Trends in Appliance Colors – Is Stainless Out?

Our dishwasher needs replacing. It is old and worn out and as I am choosing appliances, it seems stainless steel is still the color of choice. What is the next big color in appliances? … I wonder? I Googled this and came up with a few answers, but nothing that seems to dominate the stainless steel. It seems people like the sleek, industrial look of the stainless steel “like you are in a commercial kitchen”. One of the best articles I read on the subject was “After Stainless What Now” by Ellen Byron of the Wall Street Journal. What do the manufacturers say about a demand for new colors: Whirlpool is rolling out a “new” color which it calls “Ice white”. Wow, that is creative! “White is the new stainless” Whirlpool says. Meanwhile, General Electric has unveiled a new color in their microwaves, refrigerators and dishwashers in muted gray … Read more

What’s the deal with the We Buy Houses signs in Austin

by Steve Crossland

Ever wonder what the “We Buy Houses” signs really mean? You see them all over Austin, usually in middle to lower priced neighborhoods, and older transitional areas with a lot of fixers. Often the signs seems homemade and haphazardly placed. The words “fast” and “cash” are on most. If you were to call this sign, would you really receive an offer to close fast, for cash?

Maybe, but probably not.

The signs, called “bandit signs”, are actually a lead generation tool used by real estate wholesalers and flippers. Some of these guys are actually legitimate real estate investors looking for motivated sellers with dumpy homes who want or need to sell fast. Most of the sign placers are “bird dogs”, who find the motivated sellers then turn the deal over to the investor for a finder’s fee.

Either way, the main goal is to make you an offer and get the home under contract at a price that will produce a profit on either a wholesale resell (selling the contract) or a rehab/flip.

What sort of offer will these guys (or gals) make you?
The formula is fairly universal and straight forward. 70% of market value minus repair costs. Market Value, also known in the business as “After Repair Value” (ARV), is the value of the home if it were in retail sales condition and able to sell to a buyer using a conventional mortgage.

So, let’s say you inherited an old junker in South Austin that would sell for $225,000 in good condition, but it has a bad slab, bad roof, major plumbing problems, severe neglect and multiple trailer loads of junk to haul out of the rat infested back yard. And let’s say it would cost $100K to bring the home up to par, including the investor’s holding time costs, interest, insurance, utilities, risk factors, etc.

That home would be worth (0.70*225,000) – $100,000 = $57,500.

I’m over-simplifying the formula, and there are a lot of other components that go into the “repair costs” part, but this is an accurate “quick and dirty” computation. Also, the terms of the deal will often not be “all cash”, but instead some sort of creative financing. And, these deals are very, very hard to find.

Will this investor make money if he can buy such a house at this price, owner financed? Maybe, maybe not. Many don’t.

Austin Xeriscaping – Someday Mandatory like El Paso?

by Steve Crossland

Steve and I took a GRI class last week in pursuit of more knowledge about current real estate trends and practices. I always find these educational courses to be informative and helpful.

My biggest “take away” from this class was when one of my fellow classmates, who drove over 900 miles from El Paso for the 4-day class, shared with us the current landscaping requirements in El Paso. ALL new homes there are now being required to use xeriscape landscaping in the front yards because of the water shortage.

I wonder how long before the same requirement comes to Austin?

So Saturday as I was taking my buyer clients around looking at different houses, I was pointing out features that I may have overlooked in the past. One home had full gutters and a rain barrel capture system in place which I highlighted as a plus. Also, in the very small fenced in front yard where there was mostly Bermuda grass, I suggested, “You can take this grass out and put in xeriscape with native Texas landscaping”.

This whole idea of “no grass” front yards has really got me thinking.

Refinancing your Austin home makes a lot of sense right now

by Steve Crossland

Sylvia and I just refinanced our Austin home. When we bought the home in 2010, 4.75% interest on a 30 year loan was the lowest interest rate we’d ever had on any real estate loan, ever. Yesterday we refinanced at 2.75% for 15 years. Bottom line, this will save us about $40K in interest payments and chop 13 years off the life of the loan. Let’s take a look at some numbers:

Refinancing from 4.75% 30yr to 2.75% 15yr
	Old Loan	New Loan	Diff
Interest	$1,056	$636	-$420
Principle	$383	$1,247	$864
Escrow	$706	$706	$0
PITI	$2,145	$2,589	$444

The above numbers are taken from my October mortgage statement for the old loan, and the first December payment for the new loan, so they will actually grow more favorable over time.

