As I start typing this Austin Real Estate blog article at about 6:15PM on a Tuesday, a crazy reality befalls me. It’s almost my bedtime. In less than 2 hours, maybe 3 at most. I have to get to bed around 9PM Sundays through Thursdays because of a new lifestyle commitment I’ve made. And it’s messing up my longstanding habit of splitting my “productivity” time into daily and late-night chunks.
For one month now I’ve been waking up at 5AM M-F, cooking and eating some eggs, out the door by 5:15AM. Getting to the gym by 5:30 for a 6AM-7AM fitness bootcamp workout. I have to arrive by 5:30AM because the classes fill up by about 5:40AM, and I don’t want to miss a class, and I like getting my same spot every time. I get back home around 7:15AM, about the exact time I use to wake up normally, before the workouts. At first I thought, “wow, I’ve captured 2 hours that would have been wasted sleeping each day”.
My old schedule only required 5 or 6 hours sleep at night. For many years, I’ve had very productive “work” time between 10PM and 2AM. I can go to sleep at 2AM and get up at 7AM with no trouble. Been doing it all my adult life. But getting up at 5AM is different. I just can’t go to sleep at Midnight and get up at 5AM. And then busting it in a 1 hour workout class. The math seems simple, but the reality doesn’t work. It just requires more rest than before.
And as the Austin real estate market seems to suddenly be coming to life, Sylvia and I have a bulging pipeline of upcoming listings and buyer prospects, and now I’m wondering how I’m going to get my work done without the peace and quiet of those late night, no interuption hours.
I just mailed a batch of renewal letters for leases expiring April 30, 2012. All of them include rent increases, but most tenants will still be below market rent value even with the increase. More on that in a minute. Furthermore, many tenants will be paying a rent amount lower than the rental rate the house would have rented for 11 years ago. No, I’m not kidding. Austin rents peaked in 2001 and we’re just now starting to get above 2001 rates on some properties.
My Approach to Lease Renewals
I’ve been renewing leases in Austin for 22 years. I’ve mailed thousands of renewal letters. During that time, in dealing with tenants who are trying to decide whether to stay or go, I’ve noticed something interesting about basic human behavior related to lease renewals.
First, an increase above $50/mo. seems to trigger in many tenants in Austin a negative emotional reaction, causing the tenant to feel slighted, even if they logically understand the reason for the increase and the data supporting it. This results in some interesting phone conversations where a tenant confesses to knowing that the increase is fair, but it still makes so them so mad they might move.
Almost overnight, with little warning, the Austin real estate market has caught fire. We are encountering multiple offers and buyer frustration. Not everywhere, but in the popular neighborhoods. Let’s look at some Active/Pending stats for popular neighborhoods.
27 Active Listings. Average Days on Market = 35
31 Pendings. Average Days on Market = 32
Over half of all listings under contract. A normal ratio is about 1 of 5 listings under contract in a balanced market.
Southwest Austin 78749 Zipcode (includes Legend Oaks, Village at Western Oaks, Westcreek)
25 Active Listings. Average Days on Market = 88
49 Pendings. Average Days on Market = 38
Double the number of homes under contract than there are available. This is an ASTOUNDING ratio reflecting a lot of pent up demand.
South Austin 78704 Zipcode – MLS Area 7 – Zilker/Barton Hills
10 Active Listings. Average Days on Market = 126
16 Pendings. Average Days on Market = 50
Like SW Austin, the Active/Pending ratio is inverted, with more Pending listings than Active.
Northwest Austin 78759
60 Active Listings. Average Days on Market = 59
51 Pendings. Average Days on Market = 47
Nearly half of all listings under contract.
The ratio for the entire Austin MLS at present is 1 of 3 listings under contract, which is very strong overall, even in typically weaker areas like Manor and Hutto. What does this mean for the Austin real estate market?
I’ve been busy the past several weeks attending real estate education events. First was the NARPM Convention (National Association of Residential Property Managers) in Las Vegas last week. Immediately upon return, there was three days in Austin at the Texas Association of Realtors Winter Meetings at the Hyatt. Then last Monday at an all-day Realtor Technology Forum, stupidly named “xplode“. I’m all educated out. Now I need to figure out what to implement and what to ignore. The “ignore” list is huge. The “implement” list is small.
But there is one thing all these Real Estate related education conferences have in common other than real estate. They could all double as Baby Boomer Conventions. Very few young Realtors.
While in Las Vegas the first night, Sylvia and I ate in a steak restaurant in our Casino/Hotel the, Orleans. While eating, looking around at the 1960’s decor and all the old people there, I commented to Sylvia “we’re the youngest people in this place”. She responded with one of the gentle, rhetorical “wife” responses that every husband will recognize, “So, you think we look younger than everyone in here?” Translation: “Uh, we look that old too, honey”.
No way! Say it ain’t so! I’m 49 and 1/2 and these people all look so old. Like they’re at least …well, … 50. Or older.
I guess maybe my age-perception of myself and Sylvia hasn’t kept up with the actual aging we’ve experienced. We were both in our late 20’s when we started in real estate. As of Sept 2012, we’ll both be “in our 50’s”, like the average Realtor.
Question: Will us older Realtors be able to relate to and help the younger generation of buyers?