The $8,000 First-Time Home Buyer Tax Credit will end April 30th. By “end”, I mean Friday April 30 is the last day to write a contract that qualifies. The transaction must also close by June 30th, which should be plenty of time.
But an interesting thing will start happening May 1st, 2010. Buyers who miss the April 30th deadline to be under contract might wonder if the purchase contract can just be back-dated for April 30th, 2010, thus allowing them to still claim the $8,000 tax credit. In Texas, the “Effective Date” of the contract is written in by the agent after that last signature or initial has been placed on the contract. That’s the official contract date, and the date from which all time related matters are counted. It reflects the date the transaction becomes a “done deal”.
So, here is a potential scenario, just for discussion purposes.
Let’s say on Saturday May 1, 2010, we receive an offer for one of our listings. It’s a full price offer, clean, ready for the seller to sign, and is accompanied by a pre-approval letter. And let’s say this hypothetical offer includes a note from the Buyer Agent stating, “Meant to get this to you last night. I assume the seller will sign as-is so I went ahead and filled in the Effective Date April 30th, 2010 so the buyer won’t miss out on his tax credit”.
Can we do this?
Read more …
The chart below, from this morning’s Austin Statesman article, shows why 2009 was probably the bottom of the real estate market for Austin. The inertia of population growth is going to, in the next year or two, overtake inventory and home prices will rise and continue to do so for the next 5 years or more, in my opinion. Barring any further macro economic calamities.
“What this newest data continues to support is the fact that, although the recession very much has come to town, is that Austin continues to be one of the fastest-growing large urban areas in the country,” City of Austin demographer Ryan Robinson said.
Read the entire story here.
The Austin real estate market for Feb 2010 remained about the same as February a year ago. None of the measurable price metrics changes by more than a percent or two. Homes are selling faster though, and the number of failed listings (Expired/Withdrawn) is down considerably. Days on market is down 13% and the number of Exp/Withdrawn listings is down 13% also. This indicates perhaps a swelling in momentum.
Sylvia and I are seeing increased activity both with buyer inquiries and activity on our listings. Other agents we talk to are saying the same. The current tax credit incentive ($8K for first time buyers, $6,500 for move-up buyers) expires soon. Offers must be written by April 30th to qualify for the tax credit. This seems mainly to be motivating first timers. We haven’t heard from any move-up buyers motivated by collecting a $6,500 tax credit. The move-up credit is a farce because it requires the recipient to complete two real estate transactions, the cost of which would exceed the $6,500 credit. Only the people who were going to move up anyway will benefit from this useless freebie.
Upcoming factors to keep an eye on include the discontinued buying of mortgage backed securities by the government on March 31st. This has provided a marketplace for loans and kept interest rates artificially low, perhaps by as much as 1.5%. Interest rates should rise throughout the rest of 2010 and will probably be in the 6%+ range by the start of next year.
Then on May 1st, the tax credit ends which, combined with rising interest rates, could put the skids on demand in the lower price ranges. We need the lower price ranges to do well because the sellers of those homes become the buyers of the mid range homes. Of course there remains the national economy and unemployment as well. Improvement in the economy will lift consumer confidence and jobs numbers, which will positively affect the real estate market.
Below is the chart of stats for Feb 2010. Further below are the year to date and inventory stats.
I just wrapped up 5 days at SXSW Interactive. It was a fantastic conference with many great workshops, panels and discussion events related to technology, business, the internet and social networking. Much of it was relevant to the real estate business and small business in general, which surprised me.In fact, I attended two discussion workshops dedicated to real estate.
The first was “Making the Move from California to Austin“. Lots of good interaction, insight and questions regarding the differences between the larger California cities (the Bay Area in particular) and Austin. There were many Californians in attendance and it was fun to hear why so many feel drawn to make the move to Austin. I could say more, but that’s not the topic of this article.
The other real estate related event I attended was titled “Can Web 2.0 Kill the Real Estate Industry?“. This one surprised me because I actually got pretty worked up and steamed at how completely uniformed those are who dismiss the real estate agent as an obsolete, useless tour/taxi driver. It’s extremely irritating to listen to people who don’t know what they don’t know speak as if they know everything.
Interestingly, the folks in the audience who had actually purchased or sold a home recently defended real estate agents and said they greatly valued the services received. This sentiment is reflected in the internal surveys we sent our own clients after the close of each sale, which uniformly rate the experience as a very good one (whoa, I need to update that page on our site!).
Anyway, the discussion that took place stirred up some thoughts regarding my profession, what we do and how we are paid, and how the internet has changed things. Since I wasn’t able to fully make my points in a couple of short soundbites during the open discussion, I’m going to expand on my thoughts here.
So, with almost all MLS listings online and so much information available to real estate consumers nowadays, why is it that an agent is still needed? Why can’t we just be replaced by the internet? And, as one grouchy know-it-all complained about repeatedly, why should the listing data be controlled and disseminated only through private MLS Associations with strict rules on how the data is used and displayed online? Why isn’t all this MLS listing data free for the public to see and use?
I’m going to answer those questions, and others, by starting at the beginning – with the Seller.
Everything Begins With the Seller
Let’s say that Ms. Home Owner is happily living in Austin TX, working in an industry she loves, doing well, and one day she gets an unexpected job offer that will require her relocation out of state. The offer is too good to pass up, so she makes plans to move in two weeks and sell her house.
I’m day three of five into the SXSW Interactive “Festival” in Austin. Though I wasn’t at first certain that a convention like this would be a valuable use of time and money, I am now convinced it is, and I know exactly why I’m here.
I’m here because I want to gain insight into new and emerging technology and how we as humans, and business people, interact with that technology. Also, as a professional in an industry that has been chronically and predictably behind the curve and late to the party on almost all new and emerging internet technology, I can’t rely on real estate workshops and conventions to keep me up to speed. In a way, at this point in history, SXSW Interactive is more relevant to my real estate business than any real estate convention could be. It’s causing me to wonder if I shouldn’t attend more non-Realtor related educational opportunities.
So, below, are some initial observations and insights about my experience thus far.
SXSW Interactive Attendees Are Definitely in a Different Tech League than Realtors
The contrast is palpable. This is revealed in the level of conversation and discussion I am experiencing not only in the workshops, but also at the lunch table with people I’ve met. I spoke for 30 minutes this morning with a guy launching a startup to better connect job seekers with jobs that match their needs. His niche concept is very interesting, and I thought it even more interesting that his business, like mine, is essentially one of matching people with a solution to their needs.
At the urging of one of my more advanced Tech Guru friends, I am attending SXSW Interactive this year. Matter of fact, I’m here now, at the Convention Center, killing time before my first round of workshops this afternoon. This is the Tech portion of the now three-part SXSW Festival. The Music and Film portions are the other two.
So, what can a Realtor learn by rubbing elbows with a bunch of geeks and techies at SXSW? A lot, I hope. The business of real estate is now very much a technology occupation. Yes, the “people aspect” and the relationships we build and maintain are still the most important factors, but technology now more than every provides the frameworks and tools that support those relationships, as well as the deal tasks that we perform.
So, even though I remain dubious about most “Social Networking” hype, this blog being the exception, I’ll start off by attending a workshop entitled “Social Media Marketing for your Business“, where hopefully I’ll “Learn solid strategies, how to measure success, and all the tools you need to succeed in the fastest growing marketing medium on the web”.
Yeah, whatever. I’ve still never received a lead from any social networking source other than this blog, but I nevertheless feel it would be a mistake to ignore this topic, especially knowing that my 17 year old daughter and her friends (the future generation of real estate customers) don’t even use email or talk on the phone anymore.