OK, first let’s look at the bottom right box where you’ll see that our monthly payment increases $444 over the previous payment. I don’t care about that, and neither should you, unless you can’t afford the increase. All I care about is my Net Worth spreadsheet that I update monthly, tracking our progress toward financial freedom aka retirement. Everyone should have one of these spreadsheets and update it monthly. It helps you focus on what really matters, which is the growth of your net worth.

So how can I be adding to my net worth if I just increased my payment by $444 per month? Aren’t I “losing” $444 per month now? I assume most readers (hopefully) think that’s a stupid question after looking at the chart, and you already know the answer. But I’m surprised by the number of otherwise pretty smart people who do in fact think of a monthly payment as just one number. So, the explanation is that the interest portion of the payment decreased drastically (by $420/mo) while the equity paydown portion of the payment increased drastically (by $864).

So, almost the entire extra $444 monthly payment is actually saved with a smaller interest payment while the equity paydown is accelerated and the loan will be fully paid off in 2027 when I’m 65 years old instead of 2040 when I’m 78 years old. This is the $40K in interest savings and 13 year sooner “free and clear” date.

But I want to talk about the concept of “monthly payment” a bit more, because it bothers me that we live in such a payment driven society and that so many consumers, including real estate buyers and owners, think in terms of monthly payment instead of wealth building.

Are Austin Real Estate Buyers Too Picky?

by Steve Crossland

One of my favorite pastimes while driving in Austin is listening to Bloomberg News on my XM Radio. More specifically, I enjoy hearing interviews and discussions with people who explain and justify the positions they take on a wide range of (mostly) business topics. This includes small business, the economy, politics, real estate, etc., but also more specific micro topics such as the current and future outlook for farm tractor sales. And, thankfully, Bloomberg Radio is free of the bluster, yelling and arguing heard on the other XM Radio news stations. These are, for the most part, reasoned subject matter experts giving their honest take on things.

Call me nerdy, wonky, or whatever, but I really dig listening to this sort of stuff. When not listening to it, I’m reading about it. I believe it helps me better understand my own life and business. And it helps fulfill one of my ongoing goals, which is to never stop learning.

Recently, a dating expert was being interviewed about the business of match making sites and the state of modern “mate seeking”. She also discussed the mistakes she sees made by most aspiring romantics. Turns out there are a lot of frustrated romantics unable to find what they want in a mate. This despite the fact that finding and “connecting” with good, quality candidate dates has never been easier. I was struck by how similar her points were to the typical “match seeking” efforts of real estate buyers looking for the “perfect” home.

The quote that stuck with me most was related to how many daters reject someone who actually possesses more than 85% of what the seeker says she “must have” in a mate. To that point, she said. “Do you know how hard it is to get to 85%? If you find someone who meets 85% of your most important criteria, you should be running, not walking, to the alter with that person”. That’s what she said. Run, don’t walk to the alter.

Daters, apparently, allow too many small, picky “deal breaker” distractions into the evaluation process. “I don’t want to date a guy with thin hair” or “I can’t see myself with a guy who would wear a checkered shirt”. But if the guy loves horses, wants kids, and appreciates and “gets” her sarcastic irreverent humor, he’s going to make the great husband she says she wants because he meets the most important set of criteria. Even if he’s only average looking and a little too short.

Dating is more complicated than house hunting because the three (and only three) most important criteria a mate seeker should be evaluating will differ from person to person. House hunters, on the other hand, have had the same three static criteria forever – Location, Price and Condition (which includes age/size). It’s really not complicated at all. But modern buyers have made it so, by allowing too much information and data into the equation.

So, why do so many Austin buyers reject homes that are priced right, in the desired location, and of acceptable condition/size? Are Austin real estate buyers too picky? Yes. And many are just as frustrated as the single 34-year-old gals that dating expert was talking about.

