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The Crossland Team
Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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Featured Listings
How to NOT Rent your South Austin Home
March 25, 2007
Yesterday I was pulling up lease and sales listings for a client who wants to either buy or rent in Southwest Austin. I came across a lease listing in a great neighborhood in MLS area SWW that has been on the market for more than 130 days. Sylvia was sitting at her desk and I remembered that she had shown that house to a leasing client several months ago. “What’s up with that house on {Street name}?” I asked her. “It’s been on the market for 135 days!”
Sylvia said, “It’s in bad condition, the fence is rotted and falling down, the carpet is dirty and stained, it stinks inside, the yard isn’t taken care of, it’s outdated with ugly pink decor and bad wallpaper, it needs paint and it’s over priced”. OK, that explains it.
Are there really Property Owners and leasing agents who are so out of touch with reality that they allow this to happen? Absolutely. Cheapskate owners and incompetent Realtors seem to find each other on a regular basis in the Austin real estate market. The outcome is rarely good.
I showed the house yesterday anyway, partly because there were only a handful that fit my client’s search criteria, and I wanted to see it for myself and let the client rule it out herself instead of just not showing it. Upon viewing the property, it now has a new fence, and there are paint cans and supplies in the middle of the floor in the garage, but everything else Sylvia said is still as she described. Looks like the rental market may be slowly teaching the landlord a lesson, but it’s still pretty late in the game to be hearing the wake-up call, and the home needs much more than a new fence and some paint.
Read more
The truth about flipping homes in Austin TX
March 23, 2007
Here is a good story from the Austin Statesman about flipping houses in Austin. We’ve tried to hunt down some flip deals for a few Buyers but have decided it’s not the best use of our time. We don’t have cable TV or watch much TV, but from what I’ve been told by others there are a lot of TV shows about selling, rehabbing and flipping houses that make it look easy. It’s not easy.
Back in the 1980’s and 1990’s, real estate investors were a small group of people. Now everyone with Cable TV training and free time on a weekend is a nascent fix and flip artist. We also have way more young couples (weekend warriors) willing to buy a fixer and live in it while they work on it for a couple of years (thanks to the IRS 2yr capital gains tax exemption) and they drive up the pricing of fixers beyond the amount that makes sense for the old school fixers like us.
The good news is, if you have a beat up old house in a desireable area, you have a much bigger pool of potential buyers than you would have (proportionally) 10 or 20 years ago. The bad news for investors who want to fix and flip homes, those homes are not just laying around like they were in Austin in the late 1980’s and into the mid to late 1990’s.
Here is the story below:
Take it from these Austin pros: It’s hard work, high risk and not a ticket to easy money.
By Charles Ealy
AMERICAN-STATESMAN STAFF
Sunday, March 18, 2007If you’ve ever stayed up late and channel-surfed, you’ve probably seen a cheesy infomercial about how to get rich quick by flipping homes. You know the pitch: Buy a house cheap, fix it up and sell it fast for a big profit.
Don’t believe them, say Rick Villani and Clay Davis of Austin. You’ll do much better if you set your sights on “getting rich slow.”
It might not sound as appealing, but it’s much safer and more sensible, Villani and Davis contend in their new book, “Flip: How to Find, Fix, and Sell Houses for Profit” (McGraw-Hill, $21.95). In it, they offer detailed advice on what they say are the two big strategies in flipping.
“You have to find value or create value,” Davis says.
The men, who are co-owners of Austin-based HomeFixers Corp., say they have worked on more than 1,300 flips in recent years and have attracted the attention of TV’s “Flip That House.” And no, that’s not a cheesy, late-night show. It’s on The Learning Channel, and it’s similar to “Flip This House” on A&E.
They also have caught the eye of one of Austin’s biggest names in real estate: Gary Keller, co-founder of Keller Williams Realty Inc.
He’s the co-author of “The Millionaire Real Estate Agent” and “The Millionaire Real Estate Investor,” and he chose the “Flip” book to be the third in the Keller investment series.
