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The Crossland Team
Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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Austin Real Estate Market Sales Update – 2006 Summary
January 29, 2007
Below are the sales stats for December 2006 as well as a 2005/2006 comparison summary. This month, on the chart directly below, I’ve added Duplex sales and Townhome sales so you can see how those track over time compared to single family homes.
2006 was a very strong year for the real estate market in Austin and I expect 2007 will be more of the same. December average sales prices were up 6.6% (less than the year as a whole), but 2006 over 2005 saw an average price appreciation of 9.5% overall, and a median price appreciation of 6.2%. Eliminating New Home sales from the stats reduced the gains somewhat, to 8.3% appreciation for average sales price of resale homes, and 5.8% appreciation for the median prices. More on that below.
In general, closer in areas appreciated much better than the further out areas, which is why we’ve tried to keep our investor buyers closer to Austin when possible.
Below is the December comparison for last month and last year.
Study: Texas riddled by foreclosures
January 27, 2007
I hate to post negative news, but I’m on a personal mission to stop unqualified buyers from purchasing homes they can’t afford. Hopefully a few people reading this will take notice. “Owning” a home means having equity in a property you can afford to maintain and pay for. It’s shameful that the new home builders and the mortgage industry enable so many unqualified buyers to get in over their heads. These foreclosures are the result. One out of every 51 Texas households was foreclosed on according to this study. Wow…that’s a lot, and Texas is #4 nationwide in that ratio.
Austin Business Journal – Jan 27, 2007
The state and national foreclosure numbers are in, and they’re not pretty.Texas finished 2006 with a total of 156,876 foreclosure filings — the highest aggregate total of any state, according to a year-end report by foreclosure source RealtyTrac Inc.
Texas’ total filings equates to a rate of one foreclosure filing for every 51 households — making it the state with the fourth highest foreclosure rate.
Read more
Who Bought, Who Sold?
January 26, 2007
Here is a rundown on who buyers and sellers are in Texas. I found it most interesting that 20% of buyers are single women, but only 5% are single men. You go girls!
TEXAS (texasrealtors.com) – Last year, first-time homebuyers, with a median age of 33, accounted for 35 percent of existing homes purchased statewide, according to the National Association of Realtors’ (NAR) 2006 Profile of Home Buyers and Sellers, Texas Report.
The median income for first-timers was $62,700, about 7 percent higher than the national average. All first-time homebuyers financed their purchases compared to 98 percent of repeat buyers. Almost half of all buyers believe their home purchases are better investments than stocks.
Most homebuyers were married couples (68 percent), with single females purchasing a whopping 20 percent compared to single males (5 percent). Detached single-family homes accounted for 86 percent of homes sold. The typical buyer planned to live in the home an average of eight years. Most buyers bought their homes about 18 miles from their previous residences.
About 87 percent of buyers searched for their homes with the help of real estate professionals, with 79 percent purchasing through real estate agents. Of those purchasing through an agent, 79 percent reported they were “very satisfied” with the honesty and integrity of their agents.
The seller’s median age was 46 years with an average household income of $89,500. Married home sellers accounted for 73 percent of sales, and 49 percent had no children younger than 18 living at home. Eighty-six percent used agents or brokers to sell their homes, with 67 percent very satisfied with the selling process. Average days on market was six weeks, with more than half of sellers receiving their asking prices.
Austin Economic Update: Coming years should be fruitful
January 25, 2007
Angelou Economics is out with their 2007 economic forecast for Austin. Like 2006, the 2007 forecast is all good news for Austin and our economy. Strong job growth will continue to drive a very healthy real estate market. The article below is a summary from the Austin Business Journal.
You can view a pdf file of Angelou’s Power Point presentation here, but read the article below first for a good summary.
Austin Business Journal – Jan 25, 2007
According to projections by AngelouEconomics Inc., 2007 is shaping up to be a very good year.
The Austin economic research firm forecasts strong economic growth for the metro area, with Austin employment expanding by 24,400 jobs in 2007 and 26,100 jobs in 2008. Last year, 22,400 new jobs were added to the Austin economy.
