The Austin area has been recognized nationally for staying strong among the mortgage crisis. Median house prices have remained fairly steady in area such as Round Rock. The job market has remained healthy here, creating even more security during a tough economic year where everyone is concerned for their jobs. Companies are still moving to Austin, thus keeping a steady demand for houses. While many builders have slowed down a bit, the supply is still readily available.
Of course, Austin has not been completely impact free. The housing market has slowed down a bit. In September, just over 1,800 homes were sold in and around Austin. According to data maintained by the Texas A&M Real Estate Center, this is down about 10% from the same time last year. The median price for a house in Austin is around $183,000. This is a small increase from last year. It seems this is exactly how Austin has fared so well. Real estate markets are governed by the basic supply vs. demand. Most local builders have decreased their inventory to about six months. This is considered a good amount for a solid market. Housing prices have never exploded in Austin, which is what has happened in other areas of the country affect badly by the mortgage issues. This small, but steady, increase has been leveled with steady employment rates. What this creates is an area where the real estate market can still flourish. The Austin area has made it to the top ten of several studies as one of the best areas for both housing and job growth.
When offering a home loan, many financial institutions will offer points to lower the interest rate of the loan. This can be helpful to reduce the monthly mortgage payments, but is not always a good idea. The decision to pay points should be made after careful consideration of the home buyer’s specific circumstances. Each loan is different, and it is important to realize what is best for you.
How does paying points up front work? Basically, the buyer would agree to pay a certain amount at the time of closing and the lender agrees to lower the interest rate. Perhaps with no points, the loan is offered at 9%. The bank may then offer a 7% loan based on a payment of a specific number of points. It may be a small amount overall, but remember to consider how long you will need to be in your home to make up for that extra money spent up front. For example, the paying points means $3,000 more at closing, it may take several years to recoup financially that amount. Paying points on a loan is a better idea for homeowner’s that plan to stay in a house for many years. That almost guarantees that the difference will be made up in time. If the buyer is planning to live in the home for only a few years, the money up front may actually cause a loss to the buyer. On an original loan, these points are tax deductible in the same year as the closing. Check with your tax professional to help determine if it’s right for you.
Two new homes on Riley Road have received kudos from Austin’s Green Energy Building Program. The first home was rated a five-star example of an eco-friendly home, while the second should meet the same requirements, once construction is completed over the next several weeks. Those involved with the project have worked to include many home features that will allow the home’s occupants to have as little contact with dangerous chemicals as necessary, protecting both their own health, as well as that of the environment.
Included in the features of these homes are efficient fixtures and appliances, such as toilets, washing machines, dishwashers and numerous windows, all of which cut the need for excess water and electricity. Both homes have private pools with special filtration systems that remove impurities from the water, without the need for chlorine or other chemicals.
They also feature induction stoves, rather than gas or electric models, further reducing the carbon footprint of the homeowner. The paint used within the models is as chemical free as is available, making the home safe for those who have problems with allergies or those who are sensitive to chemicals. The floors are made from sealed concrete that does not require the use of chemical cleaners and can be washed with pure water.
When shopping for a new home, buyers that employ the services of a Realtor can assure that their purchase has the “green” features that they want, without overpaying. A Realtor will work with the builder and buyer to develop a suitable agreement about what materials are used and what features are added to the home, preventing misunderstandings and unethical practices. A Realtor can help a buyer to make the right choices when selecting their home that will meet both their budget and their needs, leaving everyone satisfied, once the deal is complete.
One Austin are company believes that there is a great stake to be had with campus local properties.
Student housing on college campuses may become the real estate deal of the year. American Campus Communities, Inc has been developing student dorms and campus apartments since 1996. The company went public in 2004, and the website states it has developed over $1 billion in this specific housing. The company, based in Austin, has built housing at Arizona State University and near Texas A&M, among others. The company is well known for their quality work and building owners can usually expect to increase rent prices once updates are complete.
The most recent transaction of American Campus Communities, Inc is the acquisition of GMH Communities Trust student housing division. This $1.4 billion buyout was completed in June and has hindered some of the buying company’s revenue. American Campus Communities reports quarter increases of 30%. Occupancy has increased and rent has also gone up over the last few quarters. Though the GMH portfolio was a bit weaker than ACC, the company expects that this new deal will serve to continue the steady increases across the board. “While we inherited the GMH portfolio with leasing status approximately 5 percent behind last year’s pace, we believe that given our track record for integration and execution, we can dramatically impact value with the commencement of leasing activities for the 2009-2010 academic year beginning Q4 of this year,” American Campus CEO Bill Bayless says.
With the addition of the GMH portfolio, American Campus Communities now has 88 student housing properties with more than 54,000 beds nationwide. The company will continue to improve on existing properties and increase revenue throughout the next quarter as well.
The decision to refinance your home is a big one. The equity built in a home is a great resource for funds in a tight squeeze, but will it help you, or hurt you? It is important to weigh all of the pros and cons and to make a decision based on what will be best for your situation overall, not just in the short term. Your home is the greatest investment you will make. Consider all options and possible outcomes before deciding to refinance.
Most homeowners refinance their home when a large amount of money is needed, say for college tuition. Remember, though, that by refinancing, you are starting all over on your mortgage. If you have a 25 year fixed mortgage and are already five years into it, then refinance to another, you are actually paying for your house for thirty years. Also consider that refinancing has its own fees just as the original loan did. There are closing costs such as loan origination fees. This means you may be lowering your monthly payments, but it could take years to recoup the fees to refinance. Most experts suggest not bothering unless the new rate is at least 2% less than what you pay now.
