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Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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Austin Real Estate Market - Another Favorable News Article
December 29, 2006
Here is another favorable news article regarding the Austin real estate market and expected homes sales activity in 2007.
AMERICAN-STATESMAN STAFF
Thursday, December 28, 2006
Austin home market expected to remain strong next year
Home prices up significantly in 2006 and expected to be higher in 2007.Central Texas home builders have been offering plenty of year-end discounts and bonuses to boost sales, but that doesn’t mean that the Austin area housing market is cooling or that prices are falling.
Strong job growth, a steady influx of new residents and relatively affordable prices have kept the Austin housing market strong, even as markets on the East and West coasts faltered.
That isn’t likely to change in the coming year.
Angelou Economics predicts the Austin area will add about 20,000 jobs and 40,000 residents next year, about as many as were added in 2006. According to Texas Workforce Commission, Central Texas’ total work force reached a record 728,100 in 2006.
Austin Real estate to remain strong in ‘07
December 29, 2006
This article is about commercial real estate, but good news for commercial real estate is good news for residential real estate as well.
From the Austin Business Journal
Friday Dec 29, 2006
A new report from a national real estate services firm is telling investors what many of them already know–Austin’s a good bet in 2007.
The capital city’s retail sector placed third in Integra Realty Resources’ annual IRR-Viewpoint, which ranks U.S. markets with the greatest commercial real estate potential in the coming year. The report looks at the four main commercial property sectors: office, retail, industrial and multifamily. Austin’s office and multifamily markets ranked fifth in their respective classes.
The booming city of Las Vegas ranked No. 1 in the office, retail and multifamily categories with Miami taking the lead in the industrial sector. Among other Texas cities, Fort Worth ranked No. 2 in the office category while Houston placed fourth in industrial.
Integra determined the rankings through a national survey and research that looked for markets with positive growth patterns, strong current conditions and enough absorption to accommodate current vacancy and planned projects.
Austin Real Estate Market - November 2006 Sales Stats Update
December 23, 2006
Austin Average Sales Prices for Nov 2006 are up 5.7% from Nov 2005, and up 9.7% year to date. The Austin market sold 10% more single-family homes so far this year than last, and the Day on Market are about the same as Nov last year but down 11% Year to date. The Austin real estate market continnues to move in a positive direction overall.
Out of 55 Austin MLS areas charted below, only 3 have year over year decreases in average sales prices. Of the 55 Austin MLS areas, 30 have double digit appreciation of average sales prices. Of those 30 MLS areas, 13 areas have appreciation of 15% or greater. Austin’s real estate market is very strong and will continue to do well in the coming years, in my opinion.
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October 2006
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Nov 2006
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Nov 2005
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Yr % Change
|
|
| # Sold |
1899
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1795
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1759
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2%
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| Avg List Price |
$242,020
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$247,402
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$234,048
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5.6%
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| Median List Price |
$179,900
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$179,900
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$175,000
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2.8%
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| Avg Sold Price |
$236,053
|
$240,115
|
$227,203
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5.7%
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| Med Sold Price |
$177,000
|
$175,000
|
$171,400
|
2.1%
|
| Avg Size SQFT |
2089
|
2102
|
2096
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0.2%
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| Median SQFT |
1907
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1898
|
1916
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-0.9%
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| Avg $ per SQFT |
$113
|
$114
|
$108
|
5.5%
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| Avg Days on Mkt |
65
|
68
|
68
|
0
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| Median Days on Mkt |
46
|
45
|
46
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-2.1%
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Below is the 2006 year to date totals compared to the same period of time (through November) of 2005.
Austin Job Market Looks Good - hiring managers optimistic
December 13, 2006
This article is from the Austin Business Journal. Job growth drives the real estate market more than anything else. Austin’s job growth continues to look better than the nation as a whole.
Austin Business Journal (12/13/2006)
More than a third of Austin employers will look to hire in the first quarter of 2007, according a recently released report.
The Manpower Employment Outlook Survey, a quarterly employment forecast, finds that 38 percent of companies expect to hire more employees from January to March. Only 3 percent surveyed were planning to let people go during that period.
However, those numbers aren’t as rosy as they were a year ago, when 47 percent of employers were looking to add jobs and none expected to cut them.
The best job prospects are in construction, durable goods manufacturing, services and public administration.
The Austin area might outpace the nation as a whole, in regard to job growth. According to the survey, about 23 percent of U.S. employers were expecting to hire in the first quarter of 2007, while 11 percent were going to cut staff.
The Manpower Employment Outlook Survey has run for more than 40 years, and polls more than 14,000 public and private employers in 460 U.S. markets. Manpower Inc. (NYSE: MAN) is a $16 billion employment services company.
Austin Rental Market - Nov 2006 Update
December 13, 2006
The Austin Rental Market for single family homes continues to show modest gains over a year ago. As you can see on the graph below, 2006 looks like it will be the year when rent values in Austin finally took a turn upward after falling for 4 years in a row.
See below for more charts and the complete update. This month I’ve added a new column to the MLS Area breakout of YTD Leasing stats. More on that below.
Foreclosures: Blame It on Second Mortgages
December 12, 2006
I thought this was interesting. Again, people are over-borrowing against real estate and getting into trouble. At our sales meeting this morning a Mortgage person updated us on a few things and then wanted to make sure we knew that they can do so-called 80/20 loans (80% first mortgage, 20% second mortgage = 100% loan) so our buyers can buy property with zero down and no PMI. I have to bite my lip. I want to shout out “quit giving people loans who can’t afford to pay a downpayment to buy real estate!”
