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Austin Rental Market Update – March 2009

Average rents in Austin have taken a slight dip for the first quarter of 2009. The number of rented homes is up 11% over the same three months a year ago, no doubt due to the fact that many sellers are opting to rent instead of dropping prices below their bottom dollar. This creates additional rental inventory, which gives renters more homes to choose from, and prevents prices from increasing.

Personally, I’ve leased 4 or 5 homes in the past 2 months, and the market is really spotty. One house I leased central received 4 applications in 2 days. Another one I leased north central leased immediately for $1,650 a year ago, but took about 45 days to lease for $1,595 this year. Another one in Western Oaks leased for $1,550 (same amount as last year) in about a week. A different home in Western Oaks, also listed at $1,550, and newer and in better condition, has not received any showings in more than a week. It’s not an easy market to predict right now, much like the sales market.

The stats chart is below, followed by the 1999-2009 Austin leasing history graph.

Austin Real Estate Rental Market Update Q1 2009 Jan-Mar
Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data
	Oct-Dec 2008	Jan-Mar 2009	Jan-Mar 2008	Yr % Change
# Rented	1878	1979	1782	11.05%
Avg List	$1,407	$1,382	$1,393	-0.79%
Med List	$1,250	$1,225	$1,250	-2.00%
Avg Rent	$1,390	$1,364	$1,384	-1.45%
Med Rent	$1,225	$1,200	$1,225	-2.04%
Rent/List %	98.79%	98.70%	99.35%	-0.66%
Avg SQFT	1934	1930	1919	0.57%
Med SQFT	1794	1798	1799	-0.06%
Avg $ SQFT	$0.72	$0.71	$0.72	-2.01%
Avg DOM	42	50	41	21.95%
Median DOM	33	40	29	37.93%
# Expired	293	206	183	12.57%
# Withdrawn	513	458	350	30.86%
Not Rented	806	664	533	24.58%
Not Rented %	30.03%	25.12%	23.02%	9.12%

As noted in the chart above, average rents in Austin (for single family homes) are $1,364/mo., down 1.45% from $1,384/mo. the same quarter 2008. Median price has fallen from $1,225 a year ago to $1,200 this year, meaning half of all homes in Austin rented for $1200 or less.

Below is a graphical representation of the Austin rental market from 1999 through March 2009.

Do Real Estate Conventions Make Better Realtors?

by Steve Crossland

Keller Williams Family Reunion I’ll be travelling to the Keller Williams “Family Reunion” convention for 5 days in Orlando later this month. Sylvia and I have attended the Family Reunion together every year since joining Keller Williams in 2005, and we also attend the yearly “Mega Agent Camp” held here in Austin. Sylvia is staying home this year due to scheduling conflicts, so I’ll be flying solo and taking good notes to bring back home, and some new ideas to implememt in our business.

Are these real estate conventions worth the time and expense? All totaled, I’ll drop about $1,200 to $1,500 on this trip, plus lost productivity while I’m away, plus the torture of airline travel, hotel stay, and lugging around the “convention bag” full of trade show stuff, goodies and the notes and handouts that are accumulated each day during classes and workshops. And, finally, when I get back home, I’ll have to work hard to get caught up. Is it worth it? Maybe a vacation would be better.

Yes, it is worth it. You couldn’t pay me to not go. Here are some internal stats from Keller Williams:

Agents who attended the 2008 Family Reunion convention …

Took twice the number of listings in 2008 as KW agents who did not attend.
Sold 81% more houses.
Closed 47% more buyers
Completed 61% more transactions than agents who did not attend.

Attendees who attended BOTH the 2007 and 2008 Keller Williams Family Reunion convention…

Black Friday for the Crossland Team

by Steve Crossland

Austin Real Estate Agent — Sylvia at our Whiteboard - No Pending Closings at top. Yikes!

Yesterday was not a good day for the Crossland Team. In our office Sylvia and I have a whiteboard mounted on the wall where we write our listings and our pending closings. After yesterday’s closing, we have no more pending sales written on our board.

We have listings, but the showings are slow and we have no offers in the works and nobody threatening to write an offer on any of our listings.

We were discussing this morning when the last time might have been that we didn’t have at least one closing on the board, and we just don’t remember. But it must have been 2005 when we returned to the business after selling our former real estate company and then taking a hiatus/sabbatical. Since we’ve averaged 3 to 5 closings a month, there is always something up there on the board waiting to close. But not since yesterday – our “black Friday”.

What does this mean?

Austin Realtors continue to disappoint me

by Steve Crossland

I just finished entering the last listing we’ll take this year (that I know of) into the Austin MLS. I know, it’s Christmas Eve, but I’m all done shopping and don’t have anything better to do before we have a house full of relatives later tonight.

Anyway, we signed the listing agreement earlier this month, but had to wait for the tenants to move out, then get the home cleaned and touchup painted, then get our stager in and then the virtual tour people. Now that it’s in “model home” showing condition and ready to sell, I’ve entered it into the MLS. It’s really not a good idea to enter a listing before it’s 100% ready for the market, and we try never to do so.

After I enter a new listing, I always do an MLS search for the subdivision and take a look at how our listing sits among the competition with regard to price and presentation – to see it as other agents will see it in a search result. Let’s take a look at how we stand up against the competition on this one.

