And just like that, we’re moving again

Have you ever woken up on a Friday morning with no intention of moving and by 5PM that day have submitted an offer on a home? That’s what Sylvia and I recently did, and it’s not the first time.

We really thought our current place in Westlake would be our “forever” retirement home. We’ve slowly improved and updated it, but still had a major kitchen and master bath redo and expansion in our future. The location is, in my opinion, the best in Austin for both our current working/family and future empty-nester lifestyles. 8 minutes to Town Lake, Zilker or Downtown, easy access to Mopac or 360, walking distance Trianon Coffee, FroYoyo, a Thundercloud Subs and more. Even a Cap Metro bus stop 6 minutes walk from our front door goes through Zilker Park and into downtown.

Our daughter can walk to Westlake High, and we’re within even closer proximity to the elementary and middle schools, which is what draws so many families and gives the Woodhaven neighborhood such a good mix of great people. It’s really perfect. A geographically “central” location without the quirky annoyances and absurdities of the 78704 areas.

But …Prices in the ‘hood have gone through the roof. It’s not going to be affordable or practical as a retirement home. If we make the contemplated improvements, our “retirement” home – a basic 1970s rancher – would be transformed and more highly valued and thus produce an annual property tax bill bigger than I want to swallow for the next 30 years. Sure, we’d be building equity, but still, property taxes seem to have gone too high already.

Austin City vs Metro Home Prices 2013

by Steve Crossland

When you read a news article about Austin real estate that reports average and median home prices, the values quoted are often those from total Austin MLS sales. Those sales figures are compiled from the entire Austin MLS service area, including suburbs, nearby cities as well as some far flung areas. The “Austin MLS” might more accurately be referred to as a “Central Texas MLS”.

Therefore, you might read in one of the “Best of” articles about Austin, that “The Average Sold price for single family homes in the Austin Metro area for 2013 is $314,300 and the Median Sold price is $235,000”.

Those values are represented in the green bars in the graph above. To those thinking of moving to Austin, a median price of $235K sounds pretty affordable. It means half of all houses in “Austin” sell for less than $235K. A buyer with good credit earning the Austin median family income of $65K annually, can qualify for a mortgage payment of $1,950 per month at 5%, or a $266K home. Austin seems like a sweet deal and a great place to live to an outsider reading about it.

Forgetting the MLS Key Really Stinks

by Steve Crossland

No doubt every Austin Realtor has forgotten – or almost forgotten the electronic MLS key when showing a property. That really stinks when it happens. Me and Sylvia are still old school and carry around these horrible devices. The alternative would be to use an iPhone app that requires a small infrared stick that plugs into the bottom of the iPhone. The problem with that is if you lose your iPhone, or the battery goes low, you’ve also lost your MLS key. I’d rather spread the risk to separate devices. I also don’t want to have the tiny plugin stick to keep track of or junking up my key ring.

Anyway, I drove way up northwest by the lake today, past Lakeway, to show some buyers who had driven up from Corpus Christi to meet me at a house. This was a 45 minute drive from my house. About 15 minutes away I realized I left my MLS key laying on my desk, where it had been charging.

I quickly assessed the options in my head while not panicking, but almost panicking. I checked the listing agent on the MLS printout and noticed it was a KW agent in Lakeway. I just happened to be on 620 not far from the KW office.

I called the agent and got ahold of the assistant. “I’m on my way to show your listing on {Street name} and left my MLS key at home. Is there a combo box on the property or is the MLS box the only way in?”, I asked cheerfully, keeping my optimism high. “No”, the well informed assistant told me, “there is no combo box”.

“OK”, I said. “Do you have a spare key in the office that I could come by and pick up? I’m not far from you” . There was no spare key either.

I was now about 12 minutes away. I could either:

a) Turn around and know for sure that although I’d be terribly late arriving (like, 75 minutes late), I could call and ask the client to go get lunch and show up later for the appointment.

b) Show up on time and deal with it, knowing I might not be able to get in.

c) Call a Realtor friend close by and beg them to meet me there.

I’ve always been lucky. I decide to give myself a chance to get lucky and proceeded to the appointment to face the music. I’d just have to figure out a way to get inside.

