A Closer Look at Failed Listings in Austin 1999-2009

We all know that some Austin MLS listings don’t sell. The reasons vary, but when demand is insufficient to absorb supply, the prettier better priced homes win, and the sellers who love their homes, and express that love and devotion through too-high list prices, get to continue the romance.

Let’s see what that looks like when put on a graph.



This is one of my favorite real estate statistical charts. The relationship between the number of successful sales efforts and the number failed sales efforts in any given market tells us a lot. This graph shows what happened to the relationship of success/failure of Austin’s MLS listings immediately following dot.com boom, 9/11 in 2001, and the subsequent bleeding out of jobs over the next few years. The real estate market became saturated with homes for sale as people had to leave Austin to find jobs, and new people stopped coming.

If you’ve seen the Austin real estate sales history graph that I post every month, you’ll know that home values stayed flat from 2002 through the end of 2005. Volume held steady during that period, but prices were flat while the rest of the country had its massive real estate bubble.

For Austin, there was no bubble. Instead, we suffered with too many homes for sale, not enough buyers, and thus in 2003 the number of listings that departed the Austin MLS as failed sales efforts (Expired or Withdrawn) actually exceeded the closed sales for the entire year. Austin sellers had it rough in 2003.

We’ve recently seen this inverted Sold/Not Sold ratio a lot during recent months throughout 2008 and 2009, but neither year ended with more total failed sales than successful sales. So, in that regard, these past couple of years haven’t been as bad as 2003.

Wanna know what happened to all those unsold homes in Austin between 2002 and 2005, back when foreclosing or short selling was still such a shameful event that sellers knuckled down and figured out how to hang on? A bunch of them became rental properties. This in turn caused a severe over-supply of Austin’s rental home market. Simultaneously, the in-migration that feeds the rental market stopped cold, and the chart below shows the result.

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Austin Real Estate Market Update – Jan 2010 Stats

The Austin real estate market started 2010 on an upswing. Average sold price is up 5.39% from a year ago, median sold price is up 2.12%, days on market are down. In fact, every measured metric on the chart below moved in a positive direction except for median list price, which is down slightly, but of no consequence. Let’s have a look.

Austin Real Estate Sales Market Update – January 2010
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data

Dec 2009 Jan 2010 Jan 2009 Yr % Change
# Sold 1323 823 816 0.86%
Avg List $274,819 $259,858 $249,289 4.24%
Med List $199,740 $188,000 $189,700 -0.90%
Avg Sold $262,574 $247,767 $235,101 5.39%
Med Sold $194,000 $184,000 $180,189 2.12%
Sold/List % 95.54% 95.35% 94.31% 1.10%
Avg SQFT 2283 2220 2170 2.30%
Med SQFT 2049 2043 1942 5.20%
Avg $ SQFT $115.01 $111.61 $108.34 3.01%
Avg DOM 82 78 82 -4.88%
Median DOM 48 50 66 -24.24%
# Expired 852 394 544 -27.57%
# Withdrawn 696 577 701 -17.69%
Not Sold 1548 971 1245 -22.01%
Not Sold % 53.92% 54.12% 60.41% -10.40%


So, is this good news? Maybe. I don’t think sellers should get too excited, and buyers need not start worrying about rising prices. Jan 2009 was a down month, so topping it is nothing to brag about. Nevertheless, I do think our Austin real estate market has sunnier weather ahead, at least for the first half of the year.

The extended tax credit and continued low interest rates will motivate buyers in the lower ranges. An improving job market and the return of good job news, (some of which was announced today with Facebook bringing 200 new jobs and a Solar Panel company bring several hundred more), will cause an already “ok” Austin unemployment rate to keep dropping through the summer, barring any terrible macro-economic setbacks in the national economy. Once interest rates starts rising, as we expect later in the year, that will frighten some additional buyers into getting off the fence for fear of missing out on the good rates.

