Restricted Showing Access Hurts Sales Effort

Showing Homes - Restricted

Recently I sat scratching my head wondering why some Austin real estate sellers make it difficult to show their homes. On this particular day, I was scheduled to pick up a Buyer at a hotel at 10:30 AM. We were going to be looking at homes from about 11:00 AM until 2:00 PM that day. At about 9:00 AM I started calling occupied properties to let the owners know the approximate time I’d be showing up with my buyer, based on the route I had mapped out.

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Office vacancy rate drops in Austin

Office Vacancy Rates Drop 2006

The article below is from the Austin Business Journal. I want to comment on it. When people ask me “how do you know Austin real estate is going to do well in the coming years?”, the answer necessarily includes a list of things. One of the most important pieces of information is the rebound of the office market. As jobs drained from the Austin economy in 2001/2002, and office space emptied, so followed the flat-lining of the Austin real estate market. Employment activity and the occupancy rate of commercial space have a direct impact on home sales and rental activity. The people who work and occupy office space in Austin also buy and rent homes. The two work hand in hand.

The affordability of homes and the quality of lifestyle in Austin help attract employers to our city. That growth in turn fuels the economy and the housing market. As we are officially in a seller’s market now in Austin (in price ranges below $400,000), the return of a healthy commercial real estate market is just one of many positive indicators that we are entering another growth cycle.

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Austin TX Rental Market 2005 Summary

Austin TX Rental Market 2005 Summary

The rental Market for Single family homes in Austin continued it’s trend of the past 4 to 5 years of over-all declining rents, lower rents per square foot rates, and increased days on market. The rental market for single family homes in Austin continues to be over-supplied even as the Austin economy is doing well, residential sales are brisk, home prices are rising, and the multi-family rental market is improving.

There are not yet enough Austin renters to lease all of the homes being made available by out-of-state investors. It remains a renter’s market for single family homes in Austin. I believe a turnaround will come, but it didn’t happen in 2005. As I tell every new real estate investor I meet, you’re not buying in Austin for cash flow unless you have at least 20% cash downpayment (and even 20% might barely get you break-even before vacancy loss and repairs). Instead, you are anticipating healthy value appreciation in the Austin real estate market during the next 5 to 10 years as Austin goes through our next growth cycle.

Let’s look at some leasing statistics below from the Austin MLS.

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