Austin Real Estate Market – 2010 Breakdown by MLS Area

by Steve Crossland

Below is a chart breaking down the 2010/2009 sales comparisons by MLS Area for the Austin real estate market. This time I’m adding a couple of new things. First, there is color coding on each of the summary rows for each area. A green shade indicates “improvement” in the measured metric. I put “improved” in quotes because it’s debatable what that means, and for whom, so perhaps a better word to use would simply be “increase” toward seller’s market. Note that a decrease in Days on Market is an “improvement”, however, as it means homes are selling faster, so a negative number on DOM is coded green and vice-versa, whereas the other negative numbers are red. Confusing enough? I hope not.

Next, I added a new column called SP/OLP which is the Sold Price divided by the Original List Price. I think this is a useful metric to observe as it informs us of the gap between the original list price a seller was hoping to obtain and the ultimate sold price achieved. This is more useful to know than the more commonly reported metric of SP/LP (Sold Price/List Price) because it doesn’t disguise the price drops that occurred before the home eventually sold.

In other words, a home that started at a list price of $300K, was eventually dropped to $270K, and then sold for the $270K list price, would produce a SP/LP ratio of 100%, but a SP/OLP of 90%. The 90% is a more accurate measure of market strength or weakness in a given area. You’ll see below that some areas are right at 95% (which is pretty good) and some are below 90%, which is a tougher market requiring bigger price drops.

OK then, let’s take a quick look at the new format using the cumulative sold data for all of 2010 compared to 2009.

All MLS	# Sold	Avg Sold	Med Sold	Avg SQFT	Avg PSF	Avg Days	Med Days	SP/OLP
2010	17,709	$255,049	$195,000	2,214	$115.20	73	48	93.19
2009	18,636	$245,765	$190,000	2,177	$112.89	75	47	95.2
Change	-4.97%	3.78%	2.63%	1.70%	2.04%	-2.67%	2.13%	-2.11%

So, with the color coding, this allows a “quick glance” gleaning of which areas saw increases/decrease in the measered metrics across the board. We can see above, looking at the entire Austin MLS market as a whole, that the average sold price increased 3.78%, median sold also increased, by 2.63%, Sold Price Per Square Foot increase 2.04%, and homes sold faster when looking at Avg Days on Market. But we also see that 5% fewer homes sold (lower demand) and that the median DOM and the SP/OLP ratios worsened. This “mixed” market is in fact what most areas produce.

One last aside, if an MLS Area is mostly red all the way across, such as Area 10S, does that mean buyers should avoid that area? Absolutely not. This is a look in the rear view mirror and doesn’t necessarily predict the future or indicate a trend. Same with areas that did well in 2010. This is just a snap shop of what happened in the given year 2010 compared to the year prior. If you own a home in an area that had a dog year, your particular neighborhood or size/price of home may have perfromed differently, and that won’t be reflected in this type of macro analysis of area-wide stats.

OK, the entire Austin MLS is broken down by MLS Area in the chart below. As usual, questions, comments, observations are welcome.

Austin Real Estate Market – Year 2010 Summary and 2011 Predictions

by Steve Crossland

The Austin real estate market finished 2010 with increased overall sales prices. The market is roughly a bit higher than the peak 2007 values. See the graph below for an illustration of Austin home sales values from 1999 through 2010.

The graph can be deceiving though. It simply represents the cumulative data from all MLS sales. Certainly, most homes in Austin are at or still below the 2007 values. Some are significantly below the 2007 values, especially in the high end at $500K and above. For the entire year of 2010, 48% of all MLS listings departed the MLS as a failed sales effort (expired or withdrawn). Anytime half the listings are not finding buyers, it’s a tough market for sellers overall.

On the flip side, 2010 was not exactly a “buyer’s market” in Austin. There was little to no “low hanging fruit” to be plucked from the market. Sellers were, for the most part, not crying Uncle and were not dropping prices drastically. Yes, we have anecdotal examples of some good deals that were had by some buyers, but most buyers were simply frustrated at the difference between the perceived “buyer’s market” and the actual reality of trying to find a great home at a great price.

The only winners in 2010 were the sellers who were fortunate enough to sell quickly at an acceptable price, and the buyers who allowed for themselves enough flexibility and patience to eventually find the right combination of motivated seller and acceptable home. It was not a good year for picky buyers with narrow parameters, as they kept running into stubborn sellers unwilling to negotiate to the degree buyers thought warranted by market conditions.

