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The Crossland Team
Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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Austin Rental Market Update - August 2007
September 30, 2007
The Austin rental market saw rising rental rates again for August 2007, up 2.4% over last year to $1384 per month. Not a rise worth celebrating, but a gain nonetheless. The number of homes rented fell 5% though, from 806 last August to 765 this August. This may be due to fewer renters moving to new rentals in Austin (churn), but I thought some of the first time buyers who are now unable to obtain home loans would have helped create higher demand. It may be that the market already absorbed those buyers over the past 6 years and there are simply none remaining.
Below you’ll find a month by month chart, a year to date, and a history of rental rates in Austin going back to 1999. Next month I’ll provide a quarterly breakdown by area through September 2007. As usual, post any comments or questions and I’ll be happy to answer.
|
July 2007
|
Aug 2007 |
Aug 2006 |
Yr % Change
|
|
| # Leased |
791
|
765
|
806
|
-5%
|
| Avg List Price |
$1385
|
$1394
|
$1364
|
2.2%
|
| Median List Price |
$1250
|
$1225
|
$1200
|
2.1%
|
| Avg Leased Price |
$1378
|
$1384
|
$1352
|
2.4%
|
| Med Leased Price |
$1225
|
$1225
|
$1200
|
2.1%
|
| Avg Size SQFT |
1848
|
1871
|
1882
|
-0.6%
|
| Median SQFT |
1761
|
1766
|
1751
|
0.9%
|
| Avg $ per SQFT |
$0.75
|
$0.74
|
$0.72
|
2.7%
|
| Avg Days on Mkt |
37
|
37
|
44
|
-16%
|
| Median Days on Mkt |
29
|
31
|
34
|
8.9%
|
Below is the Year to date breakdown.
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Living in an immaculate Austin home for sale
September 29, 2007
After many weeks of preparation, Sylvia and I finally have our own home officially on the market and entered into MLS.
Our new home will be ready for move in by December. Summer rain delays put us three months behind in construction, so now we’re stuck trying to sell our current home during the slower season.
This will be the second time we’ve actually lived in a home we are selling, but the first one doesn’t count. That was back in 1999 and we priced it well below market and had a cash offer in less than 12 hours. Our motivations were different that time as we had just stumbled onto a fantastic deal and needed to move very fast. This time, we really want top dollar and have more time.
Given the time of year and the general slowdown of the Austin real estate market, we have gone to great lengths to ensure that the home shows like a model. The preparation has included interior paint, exterior power washing, carpet cleaning, tile cleaning throughout, painting of all three porches, de-cluttering of possessions, cleaning up the yard and planting new plants where needed, minor repairs, preventative maintenance, re-grouting some tile, cleaning all windows inside and out - including screens, professional maid service (now scheduled for every Friday while on the market), professional lawn service every Friday. Total investment in these pre-sale preparation activities? - over $5,000.
Most important though, we hired a professional stager who brought in staging furniture to replace and/or complement our own. We’ve never cared much about decorating or spending money on furniture, so our furniture was several notches below the quality of our home. The staging is another $1,500 plus $500/mo furniture rental. Finally, the professional photographer came yesterday to take photos for the Virtual Tour.
So after all the work and preparation, we have a home on the market that’s as close to being in “model” condition as we can reasonably attain with a 4 year old home. Now the big question - can we keep it looking like this while living here?
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Why Every Realtor Should Consider Blogging
September 28, 2007
A couple of weeks ago, I was a guest panelist on a webinar/conference call for about 50 real estate agents from across the country. I was invited by the course instructor, along with two other real estate bloggers, as part of an online marketing course he was teaching for Keller Williams University (KWU). The three of us were interviewed by the moderator while everyone else listened in and sent questions through a web interface. It was my first time to participate in a web/voice conference like that and it was pretty cool.
We covered a lot of information, and I enjoyed hearing what the other two bloggers had to say, as they have somewhat different approaches to blogging than I do, but their approaches work well for them and mine works well for me.
But the main question was “Why should a Realtor spend time blogging?“, and I’m going to cover that topic in this post.
There two main reasons a Realtor should maintain a blog. First, by having dynamic content on your website, search engines have more content to index, more reasons to visit your website, and therefore your website becomes more visible and easier to find by the people you want to help. Second, it allows prospective clients to get to know you without having to pick up the phone or send an email.
