Comments on: Austin Real Estate Market Update for March 2008 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/ Austin Real Estate Blog Fri, 11 May 2012 17:13:15 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Steve Crossland http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1377 Steve Crossland Thu, 17 Apr 2008 18:40:32 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1377 Thanks for the comments. What I meant by "Stubborn Sellers" is that we are seeing many listings that are priced at amounts not supported by market activity - current or past. Before my buyer wrtes an offer, we do a market analysis to make sure we offer the right amount, often, we see listing priced way out of range. I wrote about a specific example of this a couple of months ago. House was price $20K over market. Listing agent (eventually admitted) knew it was over priced, seller knew it was over priced, but we were told that the seller didn't need to move (i.e. unmotivated seller) and if he didn't get his price he would just stay. Out of curiosity, I just now looked up that listing (which my buyer of course passed up after receining no counter-offer, just a "no thans to our offer) and sure enough, it was withdrawn from the market and is no longer for sale. Net result, Seller and Listing agent wasted their time and that of others by believing that some fool would actually come along and pay $20K over market for the home. Buyers are smarter than that. So are most agents. That's what I mean by a stubborn seller. I have no problem with a seller holding fast to a list price that is in line with the market. That's what a seller should do, depending on their timeframe needs and level of motivation. Steve Thanks for the comments. What I meant by “Stubborn Sellers” is that we are seeing many listings that are priced at amounts not supported by market activity – current or past. Before my buyer wrtes an offer, we do a market analysis to make sure we offer the right amount, often, we see listing priced way out of range.

I wrote about a specific example of this a couple of months ago. House was price $20K over market. Listing agent (eventually admitted) knew it was over priced, seller knew it was over priced, but we were told that the seller didn’t need to move (i.e. unmotivated seller) and if he didn’t get his price he would just stay.

Out of curiosity, I just now looked up that listing (which my buyer of course passed up after receining no counter-offer, just a “no thans to our offer) and sure enough, it was withdrawn from the market and is no longer for sale. Net result, Seller and Listing agent wasted their time and that of others by believing that some fool would actually come along and pay $20K over market for the home. Buyers are smarter than that. So are most agents.

That’s what I mean by a stubborn seller. I have no problem with a seller holding fast to a list price that is in line with the market. That’s what a seller should do, depending on their timeframe needs and level of motivation.

Steve

]]> By: arz http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1376 arz Thu, 17 Apr 2008 18:07:32 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1376 Not that I'm supporting Ray's points, but I've seen homes in my neighborhood selling and holding. Almost uniformly, those sold (fast or slow) took a beating on the price (I'd say about 5-7% lower than what they could've sold a year earlier. Maybe those prices are consider "fair" market price, but I can tell you that those who sold their homes aren't feeling any better than those "stubborn" sellers. So, say everyone got enlightened and is willing to sell lower price. You will then create a downward competition (meaning that price will sliding down further). The balance point of supply and demand is not going to catch on for a while (it seems the supply will continue to over take demand for a long while). The only people that will gain from this downward spiral is agents. They collect 6% only when a home sells regardless of the price. Not that I’m supporting Ray’s points, but I’ve seen homes in my neighborhood selling and holding. Almost uniformly, those sold (fast or slow) took a beating on the price (I’d say about 5-7% lower than what they could’ve sold a year earlier. Maybe those prices are consider “fair” market price, but I can tell you that those who sold their homes aren’t feeling any better than those “stubborn” sellers. So, say everyone got enlightened and is willing to sell lower price. You will then create a downward competition (meaning that price will sliding down further). The balance point of supply and demand is not going to catch on for a while (it seems the supply will continue to over take demand for a long while). The only people that will gain from this downward spiral is agents. They collect 6% only when a home sells regardless of the price.

]]> By: Barry http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1381 Barry Thu, 17 Apr 2008 14:20:31 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1381 FYI home prices in the UK, Spain and Ireland are crashing very hard. Here is a chart on affordability http://www.housingtracker.net/affordability/ This compares local home prices to local incomes. Austin while not at the top of affordability, Austin does pretty well. This data is from 3Q 2007, but since then the regions with the highest price to income ratio have fallen the furthest. Future real estate appreciation will have to come without altering this ratio. When this number gets large its actually a pretty good indicator of a bubble. If we see appreciation, without the P/I ratio increasing, then its healthy appreciation. FYI home prices in the UK, Spain and Ireland are crashing very hard. Here is a chart on affordability http://www.housingtracker.net/affordability/

This compares local home prices to local incomes. Austin while not at the top of affordability, Austin does pretty well. This data is from 3Q 2007, but since then the regions with the highest price to income ratio have fallen the furthest. Future real estate appreciation will have to come without altering this ratio. When this number gets large its actually a pretty good indicator of a bubble. If we see appreciation, without the P/I ratio increasing, then its healthy appreciation.

