Archive Monthly Archives: March 2008

Tenant Eviction in Texas

Texas Eviction
I had to file eviction in JP Court on one of my tenants this month. I’ve evicted more than 80 tenants in Austin since 1990, but it’s been about 4 years since my last one. In the old days (the 1990’s) when I managed 4-plexes and some lower end properties, eviction filings were more frequent. Now that we don’t handle low-end properties, it’s not often we have to evict a tenant.

What’s involved in evicting a tenant in Texas?
The following is an outline of the basic steps for tenant eviction as I perform them. This is not legal advice, but an overview of the administrative steps and my personal experience. For legal advice, contact an attorney.

1) Make Sure You Have a Good Lease Agreement
It all starts with a proper lease agreement. A TAR (Texas Association of Realtors) or TAA (Texas Apartment Association) lease will properly protect your rights as a landlord and afford the necessary legal language. If you hire a Realtor to lease your property, you’ll have a TAR lease. You can join TAA as an individual, but many single-property owners find the dues to be high (though I’ve seen landlord boo-boos that would have paid 10 years TAA dues). Otherwise, have a good real estate attorney provide a lease for you if you are a do-it-yourself landlord. Why is this important?…

The worst lease I ever saw was an office supply store special that afforded the tenant a 30 day grace period to pay rent (because the owner filled “30” days into that blank not knowing any better) followed by a 30 day “cure” clause (same thing, clueless owner filled in a blank with “30”).

This meant the tenant had to be 30 days late before a “demand to cure” (as the lease termed it) letter could be sent, then the demand letter had to give another 30 days to cure. After taking over that property from the owner, whom the “professional deadbeat” tenant was running circles around and was already more than two month’s behind in rent, I had to send the demand letter (which the owner had not done because she was afraid of conflict) and wait 30 days before sending a Notice to Vacate. It took another three weeks after that for the court date, and another 5 days which the court provides to appeal or vacate. Then the tenant finally vacated, leaving the home trashed with litter and junk furniture.

That owner lost a total of 4 month’s rent plus damages by the time it was said and done. How much do you think the owner “saved” by using that cheap office supply store lease and not seeking help from an attorney or a professional leasing agent? The owner also told ne that no credit report or eviction search or criminal background check was done on the tenant. “She seemed like a perfectly nice young lady” the owner told me. Deadbeat tenants are experts at seeming to be nice people, and they only seek rentals from do-it-yourself landlords who they know won’t check them out properly. But I’m drifting into another topic, tenant screening, so back to the eviction process …
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Posted by Steve
8 years ago

Texas Dominates Top Growing Cities List

The following is from my Realtor e-newsletter today. It shows Texas as having more fast growing cities than any other state with 4 out of the top 10 being Texas cities. Though we’re not immune to market slowdowns, we’re positioned to weather it better than almost anywhere else in the country at present.

The fast-growing areas in the United States are in the Sunbelt, with Texas leading the way, according to data released today by the U.S. Census Bureau.

Dallas-Fort Worth added more than 162,000 residents between July 2006 and July 2007, more than any other metro area. Three other Texas cities — Houston, Austin, and San Antonio — also were in the top 10.

Experts credit much of the growth in the South to strong local economies and housing prices that are among the most affordable in the United States.

A report earlier this month by Global Insight found that housing prices in the Dallas area were undervalued by as much as 30 percent.

Other areas experiencing growth included the New Orleans area, which is recovering from Hurricane Katrina and grew by 4 percent or nearly 40,000 people. During the same survey last year, the population of New Orleans dropped by nearly 290,000 people.

Meanwhile, Detroit lost more than three times as many people as any other metro area — its population declined more than 27,300. Other areas losing more than 5,000 people were Pittsburgh, Cleveland, Columbus, Ga., Youngstown, Ohio, and Buffalo, N.Y.

The 10 biggest gainers:

1. Dallas-Fort Worth-Arlington, Texas: 162,250
2. Atlanta-Sandy Springs-Marietta, Ga.: 151,063
3. Phoenix-Mesa-Scottsdale, Ariz.: 132,513
4. Houston-Sugar Land-Baytown, Texas: 120,544
5. Riverside-San Bernardino-Ontario, Calif.: 86,660
6. Charlotte-Gastonia-Concord, N.C.-S.C.: 66,724
7. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.: 66,231
8. Austin-Round Rock, Texas: 65,880
9. Las Vegas-Paradise, Nev.: 59,165
10. San Antonio, Texas: 53,925

The 10 fast-growing metro areas
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Posted by Steve
8 years ago

My Real Estate Interview with KXAN-36 News

I received a call from a KXAN-36 reporter today who found my blog and wanted to ask some questions about the Austin real estate market. I answered some questions and then she asked if she could come out and interview me on camera. I said “sure, come on over” so she and her camera man came to my house.

“Finally”, I thought. “I can explain why these newspaper and TV reporters get it wrong so often and don’t know how to interpret market stats and report market activity”. She showed up with a camera man and we set up in my front yard and chatted a while.

Now I’m terrified about how this interview will come off. I quickly snapped to the fact that the short time slot in which the story would need to fit doesn’t accommodate good, detailed explanations of market activity. In fact, the reporter repeatedly explained to me “I need simple information that our viewers can understand”. She wanted to know which were the three “best” and “worst” areas to buy in right now in Austin.