“You’d be hard-pressed to find anyone with greater real-world experience in the process of flipping houses,” he says in the book’s foreword.
Austin Real Estate - Feb 2007 Sales Market Update
March 20, 2007
February real estate sales stats for Austin show a modest gain over the same month last year. Number of sales for single family homes is up 1.5% from Feb 2006. The Average Sales price is up 3.0% from $231,337 in Feb 2006 to $238,374 in Feb 2007. Median sales price is up 5% from $171,250 to $179,000. Average price per square foot is up 2.7% from $111 to $114.
These numbers seem flat compared to what Sylvia and I are actually experiencing in South Austin, so I checked the stats on the areas we work to see what was going on.
Area 10N: Avg Price up 21%, Median price up 6.01%
Area 10S: Avg Price up 15%, Median price up 13.33%
Area SWE: Avg Price up 12.7%, Median price up 13.62%
Area SWW: Avg Price up 5.09%, Median Price up 2.81%
Not sure what’s up in area SWW. It’s been hot for the homes we’ve sold. There are some pockets that do better than others, and we’re also dealing with small sample sizes.
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Jan 2007
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Feb 2007
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Feb 2006
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Yr % Change
|
|
| # Sold |
1360
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1583
|
1559
|
1.5%
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| Avg List Price |
$254,404
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$245,601
|
$237,777
|
3.3%
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| Median List Price |
$180,000
|
$184,700
|
$174,500
|
5.8%
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| Avg Sold Price |
$246,595
|
$238,374
|
$231,337
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3.0%
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| Med Sold Price |
$176,305
|
$179,900
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$171,250
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5.0%
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| Avg Size SQFT |
2098
|
2090
|
2086
|
0
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| Median SQFT |
1880
|
1913
|
1878
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1.9%
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| Avg $ per SQFT |
$118
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$114
|
$111
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2.7%
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| Avg Days on Mkt |
76
|
68
|
71
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-4.2%
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| Median Days on Mkt |
54
|
45
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49
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-8.2%
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A Case Study in Lousy Austin Realtor Representation
March 18, 2007
A few days ago I wrote up a deal for a Buyer. The house was priced about $15K above market value, but it was a nice home that fit my buyer’s needs, so we ignored the list price of $239K+ and wrote it up at market value of $225,000. Along with the offer, I wrote that the offer was based on what we believe to be a fair price for the home based on our market analysis and current market conditions in the area, and that I’d be happy to send over the analysis along with the comps if requested.
The agent faxed back a counter-offer with the following written in the cover letter (with price typo and grammatical errors left unchanged).
“Making a offer $15,000. low was a mistake. If you would have offered say $133,000. they might have taken it but here is there counteroffer,”
Read that quote again. It’s exactly as written by the listing agent. He’s a great negotiator isn’t he? NOT!
The counter-offer was for $235,000. I discussed the deal further with my Buyer, and we decided to move on to another home with a more reasonable Seller and an agent who isn’t an idiot.
Read more
Keeping it Weird in Austin
March 15, 2007
I took my laptop to Mr. Notebook today because the “A” key was not working. They fixed it in 5 minutes (a crumb? was under the key) and sent me on my way with no charge. I really like dealing with those guys at Mr. Notebook. Actually, I should say I really like dealing with competent businesses who know how to take care of their customers. Mr. Notebook in Austin fits that description well.
Anyway, after leaving, I headed south on Guadalupe and as I approached 15th street, a woman came out in the street and flagged me down. I stopped and she asked if I could drive her and her friends “downtown”. I looked at her and her 4 friends, all wearing SxSW badges and looking exactly like the kind of people you’d see at SxSW, one with a Mohawk, and told her “you’re already downtown”.
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Study: Austin home size limits hurt economy
March 13, 2007
From todays Austin Business Journal email newsletter is the article below citing a study that says the Austin “McMansion Ordinace” is hurting the Austin Economy.
I haven’t read the study, but the Homebuilders Association of Greater Austin paid for the study. The Home Builder’s Association is against the ordinance and is lobbying the Texas Legislature to pass laws that will effectively void it. So I’m not sure if the study results should be trusted.