Year 2011 will be more of the same in the Austin real estate market, but volume will pick up and I believe sellers will start enjoying a slightly better market. 2012 is the year that things will really bust loose again, in my opinion, but we’ll see. 2011 may have a surprise upswing in store if job growth continues to pick up in Austin. More market stats below.

How Long Does it Take To Add a New Listing to Austin MLS?

by Steve Crossland

I just finished adding one of our new listings to the Austin MLS. Years ago, this took about 15 minutes. There was far less data included and only 8 photos with no comment space for photos, no pdf attachments, and far less space to type the general description of the property.Today, a nearly overwhelming amount of data, photos and attachments must be included with a properly entered MLS listing, and it takes a while to enter it all in.

How long do you suppose it takes today to enter a real estate sales listing into the Austin MLS, from start to finish, sitting down at the computer with photos, files and info all ready to go? This includes 25 photos to upload and type in comments for, several pdf attachments, 512 characters of description (both agent-only and another 512 for the public sites), and (I haven’t actually counted) what must be well over 100 fields and data-points, including driving instructions to find the property right down to trivial data such as whether the 2-car garage has one door or two and which compass direction the property faces.

The one I just completed took me about 70 minutes. I started at 7:42AM and completed it at 8:50. It’s best to do it late night or early morning to reduce interruptions. Sometimes it can take as much as 2 hours, or longer if interruptions occur, or sometimes we have to save as “incomplete” and finish later before posting live.

But it’s important to get it done, start to finish because not all of the listing feeds update properly. This means that if I add a half dozen photos to start with and decide to finish the rest later, the initial data feed that sends listings to the vast array of public facing websites will send out an incomplete set of photos.

Some photos will update later, but others will not, and those sites will retain only the initial set of pics. So, in the case of adding a new listing, first impressions are literally the only impression in many instances. So it’s important that your listing agent knows how to gather everything needed ahead of time, including all 25 of the best photos to be used, virtual tour links, and all of the data points needed so that every photo and every field on your listing is correct right out of the gate.

An impatient seller might ask, “what’s the big deal. Can’t we hurry up and get the listing in this weekend and add the better photos later?

Tax Credit Effect on Austin Real Estate Market

by Steve Crossland

The $8,000 buyer tax credit ended April 30, 2010. Take a look at the following graph to see the effect the tax credit had on buyer activity in Austin TX. This shows Pending activity for Austin MLS listings going back to Jan 2005 through April 2010. The green line is 2010. The previous years of 2007, 2008, 2009 are represented by the other colored lines.

I used Pending listings because a lot of the April Pending sales haven’t closed yet, but anything that qualified for the tax credit would have to be Pending by April 30th, so this gives us a sneak peek at what the sales data will look like for May closed sales.

A couple of interesting things to note here. I went back to 2007 because that was the peak year for Austin. As you can see on the chart, April Pending listings exceeded the peak year of 2007 for April. I suspect we’ve never experienced an April in Austin where almost 3,000 homes received accepted offers.What does this mean for the future?

Austin Real Estate and Automated Valuation Tools

by Steve Crossland

You’ve no doubt heard of Zillow, and know how inaccurate its Austin real estate valuations can be. That’s not completely the fault of Zillow because Texas is a non-disclosure state, meaning when you sell your house, it’s nobody’s business what you sold it for, or what the buyer paid.

This results in limited sold data being available in public records. Thusly, it’s more difficult for third party estimation tools such as Zillow, Trulia and Yahoo to produce an accurate home value estimate. In most states, all real estate sales data is public record and thus there is more data from which to draw conclusions about a particular home value. Not so in Texas. So, with the exception of lower valued homogeneous neighborhoods where value ranges fall within a fairly tight range of size, age and condition, estimates from Zillow (or Zestimates as they call them), can be all over the map, sometimes grossly inaccurate.

Lately I’ve been experimenting with a new valuation tool that mashes up public data with actual Austin MLS sold data. This is called Value Map and is provided by our Austin MLS to its members. I have mine it set up at AustinValueMap.com because the default url is long and ugly. It’s free, no signup required. And so far, I’m finding it to be surprisingly accurate, though of course not perfect. You can also sign up for alerts when a property similar to yours and within a two mile radius is sold. For some reason, though provided by our Austin MLS, you can type an address from anywhere in the U.S., not just Austin. Try it out, let me know what you think about the accuracy of the value for your property, even if you’re not in Austin.