I tried to explain that sometimes the “worst” areas are in fact the best areas in which to buy, depending on how one defines a “bad market”. And that even areas with slow sales and high inventory (such as Steiner Ranch) can have a segment of the inventory that is a seller’s market (such as homes under $280K in Steiner Ranch). I’m not sure I did a good job of making my points though. I’m worried about what will be snipped and spliced and therefore don’t really know just exactly what viewers will hear me saying, or whether it will make sense.
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Posted by Steve
8 years ago

Austin Real Estate Market -Feb 2008 YTD MLS Area Breakdown

Below is Year to Date breakdown for sales of single family homes in Austin by MLS Area. Something interesting happened when I was running these stats that reminded me of the big swings that can be caused by just one or two sales when we are looking at small sample sizes.

About half way through, I realized that this year is leap year, so I was running 2008 sales from 1/1/2008 thru 2/28/2008, which means I was unintentionally excluding homes that closed Feb 29, 2008, so I had to go back and recalculate the values. In doing so, as I typed revised sales numbers numbers into my excel spreadsheet and watched the percentage fields change, it was interesting to me to see the resulting percentage changes.

For example, MLS Area 6 had 15 sales through Feb 28th. These 15 sales had an average sales price of $329,028 (2.51% higher than the year before) and a median sales price of $281,000 (4.75% lower than the year before). When the 16th sale from Feb 29th was was factored in, the median sales price fell from $281,000 to $258,000, changing the percentage drop from -4.75 to -12.54%. The Average Sales price change went from 2.51% to 0.68%.
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Posted by Steve
8 years ago

Bad Advice for Non-Producing Realtors

It is with great amusement that I read an article in today’s Realtor Magazine email newsletter. The article, which I will excerpt below, offers suggestions and advice to Realtors dealing with market slowdowns.

For career real estate agents in the business for the long haul, a slower, “down” market is beneficial to our careers longterm. Two things happen when markets slow down; 1) the “pretenders” (fair weather agents) fall out of the business and 2) the remaining agents gain market share and credibility. We’re cranking up our advertising, doubling up on marketing expenses, and powering through the slowdown. There is no other alternative I would consider.

But what does Realtor Magazine suggest agents do during a slowdown? Let’s have a look.

From Realtor Magazine Online
Practitioners Dig Up New Revenue
Rather than flee the real estate industry due to the housing downturn, experts say real estate practitioners should use their skills and experience to offer services outside of buying and selling homes to supplement their incomes.

Steve’s Comment: Uhh, excuse me. Who are these “experts”? Wouldn’t said skills and experience preclude the need to seek outside income?
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Posted by Steve
8 years ago

Austin Real Estate Market Update – Feb 2008

The average sales price for single family homes in Austin FELL in Feb 2008 compared to Feb 2007. In the 2 and a half years I’ve been posting Austin real estate stats on this blog, this is the first year over year drop. How much did prices fall? Well, -0.07%. But it’s a number with a minus sign in front nonetheless. Last month, Jan, saw a rise of 6.61%. The year 2007 was up 6.62% over 2006. So what happened in February?

I can’t personally answer that question yet. Sylvia and I have been swamped since New Years. We wrote more volume in sales than any other team in our office for Feb (a “Team” is a two person entity at Keller Williams, a “Group” is 3 or more working together), and we’ve had a heck of a time finding reasonable deals for our buyers (see my write-ups on over-priced listings and stubborn sellers).

I’ll dig deeper into the numbers and report what I find in Part II of this month’s stats report, but a quick peek tells me is that area SWW, where we specialize, is up 8% from last year, so we just are not experiencing what the macro stats indicate. It’s most likely the outskirt areas that have fallen, dragging down the area-wide average sales price. I doubt that any of the closer in areas we work (South/SW Austin, Central, W, NW) have fallen. We’ll know for sure after I find time to run an area by area breakdown.

Below is the chart for Feb 2008 austin sales market. Remember, I only run single family homes. Condo sales are not included.

Austin Sales Stats Feb 2008
Previous Month and Year Comparison
All MLS Areas - Houses Only

 
Jan 2008
Feb 2008
Feb 2007
Yr % Change
# Sold
1228
1419
1680
-15.54%
Avg List Price
$260,784
$247,586
$245,467
0.86%
Median List Price
$196,008
$189,000
$184,548
2.41%
Avg Sold Price
$260,742
$237,974
$238,131
-0.07%
Med Sold Price
$190,000
$182,471
$179,000
1.94%
Avg Size SQFT
2150
2089
2087
0.10%
Median SQFT
1954
1907
1913
-0.31%
Avg $ per SQFT
$121
$114
$114
-0.16%
Avg Days on Mkt
69
70
64
9.38%
Median Days on Mkt
51
53
42
26.19%
# Expired
578
495
298
66.11%
# Withdrawn
626
511
365
40.00%
Total NOT Sold
1204
1006
663
51.73%
Not Sold %
50%
41%
28%
46.60%

As you can see above, number of sales was down 16%, Avg Sold price was down 0.07% in Feb from the same month last year, median price is up 2%, and the average days on market have increased 9% while the median days on market have 26%.

And my new stat that I track each month, NOT SOLDS, increased 53% over Feb 2007. 41% of the homes that fell out of the MLS in Feb-08were expired or withdrawn instead of Sold. In Feb-07 it was 28%. So we continue to see more inventory than demand can absorb, but that can mask the fact that some areas of Austin are extremely strong still.

Below is the Year to Date chart, which of course this early in the year is simply January and February.
Read more …

Posted by Steve
8 years ago