The only questions I have would be:
1) Have home and/or lot values in the areas covered by the ordinance declined in value?
2) If homes in these areas have not declined in value, have values appreciated in equal proportion to the rest of Austin and/or similar areas not affected by the ordinance? (has the ordinance stunted the potential appreciation of homes in the areas affected)
In other words, is that puny little teardown in Tarrytown, on a 50ft by 125ft lot, now worth less than it would be if a bigger home could be built than what the ordinance now allows? It wouldn’t surprise me if the ordinance has had at least some impact, but MLS Sales data doesn’t bear that out as the central areas saw some of the strongest real estate appreciation numbers in Austin from 2005 to 2006. See my 2006 Austin Sales Market Summary for detailed area by area stats.
See the article below. The math seems confusing to be. I’d rather see a study that simply answers the above questions.
Austin Business Journal - 2:41 PM CDT Tuesday, March 13, 2007
A new study suggests that a city of Austin ordinance restricting home sizes is having negative effects on homeowners and causing a reduction in economic activity within the city.The study conducted by Austin-based economic research and analysis firm Impact DataSource concludes that the city’s “McMansion” ordinance has forced increases in the cost of new homes and remodel projects in the areas it covers, making it difficult to finance improvements while limiting the ability of homeowners to sell their property. The Homebuilders Association of Greater Austin paid for the study.
The ordinance that went into effect in September 2006 limits development plans for owners of lots in the zone between Northwest Hills and Montopolis in the north and south sectors, and between Barton Hills and University Hills in the west and east sectors. A bill recently filed in the Legislature by Rep. Edmund Kuempel, R-Seguin, would force Texas cities to regulate home sizes based on one set of criteria and not multiple criteria like the Austin ordinance does. The city is fighting that bill, saying it would effectively “gut the ordinance.”
The study evaluated four properties, demonstrating an average loss of $229,888 of real property improvements, along with a $5,806 annual loss to local taxing districts per property and reduction in possible construction to an average of $451,375 per property. In total, of a possible 110 similar infill redevelopment properties listed for sale on October 31, 2006, improvements not added to tax rolls could total $25.2 million. Homeowners would lose $12.8 million in their share of actual and projected market value resulting in a further loss of $638,614 in annual tax revenues from these properties.
“The new residential standards make urban projects more complicated and more expensive,” says Jerry Walker, principal of Impact DataSource. “Regulations could add as much as $75,500 to the cost of remodeling and constructing a new residence in the affected area, further pushing middle-income residents to areas outside Austin and contradicting the city’s stated urban density goals. Young homeowners trying to upgrade or move to larger houses to accommodate their growing families are getting squeezed the worst.”
Out of State Lenders Still Dropping the Ball in Austin
March 12, 2007
I remain completely unimpressed and appalled by almost every out of state lender we encounter. We have a deal closing this coming Thursday the 15th (in 4 days) and have been unable at any time to get any sort of response at all from the lender. This time it’s a Bank of America loan person in California.
I thus had to send the following email this morning:
Dear {lender name},
Unless we hear from you immediately that you will be able to complete the loan for {client name} at {client address} - Loan # {loan#}, we’re switching him to a local Austin lender.
You have not responded to Sylvia’s emails (at least 2) or voice messages (at least 3) regarding this, and have had 45 days to get the loan done. It now appears no action has been taken by BOA to complete this loan, and this is unacceptable. You called the Title Company this morning looking for the Title work which was sent to you on Feb 15, 2007. I wonder if the appraisal has even been ordered.
Please respond immediately and let us know why you’ve dropped the ball and let me know why I should now trust you to stay on and complete this deal for my buyer, given the poor performance thus far. If you think you can get the ball rolling, I need a promise that you can indeed have all loan docs to the Title Company in time to close this coming Thursday the 15th, otherwise we’ll be moving to a more capable lender.
