prices. Austin has not seen this small number of new housing units since around 1994 when the Austin MSA population was just under 1,000,000.

If you’re like most people, you don’t want to have to pay more for your home’s energy than what you need to. Forget for a moment concerns about waste and the environment, and understand that most homeowners are throwing money away every month because their homes could really stand to improve their energy efficiency.

Fortunately, there are some relatively basic and quick things you can do if you want to improve your energy efficiency today:

•    Start by assessing the situation. There are a number of online energy efficiency calculators you can use to estimate how much money you’re burning every month just because your home could stand to see improved energy efficiency. These calculators take all of about five minutes to use. If you’re more aggressive and have more time, you can bring in a professional energy auditor who can do a thorough assessment and tell you where the most effective energy efficiency improvements will be for your particular home.

•    Change out your thermostat. One of the quickest ways to improve energy efficiency in your home is to start with the thermostat. You can install a programmable thermostat fairly simply, and they’re really not that expensive at all. They are readily available at most local hardware stores, and you’re almost certain to find them at the big box tool and home improvement stores.

•    Check your insulation. Whether it’s adding some insulation to your attic or simply caulking around your exterior doors and windows, taking an hour or two to better insulate your home and reduce the air flow is a great way to quickly improve the energy efficiency of your home.

•    Make use of an alternate heat source. If you have a fireplace, use it. Of course, you want to make sure that the damper on the fireplace is shut when you’re not using it, and that all of your seals around your fireplace’s hearth are tight.

•    Get energy efficient appliances. If you’ve got a 20 year-old clothes dryer, chances are pretty good you’re not being anywhere near as efficient as you can. Today’s appliances are greener (not to mention much more feature rich) than those of decades past.

About the Author: Brian Kinkade is a broker and team lead with Brokers Guild – Cherry Creek Ltd, one of Denver’s fastest growing full service Denver real estate firm. Brian’s team of Internet savvy agents service the Denver Metro area while specializing in Denver luxury homes, Colorado horse property and International sales. They invite you to visit their advanced real estate website today to search for homes, gather local information, and learn about Denver neighborhoods. Brian and his team are standing by, ready to assist with your home purchase, property sale or relocation needs.

Are you trying to determine the value of your home? If you are planning to put your home on the market sometime soon, determining its actual value is the first and most important step in the process. After all, you need to know the value of the home in order to determine a fair asking price. At the same time, you want to get as much for your home as possible. So, how do you go about determining the right asking price for your home?

Pricing Too High…..Big Mistake

Unfortunately, many sellers make the mistake of asking a price that is more than the fair market value. For these sellers, the belief is that asking a higher price will allow them to sell the home for its actual value. According to this logic, asking for more than the fair market value gives the buyer more room for negotiation. While this may seem logical, the reality is that overpricing a home can cause it to sit on the market for too long. Many propects will not even take the time to look at the home because of the perception that the seller’s may be unrealistic. As a result, the seller may ultimately end up selling the home at a price that is well below the actual market value.

Time on the Market

It is a well-known fact within the real estate industry that a home loses value the longer it sits on the market. Furthermore, the longer a home sits on the market, the greater the probability it will not sell. In fact, a simple formula is used to calculate what is known as the “absorption rate,” which is the probability of the home not selling. To determine the absorption rate of your property, simply divide the number one by the number of months of housing inventory on the market. If there are 12 months of housing inventory in your market, for example, the probability of it selling in any given month will be 8.3%. This means the probability of it not selling is a whopping 91.7%. With odds such as these, you certainly don’t want anything to stand between you and getting your home sold – and that is just what will happen if you ask for more than the home is actually worth when you put it on the market.

Time is Money

Of course, the longer your home stays on the market, the more it is costing you. After all, while your home sits on the market, you still have to pay the mortgage, utilities, insurance and other costs associated with maintaining the home. By holding out for an unreasonably high price, you increase your expenses by keeping the house on the market for longer than necessary. Furthermore, even if you do find someone who is willing to pay what you are asking for your house, the buyer will be very unlikely to find a lender who will provide the buyer with a loan. Remember, this is an investment for the lender and paying more than the actual market value simply is not a good investment.

Correctly Pricing Your Home

So, how do you go about determining a realistic price for your home? Getting an appraisal is a good first step, but you and your Realtor can use a number of other methods to determine the best asking price possible. For example, your Realtor can do a Comparative Market Analysis (CMA) to compare the prices of comparable homes in your area on a price per square foot basis. Or, you can use online resources such as Zillow.com, which allows you to learn more about competitive pricing as you determine the price to ask for your home. Although Zillow’s Zestimates are sometimes a useful tool, appraisals and CMA’s are much more reliable and accurate.

If you are considering listing your home in this challenging real estate market, proper and realistic pricing is a must. Work with your Realtor to establish a competitive asking price so that you can get your home SOLD.

