Austin Real Estate Blog

After a year of sluggish sales, Austin saw a large jump in November '09.

A last-minute scramble to take advantage of tax credits and low interest rates is credited with a 58% increase in Austin home sales in November 2009 over the same period last year. The increase in sales is the largest in over a decade, and offers hope for recovery in the beleaguered residential real estate market. While overall home prices in Austin continue to fall, the decrease has begun to level off and seems to be reaching a state of equilibrium, allowing anxious sellers a well-deserved sigh of relief.

Analysts point to the recently extended First-Time Homebuyer Credit and interest rates that have dipped below five percent as the primary causes for this significant increase in sales. Additionally, while median home prices in Austin have not fallen as sharply as some experts had predicted, appreciable reductions in the asking prices of many homes have led to a surge in bargain-hunting by home buyers who might otherwise be priced out of the market. The median price of a single-family residence in Austin has decreased only two percent over the past year, demonstrating the resiliency and stability of the housing market in the metropolitan area.

Most real estate experts are cautiously optimistic about Austin’s residential real estate market going into 2010. Sales are expected to continue to grow more slowly, with no repeat of November’s record-setting figures. The expansion of the federal tax credit for first-time home buyers and continued low interest rates will likely continue to attract buyers to the market, especially in entry-level communities. However, as the economy begins to rebound, interest rates are expected to return to over five percent, and home sales will slow as a result.

As consumer confidence improves, economic conditions in Austin and throughout Texas are expected to continue to rebound, providing employment opportunities and spurring additional sales of new and existing homes. Home prices are expected to increase as well in correlation with the anticipated growth in demand. With ultra-low interest rates, federal incentives, and the current undervaluing of homes on the market, most real estate advisors believe that now is the time to invest in residential real estate, before interest rates and values return to higher levels later in 2010.

Selling your home during the holiday season can be challenging; winter is usually a slow time in the real estate market. The good news is that buyers who brave the cold are usually motivated to buy and looking seriously for their new home. This can work to your advantage in selling your home quickly and for the right price. By setting the stage properly, you can present your home to its best advantage during this joyous time of year; here are some hints to get you started.

Celebrate the season, not the ceremony
Make sure your holiday decorations are not overly faith-specific; religious themes can make some buyers uncomfortable. Opt for general holiday ornaments like a tree or lights, rather than a full-scale Nativity scene. Avoid excessive clutter or overly elaborate decorations; a clean, simple holiday display can let your home shine without overwhelming potential buyers.

Everyone loves a bargain during the holidays
While severely underpricing your home is probably not the best idea, pricing it just below the listings for comparable homes in your area will attract more attention and ensure your home is one of the first stops for buyers. It may sound simple, but if you price your home to sell, it’s much more likely to sell. In today’s market, opting for a realistic asking price can prove more effective than starting high and expecting to negotiate with buyers later. A lower initial price will attract more views and can help your home sell fast.

Say it with pictures (and video)
Clear, attractive pictures of your home will help attract buyers who otherwise might not be willing to journey out in the cold. An online video tour is even better, letting potential home buyers take a virtual walk through your home and attracting additional attention for your property. If at all possible, post pictures of your home’s exterior in different seasons; this will give buyers a better feel for your home’s unique appeal.

Offer a warm welcome
When it’s cold outside, a crackling fire in the fireplace can add a warm glow to your home and showcase an important selling point. For homes without fireplaces, keeping the temperature at a comfortable level and offering fresh-baked goodies like cookies or brownies can create a holiday atmosphere and add to your home’s appeal.

Fix it up and save
If there are any nagging home projects you have been putting off, the holidays are an excellent time to take care of them. Little improvements can make a big difference in your home’s appeal; prices are usually lower off-season, so investing a little now could reap large rewards at the time of sale.

You might want to think twice about the lamps you put out as you can see from the above video.

Increase in construction billing is a positive sign, but spending will lag a while longer.

The big factor is time-lag between billings and construction spending, which is between 9 and 12 months. A score below 50 indicates a decline in demand, and the current U.S. score is 43.1 for September, 2009. But it reflects a slight increase from the 41.7 from August.

However, new construction inquiries are up, showing a nice 59.1 percent increase. This could be showing that the government’s stimulus program is working. Or, it could be showing the stiff competition in the business is resulting in multiple submissions. The outlook depends upon the reality of this number’s creation. The optimistic eye will be hopeful, pointing at the stimulus program. It’s believed that some big stimulus projects will be beginning soon, helping to counter the big decline in private commercial construction.

It helps to look at one other factor: The rating for inquiries is the highest it has been in 2 years. That is encouraging. However, the only way to be certain is to watch October’s numbers, which should help us determine whether or not this is just a temporary upswing, or just a hillock which we have glided over. Until November, we can’t be certain of the figures final application. We must proceed with caution; not with unbridled enthusiasm. Yet, being too cautious could spell more difficulties. It’s hard to know where to set your accelerator when your speedometer isn’t working.

The number 107 doesn’t seem like a big number when you are talking home sales. But when existing home sales increase; it can be a good sign. In Austin, that 107 totals 6%. That’s a 6% increase in sales from last September, and it does make the economy seem a little more rosy than it was.

The median price increased, too, on a single family home in the Austin area. It is small, but noticeable. A 2% increase can only mean good for the sellers, and since the prices are on the way up, it means that someone has a little more to spend. Total quarterly sales from last year are still down, but hard times for the housing sales may finally be over.

