Austin Real Estate Blog

April brought some of the biggest gains in the US home buyer market. The number of home buyers who have agreed to purchase a previously owned home took the biggest gains by leaps and bounds in the month of April. Historically, it is the largest jump in previously owned homes since 2001.

Even as the market is moving forward, home buyers can expect prices to continue to fall in different areas around the country. One benefit of shopping for a home in the Austin market is that it has not been a part of the huge pricing swings. Prices in this market are not expected to swing in one direction or the other.

According to the Austin Board of Realtors there were 1,919 pending sales anticipated to close in May, bring the April total up 3%, the highest number since July 2008.

Home prices will increase once foreclosures stabilize again. Currently on the national level, there is still a plethora more homes in the sales inventory base, than home buyers. This is changing, as seen in the evidence from April, and forecasters only expect this trend to continue until the end of the year.

With the growing expectations and the increase in pending home sales, the market is ripe for new home buyers. For 2009 there is available an 8,000 dollar new home buyer tax incentive. This is an increase from the previous 5,000 and in addition to any incentives being offered at the state level. This means that the buyer’s market is reaching its pinnacle in 2009.

Ok. So I know that lawmakers need to feel important and thus create tons of rules, lingo, processes, etc so that no layman can figure out what the hell is going on without actually getting elected, but I was trying to figure this out today and thought maybe someone out there could enlighten me.

I’ll run it in sort of a time-line style.

1) Austin passes Mandatory Energy Audit Ordinance
Austin Ordinance

2) Texas Legislature inserts a statement into SB 546 making it illegal for a municipality to impose a criminal penalty (fine in the case of Austin’s Energy Rule) on the seller of a piece of real property (real estate) for failure to perform an energy audit.
Bill Info

3) SB 546 passes both houses by 5/18/09
SB 546 Bill progress

4) The Texas Governor is next up on the SB 546 path to resolution
Governor’s Action

5) The 81st Legislative session ends June 1, 2009 and the Governor has until June 21, 2009 to veto or approve the bill
Important Dates

So as I read it…

Outcome 1: Governor approves SB 546 and the bill becomes law. I assume that this would then become law immediately, but not sure.

Outcome 2: Governor vetoes SB 546. In this case, the bill goes back to the legislature and needs 2/3rds to override the veto.

Outcome 3: Governor does nothing. Then on June 22nd, 2009 the bill becomes law. Of course that is if the bill could not become law immediately for some reason (read some of those crazy rules the government makes to keep itself feeling important and noted above) then it would become law 91 days after the session ended on September 1, 2009.

Man, I’m confused. Can anyone add some lucidity to this whole deal for me?
Joe

It has not been a fruitful few years in regard to any housing market. The current recession that continues to plague the nation was first indicated through an enormous surge in foreclosures. Not long after the housing bubble burst, unemployment took its turn at rising to levels not seen in years. While Austin has been a city that has maintained overall decent economic health, it has not been completely untouched. The market here has slowed significantly, with March home sales down by around 22% when compared to the same month last year.

Buyers are still skeptical about buying in a down market. This is evident from the low home sales so far through 2009. One major hurdle that interested buyers are facing is the credit crunch that has limited many options for loans. These days, it is harder than ever to secure financing for a large investment. While this may mean that those who are purchasing may have less trouble with continuing payments, it has taken a lot of people out of the running for new homes. People who may have been approved just a few years ago are no longer eligible.

Home values in Austin have not dropped as dramatically as in other cities, though they are down by about 4% from last year. The strong local economy, availability of employment, and pleasant atmosphere all help to boast the housing market. These traits continue to bring newcomers to the area, which will continue to help the housing market. The market here is not expected to start looking up until late this year, or possibly into 2010. Until then, Austin will likely remain as steady as possible in such a difficult time.

An amendment attached to a solar bill that’s steaming through the Legislature could torpedo a City of Austin energy efficiency program.