The article below backs me up. Unless used purly as a leveraging strategy by investors who know what they are doing (and have the cash on hand to buy out if needed), I can’t think of a good reason for anyone to borrow 100% when purchasing a home, thereby becoming upside down on the mortgage payoff vs. attainable sales proceeds from day one.
From the Wall Street Journal:
Mortgage lenders are tightening their underwriting standards as more homeownership ends in foreclosure, but a new study suggests that the popularity of second mortgages could undermine their efforts.
New data in a research report from securities firm UBS shows that nearly half of all loans delinquent for more than 90 days this year also have second mortgages, while 30 percent of loans that are current have them, according to the UBS report.
“Mortgages that have a second mortgage behind them run a far higher risk of default,” says Zach Gast, a financial analyst in Rockville, Md., for the Center for Financial Research and Analysis, an independent research group. Gast says borrowers’ debt-to-income levels are similar for all mortgages, regardless of whether payments are late or current, suggesting the second mortgages are pushing borrowers into delinquency or default.
Zillow.com Now Posting Homes For Sale in Austin
December 8, 2006
Zillow.com, the website that provides “Zestimates” of home values for properties in the U.S. has now enabled new features that allow homes to be listed for sale. This is the next logical step for Zillow as they try to gain a foothold as the place to go for home information. More on that later.
For Sale listings can be entered both by home owners and also by Listing Agents. Oddly, there is also something called “Make Me Move”, where owners can “tell others the price you’d be willing to sell your home for, without actually putting it on the market. It’s that magical number you just can’t refuse.” Zillow says, “Once you set your Make Me Move price, potential buyers can contact you anonymously via e-mail. Then it’s up to you whether or not to sell your home.”
I predict the “Make Me Move” feature won’t last long. Every kook in the Country will be placing a MMM price of triple the value of the home and it will eventually turn out that nobody will take it seriously. Also, once Owners realize that 9 out of 10 emails they receive are from people saying “please provide your absolute bottom dollar price and email more pictures”, owners will pull their MMM listings pretty fast. Zillow should just stick to posting homes either for sale or not, and leave out this weird “Make Me Move” category.
But with regard to the For Sale part of it, I decide to enter a listing to see how it works. Here’s how it went.
East Austin Real Estate Appreciation
December 6, 2006
I decided to see what the actual appreciation has been in East Austin over the past 7 years, as reflected in average sales prices for some of the areas we call East Austin. The blue line at the top of the graph below represents the entire Austin housing market for houses only, and the other lines are the average sales prices for East Austin zip codes. I left the actual dollar amounts off the chart because they caused too much clutter and made the chart to hard to read. I have the actual numbers posted below the chart
So what does this show us?
One way to measure the strength of a particular neighborhood or area of Austin is to look at its performance relative to the larger Metro area overall. In other words, looking at the slope of the lines above, if a particular area is performing about the same as the city overall, the lines would run parallel. This is in fact what we see with zip code 78721 and 78723 (the red and purple lines). Those East Austin zip code areas more or less maintain their relative positions to the citywide averages (and to each other) from 1999 through Dec 3, 2006 (when I ran the stats). So, a home owner in those areas of East Austin did not enjoy appreciation in home values any better or worse than the overall Austin average over the past 7 years.
East Austin zip codes 78702 and 78722 reveal something much different though. The relative position of those areas enjoyed much greater appreciation than the average of Austin. Let’s look at the chart below.
Read more
Californians Can Learn From Texas About Falling Home Values
December 3, 2006
This article posted below is in today’s Austin Statesman. It makes reference to the late 1980’s and early 1990’s when Austin’s real estate market was in the tank, and compares what happened in Austin back then to what some are now experiencing in California. Namely, owning real estate that is worth less that the amount owed - being upside down in their properties.
Those of us who were in Austin in the mid 1980’s remember that a perfect storm of the Texas Oil Bust, 1986 tax law changes, and the S&L (Savings and Loan) fraud/crisis wiped out the Austin real estate market. The legend holds that large numbers of Austinites simply left the keys on the kitchen counter and left in droves (I don’t know anyone who actually did that). Real estate fortunes evaporated almost overnight and the US Government became the biggest real estate owner in Austin, selling homes through HUD and RTC (Resolution Trust Corporation)
The tech industry took hold in Austin the early 1990’s and everything was great for the next decade, until the stock market slide and the high-tech bust, and thus our recent 5 year skid that ended about a year ago.
It’s funny, whatever you want to believe about the severity, or lack thereof, of the current real estate market in “bubble” areas such as California, Arizona and Nevada, can be confirmed or contradicted by any number of news articles and stories. I don’t know which ones to believe, but I do know that it’s not a good idea to be upside down in real estate. The article below takes a less than optimistic view of the California market.
SANTA ROSA, Calif. — In a laid-back kind of way, the Flamingo Resort Hotel and Spa, where I am staying, is centrally located. Drive in one direction and you’re less than a mile from downtown. Drive in another and you’re at a casual shopping center. Drive in still another and you’re on your way to Glen Ellen and wine country.
My son Ollie, who lives in Santa Rosa, told me that real estate values are down.
A day later, the Santa Rosa Press Democrat had an article observing that the median price is down 4.2 percent — to $565,000. This means the median home price here is now only 10 times the $55,000 median household income in the area.
Worse, prices have fallen for four consecutive months. This means that many of those who bought at the top — which the Press Democrat identifies as August 2005, when the median home price in the area peaked at $619,000 — are now upside down. With virtually no down payment and creative financing, recent buyers now owe more than their house or condo is worth.
This may be a good time for Californians to talk to Texans who went through the Texas real estate crash in the late 1980s and early 1990s.