Austin Realtors: To Whom Are You Addressing That E-mail?

by Steve Crossland

As a general rule, I don’t forward emails from other agents to my clients. Instead, I filter the communication and distill it into what my client needs to know. I rephrase, reframe, boil down and summarize. This benefits my clients by keeping them focused on the relevant information and protecting them from irrelevant, irrational and emotional dialogs that can derail and harm the progress of a real estate transaction.

Not every Austin Realtor follows this approach. In fact, so many forward emails directly to clients that, when composing an email, I automatically assume the other agent’s client will read it unfiltered, as a forwarded message. Thus, when writing emails to other agents, I do so assuming that the agent’s client will read it also. This benefits my clients by allowing me to state the case directly to the other party in a way I hope will seem reasonable, unemotional and persuasive.

My refusal to forward emails to and from my own client so infuriated another agent once, that she accused me of “not presenting” a proposed Amendment. This was a typical listing, under contract after multiple offers. Then came the post-inspection proposed Amendment from the buyer’s agent, which said in the email.

Attached please find the amendment for the above transaction. We have asked for additional closing costs in lieu of repairs as we know your seller is out of state. I have also attached the inspection for your seller to review. There are many delayed maintenance concerns that need attention, for example: trees have not been cared for and have caused damage to the roof, missing smoke detectors, front door lock is broken, many areas of wood rot, air conditioner needs servicing and the sprinkler system needs repair.

Please feel free to call me in the morning if you have any questions otherwise we look forward to moving to the next step.

I didn’t look at the inspection report, nor did I forward the email or inspection report to my seller, or even tell him what the agent said.

Should Every Realtor Have an iPad ?

by Steve Crossland

Sylvia and I have two children. We didn’t want three, only two. So after the second daughter, I visited Dr. Chopp (really his name) and that was that. Although I admire and love my friends with bigger families of 3, 4 and 5 kids, I like having just two offspring. We didn’t want a third, for many reasons.

What’s this got to do with iPads? Well, I don’t want a 3rd digital device to haul around either. I have a laptop and an iPhone. I don’t want a 3rd electronic thing, simple as that. Enough is enough. I have enough digital overload, I don’t need something else to plug in and care for. I refuse to add a third device, period.

That said, the geeky side of me really, really wants an iPad, but I can’t match the emotional desire to have one with any relevant productivity benefits. To me, it would have to prove itself as a productivity tool, first and foremost. I don’t need a toy. Until a tablet can function like a laptop replacement, I have no use for one.

Does this hurt our productivity as Realtors? If you believe all the hype, yes. But as I’ll explain in this article, no, there is nothing that Sylvia and I need to do as Realtors that would get done better, faster or easier with an iPad.

Let’s look at some of the benefits of iPad for Realtors that I see and hear about most often.

Listing Presentations Tool
In the old days, Realtors used notebooks and flipped the pages while sitting with a seller. Later, PowerPoint came along, which required a laptop. And now, agents can dazzle prospective clients with presentations on the iPad.

If People Bought Houses The Way We Buy Cars

by Steve Crossland

I’ve been buying and selling stuff lately other than real estate. Mainly with Craigslist ads. Washer/Dryer left over from a sale. A Fridge too. Bought a used car for my daughter, and we’re selling our minivan. It’s funny how the non-real estate inquiries differ so much from real estate inquiries.

First up, I’m selling our trusty 2007 Honda Odyssey. It has 107,000 miles now, and we no longer need it. Our oldest daughter is in college and youngest in high school. We just don’t haul around gaggles of kids to parties, playdates, etc. anymore. Plus, the van is a 16 mpg gas hog. As a replacement, we bought Sylvia a 2012 Hyundai Sonata Limited, which achieved 38 miles per gallon driving our daughter up to TCU in Ft Worth last week! It’s a neat little car. GPS just like the Honda, and built in blue tooth connectivity for the phone. So, when driving and the cell rings, Sylvia just taps a button on the steering wheel to answer and start talking hands free. It’s roomy inside and nice enough for taking clients around, but more economical and easier to drive and park than the minivan.

