Austin Real Estate Market Picking Up Again for 2007

by Steve Crossland, REALTOR in Austin TX on February 4, 2007 · 6 comments

Sylvia and I have been hopping busy the past couple of weeks, and we’re starting to see a lot of multiple offers again, and it feels like the Selling Season is ramping up as it did about this time last year in Austin. Here is a look at the last several deals we’ve written for Buyers this past week:

• We wrote a deal two days ago in which the agent had 5 offers. This was in Area 10S (old Austin MLS Area 10 is now split into North/South, thus area 10S and 10N replace old area 10). In order to win, our buyers went $2,100 over list price, offered all cash, offered a closing date of Seller’s choosing, and of course we wrote an impeccable offer that was free of mistakes or errors, which the Seller was able to sign without counter-offering. The offer was also accompanied by a letter outlining what the Buyer felt were the merits of the home and their offer.


• Another one last week was multiple offers just a day or two on the market in Austin MLS Area SWE (old Austin MLS Area SW is now split into East/West, thus area SWE and SWW replace old area SW). This one our Buyer got with a full price offer, again very cleanly written with no nonsense. I can’t stress how important it is, if you’re a Buyer going after a hot listing, that you and your agent know how to write a no-nonsense offer to which the Seller can easily say “yes” and sign off as-is. It’s not always the highest price that wins multiple offers, but the best looking offer considering other factors in addition to price. Sending a sloppy offer with missing initials, missing addendums, sloppy writing, no pre-approval letter, no cover letter to the agent and sellers, etc., diminish the attractiveness of your offer.

• Another one was again multiple offers the second day on the market in MLS Area W, west Austin. This listing, we felt, was under priced and we anticipated multiple offers over the list price. Our offer won by utilizing an escalation clause which stated “in the event Seller receives multiple verifiable offers, Buyer will increase this offer price by $2,000 up to a maximum of $xxx,xxx.” The agent called and said there were indeed multiple offers, and that ours was not the highest, and asked if we did indeed want to raise our offer price, which we did, and our offer won.

• A 4th deal we wrote last week was on a listing that was somewhat over-priced, and not in multiple offers, but the Seller held out for a price which was in fact slightly higher that the value our CMA indicated. But given that there was not a suitable “second choice” currently on the market, and our buyer really liked the home, we were able to make the deal work.

If the activity we’ve been seeing the past couple of weeks, and the number of web inquiries and new buyers we’re taking on is any indication, 2007 is going to be another very busy year in Real Estate sales for Austin. Prices appreciated in Austin more than 10% in 2006, and I won’t be surprised if that happens again in 2007 in the better areas (i.e. – not areas that are affected by cheap new-home sales.)

This is good news for Sellers, but not necessarily bad news for Buyers. As a Buyer, you’ll pay more for your home in Austin than you would have last year, but Austin still has, in my opinion, a good 5 to 7 year run ahead of us. Our economy is humming. Our home prices are still favorable given that we have 4 years of ZERO appreciation from 2002 through 2004, and just meager appreciation in 2005. The price gains of 2006 are in part pent up gains that would normally have already occurred had we not suffered the tech bust in 2001.

So 2007 is still going to be a great year to get out and find and a great home in Austin – even if you have to fight against multiple offers to get the one you (and others) really want.

{ 6 comments… read them below or add one }

1 charles February 21, 2007 at 11:08 pm

I disagree with the assessment. The dell restructure will put about 15k homes on the market with no new employees coming in. The tech sector is cooling and most employers are hiring less. There will be fewer people relocating from Cali and other areas because they can’t sell their homes in a down market. Jan homes were down and the market will continue to cool through May. Several employers deliver their bonuses in April which is another big transition time as people sell their homes and take new jobs outside of Austin. Big construction and huge local employer hiring in 2006 delayed the Austin realestate market correction like the rest of the country. But its coming in 2007 which is forcast by the lower Jan buyers.

2 Steve Crossland February 22, 2007 at 12:12 am

Hi Charles,

Thanks for your comments.

I enjoy hearing other perspectives but you’re wrong on just about everything stated. The Jan sales were down due to ice storms immobilzing Austin for a number of days. There is no “delayed” real estate correction for Austin to have as we were flat as a pancake from 2002 through 2005 while other markets were in hyper-appreciation. We’re still playing catch up. Hiring is strong and continues to gain strength. Dell layoffs, if they come, will affect areas of Round Rock, but not the Austin market as a whole.

By April, the Austin market will be chugging along at a more brisk pace than the year prior and prices will continue to rise in the closer in areas. Feel free to check in each month as I post stats on both the sales and rental markets and we’ll see how things are doing next April.

Thanks for sharing your thoughts.
Steve

3 Charles February 26, 2007 at 10:33 pm

Steve, Wish you were right but the Feb stats make it difficult to see your point of view. Do you have an explanation for the Feb decreases in pendings and solds?

Feb. 4 – Feb. 10, 2007 (compared to the same week in 2006)

New listings down 2.01%.
Pendings down 31.11%
Solds down 11.30%.

February 11- February 17, 2007 compared to same week last year:

New listings up 20.96%
Pendings down 38.72%
Solds down 3.24%

4 Charles February 26, 2007 at 11:38 pm

The latest stats are out and Feb pendingd and solds continued to decline. In my opinion two extremely bad months is no longer forecasting a downtrend…It is a downtrend.

Feb. 18 – Feb. 24, 2007 (compared to same week last year)
Pendings down 30%
Solds down 15%

5 Steve Crossland February 27, 2007 at 7:43 am

Hi Charles,

I’m not sure where your getting Feb stats, but Feb has not even ended yet. We have to wait at least 10 to 15 days into March to get a full view of March stats because of the lag time between the date the sale closes and when the agents change it to sold in the MLS. I have a closing tomorrow, which will be a February sale, but it’s not included in any stats you’re looking at. I also see you’re looking at weekly stats, which in my opinion are rather useless. Too short of a time span to be meaningful. You also have to factor in weather conditions for a particular week. We’ve had two big ice storms already this year and certainly that would affect a particular week.

For Sylvia and I, February 2007 has been a record month both in number of deals and dollar volume. I’m sure there are other agents who might say the opposite, but my initial post was relating to the activity we are personally experiencing as the new year gets rolling. For us, it’s looking very strong.

Thanks for your comments.
Steve

6 Josh March 13, 2007 at 1:40 pm

Steve,

How can you say that Dell layoffs wlll not affect austin as a whole. Dell is the largest private sector employer in Austin and as Dell, and the rest of the tech companies go, so will the Austin economy.

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