Sincerely,
Steve Crossland
I also left a similar but more succinct voice message. Unfortunately, this is very common with these California lenders. They apparently think the closing date is an approximate date to shoot for, and that it’s ok to close a few days late. I’ve had to tell more than one that, in Texas, we close our deals on time.
A Seller has no obligation whatsoever to extend a closing date if the Buyer’s lender doesn’t get the loan done on time. Most Sellers in fact will, but a buyer risks having a seller have second thoughts about selling if the closing date is not met, and the Seller can simply refuse to close and terminate the contract.
If you’re buying in Austin, use an Austin lender. There is no upside whatsoever to using an out of state lender.
Austin Real Estate - Rental Market Update Feb 2007
March 11, 2007
The Austin Rental Market continues to show steady improvement for landlords. Average and Median rents for single family homes are up about 5% from Feb of last year. Median Days on Market dropped 7.8% to 47 days, meaning half of all homes leased through the Austin MLS took longer than 47 days, and half took less than 47 days to lease.
I do suspect, however, that good Austin Property Managers and Landlords achieve better results than what my stats show. For example, Sylvia and I purchased another investment home last month in Oak Hill (built in 1973, none of our investors wanted it so we jumped on it ourselves). I stuck a sign in the yard and Sylvia showed the first person who called that day and we leased it before it even got entered into the MLS.
The overall stats I report don’t have the benefit of that favorable outcome included, since the home leased immediately from the first sign call. And I’m sure this happens with other well priced homes in good locations as well. On the other hand, many homes that lease through the Austin MLS are represented by inexpeienced Realtors who don’t really know how to lease homes, and those listings (which are often the ones showing 90+ days on market) skew the rest of the stats to make things look worse as well. Of the Austin Property Managers I stay in touch with, all are raising rents on renewal and, for the most part, leasing their homes quickly - especially in the closer in areas that we recommend to investors.
I’m still not including Year-to-Date stats since we’re too early in the year for those to be meaningful, but I have once again republished the 2006/2005 year end stats.
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Jan 2007
|
Feb 2007
|
Feb 2006
|
Yr % Change
|
|
| # Leased |
594
|
606
|
601
|
1%
|
| Avg List Price |
$1239
|
$1262
|
$1207
|
4.6%
|
| Median List Price |
$1150
|
$1150
|
$1100
|
4.5%
|
| Avg Leased Price |
$1235
|
$1250
|
$1194
|
4.7%
|
| Med Leased Price |
$1145
|
$1150
|
$1095
|
5.0%
|
| Avg Size SQFT |
1876
|
1834
|
1818
|
1%
|
| Median SQFT |
1771
|
1766
|
1732
|
2%
|
| Avg $ per SQFT |
$0.66
|
$0.68
|
$0.66
|
3%
|
| Avg Days on Mkt |
61
|
61
|
60
|
1.7%
|
| Median Days on Mkt |
50
|
47
|
51
|
-7.8%
|
Below are the previous years charts and graph.
Married 16 Years Today
March 9, 2007
Today Sylvia and I have been married 16 years. We’ve been working together longer than that, about 17 years, starting with the first apartment we managed on Burnet Rd. in Rosedale in 1990. On our night out tonight we pondered whether working together makes it easier to be married or not. I think working together makes it easier to be married. Sylvia thinks it’s easier in some ways, harder in others. A lot of people we know say “I could never work with my husband/wife”. But we rather enjoy it.
In a way, being married is working together, toward the common goal of building a future and raising our kids. Working together in a business requires a lot of the same skills required to work together in a relationship, so I think the two go together nicely. And it’s probably not for everyone.
So what do long time Austinites do on an anniversary night out in Austin? We went to the Roaring Fork downtown and had a superb dinner. This being Austin, contradictions were abound. It’s the first night of South by Southwest, so there are plenty of interesting characters downtown. At one table near us was a lady who looked like she could purchase downtown. Wow, was she decked out all the way, as were the others in her party. It was like being at the Oscars - until you looked one table over. At another table near us was a guy in a loose tank top who looked like he just left the gym. I had on Levis. This is Austin.