The Austin rule taking effect June 1 requires Austin homes receiving electricity from Austin Energy to have an energy audit before being sold. (Homes can be exempted for a number of reasons, such as if they’re less than 10 years old at time of sale or have received energy-efficiency improvements through Austin energy.) The goal of the plan is to make old building stock more efficient, by encouraging buyers and sellers to learn ways they can cut energy use by doing things like adding insulation.

Violating the ordinance is a Class C misdemeanor, and violators can be fined up to $500.

Read the rest at Latest on Austin’s Energy Audit Ordinance

My comment…

If you want to get an energy audit, no one is stopping you. Go and upgrade your home as you see fit. Be ready when the buyer decides to give you exactly what you’d get for a home without the audit or upgrades, but do it because it’s right and you can afford it. If you want to keep your house at 60 degrees, go ahead, but be ready for the bill.

Many people struggle to pay their mortgage and don’t make a ton of money when they sell so the audits can amount to a monthly payment to them. There is no way anyone should face criminal charges and fines for failure to comply with an unfair law anyway.

If you want to list with a real estate agent who charges $500, do it. If you want full service, pay for it. That’s the beauty of choice and freedom.

Why people think it’s ok to turn Austin from a group of laid back folks who want to coexist with others of differing viewpoints to psycho, militant, legislate everything ya do nut-balls, I’ll never know. But it isn’t cool. It isn’t Austin. At least not the Austin I love and enjoy calling home.

Joe

As an aside, I do feel sorry for all the people who rushed out to corner the mandatory energy audit market and are now potentially sitting on a goose egg. That’s kinda rough.

The department of Housing and Urban Development, HUD, is updating the stimulus package of 2009. In that economic stimulus package, there was an 8 thousand dollar tax credit allotted for first time home buyers. The intention was to offset the cost of closing a home mortgage. Unfortunately, due to the nature of the clause, people have been unable to access this money until they file their 2009 taxes by April 15th 2010. HUD knows people need it much quicker.

The government agency known for making home ownership possible, is still working toward that goal. They are looking for a way to allow first time home buyers access to their 8,000 dollar credit, at closing instead of next year. The Federal Housing Authority has a list of approved lenders. These aforementioned lenders will be able to loan the money as an advance to the first time home buyers. Currently there is not a timetable, but this process has already begun.

Several states have begun to develop similar plans to help first time home buyers now. This state level loan gives home buyers the ability to open up funds to spend on furnishings and other items for the new home. This money will then do exactly what it was intended to do, stimulate the economy. This will enable growth and recovery. It is only a brief matter of time before Austin will see the benefits.

The new home valuation code of conduct is a lazy tool of weak minds. If you can’t stand by your estimation of value in the face of scrutiny, then maybe you should be changing your values. And if you don’t like working for a bank that pressures you to inflate values or do other things that you don’t like, FIND OTHER CLIENTS! That’s what everyone else in the business world does.

I just had a transaction get pushed out a week, a family lose a weeks worth of on the market time for their existing home, and a family end up putting $5k extra down that they didn’t have to put down because of an appraiser who did a sloppy job. Of course, I pulled the data that showed an error in the comparable lot size the day we got the appraisal a week before the originally scheduled closing. I forwarded the evidence of the error to the lender, who forwarded it to the appraisal management company, who forwarded it to the appraiser, who did nothing about it. Why should he? He can’t be fired from the bank’s list of appraisers. We can’t talk to him or say hey man, are you retarded? Look at the lot? Turn your head 90 degrees and look at the lot next door, can’t you tell that it’s not twice the size of the lot you are appraising and that therefore your adjustment and the data on the appraisal should be fixed? I plan on filling a complaint with the Texas licensing board for this and every single apathetic appraiser that I run across now.

In what other free market do people get handed business with their license and then get removed from responsibility for the quality of work they do and professionalism with which they do it? Your license is your ticket to the game, not tenure and guarantee of business. Sorry, but real estate is a rough and tumble business. 95% of agents don’t make it 5 years. It should be the same way with appraisers as with all other new businesses. Find a way or find the door.

I’m open to hearing other viewpoints, but right now, this whole deal seems like a cop out.