Lending and appraisal companies seem to be trending toward automated valuation system. The Value Map product is used by banks and appraisers all over the country. It uses a proprietary algorithm to determine values. Often, when we sell a house, the bank trusts the value produced by this methodology and won’t even order a full appraisal, opting instead for a “drive by” appraisal, where an appraiser drives by to make sure the house is indeed there, but doesn’t go inside or perform the full appraisal. I think this is dumb.

On the other hand, though it might be inaccurate, the valuation tool won’t commit purposeful fraud, as many appraisers and lenders did during the most recent real estate boom. So it may be, from a bank/lender perspective, the benefit of fraud elimination outweighs the occasional over-appraising of a home. And probably, if the value is way off from the contract price, they’re going to order a full appraisal anyway.

But as a buyer or seller, will there ever come a day when you simply type in your address and it spits out the true market value of your home (what a buyer would pay)? No (except by coincidence), and here’s why.

Will Web 2.0 Render the Full Service Real Estate Agent Obsolete?

by Steve Crossland

I just wrapped up 5 days at SXSW Interactive. It was a fantastic conference with many great workshops, panels and discussion events related to technology, business, the internet and social networking. Much of it was relevant to the real estate business and small business in general, which surprised me.In fact, I attended two discussion workshops dedicated to real estate.

The first was “Making the Move from California to Austin“. Lots of good interaction, insight and questions regarding the differences between the larger California cities (the Bay Area in particular) and Austin. There were many Californians in attendance and it was fun to hear why so many feel drawn to make the move to Austin. I could say more, but that’s not the topic of this article.

The other real estate related event I attended was titled “Can Web 2.0 Kill the Real Estate Industry?“. This one surprised me because I actually got pretty worked up and steamed at how completely uniformed those are who dismiss the real estate agent as an obsolete, useless tour/taxi driver. It’s extremely irritating to listen to people who don’t know what they don’t know speak as if they know everything.

Interestingly, the folks in the audience who had actually purchased or sold a home recently defended real estate agents and said they greatly valued the services received. This sentiment is reflected in the internal surveys we sent our own clients after the close of each sale, which uniformly rate the experience as a very good one (whoa, I need to update that page on our site!).

Anyway, the discussion that took place stirred up some thoughts regarding my profession, what we do and how we are paid, and how the internet has changed things. Since I wasn’t able to fully make my points in a couple of short soundbites during the open discussion, I’m going to expand on my thoughts here.

So, with almost all MLS listings online and so much information available to real estate consumers nowadays, why is it that an agent is still needed? Why can’t we just be replaced by the internet? And, as one grouchy know-it-all complained about repeatedly, why should the listing data be controlled and disseminated only through private MLS Associations with strict rules on how the data is used and displayed online? Why isn’t all this MLS listing data free for the public to see and use?

I’m going to answer those questions, and others, by starting at the beginning – with the Seller.

Everything Begins With the Seller

Let’s say that Ms. Home Owner is happily living in Austin TX, working in an industry she loves, doing well, and one day she gets an unexpected job offer that will require her relocation out of state. The offer is too good to pass up, so she makes plans to move in two weeks and sell her house.

Austin Real Estate Market Update – Jan 2010 Stats

by Steve Crossland

The Austin real estate market started 2010 on an upswing. Average sold price is up 5.39% from a year ago, median sold price is up 2.12%, days on market are down. In fact, every measured metric on the chart below moved in a positive direction except for median list price, which is down slightly, but of no consequence. Let’s have a look.