Austin isn’t the kind of town where dressing up for dinner is required. In fact, there probably are not many places where shorts and flips flops won’t be welcome. But if you want to put on the dinner attire and head out to a place like the Roaring Fork, you won’t be overdressed. I love that about Austin.
After dinner we walked down Congress Ave. to a raunchy little coffee house/improv theater called the Hideout, and had coffee and hot chocolate, and talked and observed the quirky crowd of people there. Definately more of a tattooed and pierced crowd. We love the Hideout - it’s a great little coffee house. And we love the Roaring Fork - it’s a very nice restaurant. And we love that they are so opposite, yet there they are next to each other.
And thus I suppose in celebrating our anniversary and what we love about each other, we were also celebrating and appreciating that which we love about Austin. The rich diversity that exists here. The fact that this city accommodates all types of people and businesses. All forms of dress and appearance. Austin is at the same time refined elegance and gritty counter-culture. It’s a town where we can pay a $100+ dinner tab (and we don’t even drink) and walk afterward 100 feet to a frumpy coffee house, and it all blends together beautifully to make a nice night out.
As for our marriage, it’s a bit like Roaring Fork meets The Hideout. Sylvia, of course, represents the elegant side of the equation. I’m a lucky guy.
Austin Area’s job growth is strongest since 2000
March 8, 2007
I was at an economic forecast luncheon last week at the Oak Hill Business and Professionals Association and the speaker talked about how great the job growth is in Austin. Interestingly, he said the current level of job growth in Austin is about as high as we like it to be - strong and steady, not too heated. When jobs grow too fast, it creates problems in the workforce as employers have to compete against each other for talent, and you start seeing job hopping and shortages in the workforce that make it hard for companies to expand and grow.
The article below from the Austin Statesman shows that we’re now back to the job growth rate of the year 2000 in Austin. Easy does it Austin! Job growth drives the real estate market more than any other factor in Austin. We saw seen good real estate value appreciation in many areas of Austin last year, but like job growth, too much can cause unwanted side effects. I’m hoping we stay in the 8% to 15% appreciation rate range for 2007, but Sylvia and I are already seeing a very strong market in Southwest Austin and many homes are selling over list price in a few days, just like last summer.
The other interesting thing the speaker said was that some of the institutional investors he knows think that Austin is actually still in the early stages of this real estate boom cycle and that we have plenty of ground ahead of us. Finally, he said he thinks the downtown condos are going to be overbuilt if everything in the pipeline is actually constructed. The early projects will sell out and do ok, but the next wave may find a saturated market. He thinks some of the projects on the drawing board won’t actuially be built. It’s also not clear how the downtown streets in Austin are going to handle an additional 20,000+ vehicles that these new highrise condos will bring. Especially at intersections such as Lamar and 5th and Lamar and 6th.
Here is the news story.
Area’s job growth is strongest since 2000
Five-county region posts 4.9 pecent annual growth rate
AMERICAN-STATESMAN STAFF
Thursday, March 08, 2007The Austin area’s job picture had a strong start this year, according to revised figures released by the Texas Workforce Commission today.
The five-county region added 33,900 jobs.
That’s a 4.9 percent annual job growth rate, which is a six-year high as well as one of the state’s highest rates (Midland’s much smaller job market saw a 5 percent annual growth rate).
The total Austin work force, excluding agricultural jobs, reached a total of 730,300 jobs.
“This has pretty much been positive growth for Austin,” said Veronica Downey, a labor market analyst for the agency.
Before the revisions, the state agency said the region, which includes Travis, Williamson, Caldwell, Bastrop and Hays counties, added jobs at a 4.4 percent rate.
It also marks the strongest job market for the region since 2000, when the area posted a 5.9 percent growth rate in January 2000 at the tail end of the high-tech boom.
In terms of total new jobs, Houston led the state with 99,100 (a 4.2 percent growth rate), with Dallas coming in second with 78,900 jobs (a 4 percent rate) and Austin coming in third.