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The Crossland Team
Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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Featured Listings
Former Boom Markets Hit Hardest
December 27, 2007
Austin was not a “boom market”, but the sentiments and national news resulting from the markets listed in the news snippet below have contributed to a somewhat timid buyer pool in Austin at present. Hopefully, buyers will perk up this spring as the mortgage fallout further clears up and people realize that Austin is not in any way a bubble poised to pop.
The Standard & Poor’s/Case-Shiller Home Price Index, released Wednesday, says the median resale home price in 20 key markets declined 6.1 percent during the 12 months ending in October.
The index shows price drops ranging between 10.6 percent and 12.4 percent in Phoenix, Las Vegas, San Diego, Tampa, and Miami. Additionally, existing-home prices were down 11.2 percent in Detroit and 7 percent in Washington, D.C., with the smallest declines of 0.7 percent and 0.1 percent recorded in Atlanta and Dallas, respectively.
This was the largest decrease in the index in its six-year history and what Michael Larson, housing analyst for Jupiter, Fla.-based Weiss Research, calls “one of the worst months we’ve had yet.”
Among the 20 cities, prices rose in only three — Charlotte, N.C.; Portland, Ore.; and Seattle.
Austin Rental Market Update – November 2007
December 26, 2007
The Austin rental market for November in Austin continues the strong climb in prices. The average rental rate of $1386/mo. is a 12% increase over the same month last year. The median leased price is $1200, up 4.3% from a year ago. The number of homes leased dropped 13% from 588 a year ago to 510 in November 2007. Days on market for leased homes have dropped dramatically (a good thing), from an average days on market of 46 in Nov 2006 to an average of 35 this November. Median days on market dropped 31% from 35 days last Nov to 24 days Nov 2007. Avergae price per square foot for rental homes in Austin is up to $0.71 psf from $0.68 psf last year.
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Oct 2007 |
Nov 2007 |
Nov 2006 |
Yr % Change
|
|
|
# Leased
|
571
|
510
|
588
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-13%
|
|
Avg List Price
|
$1354
|
$1402
|
$1249
|
12%
|
|
Median List Price
|
$1250
|
$1225
|
$1150
|
6.5%
|
|
Avg Leased Price
|
$1337
|
$1386
|
$1239
|
12%
|
|
Med Leased Price
|
$1245
|
$1200
|
$1150
|
4.3%
|
|
Avg Size SQFT
|
1927
|
1964
|
1865
|
5.3%
|
|
Median SQFT
|
1829
|
1829
|
1750
|
4.5%
|
|
Avg $ per SQFT
|
$0.69
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$0.71
|
$0.66
|
7.6%
|
|
Avg Days on Mkt
|
40
|
34
|
46
|
-26%
|
|
Median Days on Mkt
|
32
|
24
|
35
|
-31%
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Year to date stats are below. They are again missing the Median values because our lousy new MLS software won’t let me produce a report with median values if more than 5,000 results are included.
Read more
Austin Real Estate Market Update – November 2007
December 26, 2007
The number of homes sold in Austin for November 2007 was down 19% from November 2006. Average sales price is up 6.5% $255,073 and Median sales price is up 7.9% from $175,000 a year ago to $188,900 this year for November. Average price per square foot is up 4.4% to $119 per square foot. Average Days on Market is up 7.9% to 68 days (still not bad) and the Median Days on Market is up 12.4% to 46 days, meaning hlf of all homes sold in November sold in 46 days or less.
Not reflected in these stats is that inventory remains high and many homes in fact are not selling. There are currently 8,144 single family homes on the market as of this posting (Dec 26, 2007), which is too many given current demand. I’ll update my Sold vs. Not Sold chart to include October and November soon and I suspect we might have have more “Not Solds” in November that there were closed sales.
Finally, the stats are missing Median Values for the year-to-date charts below. That’s because of our crappy new MLS software and the fact that it can’t perfom certain high-count median stats.
November stats as well as year to date and Resale vs. New home sales charts are below.
|
Oct 2007
|
Nov 2007
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Nov 2006
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Yr % Change
|
|
| # Sold |
1641
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1527
|
1880
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-19%
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| Avg List Price |
$255,617
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$266,062
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$246,646
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7.9%
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| Median List Price |
$189,888
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$197,500
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$179,900
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9.8%
|
| Avg Sold Price |
$246,796
|
$255,073
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$239,478
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6.5%
|
| Med Sold Price |
$183,961
|
$188,900
|
$175,000
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7.9%
|
| Avg Size SQFT |
2102
|
2151
|
2099
|
2.5%
|
| Median SQFT |
1917
|
1951
|
1902
|
2.6%
|
| Avg $ per SQFT |
$117
|
$119
|
$114
|
4.4%
|
| Avg Days on Mkt |
69
|
68
|
63
|
7.9%
|
| Median Days on Mkt |
47
|
46
|
41
|
12%
|
Below is the year-to-date summary, missing the median figures due to limitations of our “new” MLS System, which is less capable than the previous one. Go figure.
