Archive Monthly Archives: December 2007

Former Boom Markets Hit Hardest

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.

Posted by Steve
8 years ago

Austin Rental Market Update – November 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.

Austin Rental Market Stats November 2007
Previous Month and Year Comparison
All MLS Areas - Houses Only

 

Oct 2007

Nov 2007

Nov 2006

Yr % Change
# Leased
571
510
588
-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
$0.71
$0.66
7.6%
Avg Days on Mkt
40
34
46
-26%
Median Days on Mkt
32
24
35
-31%

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 …

Posted by Steve
8 years ago

Austin Real Estate Market Update – November 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.

Austin Sales Stats November 2007
Previous Month and Year Comparison
All MLS Areas – Houses Only

 
Oct 2007
Nov 2007
Nov 2006
Yr % Change
# Sold
1641
1527
1880
-19%
Avg List Price
$255,617
$266,062
$246,646
7.9%
Median List Price
$189,888
$197,500
$179,900
9.8%
Avg Sold Price
$246,796
$255,073
$239,478
6.5%
Med Sold Price
$183,961
$188,900
$175,000
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 …

Posted by Steve
8 years ago

Austin Board of Realtors Shamefully Incompetent Rollout of New Austin MLS System

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.

Posted by Steve
8 years ago

Texas Home Insurance Premiums are Highest in Nation

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.

Posted by Steve
8 years ago

Agent Bonuses – Buyers Should Know

Agent BonusThe 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.

Posted by Steve
8 years ago