Austin Real Estate Blog

What Did Interest Rates Do This Week?
** based on Freddie Mac weekly average survey **

30-yr Fixed – Lower
This Week:  4.78% (lowest since April 30, 2009)
Last Week:  4.83%
1yr Ago:  5.97%

15-yr Fixed – Slightly Lower
This Week:  4.29% (record low)
Last Week:  4.32%
1yr Ago:  5.74%

Jumbo Fixed (Average 30-yr Fixed)
Last Week:  5.75%Previous Week:  5.75%

Highlight of This Week’s Major Economic Reports

Despite the nation’s economic challenges, there’s a lot to be thankful for this year.  For one, the housing market has started to see stabilization – thanks in combination to historic low interest rates and increasing affordability.  Then, there’s the first-time buyer tax credit, which was set to expire on December 1^st and has since been extended to April 30^th.  The original expiration helped to prop up home sales in October, which saw the fastest sales pace since October 2007, with existing home sales jumping over 10% and new home sales spiking 6.2% from September’s figures.

What to Look for Next Week

The latest unemployment picture will be framed with the release of November’s employment report.  Even though unemployment claims have slowly dropped in recent weeks, it’s expected we’ll see a rise in the 10% unemployment rate through the end of the year.

Short-Term Rate Outlook
Relatively Unchanged

Stay Informed:  What’s in the News

“America’s Fastest Recovering Cities” – Austin #3 from Forbes.com

http://www.forbes.com/2009/11/19/cities-recovery-unemployment-lifestyle-real-estate-top-ten_print.html

“Texas’s Existing Home Sales Climb, Prices Inch Up” from Texas A&M Real Estate Center

A total of 19,347 existing single-family homes were sold in Texas last month, a 15 percent increase from October 2008, according to MLS data compiled by the Real Estate Center at Texas A&M University.

The median price rose 1 percent to $143,300 during the same period, and the state finished the month with a 6.9-month inventory of existing homes.

Here is how select Texas cities fared in October (data current as of Nov. 24, 2009):

“US Job Losses to Bottom out Next Quarter: NABE” from CNBC.com

Economists expect the joblessness that has weighed down the nation’s economic recovery will start to slowly abate in 2010, but they predict consumers will continue to keep a tight rein on spending, according to a new survey.

“Fed Remains Cautious on Strength of Recovery” from The New York Times

The Federal Reserve’s new economic forecast and minutes from a session earlier this month reveal that policymakers continue to fret over whether the economy is strong enough to hold up without government stimulus efforts, such as the temporary fiscal programs for the housing sector. Concern about the recovery comes as Fed officials begin debates on when to start raising interest rates, which have been held at virtually zero since last December, and on ending their program to purchase $1.25 trillion in mortgage-related securities. The real estate industry fears an increase in mortgage rates, but the Fed also wants to focus on reducing its holdings and bringing its balance sheet back to normal.

Marie Funston | Sr. Mortgage Advisor | (512) 750-7270
9442 N Capital of Texas Hwy., Suite 1-600
Austin, TX 78759
Fax:  (512) 343-1224
Marie@austinmortgageadvisor.com

For individuals and families looking for an opportunity to give back to the community this Thanksgiving, there are a number of volunteer opportunities available in the Austin area. By giving some of your time and effort to help those less fortunate, you can build a family tradition of caring and social responsibility. Sharing is truly the spirit of the holiday season; here are some ways you can help.

Operation Turkey
This annual event provides a hot Thanksgiving meal to homeless individuals throughout Austin. Volunteers are needed to help sort, prepare and package food and deliver it to various sites that will be serving up these meals to the homeless on Thanksgiving Day. Sign up at volunteers@operationturkey.com or learn more at www.operationturkey.com.

Meals on Wheels
This well-known program delivers food to the elderly or housebound. This Thanksgiving, Meals on Wheels is in need of a few extra volunteers to package and deliver meals. Interested individuals can sign up or learn more at www.mealsonwheelsandmore.org/volunteer/current-needs.

Arc of the Capital Area
A non-profit organization providing assistance to developmentally challenged and disabled individuals, Arc of the Capital Area offers a variety of services to special-needs individuals and their families. On Thanksgiving, they are in need of several volunteers to pick up meals from H-E-B, package them appropriately, and deliver them to Arc clients. For more information, contact Genessee Klemm, Arc’s volunteer coordinator, at (512) 476-7044 or by email at gklemm@arcofthecapitalarea.org.

Salvation Army
The Salvation Army’s Red Kettle Campaign provides Christmas baskets and toys to needy families throughout the Austin area, as well as supporting a number of other charitable activities by the organization. Bellringers are needed for two-hour shifts throughout the holiday season. Those wishing to volunteer as a bellringer should contact the Salvation Army at (512) 437-4566.