Sylvia and I receive phone calls and emails regularly from prospective clients who have already decided to hire us before we’ve even spoken because they’ve spent time reading the blog and feel like they already know about us. That’s powerful. That’s very powerful. Here are a couple of recent examples.
I received the following email on September 7th.
My name is {Client’s name) and I am looking for a home. I found a link to one of your blog entries. Now, having read several entries and your About Us page, I would like you to be my agent(s)…
How great is that? I love those kind of emails and phone calls. This is why I spend time blogging. After receiving the above email, I contacted this prospect, had him get pre-qualified for a loan right away, started the home search process and found a home. He closed on the sale 2 days ago on September 25th, less than 20 days after I received the initial email contact, and is moving in this weekend. Without the blog, this client may never have found me and Sylvia.
Here’s another on, received September 4:
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Report: Austin Home sales dip 10 percent
September 24, 2007
Today’s Austin Business Journal reports more of what’s been happening this year - the number of sales are falling COMPARED TO LAST YEAR, but the prices keep rising and days on market look good. In other words, the Austin real estate market is sending conflicting signals. What gives?
Let’s take a look at the article.
Austin Business Journal - 3:01 PM CDT Monday, September 24, 2007
Home sales in Austin continue to fall.A total of 2,501 single-family homes were sold in August, down 10 percent from a year ago, according to the latest Multiple Listing Service report released Monday by the Austin Board of Realtors. The August sales figure is also down 5 percent from July, further proof of a market in decline.
Still, other factors are tempering the sales downturn. The median price for single-family homes rose 6 percent year-over-year to $192,000 as the number of days homes sit on the market fell 3 percent to 58 days.
Pending sales dropped to 2,196, down 24 percent compared with last year as the number of new listings ticked up 16 percent.
No doubt the market is shifting, but we’ve had less than 2 years of an up market following 4 years (2002-2005) of a flat market. This isn’t the normal real estate cycle. What’s up?… The national down market is washing into Austin’s fundamentally good market. Let’s look at some quotes from area agents below.
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Austin Buyers - Top 10 Causes of Closing Delays
September 20, 2007
This is a handy list of things for all borrows to observe during your loan process, after you have your offer accepted on a home. This list is courtesy of Tommy Nelms and the Nelms Team at Land Mortgage here in Austin.
Top Ten Causes of Closing Delays
1) Not providing information requested in a timely manner as requested by your Processor or Transaction Coordinator.
2) Waiting until the last minute to choose your homeowner’s insurance company.
3) Notifying us when we can proceed with ordering the appraisal to your property. This is usually done once your option period has expired or the inspection has been done.
4) Changing terms, conditions or sales price on the contract without notifying us immediately.
5) Having late payments after the initial pre-qualification credit report or putting off paying bills in an effort to accumulate a down payment. Recent late payments may cause a loan to be declined.
6) Unclear verification of funds to close, changing the source of down payment, and using a personal check, rather than a cashier’s check to transfer “gift” funds.
7) Being out of town on the day of the closing and/or significant amounts of time during the process.
8 ) Changing jobs or employers without inquiring about the impact this change would have on your loan approval. Employment is verbally verified prior to closing.
9) Making major purchases prior to closing as this may impact your qualification ratios. Please confer with your loan officer to have him calculate what your ratios would be with any additional debts before applying for additional credit (i.e. new car, furniture, appliances, electronics, etc.). Credit reports are often updated just before closing.
10) Not bringing requested items to closing, such as a cashier’s check, photo ID, closing conditions.
Would a one dollar price drop motivate you to buy a home?
September 18, 2007
There is an active listing that pops up almost every day as a “Price Change” update in one of the neighborhoods I like to keep an eye on. At first I thought maybe this was a glitch, as the price seemed to be the same each time (or so I thought). This morning it was there again so I decided to investigate further.
I ran an Archive Report on the home, which shows the entire MLS history of a property, and sure enough, the agent has been lowering the price by $1 almost daily for the past couple of weeks. This, in my opinion, is an ineffective and counterproductive pricing tactic.
The home started out grossly overpriced in the mid $200’s in June 2007. It was never going to sell for that much. I remember the day it came on the market and I saw it. At 64 days on the market the price was dropped $19,900 (now that’s a price drop, but it was still over priced). At 75 days on the market, the price was dropped another $100, then another $100 the next day. Then the price was dropped ten times over the next 15 day, $1 each time, until the listing expired.