About the Author: John C. Allen is the broker and owner of Allen Real Estate Services, a 30 year real estate firm in Sarasota, FL. He specializes in representing buyers and sellers of Sarasota luxury homes for sale, including condominiums, exclusive golf communities and waterfront houses. Stop by his award-wining website to lean more about the Sarasota, Florida area. In addition there is free access to thousands of MLS listings and detailed information on hundreds of neighborhoods and condo communities. From vacation properties on the barrier islands to downtown Sarasota real estate, John’s team of Internet specialists can help you explore all of the options currently available.

The property market has been a hot discussion topic for quite some time now but there is no more pressing issue than that of shadow inventory, the element of the market that seems to be lurking the shadows with the potential to set the growth of the market back to an unbelievably negative degree as recovery begins.

This debate has been started by a Standard & Poor recent report, which advocated that the absorption of the shadow inventory in existence at the moment will take up to three years.  Defined as “outstanding properties that are (or were recently) 90 days or more delinquent, in foreclosure, or real estate owned (REO), but haven’t yet hit the market inventory”, this category is therefore worth in excess of $480 billion. As these properties are set to hit the market in the very near future, it is looking bleak as a result of the low prices that they will be sold at. Supply will heavily exceed demand and this may drive house prices down further.

However, there are a few issues with the assumptions made about the shadow inventory. For example, nobody actually knows how large it is because estimates stand at anywhere between two and eight million. As such, there is no way of knowing how many homes will flood onto the market in the near future. Furthermore, the problem is not exactly uniform in its coverage across the nation. Instead, the average shadow inventory is 34 months but some areas have lower or higher inventories. Phoenix, for example, is the lowest with 16 months worth and New York is the highest with 103 months worth according to Standard & Poor’s report. However, despite these discrepancies, it appears that the shadow inventory is shrinking according to the National Association of Realtors with the national total down by 3.4% in May.

The shadow inventory is certainly a problem at this moment in time because an influx of foreclosed properties into the market will definitely cause prices to plummet. However, this largely depends on the scale of the rush. Properties dripping onto the market may not cause as many problems as millions hitting the market at once. It is suggested that lenders may well seek to hold properties to enable them to get the best possible price. This trend is evident in the commercial market at the moment, where properties have not hit the market all at once thanks to realtors holding properties in shadow inventory.

Although residential shadow inventory does differ significantly from the commercial market, it should be noted that there are several categories within the market. For example, many distressed properties are low end and will not bring the higher end of the market down as well. As a result, it is fair to say that there are so many factors that could affect the market in relation to shadow inventory that it is not possible to draw solid conclusions at the present time.

Standard & Poor did issue a warning about the national shadow inventory numbers though. Careful action could undoubtedly offset the impact of the shadow inventory as it hits the market. Low interest rates and tax breaks could sustain demand and prevent disaster hitting the market at the worst possible time.

Dylan Taft is an experienced Hudson Valley real estate professional working in home sales and purchases. Visit Dylan’s professionally optimized website for more information on property taxes, and details on the Ulster County Foreclosures.

The deadline to close a property and qualify for the $8000 tax credit has been extended to September 30th.  The measure was ratified early today by the President & received bi-partisan support in both the House & Senate.  The bill does not allow for new contracts, but extends the deadline for any buyer contracted prior to April 30th to close by September 30th.  The prior deadline was June 30th.

While some may claim this relieves tardy buyers, I believe the bill helps those stuck in the seemingly endless short sale process the most.  Personally, I’m working with one couple who risked losing the tax credit due to the sellers’ lenders’ tardiness, and through no fault of their own (we contracted the property months ago.)

More than anything, I think the necessity of the bill illustrates how much we need standardization & reform of the short sale process.  Currently, buyers can expect to wait 4+ months to receive approval/denial of their offer, which is absurd.

Source & full article on the credit extension below:

Austin’s hitting the top 10 lists pretty consistently.  This time, Kiplinger gave Austin the #1 spot for “Best City for the Next Decade.”  Listing Austin’s healthy business climate, community programs, & community support, Kiplinger states “Austin is arguably the countrty’s best crucible for small business.”  My favorite quote, however, is “Mix all these elements in what many call a classless society, where hippie communalism coexists with no-nonsense capitalism, and you’ve got a breeding ground for start-ups.”  Hooray Austin!

Rounding out the list:

• Seattle, WA (2)
• Washington, DC (3)
• Boulder, CO (4)
• Salt Lake City, UT (5)
• Rochester, MN (6)
• Des Moines, IA (7)
• Burlington, VT (8)
• West Hartford, CN (9)
• Topkeka, KS (10)

All the numbers for April 2010 are looking rosy as rosy can be.  While it makes sense that we would start seeing increased activity in the market, since Austin officially moved out of the recession in August 2009, these numbers are out of this world!  But wait…we have the Home Buyer Tax Credit & its impending expiration to thank for the lion’s share of it.

Of considerable notice is that the # of homes sold is up almost 31% over April 2009.  Median sales price increased negligibly, as did average sales price.  Average sales price slight increase is actually very positive news, as it indicates that the luxury market is stabilizing.  (Bear in mind that the home buyer credit has little to no affect on the luxury market.)