Feast of Giving
St. Louis Parish Social Ministries will host a Thanksgiving Dinner for needy individuals and families at the St. Louis King of France Catholic Church at 7601 Burnet Road. Volunteers are needed to help cut turkeys and prepare the meals as well as greeting and serving the guests as they arrive. Clean-up crews are also needed after the event’s conclusion. Since this is a family event, volunteers as young as five are welcome to help with this annual event; 420 people were served at last year’s dinner, and turnout this year is expected to be even higher. Food donations are also accepted beforehand and, for perishable items, on Thanksgiving Day. Those wishing to donate or volunteer should contact Bea Dela Rosa at (512) 454-0384 ext. 199.

If you’re an agent you should do some research on the proposed RPR or Realtors Property Resource.

You can read about it here.

http://www.inman.com/news/2009/11/12/mls-buy-in-key-nar-database?page=0%2C4
and here
http://www.inman.com/news/2009/11/14/rpr-execs-under-fire-nar

Below is a snippet from the 1000watt blog posted on Inman. If you’d rather a more concise description skip down past the quote.

The NAR has taken over certain technology assets of Cyberhomes from LPS (formerly known as FNRES) in order to bring its RPR (Realtors Property Resource) project, as well as its consumer-facing play, HouseLogic, to market. To do this, they have created Realtors Property Resource LLC — a wholly owned subsidiary of the NAR.

Certain LPS executives, including Cyberhomes GM Marty Frame, will be making the transition over to NAR/RPR (see Inman News article). Frame will serve as the president of the new entity. Dale Ross, who was co-founder of MRIS, the nation’s largest MLS, will be CEO. LPS will also provide call center support and other services as part of the deal.

The RPR database will contain parcel information on nearly 150 million properties through a data license from LPS, which (along with First American) is one of the two major sources of public property data.

This is interesting news, but let’s back up a minute for those of you who have more well-rounded lives than I (my fellow online RE junkies can skip down to my take on what this deal means).

The RPR is the national property database initiative that the NAR has been quietly working on for some time. It has gone by a number of names over the past couple years, including “Gateway,” “The Real Estate Channel,” and the “Library/Archive.” It will aggregate tons of property data, including public records, in one place. This will be a Realtor-only database. The idea is to keep agents and brokers competitive amidst widespread data diffusion and other challenges.

HouseLogic.com is a NAR-owned public destination site that will be unveiled next week at the NAR EXPO. The site is part of the NAR’s long-term strategy to engage consumers on behalf of its members.

RIN is the “Realtors Information Network,” a for-profit arm of the NAR from which the RPR sprung. It was conceived for the purpose of creating an ill-fated online real estate service nearly 15 years ago. It was proprietary, something like a Prodigy or early AOL-type service. It blew up, costing the NAR millions. It was from that failure that the present-day Realtor.com was born, in 1996.

Thanks to Brian Boero and Inman for the above snippet.

If you don’t subscribe to Inman here’s the gist…

Sometimes it feels like this is my relationship with NAR...

REALTORs Property Resource in a Nutshell

Basically, NAR would love to create another cash cow like Realtor.com by taking our MLS data and building a system around it, then selling it to the likes of ANYONE WHO WILL PAY FOR IT including government agencies. Can you say appraisal districts? Hope everyone is ready for their taxes to go up once we expose our complete MLS data (even in aggregate).

A Better Idea

And you folks are Realtors like me…. Why doesn’t our MLS ever agree to give any of us all the data for free so I can sell it to other people? IDX feeds for members are $200 per year now (or thereabouts).

I’ve got an idea. Why don’t all the MLS systems around the country give me the data. Then, you know, I’ll build a website with your images, your listing data, and publicly available records and then I’ll sell the services to you and other entities for a profit? Of course your dues may go up a bit since you’ll have to hire someone at ABOR to handle all this data exchange, help NAR with any issues they have, etc, etc.

Sounds like a good deal, right? Who’s on board?

I’m not a data entry robot working to make NAR and their partners money while paying Realtor.com $50 a listing to “showcase” my data on their website, not to mention a website that is worthless without said data.

Who Wants Higher Property Taxes?

In Texas, we are a non-disclosure state and they want to sell the info to government agencies. Um.. I’m pretty sure that all the appraisal districts will love that. Personally, I think this is the dumbest thing NAR members could do to themselves. If NAR wants said data for their system our MLS should charge them accordingly. I think $100 per listing sounds about right. Then we could automatically get a featured listing in Realtor.com and have $50 profit that could go to reduce or eliminate our MLS fees.

Sounds more fair to me. NAR can go and partner and sell the data, but they need to BUY IT FIRST.

Aside from all this… Why do I, as an agent in central Texas need, or care about accurate valuation or data about property in Montana? I’m not licensed there. I don’t sell there. And NAR Code of Ethics Article 11 says I can’t because I’m not competent in the workings of real estate in Montana.

