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Austin home market surges; November median is an all-time high

by Steve Crossland

Home market surges even as supply drops; November median price hits an all-time high

AMERICAN-STATESMAN STAFF
Tuesday, December 20, 2005

Central Texas home buyers shrugged off rising interest rates in November, sending sales up 24 percent and the median price to an all-time high of $170,000, up 15 percent. But the supply of homes fell sharply, to a four-year low, and homes in some areas are selling within days, sometimes with multiple offers.

The hot markets include Southwest Austin, close-in East Austin, and South and Northwest neighborhoods. In East Austin, the number of sales is up 146 percent so far this year, and the median price is up more than 40 percent, to $155,000.

HOT RESIDENTIAL MARKETS RESIDE IN TEXAS

by Steve Crossland

SAN ANTONIO (mysanantonio.com, fortune.com)
Texas metropolitan areas are some of the country’s hottest residential markets in terms of projected home price appreciation rates for 2006, according to Fortune Magazine. Fortune worked with Moody’s Economy.com and Fiserv CSW on the analysis of home sales data for the country’s 100 largest metro regions. Three Texas markets ranked in the top ten.

Austin economy forecast to be better in 2006

by Steve Crossland

This is from the Austin Business Journal… “The greater Austin area’s economy is set to grow at a rate of 4.58 percent over the next 5 years, according to a new report. Details of that report by Waco-based The Perryman Group were revealed Tuesday at a luncheon. The 5-county metropolitan statistical area will be the fastest growing MSA in the state, says Ray Perryman, president and CEO of The Perryman Group. “We feel very good about the Austin economy right now,” Perryman says. The 4.58 percent rate is projected compound annual growth rate for 2005 to 2010. The region’s population will grow from 1.43 million to 1.58 million in the same time period, the report projects. Personal income will also grow, from $44.96 billion to $55.53 billion. And retail sales will grow from $42.45 billion to $60.25 billion. “Key locations and expansions in microelectronics in recent years will contribute to … Read more

October Austin Sales and Leasing Market Update

by Steve Crossland

Here is a belated posting of my regular monthly Austin Sales and Rental Market Update. I was unable to log into my blog for a couple of weeks and finally determined it was because of a new firewall I installed on my computer. That’s another story entirely…

On to the update:
Homes in Austin are now leasing below the prices of a year ago. Too much inventory is being created by investors. Sales continue to improve and the outlook moving forward is promising. See the graphs below.

Austin Area home sales surge in October

by Steve Crossland

supply and demand

From today’s Austin Statsman

Supply is shrinking fast, but price increases remain modest.

AMERICAN-STATESMAN
Wednesday, November 23, 2005

A third consecutive record year for Central Texas home sales is all but ensured after an unusually strong October in which the number of houses changing hands increased by 27 percent year-over-year.

Home sales from January through October are up 19 percent from the first 10 months of last year, while the number of houses on the market declined by 14 percent, according to the Austin Board of Realtors.

But real estate agents say buyers have an unusually big incentive to take action this fall, as mortgage interest rates continue to rise.

Read more

Austin Real Estate Expired/Withdrawn to Sold Ratio Analysis

by Steve Crossland

With all the talk and news articles about how wonderful the Austin Real Estate market is doing, I thought I’d take a look at a different set of numbers and share with you what I found.

While it’s good news that Austin is selling record numbers of homes, many homes still do not sell. How do the number of Expired and Withdrawn listings compare with the increase in numbers of homes sold? Let’s take a look.

The Downside of Living in Austin – Allergies

by Steve Crossland

Its’ official. Austin Allergy season has started for me (and many others in Austin). Austin is considered one of the top “allergy capitals” in the US. There are allergens in the air throughout the year in varying amounts but for Austin and Central Texas, Cedar Fever is the most annoying.

I felt great this morning – clear head, breathing fine, no allergy symptoms whatsoever, then it came out of nowhere … the 12-sneeze allergy attack. These are powerful sneezes in rapid succession. This happens to me every year around Thanksgiving and represents the offical kickoff of 3 or 4 months of Cedar Fever.

Austin Home Pricing Analysis

by Steve Crossland

The National Association of Realtors ((NAR) compliled a home price analysis for 130 real estate markets across the U.S. as part of a study into whether or not a nationwide housing bubble exists. Their conclusion? – no bubble exists, and especially not in Austin. About Austin, the report says: “A thorough analysis of the Austin-Round Rock metro market, as detailed below, reveals that there is very little danger of this (housing bubble). In fact, the local housing market is in good shape with a potential for significant housing equity gains, particularly for homebuyers who plan to remain in their house for the long run. The Austin market has very favorable home price-to-income ratio and even better mortgage servicing cost-to-income ratio. The latter ratio is currently below the local historical average. It implies no widespread financial overstretching to purchase a home in the region. Any respectable gains in the local job … Read more

Austin Population and Growth Forecast

by Steve Crossland

How many realtors does a city need?

I came across some interesting demographic information tonight on the City of Austin website. City of Austin Demographics are changing and the City of Austin site provides a lot of info worth checking out, with predictions about where new growth will happen for the remainder of this decade.

Check out the link to Population and Household Forecast by ZIP Code for the City of Austin. Among other things, the report says that overall population growth, from 2000 to 2010, should be greatest in ZIP Code 78748 in south central Austin, with a net gain of more than 10,000 new residents.

California firm invests $57M in Southeast Austin

by Steve Crossland

The article below from the Austin Business Journal talks about Industrial real estate. The reason I am posting it here is once again it contains quotes and information that are wonderful to hear for those of us in the Austin Real Estate business who have slogged through the recent slack years.