The most striking statistic isn’t shown on the chart – pending sales are up 47% over 2009.  In order to qualify for the tax credit, a buyer must have been contracted by April 30, 2010, and must close by June 30, 2010.  I predict that we will see similar sales increases for the months of May & June.  After that?  It’s anybody’s guess.  But, I love to guess, so here it goes:

I think we will see small, but noticeable declines in total # of homes purchased for July/August/September 2010 over 2009.  I think the numbers will be flat from October through December, and we’ll see an overall increase in # of homes sold for 2010 over 2009.  I predict that we will see marginal increases in median & average sales price.

So…what are your thoughts?

The days of houses selling with little or no effort are over.  After the real-estate market appreciated at astronomical rates during the first half of the decade, the real-estate market has tilted to favor homebuyers over home-sellers.  Do not get discouraged, this does not mean your house will not sell, it just means you might have to do more to get it sold.

There are a few suggestions to aide you in this process of selling your home quickly and for a fair price.  First, make any repairs you know need to be made.  In this day of short sales and foreclosures, you need your home to take on a different look.  You do not want to compete against the properties that need TLC, make your property desirable for a homebuyer not interested in a fixer-upper.  Another tip for selling in a slow market, price your home to sell.  The demand for real estate has softened significantly.  This means price is everything and if you are not prepared to sell you home at fair market value, then maybe you should wait to sell.  Pricing your home above fair market value will drive potential homebuyers away.  A home seller must also be flexible in today’s market.  Make sure your house is ready to show at all times and do not limit access to your home.  Not being flexible could cause an agent to bypass your home and move on to another that has no stipulations.

Lastly, in todays market it wise to bite your tongue even in the toughest of situations.  Sometimes a potential buyer will come with an offer that you and your seller may consider too low.  Resist telling them that or even worse turning your nose up at the offer.  Remember it takes a lot of time, energy, and patience to sometimes get any offer out of a potential buyer, and even a low one is a sign of interest.  Always counteroffer any offer, you never have anything to lose by countering, and everything to lose by dismissing or rejecting the offer without at least considering the interests taken to submit one in the first place.  Following these few simple tips will hopefully make your home selling process a little easier in today’s tough real-estate market.

Author & Realtor, Angela Kraushaar, is available for your Katy area Real Estate needs.  Visit her realty website at: Katy Homes For Sale / Katy Home Search / Katy Foreclosures.

Is downsizing right for you?

With the onset of the housing crisis and the U.S. economic downturn, more and more people have been working hard to scale back their expenses. That includes the percentage of their income they’re spending on housing, as well as the proportion of their overall budget going toward household expenses, transportation, entertainment and discretionary items including everything from haircuts to Starbucks. Many existing homeowners and first-time home buyers have been getting pretty creative when it comes to cutting their commuting costs, whether it means car-pooling, taking public transportation, moving closer to work, or eliminating a second vehicle altogether from the household budget equation. This has naturally led to somewhat of a trend in downsizing one’s house size since a lot of people no longer require a two-car garage. And yet there are a host of other reasons one might consider downsizing. For example, are you in the midst of a life-changing event? Do you dream of a simpler lifestyle, a smaller more manageable living arrangement, or one with less yardwork? Maybe you’re thinking about reducing your carbon footprint? Has your personal situation or job situation changed or is it about to change? Perhaps you’ve decided that the “McMansion” lifestyle isn’t really all it was cracked up to be – maybe it’s become too stressful, too financially burdensome, or no longer fits your lifestyle. Whatever the life change you may be experiencing, there are a number of benefits to be had by downsizing to a smaller single family home or condominium – and, surprisingly, not all of them are just financial.

So today we’re taking the opportunity to list the top 16 reasons why you and your family might want to consider moving into smaller digs, otherwise known as “downsizing”. Take a look – could you be a candidate for trading up…to a smaller home or condo?

1. Conserve energy (utility bills are lower)
2. Create better quality of life
3. Create peace of mind
4. Current home presents physical challenges (e.g. stairs)
5. Divorce
6. Fear of being laid off
7. Impending job loss
8. Impending retirement
9. Job loss
10. Live greener (smaller houses leave a smaller carbon footprint)
11. Lower taxes
12. Reduce expenses (lower payments)
13. Reduce stress (less cleaning, less yardwork, smaller financial burden)
14. Reordering your priorities (getting back to what’s important)
15. Save money (smaller houses are cheaper to run)
16. Soon-to-be empty nester

Have we missed any reasons why someone might want to downsize? If so, let us know. We’d love to hear from you!

Jolenta Averill is the owner of boutique Madison real estate brokerage Lake & City Homes Realty. She specializes in lifestyle, lakefront, and luxury homes. For more information about Madison’s most walkable neighborhoods, 55 and over condos in Madison or Downtown Madison condos, please contact her at Jolenta@LakeandCityhomes.com or call (563) BUY-SOLD.

The city is threatening to demolish the Cathedral of Junk, and this will be its last weekend open while the owner, Vince Hannemann, decides what to do about bringing it up to code.  The Cathedral is an icon of sorts in South Austin.