Why should my dollars go to fund a NAR company that makes profits for LPS Real Estate (an RPR partner) and allows the data that is our lifeblood to go out to whomever?

I’ve only been thinking about this for a few days so I could be wrong. I would love to hear what other folks at our board or at any board across the nation think. If you are for or against the RPR and have an interest in real estate other than being a salesperson please disclose it so we can get a read on where each stakeholder stands.

Joe Cline – REMAX Capital City

Reports suggest that the real estate market is gradually recovering but at a snail’s pace. There are frequent upheavals and this is evident from the RECI or the Real Estate Confidence Index which keeps track of views and opinions of real estate agents as well as brokers and their “forward-looking” sentiment of United States’ real estate market which recorded 5.59 in October as compared to 5.83 in September. As rates are still low, home refinance is an option that majority of the homeowners are turning to. Some are also taking help of loan modification.

Home refinance may be for you

It was observed that properties that ranged in between the low and mid priced ranges kept the real estate as well as the mortgage market active. The mortgage market which is still volatile is yet to recover fully and statistics suggest that about 6.7 million households in the US having mortgages have fallen behind on payments (as per MBA or Mortgage Bankers Association). Every homeowner is striving hard to become current with their payments again so that they don’t lose their home in foreclosure.

One of the best ways to save your home from being foreclosed is to opt for home refinance and that is what majority of the homeowners are doing if it is an appropriate choice for them. What do you mean by an appropriate choice? There are many factors that decide whether or not the time is ripe to opt for home refinance.

When should you refinance your mortgage?

Some of the factors that help you to decide whether you should refinance your mortgage are as follows –

Opt for home refinance when rates are low

Low rates can drive you to opt for home refinance. This is what majority of the homeowners do. This can make your mortgage payments affordable.

Weigh the short term and long term benefits

Find out how refinancing your home will affect your long term as well as short term financial goals.

Do you want lower monthly payments and reduced interest rates?

Home refinancing will allow you to enjoy lower payments and reduced interest rates.

Do you want to switch from adjustable-rate mortgage to fixed-rate mortgage?

Often it is seen that homeowners refinance if they are currently making payments as per adjustable-rate mortgage but want to switch to fixed-rate mortgage that makes their payments predictable. This is advantageous as you can plan out your finances well in advance.

Are you looking forward for some extra cash?

If you have enough equity in your property, you can opt for home refinance to get access to some extra cash that can be used for meeting your other financial obligations.

Build up equity in your property

Home refinance is also a good option if you want to shorten the length of the loan term. Homeowners usually do so in order to pay off mortgage faster so that they can build equity in the property faster.

If you are planning to refinance your mortgage, do so only if it is beneficial for you. It is important that you don’t opt for home refinance only if one of the factors mentioned above match your requirements. This is because whether you refinance your mortgage or take out mortgage for the first time, you are putting your home at stake.

Guest Blogger: Peter Gomes

On November 5, 2009, Congress approved an extension to the First-Time Homebuyer Credit, including changes designed to open up this valuable incentive to still more buyers. The bill’s main architects, Senators Chris Dodd and Johnny Isaksen, crafted the credit specifically to target the troubled housing industry and promote economic growth throughout the real estate sector of the economy; the expansion is expected to allow still more first-time homebuyers to take advantage of this $8,000 incentive. Current homeowners can also qualify for a $6,500 homebuyer’s credit if they have owned and lived in their current home for at least five of the past eight years; the five years must be consecutive, and income restrictions apply. The extension runs from December 1, 2009 to April 30, 2010, allowing current homeowners to take advantage of the credit anytime between those dates.

National Capital where the homebuyer tax credit was extended and expanded

The extension represents a compromise between those looking to decrease the government’s already over-sized deficit and consumer advocates who touted the benefits of the existing credit, which has been credited with prompting anywhere between 200,000 and 400,000 additional sales nationwide. While economic analysts may disagree on the total number of sales, it is widely accepted that the existing credit has been beneficial to the housing industry in general and to first-time buyers, home builders, and mortgage lenders in particular. By providing an additional incentive for buyers, the credit helped maintain home values and prevent further damage to an already weakened housing market; the expanded and extended credit is expected to help even more.

This will represent a real boon to Austin homeowners who may have felt “stuck” in their old home and unable to move up to a more desirable property. By providing a $6,500 credit to existing homeowners, the credit doubles its value; homeowners can count on this incentive (or the $8,000 first-time homebuyer credit) to help move their current home, while they can also rely on the $6,500 to help them make the move to their new home in financial comfort. This measure is win-win for the Austin market and for the country as a whole.

Prospective home buyers should be aware of the April 30th deadline, however. It is unlikely that Congress will extend the credit past this date, although home buyers who have signed contracts as of April 30th will receive the credit provided they close within 60 days. With home prices at affordable levels and the economy on the upswing, there has never been a better time to buy in Austin; these valuable credits provide one more incentive to buy now.