The rental market for houses in Austin is still slowly improving, climbing out of the huge dip we took after the tech bust and 9/11. For October 2009, average and median rents are both up about 1%, but homes are taking longer to rent, averaging 42 days on market compared to 38 a year ago in October.
This is a macro view though. In talking with other property managers in Austin, it’s not uncommon for some homes to be renting for the same or less than a year earlier, while others can do a bit better. It’s really a function of the number of competing homes and the location of the property. It took 45 days for me to rent a central Austin home in 78704 recently and we had to take $50/mo. less than a year earlier. Had I accepted large dogs and/or poor credit, it would have rented right away, so rental criteria is also a determining factor in how long it takes and the amount attainable.
October stats are listed in the chart below.
|Austin Real Estate Rental Market Update October 2009|
|Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Sep 2009||Oct 2009||Oct 2008||Yr % Change|
|Avg $ SQFT||$0.72||$0.72||$0.74||-2.56%|
|Not Rented %||23.48%||20.39%||27.77%||-26.59%|
Let’s have a look at 2009 year to date through October, compared to the same period in 2008.
Anyone who spends a lot of time looking for addresses knows that the GPS systems and various online mapping softwares have errors and omissions. Newer neighborhoods, even those 3 or 4 years old, often don’t appear in GPS systems. Google Maps often doesn’t have these addresses either. Or my favorite, the GPS systems show streets that don’t exists such as the one a block away from me which would send a driver right through someone’s house because the GPS thinks the street connects through to the next block. As Austin Realtors, we encounter this anomolies much more often than the average person, and we know that most mapping systems, though generally reliable, are not 100% trustworthy.
My own home address is messed up. Granada Oaks was platted in the early 1980s, Then the eighties real estate bust happened, the subdivision went into foreclosure with the Resolution Trust Corporation, was eventually purchased by a single individual in the late 1980s, then purchased by a developer in 2005. My street was named “Sisquoc” in the original plat. The builder and developer thought “Sisquoc” was too hard to say and spell, so it was changed through formal process with Travis County to “San Lucas”.
The result of this is whenever someone is going to have to find our house, such as guests, a UPS driver, repairmen, etc., I have to go through a certain “how to find my house script” when providing the address. It goes something like this:
“The street name is San Lucas, and that’s what it says on the street sign, but if you’re going to using a GPS or mapping software, you have to use the street name ‘Sisquoc’ because that was the original name before it was changed to San Lucas, and none of the GPS or mapping software have the updated name”
What a hassle. I get tired of saying all this. So the other day, I decided to use the “Report a Problem” link at the bottom right of the Google Maps page. I clicked it and send the following message:
Read more …
This information is from the Real Estate Center at Texas A/M newsletter. Tells what we already know, but I think the stats are interesting.
Texas metros, led by number one Austin–Round Rock, claimed four of the top five spots and nine of the top 16 in the 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index.
Also making the list were Killeen–Temple–Fort Hood (2), McAllen-Edinburg-Mission (4), Houston–Sugar Land–Baytown (5), San Antonio (11), Fort Worth–Arlington (12), Dallas-Plano-Irving (13), El Paso (14) and Corpus Christi (16).
Austin–Round Rock was the first metro to ever be ranked number one twice on the index, the last time being in 2000.
But it doesn’t stop there. Nine other Texas metros made the top 25 out of the 124 smallest metros that were studied.
Those were Midland (1), Longview (2), Tyler (4), Odessa (5), College Station–Bryan (14), Texarkana (17), Waco (18), Laredo (20) and Abilene (21).
Leaders in this year’s index, which ranks U.S. metros based on their ability to create and sustain jobs, are all metros that succeeded in avoiding the worst of economic declines driven by falling housing markets and job losses in manufacturing and global trade.
Regional economic factors also strongly influenced the rankings this year, with the oil and gas sector, technology and alternative energy providing stability among metros in Texas, North Carolina, Washington and Louisiana.
Another factor helping Texas metros move up in the rankings is the state’s favorable business climate and its ability to attract jobs and corporations away from higher-cost states.