Anyway, if real estate buyers were like auto buyers from Craigslist, and you were selling a home, let’s say, for $285,000, you might receive a text message saying “wil u take 235 I buy today“, and similar gibberish. What sort of dummy thinks this method of engagement is an effective initial communication for a purchase discussion? After enough of these pings, all of which I ignored, I altered my ad to say “Calls only. DO NOT TEXT. Text messages will not receive a response“.

So now I just get calls, thankfully, from intelligent people . For the Odyssey, the buyers all ask the the same opening question: “Has the timing belt been replaced?” Huh? No it hasn’t. But after enough of those calls I took it down to Howdy Honda to get the timing belt replaced. It’s just an $800 preventative maintenance thing that’s recommended at 7 years or $100,000 miles. I just figured a new owner would get it done, but that’s not working. These Honda buyers are tough! Way tougher than house buyers.

Austin Real Estate Staging – Colors in Interior and Exterior Design

by Steve Crossland

One thing I have noticed lately while showing and listing houses is Buyers like COLOR!

No longer are the neutral tones the best advice for someone putting their house on the market. My last buyer clients went under contract on a home with colors they fell in love with. This home was painted a soft yellow in most of the living areas and a pale blue in the master bedroom. They absolutely loved it.

Another home I recently listed which received multiple offers within a week had a vivid red/orange chair rail in the entry hallway! No longer am I telling sellers when I list the house to paint everything neutral. Neutral is OUT!

The Front Door is Very Important
Another interesting observation I have made is the importance of the front door color. I used to recommend red, always. Now with the hot weather, I am recommending painting the front door a soft shade of teal (greenish/blue).

Austin Real Estate Market Breakdown by MLS Area – Midyear 2012

by Steve Crossland

Below is the breakout of the Austin real estate market year to date, through June 2012 compared to the same period 2011. The format is as follows, which shows the entire market.

MLS Area	Year	# Sold	Avg Sold	Med Sold	Avg SQFT	Avg PSF	Avg Days	Med Days
All Areas	2012	10,855	$268,257	$207,000	2,244	$119.54	67	35
	2011	9,232	$261,724	$195,323	2,242	$116.74	82	52
	Change	17.58%	2.50%	5.98%	0.09%	2.40%	-18.29%	-32.69%

The color coding at the bottom of each MLS Area summary indicates whether that measure improved or slid back. In the “All Areas” example above, all of the measures improved. That is, # Sold, Avg and Median sales prices, and Avg price per sqft all increased on a market-wide basis, while days on market decreased. Average sqft size is not color coded because I don’t see how a slight change in average size up or down is either good or bad.

A quick summary of some stats results:

Fastest selling: The fastest selling area in the Austin MLS market area is Southwest Austin (MLS Area SWW) which has an average days on market of 29, and a median of 10. Yes, half the homes in SW Austin have sold in 10 days or less so far in 2012. There are a lot of other MLS areas with median days below 20, which you’ll see in the full chart below, but no area is as hot as SW Austin in terms of demand. MLS area SWW includes subdivisions such as Circle C, Legend Oaks, and Villages at Western Oaks.

Highest Price Increases: There are 44 MLS areas shown in the chart below. 12 of those have avg price increases of over 10%. 12 areas (though not the same 12) have median sold price increases over 10% from last year. Most of the highest increases are in closer in areas of Austin proper, though Cedar Park/Leander North (CLN) and Georgetown West (GTW) are in that group, as well as dark horses Manor and Elgin, which have been perennial low performers in the market.

The full chart is below. As usual, questions and comments are welcome.

Austin Real Estate Market Update – Stats thru June 2012

by Steve Crossland

The Austin real estate market has found its traction this selling season. Good for sellers, frustrating for buyers. And there hasn’t been any let up. Sylvia and I personally had a record June. July has been extremely busy as well. We’re encountering multiple offers, backups offers, and several listings we’ve sold from “Coming Soon” signs that never made it into the Austin MLS.