Austin Real Estate Sales Market Update – January 2010
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data
	Dec 2009	Jan 2010	Jan 2009	Yr % Change
# Sold	1323	823	816	0.86%
Avg List	$274,819	$259,858	$249,289	4.24%
Med List	$199,740	$188,000	$189,700	-0.90%
Avg Sold	$262,574	$247,767	$235,101	5.39%
Med Sold	$194,000	$184,000	$180,189	2.12%
Sold/List %	95.54%	95.35%	94.31%	1.10%
Avg SQFT	2283	2220	2170	2.30%
Med SQFT	2049	2043	1942	5.20%
Avg $ SQFT	$115.01	$111.61	$108.34	3.01%
Avg DOM	82	78	82	-4.88%
Median DOM	48	50	66	-24.24%
# Expired	852	394	544	-27.57%
# Withdrawn	696	577	701	-17.69%
Not Sold	1548	971	1245	-22.01%
Not Sold %	53.92%	54.12%	60.41%	-10.40%

So, is this good news? Maybe. I don’t think sellers should get too excited, and buyers need not start worrying about rising prices. Jan 2009 was a down month, so topping it is nothing to brag about. Nevertheless, I do think our Austin real estate market has sunnier weather ahead, at least for the first half of the year.

The extended tax credit and continued low interest rates will motivate buyers in the lower ranges. An improving job market and the return of good job news, (some of which was announced today with Facebook bringing 200 new jobs and a Solar Panel company bring several hundred more), will cause an already “ok” Austin unemployment rate to keep dropping through the summer, barring any terrible macro-economic setbacks in the national economy. Once interest rates starts rising, as we expect later in the year, that will frighten some additional buyers into getting off the fence for fear of missing out on the good rates.

I think the upper end market will be slower to come back as many of the former $500K to $800K buyers will, I think, scale back lifestyles and settle for less Austintacious digs. Mercedes Homes said as much during a lunch presentation I heard today. They’ve redesigned a bunch of new floorplans to accomodate what their research says will be a more frugal market in the $300K and up range, as buyers seek smaller, better quality homes instead of sprawling big layouts. Makes since to me.

Below are some additional charts and stats. Let’s start with the 23 month lookback chart.

Pre-Marketing a Listing Can Result in Quick Offers

by Steve Crossland

When should a listing go “on the market”, and what constitutes being on the market? Often we’ll take a new listing with the understanding that it won’t be placed into the Austin MLS until the pre-sale checklist is complete. That checklist includes preparation that the seller needs to complete so that the home can be properly presented to the market from the first day in the MLS.

For some sellers, this involves just minor straightening up. For others, it’s major decluttering, repairs, painting, landscaping, etc. Once the home is prepared, we send the stager, photographer and virtual tour people. Once we have the virtual tour and the photos, the home is ready to be listed in the MLS.

Meanwhile, we often place a sign in the yard with a rider that says “Coming Soon”. We’ll also contact agents that work the area in which the listing is located and let them know we have a new one on the way. Sometimes, this results in a sale before we ever make it into the MLS. Such is the outcome with one of our current listings, which received multiple offers before it was officially “on the market”.

How does this happen?

Austin Real Estate Market Update – Nov 2009

by Steve Crossland

Maybe I should start terming my Austin real estate market update blogs “Austin Real Estate Market, as Influenced by the Federal Government”. Indeed, the word “market” does need an asterisk next to it for the Sept-Nov time frame in Austin. Instead of taking its natural course, whatever that might have been, the lower end of the market was stimulated by government incentives for the Latter part of 2009 through November, and the sub-$200K buyers responded. Thus we see on the graph below the drastic drop in the average and median sold price for November 2009 as the final batch of first time home buyer tax credit sales closed.

It’s not hard to see what the real estate market is doing, but it is hard to know for sure why it’s doing it, or, that is, to what extent the number of sales (way up) and the average/median values (down) are influenced by these the artificially low interest rates and the buyer incentives, both being caused by government intervention in the market. Some economist believe that once these stimulus measures peter out, as they will later this year, the national real estate market is in for another big drop in prices as foreclosures will snowball to the highest levels we’ve seen yet.

So what does all of this mean for Austin? Is Austin real estate in generally good enough shape to ride it out better than most markets? I think so. Let’s have a look at the November stats.

Austin Real Estate Sale Stats by MLS Area – Sept 2009 YTD

by Steve Crossland

Austin’s real estate market is a “market of markets”, and thus the overall news reported about real estate activity in the Austin Metro area may or may not be reflective of conditions in the specific area in which you live, or the home you own, or the home you want to buy. Each quarter I break down the Austin Real Estate market year-to-date stats into MLS area-specific comparisons of the year before so we can take a look at the variations among different pockets of Austin.