One thing a lot of people may not realize is how business friendly Texas is compared to other states. This is why we enjoy the inbound migration of so many businesses fleeing places like California, where regulation and high taxes are increasingly burdensome to business owners and employers. So, while things are a bit sluggish overall in Texas and Austin, we are doing comparatively well compared to other regions.
October saw a huge 31% increase in the number of sales in Austin over the same month last year. Remember though, Oct 2008 took a 28% dip from the year prior, so while this October did see a good increase in sales volume, due in part to the $8,000 tax credit program, we’re comparing a dreadful month one year prior to a turbo-charged market this year, thus the big swing. Nonetheless, brisk sales for October was not an unwelcome result.
Let’s take a quick look at the monthly home sales prices in Austin for the past 20 months.
You can see that May 08 and May 09 were both the peak sales prices in their respective years and that sales prices drop in the off seasons. This year is no different but our sales volume has picked up more than usual.
Let’s see in the graph below how October 09 compares in all the metrics to October 2008.
Ask any builder, remodeling contractor, plumber, electrician, etc. what it’s like to obtain permits and do a project in the city of Austin, and you’ll marvel at the uniformity of response. You’ll hear simply, “it stinks”.
Some won’t work in Austin at all anymore. I spoke with a small builder a couple of years ago about this. He had become so enraged at the bureaucracy and hassles that he had sworn off Austin, pledging to never build anything in the city limits again. At that time he was working on a custom home in Williamson County, where he said it was like night and day and he was treated like a valued customer, not a nuisance.
One of my former investment clients built a duplex neighborhood in Austin in the early 2000s. That was his last. He moved the business up near Ft. Worth and builds apartments and duplex communities in that area. He told me it just didn’t make sense to remain in Austin. Where he is now, from the time they identify land for a project and make the purchase, they can have all permitting in place and start work in less than 90 days. In Austin it took him more than 2 years just to get started on the last project he did, a community of about 50 duplexes. And they kept changing the rules on him along the way. He said that doesn’t cut it, and left Austin.
And so when I read in the Austn Business Journal a similar tale of “never again”, it came as no surprise.
By the time Centro Partners completed the first phase of The Domain with an Austin Energy three-star energy rating, the developers had their fill of being green the Austin utility way.
When it came time to do the second phase, “we didn’t even bother,” said Kent Collins, company partner. “I didn’t want to slow down our permitting process.”
Austin remains a difficult city in which to do business. Not just for developers, but even small investors.
Read more …
Like many other Travis County residents, I found myself staring at property tax appraisal bills this year that were over-valued. In September, the Travis County Appraisal District (TCAD) unilaterally offered a lower adjusted value for one of the properties before I even attended the informal hearing. I signed off on that and mailed it back in, which dropped the home from $196K to $172K.
But that left a couple of 1+ acre lots I own, which I purchased at the peak of the Austin real estate market in 2007, valued by Travis County at 63% more than I paid. At the informal hearing, I explained to the tcad representative that the lots in the subject neighborhood are not homogeneous, and therefore the comparable sales being used were apples and oranges. I also questioned the “size and shape” adjustment they were applying, which added 35% to their “base” lot value for the neighborhood.
When the developer rolled out this neighborhood in 2006, the lots were all sold to custom builders. Some are high up on a ridge with mature oak trees and distant views. Others are down in old meadowland, no oak trees, and with waterway and floodplain issues. The two that I purchased were the two cheapest lots sold in the subdivision. The runts of the litter. The leftover lots that none of the custom builders wanted because they were in the floodplain and only had 70ft and 90ft widths at the front while the rest of the neighborhood has 100ft to 150ft lot widths. I won’t go into the strategy or thinking that lead me to purchase these “problem” lots, but the fact is, they were the cheapest sold for a reason and now I was sitting in front of a TCAD bonehead who was telling me they were “better than average” for the neighborhood and therefore priced at a premium. He offered a token adjustment, which I declined.
So a month later, two days ago, I attended the Formal Hearing. This is a panel of three incompetent older people. More on them in a minute. How they are selected I know not. And a TCAD representative who was as equally unskilled in understanding facts and data as the informal hearing representative. Bottom line, I prevailed, but not to the degree I had hoped. Here’s how it went.