The same day it expired, the listing was entered again as a new listing by the same agent, at a list price about $700 below the expired list price. Since then, the list price has been dropped $1 per day 8 out of the last 9 days. It’s now been on the market for more than 100 days, and it’s still over priced. At this rate, in about 30,000 days (82 years) the price will be right. But of course appreciation may shorten that time frame to about 4 years.
The reason the agent is doing this $1 price dropping every day, I presume, is to force the still overpriced listing to remain at the top of buyer search portals as a “Price Changed” listing, and to force the overpriced listing to show up on other agent’s the daily Hotsheets as a “Price Changed” listing. This, theoretically I suppose, causes potential buyers and agents to regularly see the listing and eventually become interested. That’s the only rationale I can think of.
Well it worked, sort of. I was so baffled by the recurring appearance of the listing in my watch list that I checked it out further because I thought something might be wrong with the MLS functionality. I was not interested in the listing, just the anomaly of it’s persistence in the watch list and wondering how that could be.
So, what is the result of the agent’s price dropping tactic? Speaking only for myself, my conclusion is:
a) The seller is poorly represented.
b) The seller doesn’t know how to hire a good Realtor.
News flash to the goofy listing agent: Reminding buyers and agents of your overpriced listing almost daily doesn’t change the fact that it’s over priced. It’s been on the market over 100 days now, and dropping the price $1 each day isn’t going to get it sold quicker.
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Conversation with a telemarketer
September 17, 2007
I received a call from a dishonest telemarketer this afternoon. It went something like this:
Phone rings …
Me: Hello, this is Steve.
TM: Hi Steve, this is Matt from United Providers {or something like that}. I had a note here to call you. How are you doing today?
Me: A note from whom, and in referrence to what? (I’m already suspicious)
TM: Well, I’m not sure. It’s just a note to call you about lowering your home insurance costs.
Me: And you don’t know who the note is from?
TM: Well, it’s here on my desk and just says to call you.
Me: And you’re not sure who put the note on your desk?
TM: I don’t know. Maybe you called, or it could have been an internet inquiry. My boss put the note on my desk.
Me: I didn’t call you and you know that. You’re calling me off a list of some kind, which I’d like to be removed from. Have a good day. Goodbye”.
I like doing business with and associating with smart, honest people. This guy called to try to sell home insurance to me, but began the conversation with a lie. It’s never a good idea to start a business relationship with attempted deception. He lost me with the over-ebulliant “how are you doing today?”
I guess this stuff must work on some people or they wouldn’t be using the “I had a note to call you” line.
Austin Real Estate Sales Market Update - August 2007
September 13, 2007
The number of single family residential homes sales in Austin took a 16% dip for August. While number of sales alone does not tell the entire story of a real estate market, a 16% dip is an eyebrow raising number, as is the 28% increase in homes for sale compared to the same time last year. The Austin real estate market has shifted.
The interesting thing is that if we ignore the supply and demand data noted above, Austin’s real estate market is chugging along just fine. Our average sold price of $264,673 is up in August 7.4% from a year ago. The median sales price of $195,000 represents a 5.4% increase over last year. The average price per square foot is up 6.1% over a year ago to $122. The average days on market are down 5% from last year to 57 days, and the median days on market are down 2.8% to 35 days.
Numbers like these are the envy of almost any other real estate market, anywhere else in the U.S.
|
Jul 2007
|
Aug 2007
|
Aug 2006
|
Yr % Change
|
|
| # Sold |
2496
|
2258
|
2703
|
-16%
|
| Avg List Price |
$270,669
|
$272,288
|
$253,355
|
7.5%
|
| Median List Price |
$196,700
|
$199,900
|
$187,500
|
6.6%
|
| Avg Sold Price |
$263,255
|
$264,673
|
$246,469
|
7.4%
|
| Med Sold Price |
$192,273
|
$195,000
|
$185,000
|
5.4%
|
| Avg Size SQFT |
2116
|
2165
|
2140
|
1.2%
|
| Median SQFT |
1920
|
2000
|
1948
|
2.7%
|
| Avg $ per SQFT |
$124
|
$122
|
$115
|
6.1%
|
| Avg Days on Mkt |
54
|
57
|
60
|
-5.0%
|
| Median Days on Mkt |
32
|
35
|
36
|
-2.8%
|
So, how can a market with falling demand and rising supply generate good sales market stats? The supply/demand equation may be a sign of things to come more than an indication of present conditions. The consensus among agent I talk to is that we may be on the cusp of a “breather” in the Austin real estate market, or something worse. Gary Keller thinks it may be something worse, as he came and told us so earlier this week during an all-day meeting with Austin’s top 100 Keller Williams agents. He attributes the pending slowdown to flattening consumer confidence, among other things.
