So August 2007 – Crossland Team

Archive Monthly Archives: August 2007

Austin a Home Flipper’s Market?

This news snippet below is the sort of thing that paints an unrealistic picture for investors who don’t take the time to properly study and analyze what they are getting ready to do.

Let’s take a closer look at what the article says…

Daily Real Estate News | August 30, 2007
Markets Where a Flipper Can Make a Buck
Flipping went out of fashion last year, leaving thousands of flippers in trouble in many areas, but an analysis by Forbes magazine shows that there are markets all over the country where investors can still turn a profit if they pick their properties wisely.

Really? I’d like to see Forbes send a journalist to Austin to find and flip a home. It’s not that easy. I’m not saying it can’t be done, but it’s very, very risky and there are a lot of owner-occupants and inexperienced investors out there willing to pay too much, which leaves the true number crunchers with little to pick from.

Forbes calculated whether a market is ripe for flipping by using data from Moody’s to calculate a market’s rate of sales against inventory, and to determine supply and demand. Then it looked at current and new-home construction numbers through the end of 2008, based on data from the National Association of Home Builders; the magazine sought out markets where planned new home construction is low.

Then Forbes used price appreciation data from the NATIONAL ASSOCIATION OF REALTORS® to get a sense of short-term market direction. Finally, it examined Moody’s figures on investor share. The higher the share of investors, the more sellers outweigh buyers, which is bad news in a bearish market.

That seems like sound reasoning for identifying strong selling markets. But a strong selling market is very difficult to buy in. I was at a gathering of Austin investors/flippers last night, and it’s universally agreed upon by my group that few if any really good deals can be found in the Austin MLS. Most don’t even bother to look in the MLS for the deals they find. That means you have to be out there networking, prospecting or advertising to find motivated and ready sellers who value a 5-day close more than a top dollar sale.

My problem is, if I run into someone like that, I’ll talk them into letting me do a minimal amount of fixup and selling the home for them at a much better price. There are sellers for whom the sales process avoidance is valuable, but most are much better off listing and selling the home through the MLS where a better price can be obtained.

The results identified the following markets as the best candidates for flipping. Here are the best markets, along with the price in each market that would make a home a candidate for a quick turnover.

1. Seattle, $385,000
2. San Francisco, $759,000
3. Raleigh, N.C., $225,000
4. Houston, $150,000
5. Austin, Texas, $175,000
6. San Antonio, $150,000
7. Boston, $389,000
8. Los Angeles, $590,000
9. New York, $489,000
10. Portland, Ore., $295,000

Source: Forbes, Matt Woolsey (07/26/2007)

Interesting that 3 of the 10 cities listed are in Central Texas within 150 miles of one another. Austin still has a good run ahead of us, though the frantic market of last summer has subsided back to just a normal good market.

Posted by Steve
10 years ago

Things every Austin real estate buyer should know

We’ve recently started providing an additional form to all of our buyers. It’s a notice provided by the Texas Association of Realtors called “GENERAL INFORMATION AND NOTICE TO A BUYER“. Though I like to keep paperwork simple and minimal, this form is helpful in bringing to the attention of buyers some of the things that may need further explanation or discussion.

Like anything in life, those of us who do something evey day can sometimes forget or become disconnected from nuances that others may not know about. We assume everyone knows about insurance, inspections, property taxes, etc., but that’s not necessarily the case with many buyers. Providing a buyer with this information brings these important items to their attention so they can ask questions and seek further information if needed.

Here is the content of the TAR Form 1506 (7/15/05)

Be an informed buyer. Make sure that the property you want to purchase meets your needs. The following information may assist you during your purchase.

ANNEXATION. If the property you buy is outside the limits of a municipality, you should be aware that the property may later be annexed by a nearby municipality. You may find information on the boundaries of nearby municipalities by contacting the municipalities directly.

APPRAISAL. An appraisal is a valuation of the property. An appraiser renders an estimate of value as of a certain date under assumptions and conditions stated in the appraisal report. Typically, a buyer’s lender requires an appraisal to verify that the loan is secured by property that is worth a certain amount. An appraisal is not the same as an inspection.
Read more ...

Posted by Steve
10 years ago

Downtown & UT Tower View From Rooftop!!

Rooftop View
This gave me a chuckle this morning. Comments that agents write in listings are often a source of amusement, but I’ve never seen one boasting of the view from the roof. There is not a rooftop deck or anything, just a normal house with a roof. But if you want to get out your ladder and climb up there, you’ll have, according to the comments written by the agent in the listing, a “Downtown & UT Tower View From Rooftop!!” That oughtta get it sold for sure!

I might add this house is about 15 miles from downtown and UT, so I’m not sure how good that view will be once you’re on the roof.

Posted by Steve
10 years ago

Stevie Ray Vaughan died 17 years ago today

Stevie Ray Vaughan died 17 years ago today. I miss seeing him play in Austin back in the 1980’s. Austin properly honored him and his music with a prominent statue on the shore of Lake Ladybird (formerly Town Lake) on the hike and bike trail downtown.

If you ever saw him play live, especially in a smaller venue, you know that it was something special, and hard to describe. Eric Clapton put it aptly in an interview. He said that Stevie (I’m paraphrasing) “seemed to go into another zone, into a different deminsion, and that the music seemed to be channeling through him from another place, beyond his consciousness”.
That says it pretty well.

YouTube has a lot of old videos of Stevie’s music, plus a loyal following of fans. This one is Stevie Ray Vaughan & Double Trouble – Live at the El Mocambo in 1983.

Posted by Steve
10 years ago

Deciding against tankless water heaters for our new home

Sylvia and I are in the process of building a new custom home in SW Austin. This will be our second custom (and new) home. All other homes we’ve owned have been resales. On the first one we built in 2003, we went $50K+ over budget by adding too many upgrades and making too many additions to the home, including an expanded second story. It was our first time building a home and we somewhat lost control over ourselves.

This time we’ve sworn to be more disciplined and to stay within budget, or to go over ONLY on things that are important to us or that add value to the home. We actually have a pre-established “over budget” amount that we’ve put into place mentally.

One of the items that remained undecided up until now, was whether to have tankless water heaters in the home instead of the traditional water heaters. After a lot of research, we decided against the tankless water heaters.
Read more …

Posted by Steve
10 years ago

Austin Rental Market – July 2007 stats update

The Austin rental market continues to see rising rents. The mortgage problems in the sub-prime mortgage loan market are helping rental markets in all parts of the U.S., as renters who should not be qualified to purchase a home are indeed remaining renters, as they should. Austin has the added benefit of a strong job market, which is bringing new renters into the Austin area. These newcomers are often qualified to buy a home but do not want to commit to a home purchase immediately, so they rent for a year or two while deciding where they want to buy, and making sure the new job works out. Thus, there continues to be an influx of quality renters.

Austin Rental Market Stats July 2007
Previous Month and Year Comparison
All MLS Areas – Houses Only

June 2007
July 2007
July 2006
Yr % Change
# 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

Stats Summary:
Average rents are up 5% this July over July 2006.
Average Days on Market for July 2007 was 37 days, which is a 21% decrease from July 2006.
Median Days on market is 29 days for July, which is a 19% decrease over last year. This means more than half of all homes leased through the Austin MLS rent in 29 days or less. This marks a return to a good landlord’s market, though there are still plenty of homes that do not rent quickly, either due to overpricing, poor condition, poor marketing by the agent, or all three.

Below is a breakdown of stats for YTD 2007 compared to the same period 2006.

Read more …
Posted by Steve
10 years ago
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