Job growth is expected to accelerate in retail, hospitality, professional services and information sectors. However, the wholesale trade and manufacturing space will remain slow.
Professional services is expected to add the most jobs in 2007 and 2008, continuing the growth in high-wage industries, while extended expansion of the information and financial sectors will take Austin’s average wage to a new high.
Read more
Austonian to tower over downtown Austin
January 24, 2007
Another high-rise condo tower is in the works for Austin. I wonder how many downtown condo units Austin can absorb? These places aren’t cheap to own compared to a house of the same size in South Austin.
From the article below, “Though prices haven’t been set for the 195 units, they are expected to start at about $500,000 for the smallest units with about 1,200 square feet” That’s over $400 per square foot, not including monthly HOA fees. One has to really want to live downtown or have plenty of disposable income to fork out that kind of bread for 1200 square feet of living space in Austin Tx.
AMERICAN-STATESMAN STAFF
Wednesday, January 24, 2007Austin’s skyline is about to undergo its biggest change in history.
Soaring 22 stories higher than downtown’s tallest existing building, a $200 million luxury condominium tower planned for Congress Avenue and Second Street will set a new bar for height and unit prices amid downtown’s residential building boom.
Read more
Austin Rental Market Update – 2006 Summary
January 21, 2007
Finally, after four consecutive years of declining average rents, the Austin rental market turned around in 2006. Though only a modest increase of 1.4% over the 2005 average rental rates, it’s the change in direction that’s important. Austin absorbed 35% more rental homes in 2006 than 2005. The market is very strong but supply remained high most of the year, holding down rental increases. In a normal market, without the additional supply, an increase in demand of 35% would have resulted in a landlord’s market and we would have seen much better rent increases. The days on market for 2006 dropped 10% from an average of 60 days in 2005 to 54 days in 2006 – another indicator that rental vacancies are becoming easier to fill, though 54 days of vacancy would make most investors nervous and unhappy.
Tenants have had a sweet ride the past 5 years, and Austin rental rates still remain below the 1999 rates, but it looks like things have finally leveled out. I have the usual charts and graphs below, including a breakdown by MLS area. I’ll be working on the end of year Sales summary next and also a couple of additional stats projects I hope to complete, including a look at Duplex rental rates and sales value trends, which I’ve had a lot of requests to do. Stay tuned.
Below is the year-over-year summary for December. December rents are up 3% over last year, better than 2006 as a whole. I think we’re going to continue to see increasing increases (is that the right away to say it?) throughout 2007 as investment activity slows a bit and inventory and demand come closer to being in balance.
Austin Renters – Does this sound like a good deal?
January 20, 2007
Suppose you were a renter interested in a house I own. In fact, it’s a brand new home I just finished building. I tell you that I’ll let you move in for no money down, but you’re going to be paying a monthly amount of $200 to $400 more than the market rent value of the home, and you also have to pay for all repairs and maintenance not covered by the warranty. You also have to install the grass in the back yard and pay for any other improvements you’d like, such as new ceiling fans or window coverings. And you have to pay my HOA fee too. Also, you have to remain in the house for 3 to 5 years. If you decide to move before then, you have to come up with $10,000 to $30,000 out of your pocket as a “move-out” fee. If you don’t have the cash, your credit gets hosed and you get to pay inflated interest rates for the next 7 years on anything you buy, such as a car, due to your bad credit.
Sounds like a crappy deal, right? Well that’s exactly the deal that new home builders are offering you when you decide to buy a cheapo home (that you can’t afford, but that they’ll sell you anyway) in a far flung subdivision for zero down. You get the exact financial equivalent of what I just outlined above. In return, you get to think you “own” the home. I believe many renters are better off renting while putting into savings the amount they are saving each month by having a lower rent payment than their mortgage would be, and avoiding the repair and maintenance costs of owning a home.