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Austin Sales Market Update - July 2007 Stats
September 12, 2007
For July 2007, the number of real estate sales of single family homes in Austin decreased 5.3% compared to July 2006. Most of 2007 has lagged behind 2006 in number of sales due to the very high volume of sales we experienced in 2006. YTD for 2007, number of sales are down 1.4% from 2006.
The number most people want to know about though - is value appreciation. The July 2007 Average Sales price of $263,255 is up 6.6% compared to a year ago. The median sales price of $192,273 is up 6.9% from a year ago. Average price per square foot rose to $124 for July 2007 compared to $116 for July 2006, a 6.9% increase. These are solid, healthy numbers. Of course the closer in areas of Austin have even better appreciation numbers, while many of the suburbs are underperforming compared to the overall market.
Days on market is down to 54 average, and 32 Median days on market for July this year compared to 59 and 35 last year. These are very good days on market numbers. A 32 day median days on market means half of all listings in Austin sell in 32 days or less. Not bad at all. So, in 2007, homes are selling faster than a year ago, and selling for higher prices.
Rising inventory (not charted here) and lower number of sales indicate somewhat of a market shift taking place. It looks like the national housing market and the lending mess is starting to creep into our Austin market, though we continue to have great unemployment, good job growth, good population growth, and affordable housing prices compared to many other U.S. metro areas. At present, Austin is one of the fastest growing metro areas in the U.S., which should continue to drive our real estate market provided we don’t run into a nationwide recession or continued loan crises. That said, if the inventory (number of homes on the market) continues to rise, and the number of homes sold continues to slow, something has to give.
I’m behind on my monthly market stats. I should have completed July stats a month ago. I’ll follow this update with August numbers soon, and we’ll see how the market is looking through August. I won’t have MLS Area breakdowns again until third quarter, through end of September.
|
June 2007
|
July 2007
|
July 2006
|
Yr % Change
|
|
| # Sold |
2613
|
2496
|
2635
|
-5.3%
|
| Avg List Price |
$270,162
|
$270,669
|
$253,671
|
6.7%
|
| Median List Price |
$199.086
|
$196,700
|
$182,000
|
8.1%
|
| Avg Sold Price |
$263,985
|
$263,255
|
$247,038
|
6.6%
|
| Med Sold Price |
$194,500
|
$192,273
|
$179,900
|
6.9%
|
| Avg Size SQFT |
2139
|
2116
|
2123
|
-0.3%
|
| Median SQFT |
1951
|
1920
|
1932
|
-0.6%
|
| Avg $ per SQFT |
$123
|
$124
|
$116
|
6.9%
|
| Avg Days on Mkt |
53
|
54
|
59
|
-8.5%
|
| Median Days on Mkt |
28
|
32
|
35
|
-8.5%
|
Below are the July YTD numbers for 2006/2007.
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What to do when your home floods
September 7, 2007
This is a picture I took on Alcott street on South Austin November 2001. The day before, 16 inches of rain had dumped on South Austin. The tenant in the duplex I managed on this street called and told me his car had floated down the street and that there was 4 feet of water inside the property. This picture shows the scene the next day, as owners and tenants were pulling everything out of the homes and getting the recovery process started.
Yesterday, one of my tenants in Oak Hill called and said “Steve, I just got home and the entire house is flooded. There was water squirting from behind the commode and I turned it off, but the entire house is flooded and there is water running out the back door.”
I headed straight over, calling my carpet people on the way. 3 hours later it was all dried up, fans were running in all the bedrooms blowing air underneath the carpets. Luckily, we got to this one fast enough that we will probably have it all put back together today. The plumber has already been by to replace what turned out to be a cracked supply line. Also, I’m lucky that this is a one-story home with hard tile everywhere except for the 4 bedrooms, so there isn’t a lot of carpet to deal with. Before we button it back up, we’ll test all the baseboards and walls for moisture to make sure the water didn’t start wicking up into the sheetrock where it could cause mold if untreated. I don’t think the water got that high, so we should be ok on this one.
So, as a landlord or property owner, what do you do when your home floods?
It’s really quite simple, you call a water extraction expert immediately. Since you’re well prepared, you already have that phone number programmed into your cell phone, because you knew this would happen someday. This isn’t the time to be hunting through the yellow pages and shopping for the best deal.
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