If you follow these quarterly Austin MLS breakdowns, you know that there is always variation among different MLS areas and price ranges, for better or worse. This Year-to-Date report through Sept 2009 is a head scratcher for me though, mainly because the number of Austin MLS areas that normally outperform the overall market has dwindled substantially. Based on what Sylvia and I are experiencing in the field, I would have guessed the opposite to be true. And the market overall is holding up.

But here’s what I’m talking about …

Of the 44 Austin Metro MLS areas tracked below…
5 Austin MLS areas had an increase in average sold prices (3 months ago it was 11)
7 Austin MLS areas had an increase in median sold prices (3 months ago it was 11)
1 Austin MLS area had an increase in average sold price per square foot (3 months ago it was 7).
4 of the Austin MLS areas saw a decrease in average days on market (same as 3 months ago)
7 of the Austin MLS areas saw a decrease in median days on market (3 months ago it was 6).
1 (only 1) Austin MLS area saw an increase in the three main pricing metrics – avg and median sold, and price per square foot. Three areas were in this clug at mid-year.

So does this mean the Austin real estate market is getting worse? As usual, it depends. From a statistical standpoint, more areas are trending down than up. But if you ask Sylvia and I if we’re busy, yes we are. We had 4 closings in October and three on the board already for November, which is unusual for the slow season. On the other hand, if you ask an agent who specializes in luxury homes in Lakeway, they will probably say things are dismal. And I do in fact have a listing on 10 acres in Dripping Springs that isn’t getting any showings even though we think it’s under priced.

Add in the government interference/intervention in normal real estate market activity with the tax credit incentives, the nervous jitters of the stock market, artificially low interest rates, appraisal issues, and what we have is a number of variables pulling and tugging with and against one another. Bottom line, overall, at 3% down for the year on average sold price and about even on medial sold price, Austin’s market is doing about what we think it should, as a whole. It’s just interesting to see all the underlying cross currents.

That said, below is the breakdown summary, then you can study the chart yourself and see how your areas of interest are doing. As usual, questions and comments are welcome.

Austin Real Estate Market Update – July 2009 Stats

by Steve Crossland

It’s getting real hard to write about the Austin real estate market when month after month it just keeps doing what is expected, treading water overall, doing well under $200K, especially close in, and still soft in the $400K+ price ranges. That really sums it up, month after month. At the beginning of the year I predicted Austin would be down 3% to 5% overall this year, and we’re still on track for that.

For July, the average sold price compared to July 2008 is down about 4%, a bit more than the 3% average we’ve been seeing each month, but not a surprise. Median sold price is down 1.5%. Average price per square foot is down 5% from a year ago. Days on market is up to 71 average and 44 median, which are not bad numbers, but still worse than a year ago, which was worse than the year before. See the chart below for the previous month and pevious year comparisons for July.

Austin Real Estate Sales Market Update July 2009
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data
	Jun 2009	Jul 2009	Jul 2008	Yr % Change
# Sold	2031	1950	2017	-3.32%
Avg List	$264,959	$259,167	$269,724	-3.91%
Med List	$206,000	$199,900	$203,000	-1.53%
Avg Sold	$254,059	$249,560	$260,832	-4.32%
Med Sold	$200,000	$195,000	$198,000	-1.52%
Sold/List %	95.89%	96.29%	96.70%	-0.42%
Avg SQFT	2221	2188	2166	1.02%
Med SQFT	2012	1985	1962	1.17%
Avg $ SQFT	$114.39	$114.06	$120.42	-5.28%
Avg DOM	77	71	61	16.39%
Median DOM	48	44	39	12.82%
# Expired	392	476	537	-11.36%
# Withdrawn	679	825	881	-6.36%
Not Sold	1071	1301	1418	-8.25%
Not Sold %	34.53%	40.02%	41.28%	-3.06%

The year-to-date chart is below. For the year Austin Average Sold price for houses is down 2.96%, median is down is dead even at 0% change, and average price per square foot is down about 5%. Our “not sold” are holding at 42%. See below for the details

Austin Real Estate Market Update – May 2009 Stats

by Steve Crossland

The Austin real estate market continues to chug along in a manner that would be considered unimpressive if not for the fact that it was expected to be doing so much worse by so many. Average sold prices are down about 3.5% and the Median is down about 2.25%. We’ll take take that. I’m not complaining.