I think the upper end market will be slower to come back as many of the former $500K to $800K buyers will, I think, scale back lifestyles and settle for less Austintacious digs. Mercedes Homes said as much during a lunch presentation I heard today. They’ve redesigned a bunch of new floorplans to accomodate what their research says will be a more frugal market in the $300K and up range, as buyers seek smaller, better quality homes instead of sprawling big layouts. Makes since to me.

Below are some additional charts and stats. Let’s start with the 23 month lookback chart.

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Realtors Who Speak in Rehearsed Scripts Instead of Thinking

Sylvia wrote an offer for one of our buyers last week. When the listing agent called to confirm receiving the offer, he immediately started in with rehearsed script-speak. For those of you unaware of “scripts”, they are exactly what you might imagine. Prefab spoken lines to use in certain situations.

Many Realtors and Real Estate Coaches swear by scripts and practice them daily.  Sylvia and I are very familiar with the concept of scripts, we’ve had training in scripts, and we’ve attended workshops at real estate conventions about using scripts. But we don’t employ scripts in a formal way. This blog article will explain why.

I only heard Sylvia’s side of the conversation with the script-driven listing agent, but she filled me in after hanging up saying, “man, everything that guy says is a script”.

It started with: “Got your offer. So … (pause)… your buyer is offering exactly ___% below list price for a listing that has been on the market only ___ days”.

To which Sylvia responded off the top of her head with with: “Well, the offer is based on the market analysis I did, which I sent with the offer. The list price is irrelevant. I determined the market value based on recent sales of similar homes and advised the buyer as to a fair offer price, and that’s what you have. Plus, we’ve sold over half a dozen homes in that neighborhood and we know what those houses are worth”.

Then, as skilled practitioners of script-speak do, whatever you say is ignored. Instead of having a conversation about the comparable sales that were used to justify the offer, the next rehearsed line is uttered, no matter what your response was to the first.

“I’m going to need your buyer to come up to a price my seller can agree to so we can make this deal work and so you and I can both get paid our commissions”.

To that, Sylvia said: “{Agent Name}, I’m not doing this for a commission. I’m helping my buyer find the best value I can for a home that meets his needs. He likes your listing, but it’s over-priced. You have a good clean offer, based on a proper market analysis, and I think the seller should seriously consider accepting the offer as-is”.

I thought it ended shortly thereafter, with the seller and agent not willing to budge from the list price. I was amazed a few days later to be told that the buyer and seller were in fact now under contract for an amount less than the seller’s price and a bit higher than either Sylvia or I felt was justified for our buyer. But the buyer is the one who makes the decision to accept a seller’s counter-offer or not. We just provide the data, our opinion and our advice. So we entered into the inspection period.

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Google Buzz – No Thanks. Leave my Gmail Inbox Alone

Google Buzz LogoI opened my Gmail account this morning to see a new Label called “Buzz” just under my Inbox label. Hmmm. I clicked it and read the “Welcome” letter, spent a few more minutes looking into it at the Google Buzz site, Read the Google Blog about Buzz, watched a video about it (see bottom of this post),  then I immediately removed it from my email interface by performing the following task:

Click: Settings -> Labels -> Hide (next to the Buzz Label). Now the “Buzz” label is not visible from my Gmail interface.

Sorry Google. My Gmail interface is a productivity tool. I have a lot of stuff to get done. I pay you an annual fee for the extra storage space I need. I don’t want a bunch of new crap inserted into my inbox which will no doubt slow me down, distract my thinking and reduce my productivity.

It is with great diligence that I put the Labels and Filtering options in Gmail to use in order to keep stuff out of my face that I don’t want or need to see immediately, or at all. I don’t need a new Google Buzz Box providing an endless stream of the social goings on and digital mussing of the people in my Gmail contact database, which is currently at 2700+ and growing daily. If I want to know what people are doing, and I have time to waste, I have other ways of accomplishing that, such as visiting Facebook or surfing blogs.

The advertised features of Google Buzz are:
No setup needed – Automatically follow the people you email and chat with the most in Gmail.
SC: Yeah, I noticed that, and turned it off immediately. No thanks.