Austin Real Estate Rental and Sales Market Update

by Steve Crossland

As of November 1, 2005, there are 1417 homes listed for lease in the Austin MLS. During September, 555 homes leased. There are 7291 homes (excluding condos and townhomes) listed for sale in the Austin MLS as of Nov 1, 2005. 2179 homes sold in September.

I’ve changed my monthly leasing graph to follow a year-over-year format. Instead of showing all months for 2005, I am showing Sept. 2005 compared to September in years past. I think this is more useful and is compatible with how ABOR tracks Sales data. See below.

Do Better Schools Increase Property Value?

by Steve Crossland

I was asked a simple question the other day – “Do better schools increase property value?” I can’t answer the question as asked because it’s somewhat of a “which came first, the chicken or the egg” question. Let me explain.

Looking at the Austin ISD list of school ratings, it’s clear at a glance that the most highly rated schools, the “Exemplary” schools, are located in areas where real estate prices are higher. I have confirmed this with MLS analysis, which I will share below. So, if the question were “Does it cost more to buy a home that attends an exemplary school?”, the answer is very much a “yes”.

But which came first?…the more expensive homes or the more desirable schools? In other words, do good schools affect real estate values by enhancing the desirability of a given area, or do the children of people who live in more expensive homes perform better academically, such that the school is able to achieve a higher rating? The best way to determine this will be to compare sales data with homes in the same areas that are as much alike as possible, except for the schools. Read on to see the results.

Austin Economy Gaining Steam

by Steve Crossland

Austin’s economy on a roll again Confident employers pick up hiring pace

This article from today’s Austin Statesman is a great read. It outlines what is happening with Austin’s economy at present – and it’s all good news. Real Estate in Austin has returned to a Seller’s Market in the price ranges below $400,000, and we’re seeing multiple offers quite often again. Is this a good time to buy Austin Real Estate? You bet it is!

Buying Austin real estate in booming suburban areas outside Austin

by Steve Crossland

Buyers often ask me about small towns surrounding Austin, such as Kyle, Manor and Hutto, where new homes can be purchased much cheaper than in Austin. Investors and first time buyers have flocked to these areas and purchased many of the homes sold there in the past 4 years, and continue to do so because of the better prices.

I’ve never personally, as an investor, liked these areas simply because it’s hard to know what they will be like in 5 or 10 years from now. I’d rather buy a beat up duplex close to downtown. I believe many of the small outlying areas are over-sold to investors and that they are also over-sold first time buyers (who are really, as far as how they take care of their homes, renters now making a mortgage payment). If you’ve read my investment page on this website, I touch on that in outlining the pros and cons of buying existing homes in established areas versus buying new homes in newly populated outskirt areas. It’s somewhat a roll of the dice, in my opinion, buying in some of “starter home” areas.

Austin office market continues rebound

by Steve Crossland

Amid strong job growth, rents hit a three-year high; vacancy rates are lowest in four years.

The article below, from the Austin Statesman, is yet another indication that Austin’s real estate sales and rental markets may have seen the bottom of the recent three year dip. Back in 2001, when Austin bled jobs, we felt it almost immediately in the residential real estate market. In order for the rental and sales market to thrive, there has to be a steady stream of newcomers to the area coming to fill new jobs. When that activity stopped in 2001, the rental and resale markets suffered – that is all except for the new home builders who sinply sold to all of our remaining good renters.

With job growth in Austin looking good again and companies hiring, the office market becomes a leading indicator of what’s in store for the residential market. The investors that are buying large office buildings in Austin have done a lor more research than you or I, and they like what they see with regard to Austin’s economy and job market. Read the article below.

August Austin Real Estate Sales Market Update

by Steve Crossland

Austin continues to see sales activity supporting the notion that Austin is headed toward a seller’s market. There are 4 key indicators of a tightening market – Number of Homes Sold, Active Listings, Average and Median Sales Prices, and Average Days on Market.

All four of these indicators are moving in the direction of a tightening market. Let’s take a closer look.

Austin Area housing market still in high gear

by Steve Crossland

The article below is from the Austin American Statesman.

Housing starts and closings in Central Texas set a record even as mortgage rates rose and job growth slowed.
AMERICAN-STATESMAN STAFF
Thursday, October 06, 2005

Central Texas home builders continue to build and sell houses at a torrid pace, despite rising mortgage interest rates and a slowing job growth rate.

Market research firm Residential Strategies Inc. reports that annual housing starts and closings set a record in the 12 months that ended in September, with starts up 21 percent compared with the same period a year earlier and closings up 26 percent.

Read more

Austin Rental Market Update – October 2005

by Steve Crossland

Average rents in Austin improved very slightly in August over July to $1258 per month. The average rented price per square foot remains at $0.69 citywide and the average size rental home is 1823 square feet.

A total 4,456 single-family homes have leased through the Austin MLS Jan 2005 thru Sep 2005, an average of 495 homes per month. We continue to have just below 3 months of rental inventory in Austin, which is an over-supply and remains a renter’s market. Homes take an average of 58 days to rent in Austin.

Foreclosure postings down for Austin metro area

by Steve Crossland

It looks like fewer people are losing their homes to foreclosures, but the drop is very small. See the article below.

From Austin Business Journal:

Foreclosure postings filed for the upcoming October auctions in the Austin metro area dropped about 2 percent, compared with the same month last year. According to Addison-based research firm Foreclosure Listing Service Inc., foreclosure postings for the greater Austin metro area totaled 629 for October.

Read more

Real estate investors still busy in Austin

by Steve Crossland

This article was in yesterday’s Austin Statesman. More of what we already know, but a good read nonetheless.

In summary, new home builders have sharply curtailed sales to investors. Some no longer sell to investors at all, others limit sales to 10% of the neighborhood. But there are still plenty of investors buying new homes in Austin. About 12% of all homes sold in Austin Texas between January and June 2005 were sold to real estate investors.