One last thought. When other groups like NAR put aout a Code of Conduct or Code of Ethics as NAR calls it generally speaks to how the group’s members should act. When the appraisers lobby for and get passed a Home Value Code of Conduct it speaks to what everyone else must do. Strange huh?

A slightly miffed Austin Realtor.

Joe

As the green movement has taken hold of the nation, Austin has endeavored to stand before the trends. Years ago Austin took the stand to become the most green oriented city in the country, and as a whole a greener Austin is surfacing. To help this along, the local government has created avenues to make it easier for families to achieve a green home goal.

Among the options is an unsecured loan intended to update a home’s energy efficiency. the Power Saver^TM Program. The goal of this program is to make it easy for a home owner to update air conditioning, duct work and other area’s of energy concerns. As these improvements are made a home becomes more affordable, and develops better value. The loans hold no sway against the home or the improvements made. The interest rate is kept low, especially in this market, which keeps the payments low.

If you desire more information you can find it:
Home Performance with ENERGY STAR®-Loan

Application for Energy Star Loan

The Pedernals Electric Coop has implemented several measure to help their members save on energy costs and improve home value. The first of these is the PEC Home Energy Center, an online tool to help members conserve electricity, save on monthly bills, and reduce carbon emissions. Using the tool can create a clear understanding what improvements need to be made. They also have a rebate program for HVAC improvements.

“…our HVAC Rebate Program. HVAC systems can account for more than 50 percent of a member’s energy consumption, so we provide rebates to those who install energy-efficient units. In 2007, PEC paid more than $548,000 in rebates to members who upgraded their HVAC systems…”

Don’t forget AustinEnergy’s Rebate program.

Austin companies and city have really taken the time to create the resources home owners need.

Thirty-year mortgage rates fell to 4.78% last Friday, hitting their lowest level since Freddie Mac started tracking rates in 1970.One-year Adjustable Rate Mortgages (ARMs) were almost the same, at 4.77%.

June first is just days away, are you ready for the energy efficiency ordinance? The city of Austin’s Energy Efficiency Ordinance requires energy audits are conducted and disclosed for a vast majority of properties listed with in Austin City Limits. If you are wondering about your home, or the ordinance, you can review the details here: Energy Efficiency Ordinance and homes not effected fall into this exemption list.

Building green homes, and green construction overall is changing how people purchase homes and make renovations. Energy efficiency is one of the primary ways consumers measure a green factor to home or construction. For many it is a vital aspect of planning a home’s affordability. By developing a solid energy efficient home, a new home owner will better be able to maintain payments and keep their home.

As people become more aware of energy and its effect on the environment and their wallet, green building continues to grow. Many homeowners have taken the time to review and evaluate their home based on energy efficiency, and many Austin area companies are offering resources to improve. If you take a moment you will find many resources and suggestions on this and other websites that focus on Austin. It is well worth it to reach for and achieve the ordinance goals for every home.

Austin’s first quarter is shining bright. As April closes, the Austin residential housing market is seeing markedly less inventory. More homes have sold than have been place on the market. This is one of very few areas in the country to be able to state this. This will soon prove the Austin Real Estate market to be the pace setter to recovery. Some contributing factors include job growth, low interest rates, and the 8 thousand dollar tax rebate.

Some of the factors in the Austin home market improvement is the job growth in the area, coupled with low interest rates on 30 year fixed mortgages and the 8 thousand dollar new home buyer stimulus credit. Austin has seen several companies move into the area, bringing with them a plethora of jobs. This makes the employment opportunities rich, and the housing market viable. As the first quarter comes to a close there are additional job opportunities on the horizon, including several solar energy production companies. As no time line has been committed to yet, job seekers will be following the incoming companies closely.

The hard knocks lesson taught by the housing crash has facilitated the smarter home buyer. This enables people who have been planning and saving for their home to have the best money savings available. Interest rates are hovering around 5% for 30 year fixed rate mortgages, and the 2009 Economic stimulus package included an 8 thousand dollar first time home buyer tax incentive. This breeds more space, more income and more incentive to purchase a home. Austin is proving to be the market of choice.