We must remember, however: we are approaching the end date of the $8000 tax credit for first-time home buyers. In order to qualify for that credit, a home buyer must close on the property by November 30, 2009. It can be a slow process, anywhere from 14 days to 2 months. We could see a spurt in the growth of sales until November 30th, and then a drop. Currently congress is reviewing several bills that would extend the tax credit, but to date, none have passed. Keeping an eye on congress will help gauge the next phase in housing development.  There are still a lot of possibilities. If the recession is finally coming to an end, it will be good news for everyone.

Hold on to your hats, Austin. The wild ride may not be over.

With every job you get, you have gone through an interview process; this should be no different for the real estate professional that you work with. This should apply to all contractors you select regardless of the work intended or designed for. Below is a short list of questions you should ask every real estate agent you meet or consider.

• How long have you been an agent?
• Can you and will you provide references?
• What is your strategy for marketing my home?
• How are you different from other local real estate agents?
• Do you object to my review of all documents prior to signing?
• Are you able to assist me in locating other professionals associated with the process?
• What percentage do you charge?
• What are your guarantees?
• Is there anything else you feel you need to inform me of?

Do not hesitate to take notes while you are interviewing the agent or agents you have in mind. This will help you keep track of who provided what information and details. Also, make a note of who made you feel most comfortable while talking to them. It is crucial that you know you will be able to contact your agent about any question you might have, anytime that is comfortable for you, not just during office hours. You should also know that your real estate agent will be actively working on your behalf. This interview process will enlighten both you and your options as to expectations from and to you about your agent.

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.

Austin has been a front runner for green living almost since the topic became a mainstream ideal. The city has created many incentives for homeowners to select a more energy efficient way of life.

As a way of continuing this venture, Austin has recently signed into law an ordinance that requires homeowners to have their homes inspected for energy usage before they are able to put it on the market. This new law will go into effect this year. The ordinance is just another way that Austin is truly trying to go green.

Homeowners who are planning to place their homes on the market may need to do a few upgrades to be sure they are prepared for the energy audit. In Austin, energy is mostly used to heat and cool the home; therefore it is important to learn about any leaks in the duct work, cracks in doors and windows, and updating insulation within attics. While the energy audit is required before placing a home for sale, the upgrades are not currently required prior to purchase. Any potential buyer must be made aware of the energy audit results.

These upgrades may not be the most noticeable when looking at buying a home, but can save money in the long run. The bottom line is, the less energy you use to heat and cool your home, the more you will save on utility bills throughout your life there. Austin has recognized the importance of these small, but important, parts of a home. The new law enables buyers and sellers to be on the same page at the time of sale.

Starting this June, those who wish to sell a home in Austin will be required to have their home inspected for energy efficiency. This new ordinance does not require the seller to upgrade any leaks or other problems that may be found, but it does state that the buyer be made aware of the outcome of the audit via disclosure. Of course, given the current market and economy, anything that may decrease the value of a home should be repaired prior to sale. Buyers don’t want to think of what needs to be fixed when looking at a home, so it will be better to make any necessary upgrades before putting the house on the market.

The energy audit will be looking into four areas of energy efficiency. There will be a duct pressure check on the air conditioning unit to check for leaks. Weather stripping around doors will be inspected. Shades and screens, especially on the east, west, and south sides of a home will be looked at, as will the type of insulation found in an attic. Energy Raters can be found online at Austin Energy’s Website, and will generally run about $300 for every 2,000 square feet. If you decide to go ahead with the upgrades, the home will need to be inspected again when complete.

There is another option considered in compliance with the new ordinance. Homeowners can participate in the Home Performance with Energy Star Certificate program. Homes that have already done so within the last ten years are exempt from the ordinance. In this case, a home performance contractor will inspect the home, sometimes for free with a bid for work. The same areas will be reviewed as with the energy audit, and then the information will be sent to Austin Energy for review. To receive a certificate of completion, three of the requirements must be met or the homeowner must have received a rebate of $500 or more from Austin Energy.
In either case, Austin Energy must approve the upgrades for energy efficiency. The information must be contained within the Seller’s Disclosure and is good for ten years.

The real estate market nationwide has suffered for more than a year. Every day, we hear about more foreclosures on residential and commercial properties. There are some markets that have not been affected as harshly as others. Austin is just such a place. Though the market has certainly slowed during the last couple of years, it has not been as detrimental here as in comparable cities nationwide. People are moving here because Austin still offers jobs with security and the median home price remain affordable.

November and December of last year were the slowest sales months in Austin. The median home price has been steadily declining throughout the real estate crisis. Austin homes have not lost all value because the area has never boomed like cities in Florida or California, where the market crisis has hit the worst. While homes have lost some value, most mortgages here are still representative of a home’s value. The most difficult hump to get over in Austin has been the number of properties for sale. The supply has outweighed the demand for several months. That number began to decline in November of last year. Local realtors believe this is a good sign for the local market. This year is expected to be the beginning of the end for the real estate market woes.

The average price in Austin for the month of January was around $320,000. This is up from $314,000 the same time last year. The average actual sold price was about $265,000 as recently as February 14th. New listings are down by 14%, while pending sales increased by about 8%. Homes sold decreased by a staggering 43.24% when compared to January 2008. As the supply decreases, the demand will continue to rise and the market should begin to stabilize.