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The Crossland Team
Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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More About Square Footage VS. Design - which matters most?
June 27, 2006
I was at the David Weekly Homes design center yesterday looking at their model home. It’s a beautiful floorplan by the way. If you live in Austin and need design ideas, you have to visit their design center and tour the model home. It’s one of the best floorplans I’ve ever seen for families.
Anyway, their marketing material has some interesting writing with regard to design vs. square footage. It says “Innovative design isn’t measured in square feet or on a calculator. It’s expressed in cubic feet and light and the way a room feels when you enter it. Nothing has a greater impact on your home’s value than design. Sight lines, room placement, traffic patterns - exceptional design is as much a science as it is an art.”
The brochure continues with “Two homes have the same square footage yet one seems much larger than the other. Why? The difference is something called sight lines. Sight lines are what you see from any given point in the home, whether you are standing in the doorway or seated in a room. As you move through a home, it’s far more interesting to get a preview of what’s to come with subtle hints of the spaces beyond than to be cut off from the rest of the home - which is why a David Weekly Home looks and lives larger than all the rest.” Sounds pretty good, and I agree. In fact, I’ve pointed this out in previous articles with regard to why some older homes, with choppy, boxy, layouts do not compete well against smaller, newer homes with better floor plans.
When Your House Shrinks - A Case Study of Wrong Square Footage Size
June 24, 2006
One of the first things people ask when they are interested in a home is “What’s the square footage?” One of the first things we ask buyers, once we know their price range is “what size home do you need?”. With few exceptions, people are able to immediately quote a size range in square feet. Square footage measurements make it easy to compare and sort one house against another and to decide, when searching, which homes to select initially as candidate properties, and which to exclude.
Many agents and buyers use the square footage size of the home to compare the price per square foot against the average price per square foot of homes sold in the particular neighborhood or area in which the home is located. Agents and Buyers use the square footage in this manner because no other characteristic of a house is as easy to understand, or as generally reliable to compare. Of course square foot size it is not and should not be the ONLY criteria used in valuing a home. There are many other factors to consider. But in Austin TX it is simply a fact that square footage size is a primary and common measure of value comparison used by agents, buyers and sellers when evaluating and comparing homes of similar size, quality and location and trying to determine what a fair offer or list price will be for a home.
So what happens when it is discovered after the fact that the square footage size of a home is substantially smaller than the number represented by the Seller? This just happened to one of my Buyers, prior to closing, and the outcome was that the deal fell apart, the Buyer may lose his Earnest Money, and the home will have to be returned to the market with the square footage amount corrected. The issue is a bit more complex than it first seems, and it’s one of those cases in life where, in my opinion, common sense and fairness collide with established law.
Austin Homes sales jump 15 percent in May
June 22, 2006
This is from today’s Austin Statesman. I’ll post some graphs and charts on Austin May Sales when I get some time. Meanwhile, this article reflects what we are seeing and experiencing in the Austin real estate market. Namely, this month we’ve had to start “fishing in some new ponds” so to speak, as some of our favorite neighborhoods to take buyers are getting pricier and more competitive. For the investors we work with, a home we could have found in Area SW near Oak Hill, Circle C, Shady Hollow, etc. for less than $200,000 a year ago now costs $225,000 to $240,000. That same home won’t rent for much more than it would have a year ago though ($1250/mo. to $1600/mo.) because supply is keeping pace with demand. So, already tight cash flow numbers become even harder to work with and one has to really become dedicated to the notion of future appreciation. Otherwise, as the article says below, we are starting to migrate buyers somewhat to areas that were not previously strong candidate areas. I have more to say about this but will have to catch up later. Article is posted below.
What is the The Purpose of Investing in Real Estate?
June 19, 2006
Last Saturday I wasn’t feeling well so I laid down for a while and flipped on the TV. I can’t think of more lazy and useless activity than laying around on a Saturday with the TV on, but I felt justified since I was “resting”. Anyway, I happened to see one of those real estate investing infomercials promoting a “real estate investment guru”. I watched it out of curiosity. What struck me was the lifestyle being promoted to those who might achieve success in real estate investing. If you believe the testimonials of others who have supposedly purchased the books and tapes, the fruit of your success will be the ability to live a lavish consumer consumption lifestyle. You’ll live in a big house, have boats and fancy cars and enjoy expensive vacations to exotic destinations.
This isn’t why people should invest in real estate, in my opinion, and the infomercial is obviously targeting the get-rich-quick dreams of people who might be able to afford to buy the books and tapes, but who probably won’t ever succeed in real estate investing.
Dripping Springs Preparing for Growth
June 19, 2006
Dripping Springs and Hays County were outlined in the Saturday June 17 business section of the Austin Statesman. I read the article with interest. The Hwy 290 corridor between Oak Hill and Dripping Springs runs 1 mile from my home in Oak Hill. This Highway has quickly outgrown its capacity in the past few years and is a dangerous road upon which to travel.