Austin Real Estate Sales Market Update May 2009
Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data
	Apr 2009	May 2009	May 2008	Yr % Change
# Sold	1522	1610	2060	-21.84%
Avg List	$245,130	$268,001	$274,380	-2.32%
Med List	$198,170	$199,970	$203,037	-1.51%
Avg Sold	$234,444	$256,603	$265,878	-3.49%
Med Sold	$190,000	$195,250	$199,788	-2.27%
Sold/List %	95.64%	95.75%	96.90%	-1.19%
Avg SQFT	2136	2208	2154	2.51%
Med SQFT	1950	1989	1945	2.26%
Avg $ SQFT	$109.76	$116.22	$123.43	-5.85%
Avg DOM	74	75	61	22.95%
Median DOM	44	43	36	19.44%
# Expired	391	383	516	-25.78%
# Withdrawn	648	590	598	-1.34%
Not Sold	1039	973	1114	-12.66%
Not Sold %	40.57%	37.67%	35.10%	7.33%

One interesting thing to note is that the “Not Solds” have dipped down to 38%, barely higher than the 35% for the same month last year. This is the first time the Pending/Withdrawn listings (not solds) have been less than 40% of the total departing Austin MLS listings since June 2008, when they represented 37% of the departing listings. We hit 61% in Jan 2009 and 62% in Nov 2008, which meant a lot of sales efforts were ending in failure last fall and winter, but things have improved a lot since then.

Personally, Sylvia and I have 6 closings this month and we are really, really busy. It’s starting to feel like 2006/2007, but the numbers don’t look like 2006/2007. We’re running really fast on our hamster wheel, but putting together transactions that stick is as hard as ever.

Below is the Year to Date (YTD) chart for Austin, followed by several other charts and graphs that will bring you up to date on current conditions in the Austin real estate market.

Austin MLS Now Allows 25 Photos – Too Many?

by Steve Crossland

Our Austin MLS system now allows up to 25 photos to be included with each Austin MLS listing. That’s too many, I dare say. Sometimes I have a hard time even coming up with 12 (the previous limit) photos that are MLS-worthy to include with a listing.

Not that twenty-five Austin MLS photos won’t be appreciated by some listing surfers, but I predict we’re going to end up with a whole lot of crappy photos saying “3rd bedroom” and showing a vanilla wall with a window. Or we’ll start seeing a photo of the doggie door, or the mailbox, or, one of my favorites “front door”, as agents stretch to find additional shots to fill the bucket with all 25 photos.

How many areas of interest are there in a home anyway? We have the kitchen, living(s), dining(s), baths, bedrooms, exterior front and back and … uhh … let’s see, I guess that’s about it.

That would cover 12 shots in a standard 3 bedroom home with 2 living areas, 2 dining and 2 baths. What shall we serve up for the additional 13 photos? We’ll also be seeing a lot of photos that say “another view of kitchen”, which I actually do sometimes already when I’ve run out of interesting or worthy shots. I guess that’s ok. But come on.

An aside: Does doubling the number of MLS photos have any affect on our carbon footprint? Just wondering. I’ll bet it does in various secondary ways. That’s gonna have to use up a lot of extra hard disk space and bandwidth. But I digress.

But here’s the thing. As a buyer surfing Austin real estate listings online, you can only ascertain so much about a property from photos.

Are Price Reduced Homes the Best Deals?

by Steve Crossland

price-reduced-sign An interesting news announcement came to me the other day. The title was “Trulia Introduces ‘Hair Cut’ Search Engine”. This is a new feature that allows someone searching for real estate listings on Trulia to weed out listings that haven’t had a price reduction, and thus view only listing that have had a price reduction.

Trulia CEO Pete Flint says:

“It doesn’t matter if your price point is $200,000 or $2 million, in these difficult times people are searching for the best deals they can find on homes. Our new price-reduction functionality makes it easier for people to find the home of their dreams without laboring through unwanted results.”

Oh brother. What a bunch of hogwash. This does not in any way make it easier to identify better deals. And why would a listing that hasn’t had a price reduction be an “unwanted result?” This gimmick joins the list of stupid and useless features and functionality pushed out to unwitting online consumers who gladly eat it up because they don’t know any better. It does give Trulia a reason to push a news release, but their programmers could have been better utilized doing something less worthless than this. Such is the world we live in today.