As I was reading this morning’s paper, the little voice in my head was, as usual, making commentary on the builder ads. Let’s have a look at what I mean. On page 1 of Section E of today’s Austin Statesman, the headline reads:
Read more
Lousy Weather Brings Austin Neighbors Together
January 16, 2007
Austin is covered in ice as I type. You’d think weather like this would keep people indoors, but if my neighborhood is any indication, weather below freezing prompts everyone to get out and have a walk!
I walked my youngest daughter around the block to a friend’s house this morning and saw more fellow neighbors out strolling than I ever have in 8 years of living in this neighborhood. I ran into so many neighbors out shuffling through the snow and ice that I wondered if it was “meet the neighbor” day.
Not only did we get out and visit, we stood in the freezing cold air wearing our beanie hats and heavy coats (which get very little use in Austin) chit chatting and watching the kids slide down the icy street on pieces of cardboard. And of course a snowman was made. It was rather enjoyable.
“Why don’t we do this on 72 degree spring days?”, I wondered. Why does it take an ice storm to get neighbors out of the house to hang out and talk and play and have fun with all the kids? We know most of our neighbors and are friends with most of them, but we don’t really get out and visit with each other as often as we should. We’re all busy working, going to and from, living busy lives. But there’s nothing like an ice storm to change that … if only for one day.
Job growth will bolster Austin rental market
January 16, 2007
This is from the Austin Business Journal. It mainly discusses apartment rentals in Austin but the same econimic rules apply to houses and duplexes. I’ll also be posting my Rental Market update and 2006 summary soon. We’ve finally turned the corner and rents started heading back up in 2006 after 4 years in a row of declinines.
Austin Business Journal
With Austin area employers set to grow their payrolls by 25,000 positions this year, a new report indicates increasing demand will put the squeeze on an already tight local rental market.Vacancy in the Austin apartment market fell to 7.1 percent in 2006 and is expected to decline even further in the coming year as new construction continues to fall short of increasing demand. That’s according to Marcus & Millichap Real Estate Investment Brokerage Co.’s 2007 National Apartment Report.
Asking rents in the market are forecasted to rise 3.2 percent to $817 a month as effective rents jump 5.3 percent to $756 a month.
On the supply front, developers are likely to bring roughly 2,800 new units to market in 2007, about the same as 2006. And investors will continue to look for value-add properties near Austin’s core as the city continues its efforts to get more people living in and around downtown.
“The local economy and limited new construction will combine to push vacancy rates below 7 percent this year, down from the double-digit rates of three to four years ago,” says Brad Bailey, regional manager of Marcus & Millichap’s Austin office.
According to the report’s findings, Austin is expected to record the second-highest employment growth rate in the country in 2007 along with the second-highest rate of population growth. The report’s National Apartment Index, which ranks 42 major apartment markets on a series of indicators, puts Austin at No. 16, up seven places from last year.
Trailer Park Owners Become Millionaires
January 11, 2007
I read about this last week somewhere else. These people who owned mobile home lots in Florida have hit the jackpot. The 48 acre mobile home park is one of the last remaining oceanfront parcels in the area, so they agree to sell out to a condo developer. Now that most of them have a $1 Million+ payday waiting (if the project gets approved), I wonder what they’ll do? After paying taxes and acquiring a replacement home, how much will be left and how long will it last? Will they turn out like a lot of lottery winners – worse off a few years later?
Residents of a coastal trailer park in Palm Beach County, Fla., called Briny Breezes have approved the sale of their community to a developer for more than $510 million.
The proceeds will be distributed based on the size and location of their lots, making most of the property owners millionaires.
Nearly all of the 488 share-owning trailer owners voted; 80 percent approved the sale, while 17 percent rejected it.
The vote clears the way for Boca Raton-based Ocean Land Investments to buy the 43-acre property. State and local officials still must approve new zoning to accommodate the 900 condo units, luxury hotel, and marina proposed by the developer.
Owner Kevin Dwyer says he understands why some people didn’t want to sell — they’ll have to give up oceanfront living. But he voted yes because the return was irresistible — about $800,000 for the singlewide trailer and lot he bought nine years ago for $37,500.
“I don’t have much money. It’s a no-brainer for me,” Dwyer says.
Source: Associated Press (01/10/07)