That said, we still see that this good market isn’t yet showing up for every home or in every neighboirhood. So, for now, the rising tide is floating most boats, but not all. I’ll have a neighborhood breakdown in a following post.

I have several charts and graphs below that give visual representation to the market. The first is my recurring 1999 look-back graph. I like this one because it puts into context our market for the past 13 years.

Next is June 2012 compared to June 2011. The left column shows the previous month, for reference. The right colum is color coded, red for downward movement, green for upward movement in the particular market measure. As you can see, everything is green.

Austin Real Estate Transactions Often Very Difficult

by Steve Crossland

Being a Realtor in Austin, or anywhere, is an interesting and rewarding profession. And often frustrating. It’s a profession where the two most visible components of the job – the screwups and the easy deals – are what the public sees the most. On the back-end though, there is a lot going on that is not visible and sometimes remains unknown to the parties because the agents just take care of it. Still, a lot of deals crater because of problems. Some for good reasons, others that could have been saved with better efforts and more tenacity, but were not because the seller, buyer or the agents involved were not able to find resolution and solve the issues (or emotions).

Thus, real estate transactions in Austin are often much more difficult to complete than most people realize. I’ll use two of my recent buyer closings as examples.

Example 1 – Underwriter Wants a Paystub
Buyer moving to Austin for new job. Solid credit, income, etc. Years of industry experience in the same profession as the new job. We go through pre-approval, get the lender letter, find a house, get it under contract, then find out the lender actually can’t do the loan until the underwriter has the first paystub. A signed employment contract is not good enough, it turns out. It use to be, so now I know.

I argued this with the lender from every angle I could think of, tried different lenders, but that’s just how tight things have become, even for good, quality buyers. Since the new job wasn’t going to start for several months, and the old job income couldn’t be used because he was leaving, this catch-22 meant buyer had to drop that deal.

How to Find and Lease a Rent House in Austin TX

by Steve Crossland

Austin Rental Market As the listing agent for a lot of rental homes in Austin (for over 20 years), I’ve been dealing lately with a lot of really angry, frustrated renters and agents.

The reason for the upset is primarily the renter losing a home to other (multiple) applicants who applied quicker and/or had their act more together. Then thinking it was unfair that they lost out.

I’ve dealt with some applicants who have lost out on 3 or 4 homes in a row and who have to be out of their current house in 1 week, and have nowhere to go. Understandably, in this tight rental market, that sucks. Big time.

But that’s the “landlord’s” rental market we have in Austin at present, so you better become more prepared and more competitive if you want to avoid this angst. This is no market for slug footed, unprepared renters who don’t take the rental home search process seriously. You have to bring your “A Game”, or you may experience great frustration.

This article is written to help those searching for a home to rent in Austin TX to avoid that unfortunate circumstance where you lose out on a home to those better prepared. It’s a step by step guide to help you become the most awesome rental applicant out there. So read this and you’ll be a step ahead of others. You will become the winner, not the loser, in this competitive Austin rental market, and hopefully find the house you want.

Determine Your Specific Move Date Window
This sounds like a no brainer, but it’s hard to believe how many renter prospects I talk to who can’t answer the simple questions “when do you need to move”. You need to know, with certainty, the soonest and latest dates you can start a new lease. The larger window of time you can create for yourself, the better.

Adjusting to a Crazy Austin Real Estate Market May 2012

by Steve Crossland

I just did something for which I am, on one level, ashamed. I entered a sales listing into the Austin MLS that is not properly cleaned, prepared, staged or photographed. The yard isn’t groomed. The photos are crappy 4-year-old rental listing photos I took when I started managing the property for the owner. The tenants moved out Monday, and it’s now live in the Austin MLS in tenant “move-out dirty” condition.

Have I gone mad? Perhaps.

I called the owner today and simply said, “look, this may sound crazy, but I think we should go on the market right away, without delay, and not spend any of the $2,000-$3,000 budget I told you to be ready to spend on yard grooming, landscaping, repainting the interior, preventative maintenance, repairs, etc., because I have a feeling the house may just sell as-is really quickly without doing any of that”.

