Austin Rental Market Update – July 2008

The Austin TX rental market continues to do well overall. Rents are steadily rising for the third year in a row after falling for 4 straight years (2002 through 2005). Average rents for homes in Austin for July 2008 were $1,493 per month. Year to date the average rent is $1,425. the graph below shows nearly the past 10 years of Austin’s rental market and our ups and downs.
Austin Rental Market graph 1999-Jul2008

The rental market is helped now by the fact that fewer renters can qualify to purchase homes, which increases demand. The easy loans that renters were able to obtain from 2002 through 2007 are gone. You need a down payment and decent credit to buy a home now, as it should be.

The chart above shows the past decade of the ups and downs in Austin’s rental market. Despite three years of gains, the average and median rents are still lower than they were in 2000. Yes, that’s right, rents are lower still today than they were 8 years ago. Austin renters have had a great ride, while landlords have been nailed with higher property taxes, insurance costs and repair costs.

I just rented a home I own for $1,225 after an extensive remodel. I rented the same home, in average condition, for $1,325 in 2001. Rents are still very specific to location, price range and condition. We just rented a luxury home for $2,295 that rented for $2,495 a year ago. We simply did not have the number of showings needed to fetch the higher rent this time, and we disallowed large dogs.

Below are July rental stats chart and the year to date stats chart. I’ve added some color formatting to the charts this time. Green fields indicate numbers that are moving in a direction positive for landlords.

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The Reputation of Your Austin Realtor Matters

An Austin Realtor who works with buyers in south Austin has brought the buyers for three of our listings in the past 6 months. Sylvia commented to me yesterday that when the agent called to say she was bringing another offer, she told Sylvia “I was so happy to see that it was your listing because I knew it was going to show great and be priced right”.

The intangible value of this can’t be overstated. When you list your home for sale, you probably have no idea what reputation (good or bad) of your agent enjoys among peers, but it’s an important thing to consider. Next time you interview a Realtor, ask them straight up, “what is your reputation among other agents and how will it benefit me if I choose you?”

Likewise, when we ourselves are working with buyers, there are certain listing agents, many from our own Keller Williams office, whom we absolutely know will not place a listing on the market until it is ready to show and who always help their sellers price the home right. Does this matter? Yes, it matters a lot. Those listings get shown more.

In the case of our listings, when other agents know in advance of showing a property that it will be a good show, in most cases professionally staged, they are less likely to weed that listing out when trying to narrow down the 8 to 12 properties that they have time to show the buyer that day. Also, when driving to the listing, the agent is more likely to “prime the pump”, so to speak, by saying things such as “oh, I know this one will show well. This agent always has the home staged well and priced right”. I say such things to my buyers, so I’m sure other agents do the same. This creates, in advance of showing, a positive impression of the home before the buyer has even seen it, much as great curb appeal sets into motion a set of positive emotions about a listing before a buyer even steps inside. As a seller, you want you home to enjoy this ever so subtle but important edge against the competition.

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Austin Real Estate Market Update – July 2008

The average sales price for houses in Austin in July 2008 remained about level, decreasing slightly (0.05%) to $262,114. The number of failed sales efforts (expired or withdrawn) was 42%, which is a large number. Days on market continues to climb also, to 60 days average on market and 39 median days on market. Those numbers are not bad actually, but last year DOM was 51 and 31, so things are definitely slower this year.

Here is a quick summary of the July stats.
• Number of homes sold is down 24% from 2,544 July 2007 to 1,926 July 2008.
• Average sold prices in Austin were down 0.05% over the same month last year to $262,114.
• Median sold price was up 3.65% over the same month last year to $199,000.
• Avg sold price per square foot is down 2.62% from July 2007 to $121 per sqft.
• Avg days on market is up 9 days (18%) from 51 last year to 60 this July.
• Median days on market is up 8 days (26%) from 31 days last year to 39 this year.
• Number of “Not Sold” (exp or withdrawn) is up a whopping 56% over the same month last year, to 42% of all removed listings.

Below is the chart with these stats, along with a YTD chart.