Read more
Austin Board of Realtors Shamefully Incompetent Rollout of New Austin MLS System
December 26, 2007
As I have started to run the stats for November to post on my blog as I do each month, I shuddered to think what I might encounter trying to pull stats from our lousy new MLS system. My fears were confirmed. The new Austin MLS system does not properly compute the data. This is one of the reasons I run my own stats, as I don’t trust auto-calculated figures put out by the system reports.
As someone with a UT degree in Management Information System, I remember at least a little bit about project management and rolling out software systems. In laymen’s terms, you check and double check to make sure everything is working right before you turn 11,000 Realtors loose with a new MLS software, and you do NOT take down the old system until you are completely sure the new one performs at the required standard.
This rollout of our new Austin MLS system, if it were to be properly documented, could serve as a case study on how to do it wrong. Austin Realtors are in an uproar, and for good reason. The new system, called MLXchange, is littered with fancy new feature enhancements, many of which are indeed nice, but the meat and potatoes functionality that we all earn a living with are defective, starting with, at times, not even being able to reliably log in to the system. The prettiest garnish won’t hide the foul taste of rotten meat. Our new MLS system stinks and our Board of Realtors dropped the ball. There is no other way to put it.
At present, I can’t run a CMA report that includes Expired listings, or the number of Sales listings computes incorrectly. The CMA Report that we commonly use to determine market activity and sales values in an area does not properly calculate the average sold price per square foot. I was unable to log into the system at all for about an hour today as it would freeze up Internet Exporer and eventually forced a reboot of my computer. These are not trivial “I don’t like change” grumblings, this is major failure of a critical system relied upon by Austin Realtors and our clients.
An apology was issued to all Austin Realtors by MLXchange on December 18th, assuring us that the problems are being addressed. Not good enough. It’s too little, too late. Accountability needs to happen. People need to be fired, demoted, retrained and maybe even sued.
Every half assed startup from here to China can create an awesome real estate web search system (Zillow.com, Trulia.com to name just two, but there are many lessor sites that pop up overnight it seems), with great mapping and searching functionality, lightening speed, clear simple user interfaces, etc. – yet us Realtors, who bust our butts obtaining the very listings that drive the traffic to those third party sites, including Realtor.com, are left with the Worst of Breed, most poorly designed MLS software systems out there. And to add insult to injury, we pay through the nose for it through our dues and membership requirements. It’s enough to make me want to spit.
If you’re one of our clients set up on a gateway, you’ve noticed all sorts of screwy problems as well. We’re sorry, and we can’t do anything about it. Our new MLS System sucks, and we know it and are powerless to get it fixed anytime soon.
Well, I just needed to get that off my chest.
I’m sure things will work out, and all the problems that could have been discovered with a competent QA process, a proper parallel rollout, and a well organized test/focus group of actual producing agents, will be fixed in 2 or 3 years, right before they switch us onto the next greatest system to be sold to a Board of Realtors not qualified or equipped to be making such technology purchases.
Texas Home Insurance Premiums are Highest in Nation
December 23, 2007
AUSTIN (Dallas Morning News) – A new study from the National Association of Insurance Commissioners shows that Texas homeowners pay far more for insurance than those in any other state.
The average annual premium in Texas for the most common homeowner policy was $1,372, considerably more than the nationwide average of $764.
Louisiana ranked second at $1,144, while Florida was third at $1,083. The premiums in all other states were less than $1,000.
However, the study, which was based on 2005 premiums, also showed that other states are closing the gap. Many of their rates have seen double-digit increases in recent years, while Texas rates have stabilized.
Texas historically has been among the most expensive states for home insurance, in large part because of its pattern of severe weather conditions such as hurricanes, hailstorms and tornadoes. A rash of mold claims in the early part of the decade caused even higher rates.
Steve’s Note: The story doesn’t mention that Texas Insurance coverage minimums are mandated by the TX Dept. of Insurance and typically cover more items than the bare bones policies available in other states. Nevertheless, an apples to apples comparison would still have us higher than other states. In general, insurance on newer homes will run about 0.5% of the value of a home annually.