News flash for Trulia: the best priced listings are already marked “Pending”, and most went Pending before a price reduction occurred. OK? This is an ascertainable fact, not a marketing gimmick to boost web traffic.

For example, of the 75 listings currently pending in SW Austin, 10 had price reductions. That’s 13% of the listings that have already been deemed the best out there by real buyers writing real offers. Of the 173 listings still on the market in SW Austin (MLS Area SWW), 39 have had price reductions, which is 23% of the available listings. Which homes are a better buy? The ones that are Pending, or the 23% of homes still available that have had a price drop? And why would someone only want to know about 23% of the available listings in an area when searching for a home? Only a really stupid buyer would restrict his search in such a manner, Mr. Flint.

So, what factors do help us determine which listings are a good buy?

Craigslist – I am thinking of firing you!

by Steve Crossland

For about 4 years now I’ve been posting all of our listings in Austin Craigslist. It seems like once upon a time, a long, long time ago, I received a call or two, and even a bonafide lead from one of our Craigslist property listing ads. I honestly can’t remember the last time it’s happened though. Must be more than two years now.

Usually all I get is a) spam, b) scam attempts or c) emails from other Realtors wondering if they can advertise our listing on Craigslist as a buyer agent. All three of these have zero value to me.

My general comment to clients when talking about the things we do to market a home for sale or lease in Austin is “..we also place it in Craigslist, which doesn’t ever generate any calls, but it’s free so we put it there just in case”.

So, if we’ve received no results at all from placing listings in Craigslist, is “it’s free” a good enough reason to keep doing it?

Does MLXChange MLS Software Calculate Price Per Square Foot Properly?

by Steve Crossland

I have have been critical of our new Austin MLS System called MLXChange since it was first placed into production in Austin in November 2007. It produces what I believe to be incorrect data. I was contacted yesterday by a product manager from MLXChange because they saw my last blog article showcasing some of the bad data. In that article, I mentioned that the price per square foot is not calculated correctly by the system.

The product manager was very nice and I enjoyed our conversation. She wanted to explain to me how the average price per square foot numbers are calculated and that, in fact, the numbers are calculated correctly. She is right on a certain level. That is, if one understands and follows the formula being used by MLXChange, it can be argued that their number is a mathematically correct.

But I maintain that the method being used by MLXChange to calculate average price per square foot is not the correct formula. I’m not smart enough to articulate it in a scientific or mathematical argument, but my intuition and instinct tells me I’m right. I’ll do my best to explain below and I hope a smart reader can chime in and offer a mathematical or statistical point of view and explanation of why two different methods, each of which seems correct independently on face value, produce different results.

So let’s look at an example that illustrates the MLXChange formula versus the method I believe most of us would use, and the method I believe makes the most sense. I’ve created a small sample set of data, shown in the chart below.

Price Per Square Foot Calculation Method
Example
	Square Feet	Sold Price	Sold $ per SQFT
House 1	1200	$150,000	$125.00
House 2	1300	$110,000	$84.62
House 3	1400	$95,000	$67.86
House 4	1500	$120,000	$80.00
House 5	1600	$85,000	$53.13
MLXChange Avg	1400	$112,000	$82.12
My Average	1400	$112,000	$80.00

What is the average sold price per square foot of the 5 homes shown above?

MLXChange computes the Average Price per Square Foot by adding together all of the individual price per square foot numbers (the five psf numbers in the far right column) and dividing by the number of sales (five). This produces a result of $82.12 per square foot as the average price per square foot of the sold homes in our sample set.

I compute the average price per square foot by taking the average sqft size of all homes (1400) and dividing it into the average sold price of all homes ($112,000). My result is $80 per square foot. That’s what you would see on a stats chart that I manually produce and post regularly on this blog.

The two methods, in this particular example, produce results that are 2.65% different. 2.65% is not an insignificant amount when pricing a home. It’s a bigger gap than the List/Sold price difference on most sold homes in Austin. It’s a $5,300 difference on a 2500 sqft home at our example psf rates. Would you like to sell your home for $5,300 too little? Would you like to pay $5,300 too much, based on your Realtor’s CMA, produced by MLXChange?

Let’s dig deeper into why I think the MLXChange method is flawed.