Austin Real Estate Market Update – Nov 2008 Sales

by Steve Crossland

The sales volume in Austin fell of a cliff for November, with only 914 sales of single family homes. That represents a 43% decline in the number of homes sold. The number of “Not Solds” (expired or withdrawn) took a big jump also, to 62% of all listings that departed the Austin MLS in November. If you remember last month’s market update, I predicted the Not Solds will hit 70% in December 2008. November stats haven’t changed my mind.

Let’s look at the breakdown of Austin single family home sales for November 2008:

• Number of homes sold is down 43% (was down 28% last month) from 1,594 Nov 2007 to 914 Nov 2008.
• Average list prices in Austin were down 5.29% over the same month last year to $250,609. This means sellers/agent are doing a better job of pricing the home correctly out of the gate.
• Average sold prices in Austin were down 6.17% over the same month last year to $238,072 from $253,718 a year ago. So, list prices are down 5% but sold prices are down 6%, which tells me sellers are still chasing the market down.
• Median sold price was down 1.87% to $185,000. Last year in Nov it was $188,527. Median prices had been holding their own each month this year, so the downturn in this particular metric is something new.
• Average List to Sold price ratio is 95.00%, down from 95.89% the same month last year, again demonstrating that sellers are still chasing the market down.
• Avg sold price per square foot is down 7.41% to $109 compared to $118 a year ago in November. This is a huge drop.
• Avg days on market is up 12 days (18.75%) from 64 last year to 76 this November.
• Median days on market is up 11 days (24%) from 45 days last year to 56 this year.
• Number of “Not Sold” (exp or withdrawn) is up 43% over the same month last year, to 63% of all removed listings compared to 46% for the same month last year.

None of this is favorable if what we want is a normal, rising market, but in the context of elswhere in the country, it’s actually pretty good.

The stats outlined above are shown in the chart below.

Austin Real Estate Sales Market Update – Nov 2008 Sales
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data
	Oct 2008	Nov 2008	Nov 2007	Yr % Change
# Sold	1249	914	1594	-42.66%
Avg List	$258,869	$250,609	$264,601	-5.29%
Med List	$199,900	$192,000	$195,955	-2.02%
Avg Sold	$247,383	$238,072	$253,718	-6.17%
Med Sold	$195,500	$185,000	$188,527	-1.87%
Sold/List %	95.56%	95.00%	95.89%	-0.93%
Avg SQFT	2160	2180	2151	1.35%
Med SQFT	1988	1984	1952	1.64%
Avg $ SQFT	$114.53	$109.21	$117.95	-7.41%
Avg DOM	69	76	64	18.75%
Median DOM	50	56	45	24.44%
# Expired	667	662	558	18.64%
# Withdrawn	1068	833	810	2.84%
Not Sold	1735	1495	1368	9.28%
Not Sold %	58.14%	62.06%	46.19%	34.37%

So, are these grim numbers cause for alarm? Not at all, and here’s why.

Redfin Abandoning Failed Model and Moving Toward Traditional Services

by Steve Crossland

The discount Broker Redfin, which I follow with interest even though it doesn’t serve Austin, looks like it’s making yet another move toward traditional real estate services. Rather than facilitating the wholesale disintermediation of the traditional Realtor, Redfin instead continues to adopt more and more of the traditional Realtor approach and offer smaller rebates to its clients, while still bashing the old real estate business model that economic reality is pushing them toward.

What does this mean? If you want to list your house for sale in a Redfin city, the Redfin Agent will actually come view your home first. Pretty cool, I know. Turns out that seeing a house before you list it is helpful after all. But it gets better…if you are a buyer, and want to be shown a house, your Redfin agent will now actually set a time to meet you there and let you in. Are you feeling goose bumps yet? Again, this is nifty stuff, having an agent treat you like you are important.

The Redfin business model at first required buyers to figure out how to get inside homes themselves, either by waiting for an open house, or getting the listing agent to come show it, or more notoriously, duping a dumb unsuspecting agent into thinking they are going to work with them, and using that agent to see homes without disclosing that they are a Redfin client.

When that model ultimately proved less than ideal, the idea of “showing tours” was introduced, which allowed a buyer to purchase “a 3 hour tour, a 3 hour tour” of homes for $250 each. But the weather started getting rough, and that concept failed to vanquish the traditional Realtor as well. So now what?

A couple of days ago, I received the announcement that Redfin now offers “unlimited buyer tours”. Uh, that sounds like what we do as traditional Realtors. We show our buyers homes until the right one is located.

From the Redfin blog Nov 6, 2008.

Unlimited Tours, Agent Choice
To hit the mass market, we’re upgrading today our home-buying service to offer free unlimited tours, and a choice of agent, and support from that agent all along the way.

Sound familiar? Pick the agent you want, see as many homes as required before making a purchase decision, and have “support” from the agent involved in the process “all along the way”.

And do you still get rebated 2/3 of the buyer agent commission? Nope.

50% Commission Refund
And we’re raising prices. Tours are now free — we used to charge $250 per tour – but we’re changing the commission refund for buyers from 66% to 50% (existing customers relax, you pay the old price). The average refund should drop from $10,000+ to nearly $8,000. If people use Redfin to sell one house and buy another, the total savings should still in most cases be about $20,000.

Then, in true “me thinketh thou doth protest too much” fashion, we are reassured that vast differences remain between the new Redfin Services and the Old Realtor.

Austin Rental Market Update – March 2009

Do Real Estate Conventions Make Better Realtors?

Black Friday for the Crossland Team

Austin Realtors continue to disappoint me

Austin Real Estate Market Update – Nov 2008 Sales

Redfin Abandoning Failed Model and Moving Toward Traditional Services

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