Agent Bonuses – Buyers Should Know
December 21, 2007
The news snippet below discusses a proposed new law in North Carolina that would make disclosure of agent bonuses mandatory in real estate transactions. Good – it’s about time. Currently, very few states require this.
I’ve long had a problem with the fact that most buyers have no clue whether or not their Realtor is receiving a bonus up and above the commission on the sale of a home. Home Builders often offer very attractive bonuses and higher commission to agents as incentive to bring buyers out to their new subdivisions. I receive builder flyers in my Keller Williams box at the office almost daily offering “$5,000 Bonus to Agent!” or “7% commission to Buyer’s Agent”, intended to motivate me financially to bring buyers out to see those builder home. The problem is, the home search should be guided by the needs of my buyer, not financial incentives offered to me as the agent. I personally think hidden bonuses to agents are unethical. Additionally, if the builder has to offer those kinds of incentives to sell homes, is that neighborhood really the best investment for my buyer? Maybe, but high builder bonuses make me think the buyer will be waiting a while for any appreciation in value to happen, and I’ll explain that to the buyer.
This is another reason every buyer should have a signed Buyer Representation Agreement with the agent you have helping you. The Buyer Rep agreement spells out the agent’s compensation. The buyer rep form that Sylvia and I use provides that the Buyer receives any bonuses or or commissions in excess of the 3% we charge. By doing this, I know that the homes I choose to show buyers are in no way influenced by bonuses or higher commissions. The Buyer may be motivated and influenced by it, but not me. This is, in my opinion, the only ethical way to handle excess or “bonus” compensation when offered by sellers.
N.C. Pushes to Disclose Agent Bonuses
North Carolina could soon join Tennessee and a handful of other states that require real estate agents to give home buyers written disclosures of bonuses from sellers.So far, Tennessee is the only southeastern state to implement such a mandate.
In North Carolina, the rule change was approved by the N.C. Real Estate Commission; and if approved by the state, the North Carolina Association of REALTORS® or individual real estate agencies would be charged with creating the disclosure forms that would be presented to buyers before they decide whether to purchase the home.
Some REALTORS® note that bonuses are not common in certain markets, making the rule unnecessary. In most states, bonuses are spelled out only in the HUD settlement statement given to buyers at the closing table.
Are Older Homes Really Built Better?
December 20, 2007
I really miss the old house we use to live in on Newning Street in Travis Heights, and the neighborhood. We lived there from 1991 to 1996, when S. Congress was still gritty and not yet “cool”. We certainly didn’t call it “SoCo”. It was still plain old South Austin and Travis Heights.
The home was built in the late 1800’s. We had no dishwasher, no disposal, no A/C, a dirt driveway, single pane windows, bad plumbing and wiring, and no Cable TV. BUT, it was a true vintage home with wood floors, high ceilings, great archetecture, great trees, great location and certain indescribable charms and nuances about it. Our youngest daughter was born at home there in the corner bedroom in 1996. After the second child, it got a bit rougher with no A/C, so we migrated further South to the Cherry Creek neighborhood, where we bought a more modern 1976 home with central A/C (and aluminum wiring).
We’ve subsequently lived in homes built in 1998, 1969, 2003 and now have now moved into another home we just completed this year.
While I miss the old Travis Heights charm and ambience, as a couple in our mid 40’s with school aged kids, Travis Heights and old houses just don’t fit into this phase of our lives, though we hold very fond memories of pushing the kid buggy through Stacy Park and swimming in the pool there. Would we trade in our modern brand new home for an old clunker in Travis Heights? Probably not while we still have kids at home. The old house had a lot of problems, and now that were are spoiled by living in an energy efficient home where everything functions properly, it’s going to be hard to ever go back to Old Time living again.
One of our inspectors, Bob Petersen, wrote an overview of the differences of older homes versus modern homes built today, which I share below.
By Bob Petersen
How many times have you heard ‘they don’t build ‘em like they used to’? Why do people say this? Is it true? Absolutely NOT!Besides a FEW things that were better with older homes (no ‘finger jointed’ studs or trim, better quality wood, no hollow doors or ‘pressboard’, better doorknobs and no computer controlled appliances), modern homes are much better in many ways. Here’s a partial list:
Roofing/Insulation: Before 1982 lasted maybe 15 years. Now roofs last a minimum of 20 and some are hail resistant. Older homes had little or no insulation; newer homes have lots of it & much better attic ventilation.