Then I confessed that this advice goes against every grain of professionalism I have. We always fully prepare our listings before placing on the market. I curse and ridicule listing agents who don’t. It’s an embarrassment to show an unprepared listing to buyers. Yet, I just entered one.

After clicking “submit”, a full 3 minutes elapsed before the first Realtor called to ask about it. 3 minutes.

The final outcome of this experiment will determine whether I’m smart or just overconfident. But let me put into context the events that led up to this decision.

Austin Real Estate Market Snapshop March 2012

by Steve Crossland

This isn’t a full-blown market update, but I wanted to post a few graphs real quick to show current market activity and movement. Let’s start with the graph below showing Average and Median Sold values for homes in Austin for the past 49 months.

So, what looked like a pretty bleak December/January (lowest of lows for past 49 months. See the previous bottoms) quickly turned into an upswing. This isn’t necessarily unusual. In fact, if you look back at every May in the chart, that’s when the price peaks normally occur, and we’re heading that direction again this year. What is unusual is the fast and sudden absorption rate of homes combined with shrinking inventory. This is a sudden “spike”, at minimum, and may develop into a sustained upswing. I’ve been monitoring this and don’t see any let-up yet.

Let’s look at the Active/Pending chart below.

Above, we see the aftermath of the Tech Bust in 2000/2001, and what happened to the Austin sales market in 2003. For 2003 there was an inverted Sold/Not Sold ratio. More listings failed to sell than actually sold. That’s a really weak, sour market when that happens. Dismal in fact. But then it happened again in 2010 in Austin. More sellers gave up (Expired or Withdrew) than successfully sold their homes in Austin. 2010 was the 4th year in a row of declining sales volume.

Then in 2011, we see these lines achieving separation again as the number of failed sales drops and the number of closed sales increases. And the separation is sudden and pronounced, indicating very strong buyer demand.

Now let’s see what that graph would look like for just the first 3 months of 2012.

How to Write a Competitive Multiple Offer in Austin TX

by Steve Crossland

The last time the Austin real estate market saw this many multiple offers was in 2006 and 2007. Back then, buyers working with me and Sylvia won more than their share of these competitive offers by following a simple strategy, which was, make your offer acceptable and ready to sign with no mistakes or weird language. That’s it, basically. There is also the cover letter, and offer price strategy, but it’s not rocket science. More on that in a minute.

I was fired by a buyer in 2006, who told Sylvia “I only want to work with you from now on. Steve is pushy, arrogant, rude and doesn’t listen to me“. Actually, I did listen to the most important thing this buyer was telling me. She really, really wanted this house and would be very upset if she lost it to another buyer. Understood. I know the mission and what we must do, I told her. We need to write a winning offer, and I know how to do that.

So we sat in Starbucks and started writing the offer, at which point this California buyer wanted to instruct me about how and what to write, which included some non-standard language and quirky California nonsense. I was confused, because on the one hand, buyer really wanted to be selected over the other multiple offers, but on the other hand buyer was insisting we write the offer in a way that would doom it to failure.

Therefore, I repeatedly said, “no, we’re not going to write that in. You want your offer to be the one the seller likes most and decides to sign without countering“. It was like pulling teeth, partly because we were both “Type A personalities, but what we ended up presenting the seller was a super clean, ready-to-sign offer, with no mistakes or goofy non-standard provisions. Seller indeed liked our offer best and signed off as-is, without countering everyone for “best and final”. The buyer got the outcome she really wanted and was happy about that. But then she fired me because she was so upset with my refusal to write the offer her way. I felt less bad about that than I would have felt about sending in a crappy, embarrassing offer that failed the buyer. Sylvia took over and everything went smooth through to closing.

Fast forward to yesterday.

Why My 1 Hour Daily Workouts Cost me 5 Hours Daily

by Steve Crossland

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”.

Not quite.

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.

Austin Lease Renewals 2012 – Rents Are Increasing

by Steve Crossland

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.

Austin Real Estate Market Suddenly Very Hot Spring 2012

by Steve Crossland

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.

Circle C
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?

Hanging Out With Old People – The Austin Realtor Demographic

by Steve Crossland

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?