One thing to note is that it was about this time last year, or a bit earlier, when we really started to notice the Austin real estate market slowing down. Because of that, I think moving forward we’re going to see the year over year gaps narrow somewhat as we move into comparing a slower period 2008 to a slower period 2007. In other words, we’re a year into our Austin lull, so were not comparing a hot market for the year prior to a cool market as we have been for about the past year.

Austin Real Estate Market Update for July 2008
All Austin / Central TX MLS Areas – Houses Only

Jun 2008
Jul 2008
Jul 2007
Yr % Change
# Sold
Avg List
Med List
Avg Sold
Med Sold
List/Sold %
Avg $ SQFT
Median DOM
# Expired
# Withdrawn
Not Sold
Not Sold %
On the Market (houses) as of July 21, 2008:
12,756 = Active Res Listings in Austin MLS (12,466 last month)
10,620 = Total Single Family Homes listed (10,335 last month)
1853 = Condo/Townhome/Loft/Garden Homes listed (1870 last mo.)
283 = Mobile/Manufactured Homes

Below is the year to date breakdown.

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Understanding Your Economic Stimulus Payment

I received this nice letter from the IRS called “Understanding Your Economic Stimulus Payment”. I got out a calculator to arrive at my own understanding and, from what I can tell, my stimulus award was taxed at a rate of 92.17%, which is the percentage of the $1,800 total that was taken back because we make supposedly earned too much in 2007. That leaves us with a whopping $140.90 which which to stimulate the economy.

That’s fine, I don’t really care about the money, but what irks me is that politicians run around spouting the gross figures, as if it has been rebated to everyone. But those of us who worked too hard and contributed too much toward our nation’s tax base were not the only ones who got left out.

I did a bit of searching and came across a blog article from a self described “Crazy Old Lady” who, along with her dog and cat, is getting by in life on $573 per month SSI income. She didn’t get a stimulus rebate either.

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All About GFIs and T&P Safety

GFI OutletBy Bob Petersen, Precision Inspection
This month I am going to discuss two of the more critical mechanical components of a house, the ground-fault interrupter (GFI) and the temperature and pressure relief valve (T&P).

GFI’s (also called gfci for “ground fault circuit interrupter“) are generally found only on homes of relatively recent construction (since about 1980). However, one can be installed in any home and is recommended.

GFI’s were included in the National Electric Code in 1973 but may not have been adopted by various city building codes until later. They were developed due to the large number of injuries and fatalities caused by relatively minor shocks from hand held appliances and power tools.

GFI’s come in two types. The first is similar to a normal electrical outlet except the device contains the GFI mechanism and test / reset buttons.

The second is similar in appearance to a normal circuit breaker with the addition of a test button and is found in the breaker box.

Both types can sense current leakage as small as 5 milliamps. In comparison, a regular circuit breaker will only trip at its rated amperage (a minimum of 15 amps.) A shock from a 15 amp circuit is very strong and can be lethal.

The National Electric Code requires GFI circuits at all accessible garage, bath, outside, & kitchen countertop plugs as these are areas where people may come in contact with water or an improperly grounded tool. Any outlets UNDER a home or at a spa tub or sink must be this safety type outlet as well.

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Consumer Reports Flawed Realtor Survey

There has been a lot going around about a recently published consumer reports survey of home buyers and sellers. I take these type of surveys with a grain of salt, but I don’t ignore them, especially when the information provided is so obviously incorrect.

The survey says:

Most people still close the deal. Eighty-six percent of our readers who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market.

Wrong. No way. I don’t believe it. National sales data completely controverts this bogus figure of 8%. In Austin TX, one of the best markets in the country, in my June stats, you’ll see that 37% of the listings removed from the MLS in June failed to sell. There is no way that only 8% of sellers in a nationwide survey failed to sell their homes.

For crying out loud, over 30% over all homes sold in California through the MLS recently are foreclosures. The former owners of those homes were certainly unable to sell. I don’t know what sort of methodology Consumer Reports used, but they screwed this up. It’s so far fetched a number that, for me personally, it means the rest of the survey can be tossed in the garbage. But before we do that, let’s see what else they got wrong.

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