Read more
Moving Tips: How to get a better price on existing services
December 11, 2007
We’re in the process of moving. I called Time Warner to move my internet service to my new address, but when they answered, I told them I want to cancel the internet service instead. I don’t want to cancel (though I truley was considering it), so why did I do this? To get connected to the customer “retention” department.
Why the retention department? Because they are the ones who are authorized to negotiate a better deal that the one I currently receive. If I simply move the service, they will keep charging me the same rate. But by telling them I need to cancel and that I’m thinking about switching to AT&T DSL, that results in my being transferred to the “retention” department, though they don’t say that.
Once the retention person has me on the line, it’s their job to talk me out of switching to DSL. It’s my job to play hard to get. End result, they talked me into staying and dropped my monthly bill from $44.95 to $34.95 for the next 12 months, at which time it will go back up. But I’ll take the $120, and I enjoyed dealing with the better trained, more knowledgeable customer service rep (they don’t put newbies in the retention department).
This works the same way with your cell phone provider. If you’ve completed your 1 or 2 year term and have no intention of switching providers any time soon, call in and tell them you need to cancel. You’ll be sent over to a retention specialist whose job it is to talk you out of canceling. In doing so, if you hold out long enough during the conversation, they will eventually offer you a pretty sweet deal, with a better plan and a free new phone. Several years ago, I had the monthly fee for my Pitney Bowes postal machine cut by more than 50% by making one of these calls.
These businesses know that it is far cheaper to retain an existing customer than to acquire a new one. Wireless companies spend more than $600 per new customer acquired. If they can spend less than that to keep you, it makes good business sense.
Bush announces 5 year rate freeze – Texas borrowers in good shape
December 7, 2007
WASHINGTON (Associated Press, Real Estate Center) – President Bush announced this week plans for a five-year freeze on interest rates for subprime mortgages.
“We should not bail out lenders, real estate speculators or those who made the reckless decision to buy a home they knew they could never afford,” Bush said. “But there are some responsible homeowners who could avoid foreclosure with some assistance.”
Bush said 1.2 million people could be eligible for help. But only a fraction will be subject to the rate freeze. Others, he said, would get assistance in refinancing with their lenders and moving into loans secured by the Federal Housing Administration.
Dr. James Gaines, research economist with the Real Estate Center at Texas A&M University, calls the plan a noble effort to find a way to keep homeowners in their homes but says the basic premise is shaky, and the details are sketchy.
“For the most part, the homeowners and borrowers likely to benefit from the interest rate freeze are the very same people who would have the best chance of renegotiating their loans with the lender in the first place — a borrower with a relatively sound credit rating and a history of making payments who simply needs a little help to keep from going into full default,” Gaines said.
Bush’s announcement followed news from the Mortgage Bankers Association that the percentage of mortgages that started the foreclosure process during the third quarter jumped to 0.78 percent, a record high. In addition, the delinquency rate for all mortgages climbed to 5.59 percent during the third quarter, the highest since 1986.
Gaines said Texas borrowers — even subprime borrowers — are in better shape than those in the seven states dominating the delinquency and foreclosure statistics, because home prices here continue to rise, making selling or refinancing a viable alternative.
ABJ: Centex pulls out of 1,400-home project
December 6, 2007
Looks like Austin is seeing some contraction in the new home inventory, which is a good thing, at least for now. The fact that Centex is backing out of a 1400 home project tells us more about the national housing market, and the financial problems of the large production builders than is does Austin’s market. Yes, we are experiencing a breather right now in Austin as inventory has risen and sales have slowed. But prices are still rising and all of our economic news is solid. Nevertheless, reslae owners looking to sell should be thankful that builders are pulling back some, as it means less compitition for resale homes.
Austin Business Journal
A plan that would have brought 1,400 new homes to northern Travis County has been eliminated as problems in the national housing sector force one of the region’s biggest builders to cut back on its projects.Centex Homes has decided not to close on 465 acres of the 750-acre Pearson Ranch near Parmer Lane and State Highway 45. The company, which had announced plans in February to develop a 1,400-home community on the tract, said in a statement it would not close on the purchase of the land after a strategic review of projects companywide.
“While nationally many housing markets have experienced extreme shifts, Austin continues to remain in healthy standing with positive employment growth and supply and demand dynamics staying balanced by industry standards to date,” the company said in a statement, adding that it would continue to invest in future and existing communities around Central Texas that better align with Centex’s long-term objectives.
Like many national homebuilders, Dallas-based Centex has been trimming staff and delaying projects across the country amid the decline in the housing markets.