]]> By: Ted http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1379 Ted Thu, 17 Apr 2008 12:47:05 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1379 I guess it's hammer on Ray day....Ray, in LS there is a glut of homes. I haven't seen March numbers yet, but last month there was nearly 15 months of inventory. That, my friend, is the very definition of stubborn. You have to consider too that in LS many homes will require jumbo mortgage financing. Jumbos are still very costly and require 25% down payments and in many instances are so filled with hurdles that buyers just give up in exasperation. Then, you have to factor in home affordability and put property taxes into the equation. With increased property values, property taxes in some areas of Austin are as costly as anyplace in the country. Lakeway is overbuilt and overpriced. I'm not suggesting the market is dead. Sure, homes are still going to sell, but the days of the uninformed buyer are gone and right now it's a buyers market. I guess it’s hammer on Ray day….Ray, in LS there is a glut of homes. I haven’t seen March numbers yet, but last month there was nearly 15 months of inventory. That, my friend, is the very definition of stubborn. You have to consider too that in LS many homes will require jumbo mortgage financing. Jumbos are still very costly and require 25% down payments and in many instances are so filled with hurdles that buyers just give up in exasperation. Then, you have to factor in home affordability and put property taxes into the equation. With increased property values, property taxes in some areas of Austin are as costly as anyplace in the country. Lakeway is overbuilt and overpriced. I’m not suggesting the market is dead. Sure, homes are still going to sell, but the days of the uninformed buyer are gone and right now it’s a buyers market.

]]> By: Mike http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1382 Mike Thu, 17 Apr 2008 02:51:59 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1382 Ray, those sellers will probably be wishing they had negotiated a year from now if/when the market is even slower and the prices are lower. Just because the prices in Europe are higher, it means nothing to our local market where the prices are set by supply and demand mostly driven by the local job market and the pay those local jobs command along with mortgage rates and mortgage availability. Ray, those sellers will probably be wishing they had negotiated a year from now if/when the market is even slower and the prices are lower. Just because the prices in Europe are higher, it means nothing to our local market where the prices are set by supply and demand mostly driven by the local job market and the pay those local jobs command along with mortgage rates and mortgage availability.

]]> By: Phil http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1378 Phil Thu, 17 Apr 2008 01:31:07 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1378 "Stubborn sellers" is referring to sellers who are over market, yet unwilling to negotiate. They may very well be well informed and not desperate to sell, but selling at market price is not selling lowball. The buyers decide what the house is worth not the sellers. It is more the fault of the realtor for taking the overpriced listing in the first place, than the seller hoping and praying some uninformed buyer comes along and pays more than the house is worth. But then maybe they are converting inquiries into buyer clients and getting something out of it besides spending marketing money with no hope of commission. Steve, I am also seeing well priced homes selling very quickly in north Austin, esp in the sub 250k range. Lots of multiple offer situations. Sellers in the duplex market have been much more willing to negotiate than in the single fam market. The 'burbs are deader than a doornail except for the nicer parts of Cedar Park. I expect more listings to pile up over the summer as we transition to a more "average" market. Rents seem to still be rising and units are leased quickly. The credit crunch is really helping landlords, as fewer borderline qualifiers can afford to buy. “Stubborn sellers” is referring to sellers who are over market, yet unwilling to negotiate. They may very well be well informed and not desperate to sell, but selling at market price is not selling lowball. The buyers decide what the house is worth not the sellers. It is more the fault of the realtor for taking the overpriced listing in the first place, than the seller hoping and praying some uninformed buyer comes along and pays more than the house is worth. But then maybe they are converting inquiries into buyer clients and getting something out of it besides spending marketing money with no hope of commission.
Steve, I am also seeing well priced homes selling very quickly in north Austin, esp in the sub 250k range. Lots of multiple offer situations. Sellers in the duplex market have been much more willing to negotiate than in the single fam market. The ‘burbs are deader than a doornail except for the nicer parts of Cedar Park. I expect more listings to pile up over the summer as we transition to a more “average” market. Rents seem to still be rising and units are leased quickly. The credit crunch is really helping landlords, as fewer borderline qualifiers can afford to buy.

]]> By: Ray http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1380 Ray Wed, 16 Apr 2008 20:46:53 +0000 http://crosslandteam.com/blog/2008/04/16/austin-real-estate-market-update-for-march-2008/#comment-1380 "Stubborn sellers [not willing to negotiate]" is a subjective comment. I can equally well state that those sellers are generally very well informed, not at all desperate to sell, and rightly confident that the days of impatient realtors, misplaced negative news spin about the local market by lazy, incompetent, or 'agendized' media, etc are numbered. Why sell low ball now if you don't need fast cash and can wait six months or a year without breaking a sweat? Local real estate is a real steal compared to prices paid in many parts of Europe and many other US regions. Just a thought. Thanks for the blog. “Stubborn sellers [not willing to negotiate]” is a subjective comment. I can equally well state that those sellers are generally very well informed, not at all desperate to sell, and rightly confident that the days of impatient realtors, misplaced negative news spin about the local market by lazy, incompetent, or ‘agendized’ media, etc are numbered. Why sell low ball now if you don’t need fast cash and can wait six months or a year without breaking a sweat? Local real estate is a real steal compared to prices paid in many parts of Europe and many other US regions. Just a thought. Thanks for the blog.

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