Share publicly or privately – Publish your ideas to the world or just to your closest friends.
SC: I’m trying to catch up on email, not share my ideas with the world.

Inbox integration – Comments get sent right to your inbox so it’s easy to keep the conversation going.
SC: No! Leave my inbox alone. I work hard keeping it at “zero”.

See updates in real time – New posts and comments pop in as they happen. No refresh required.
SC: Oh Dear God No! Don’t you get it? I’m trying to work and get stuff done. Leave me alone.

Just the good stuff – Buzz recommends interesting posts and weeds out ones you’re likely to skip.
SC: No. Don’t recommend anything to me. Stop bothering me. Go away, I’m working.

Maybe this is a knee-jerk reaction and I’ll gradually become aware of ways that Google Buzz can be utilized while remaining segregated from the focus and attention I need to maintain when in my “Email Office”. I just don’t feel like I need more social networking stuff foisted upon me at this point in life. Enough already.

Email Efficiency – Not Letting Email Run Your Life
At present, I have a systematic and specific way that I deal with email. My routine is a result of reading about how others deal with high-volume email and adopting those various ideas and concepts. If you recognize some of these ideas, you’ll know they are not my inventions. I borrowed them all. If you constantly feel overwhelmed by email, and are guilty of letting things slip through the cracks because they fall off your radar, the following routine is what helps me stay on top of (or quickly dispense with) the 200-300 emails that come at me each day. Here’s what I do.

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Husbands, let your wife have the house she wants

Below is one of my favorite commercials from the Super Bowl, though I disagree with the premise. I do appreciate the humor though. The message to married men, perhaps not completely tongue-in-cheek, is “you’ve sacrificed a lot, but surely there is a limit to your chivalry. Drive the car you want to drive”.

The commercial aims to portray married men as whipped dogs suffering under the oppressive thumb of dominating wives who’ve stripped us of our manhood via forced compliance with petty etiquette, housekeeping and social demands. The only hope for retaining our last bit of manhood, according to the message, is to drive a manly gas guzzler with a throaty sounding exhaust system, chiseled lines and lots of horsepower. Thus the title of the piece, “Man’s Last Stand”. Let’s have a look.

OK, so I have something else to add to the list of statements that could have been included in this commercial:

“I will let you make the final decision on which house we buy”.

Should husbands defer and give the final decision of which house to buy to our wives? Absolutely. As a husband, I’ve never once regretted letting my wife have her way or over-ride me on decisions related to house, home or kids. I also pick up my laundry, try to remember to put down the toilet seat, say “yes” when I know it’s the only practical answer, keep my mouth shut when when no upside utterance exists. Luckily I’m not forced to watch vampire shows or walk a dog, but do any of these other things make me less of a man? No.

As a buyer agent, I’ve pulled more than one husband aside and delivered this exact “”As a husband, I’ve never once regretted …” script. I think every husband who wants to impose his house hunting requirements on a reluctant wife should consider what I have to say.

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Pre-Marketing a Listing Can Result in Quick Offers

When should a listing go “on the market”, and what constitutes being on the market? Often we’ll take a new listing with the understanding that it won’t be placed into the Austin MLS until the pre-sale checklist is complete. That checklist includes preparation that the seller needs to complete so that the home can be properly presented to the market from the first day in the MLS.

For some sellers, this involves just minor straightening up. For others, it’s major decluttering, repairs, painting, landscaping, etc. Once the home is prepared, we send the stager, photographer and virtual tour people. Once we have the virtual tour and the photos, the home is ready to be listed in the MLS.

Meanwhile, we often place a sign in the yard with a rider that says “Coming Soon”. We’ll also contact agents that work the area in which the listing is located and let them know we have a new one on the way. Sometimes, this results in a sale before we ever make it into the MLS. Such is the outcome with one of our current listings, which received multiple offers before it was officially “on the market”.

How does this happen?

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