Those of us who live out here and travel Hwy 290 daily see accidents often. Many of the roads off of 290 West are hemmed in by traffic such that, during mornings, if you need to turn out toward Austin from the north side of Hwy 290, you can’t do it. Instead you have to make a right turn toward Dripping, go up the road a ways, then turn left across traffic onto another road, and then turn around and come back out to make a right onto the highway toward Austin heading east. The same issue exists if one wants to head west into Dripping Springs during afternoon traffic, which is heavy coming back from Austin toward Dripping. TXDot is not willing to put traffic lights at all of these dangerous intersections because it would slow traffic to a crawl.
Most of the traffic is commuting to and from Dripping Springs and other parts of northern Hays County, but Hwy 290 does have its share of people just passing through as well. We will someday have a freeway/tollroad through Oak Hill, but the design proposed by the TX Dept. of Transportation has been meet with fierce resistance, so it could be another 5 or 10 years before the road is completed. Once the freeway is in place, Dripping Springs will be an easier commute into Austin than it is already. Meanwhile, the traffic bottleneck coming through Oak Hill has not diminished growth or demand for homes in and around Dripping Springs. I think Dripping Springs is a great place to live and/or invest in real estate for those patient enough to let the growing pains work out. And the traffic will get worse before it gets better. If you’re interested in learning more about this part of the greater Austin area, see the article below.
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Austin area job growth keeps up fast pace
June 16, 2006
The Central Texas workforce is at an all-time high of 715,900. We like to keep an eye on the job market because it directly impacts real estate activity, among other things. New jobs bring the new people who buy and rent homes in Austin. As the job market goes, so goes real estate, and things are looking good. The following article is from the Austin Statesman today.
Buyers Willing to Pay More for Newer Homes
June 15, 2006
A common set of search criteria that I use for Buyers looking for homes in South/SW Austin is to search homes in Austin MLS areas 10, SW, and W, minimum 3 bedroom, 2 bath, 2 car garage, 1800 to 2500 sqft, and only those homes that feed either Bowie or Austin High School. Homes that fit these criteria have become much more difficult to find below $250,000. Many are selling for over list price in a few days.
Last week, I had to write 4 offers in 7 days for a buyer before finally getting one accepted. The 3 failed offers were all for homes brand new on the market, matching the above criteria, that we jumped on immediately. Two of the failed offers were above list price (one was substantially above - $225K list price, $239K offer), the other was only a full price offer. All three had other offers accepted that were well above list price. One agent told me he had 10 offers before 5PM, and the best offer was for cash, 8.4% above the list price. Finally, by venturing slightly outside the above criteria, we located a home in area SW that is superior to all the others in physical attributes, and priced below $220K. It just doesn’t feed Bowie High. My Buyer is very happy with this home though.
Austin OKs ban on larger homes in certain neighborhoods
June 9, 2006
From the Austin Business Journal website. I don’t have any new commentary to add to this issue. I’ve written about it before. I’m neither against not do I strongly support this new rule.
Austin Business Journal - 12:24 PM CDT Friday
by Jonathan Selden
Austin Business Journal Staff
In what’s become a frequent occurrence at Austin City Hall lately — a marathon city council meeting — the council early Friday adopted the so-called McMansion ordinance outlawing supersized homes in certain Austin neighborhoods.
The McMansion ban prohibits houses more than 2,300 square feet or over 40 percent of their lot size in most central Austin neighborhoods. Proponents say it’s needed to protect the look of an area of town built back in the days when elegance prevailed over excess. But detractors fought hard to keep the ordinance off the books, arguing nigh unto 4 o’clock in the morning that it will slash property values in affected areas and undermine land owners’ investment expectations.
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Is Driving Farther for Cheaper House Worth It?
June 9, 2006
While looking at homes yesterday in the Creekside Park subdivision in Buda, just south of Austin, I went into a home that seemed familiar. Then I realized it was the identical floorplan of a home in Legend Oaks (South Austin in Oak Hill) that one of my buyers closed on this week. The home in Buda is listed for $214K and my buyer’s home was listed for $245Kin Legend Oaks. Would it be worth saving 31K to live in the exact same home in Buda versus Legend Oaks? Or, put another way, if my Buyer had been willing to consider homes as far south as Buda, would I have recommended the identical home in Buda over the more expensive home in Legend Oaks? In this case, no. Let me explain.
Austin Leasing Update for May 2006
June 7, 2006
The number of single family homes that leased in May 2006 increased by 44% from May of last year and homes in Austin are leasing faster than a year ago. But the rental rates are still treading water. Were it not for all of the additional housing supply being created by investors, rental rates would have started a strong climb by now. Investment sales continue to be strong. Most of our investor buyers are purchasing in the $200K to $300K price range in the South and West areas of Austin, but we’ve also recently sold homes in Steiner Ranch near Lake Travis and and Tera Vista in Round Rock. The areas in which sales are very strong are also areas in which the rental market is doing very well.
I have several charts and graphs listed below. By next month will try to start doing the same stats for sales, and also lining up sales and leasing stats by area to see how the sales/rent value ratios look across different areas and price ranges.
All MLS Areas - Houses Only
# Leased
Avg List Price
Median List Price
Avg Leased Price
Med Leased Price
Avg Size SQFT
Median SQFT
Avg $ per SQFT
Avg Days on Mkt
Median Days on Mkt
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