Another reason for refinancing is to change an adjustable rate mortgage to a fixed mortgage. This would be a great idea if the rate is reasonable and you are planning to stay in the home for many years. An adjustable rate means that after some time, the monthly mortgage amounts will increase. If the original loan is an ARM, a fixed rate would be more beneficial. The payments will not change. Remember to consider all factors before going forward with a refinance. Choose what is best for your particular situation.
Austin is maintaining a low unemployment rate. Due to the technology boom, the area has seen a steady job market for many years, and will continue to do so. With the addition of many new companies in the area, the job market is expected to remain solid. Many commercial buildings in the area are seeing an increase in occupancy that has helped to create more jobs.
There has been an increase in unemployment, from 3.7 last year to 4.5 in 2008. However, the central Texas job growth rate indicates there are over 18,000 more jobs this year than last. Dell closed two plants in the Austin area, taking about 2800 manufacturing jobs off the market. That was the biggest hit, though reports indicate that almost every other sector showed an increase in employment. With more new tenants choosing Austin as base for business, the unemployment rate should remain lower than in other areas. When compared to statewide unemployment rates of 5%, the Austin job market is still as healthy as ever, even with the recent changes.
In North Austin, the Frontera Crossing commercial building has expanded one tenant, and added a new one. Combined this will create about 300 new jobs. Dashiell LLC, an electrical engineering and design firm has leased space in the office. Field Asset Services, a mortgage field services company will be expanding from 400 to 650 employees in the same building. This brings the occupancy for the Class A commercial building to 70% and promises more job growth for Austin.
Southwest Austin has begun a mixed use property boom. A recent addition to this area is the Class A office complex, Capstar at Compass Plaza. The eight story, 115,000 square foot property began construction in July and is expected to be completed within the next year. The property has already been preleased to several businesses, including Compass bank. Three Capstar companies, all owned by R. Steven Hicks have also preleased space in the building. These companies are Capstar Investment Partners LP, Harden Healthcare Texas LP, and DMX Inc.
This part of southwest Austin has seen an increase in mixed use properties, which include commercial, retail, and residential space. This building is located on the southeast side of MoPac Expressway, and is considered a gateway to downtown Austin. Also in the works for this area is 5th Street Commons, located between West Lynn and Campbell streets. This area, through development of Gables Residential and the Austin office of Direct Development will include 138 residential apartments and 38,000 square feet of retail space. Gables is also working with Capital City Partners for a 165 apartment unit and additional retail space on the corner of Fifth and Pressler Streets. A seven story garage is also planned for the area on Fifth and Lamar streets, created by Schlosser Development Corp. This will also provide about 10,000 square feet of retail space.
The creation of these mixed use properties provide Austin with increased revenue and give people the benefit of being close to everything, including downtown. There are currently several in development.
There are so many options with regard to mortgage loans, that the opportunity to review some basic terms is the best approach before obtaining a loan. Often heard during the mortgage and home buyer experience are several references to federal mortgage corporations. Rarely are they explained in a simple clear manner. We will begin by explaining what Fannie Mae, Freddie Mac and Ginnie Mae actually are and how they apply in the industry.
Fannie Mae is Federal National Mortgage Association or FNMA - The Company was chartered by the congress, however it is share-holder owned. Currently they are the principal supplier of residential mortgage funds.
Ginnie Mae or the Government National Mortgage Association or GNMA - The Company is a part of the United States Department of Housing and Urban Development (HUD). This Government agency was created by Congress to provide mortgage funding for lenders who are purchasing with a VA or other Government owned / backed Loans.
Freddie Mac is the Federal Home Loan Mortgage Corporation or FHLMC - This Company is a shareholder run company who creates a secondary mortgage market by purchasing all forms of loans from the primary market for mortgage lenders.
Generally speaking the two share holder based companies do not have much if any federal involvement. Recently due to the Real Estate Mortgage Crisis, and the subsequent repercussions, the federal government has altered their position. They now hold influential positions with in both companies to attempt to circumvent further problems. Time will tell if this was the correct choice for the country and the real estate market place.
the Austin Real Estate Market is still going strong!
Austin has withstood the national mortgage crisis very well. Though the area has seen an increase in foreclosures and a decrease in new home sales, the overall pictures still shows that Austin has been steady throughout. The numbers here are nowhere near other markets, placing Austin high on the list of desired cities. While a recent study concluded that the local housing market is lower than it was last year, the median home prices remain steady.
In the third quarter, local homebuilders began construction on over 2,000 homes, which is a 37% decline from the same time period in 2007. Home closings fell 33% from last year as well. During the first nine months of 2008, there was new construction of over 7,000 homes, showing a decline of 30% from the first nine months of last year. Again, closings have also declined for that same period. While these studies do show that the Austin market has declined, a recent PMI Mortgage Insurance Co study shows that Austin is one market least likely to see a decrease in home prices. This is due to the local inventory. Most builders are keeping their inventory of new homes at about a six and a half month rate.
Six month inventory is considered a balanced rate. This means that the supply and demand for homes in Austin is still close enough to keep the market from dropping dramatically. The median home price for Austin is still a reasonable amount, and with employment rates still very high, the overall market outlook remains good. This creates the best possible environment for home buyers and sellers in the Austin/Round Rock area.
Every industry has its own jargon. The real estate market is no exception, which often leaves home buyers and sellers in a state of confusion. This can be avoided and in the effort to assist in that goal, there will be a regular sequence of real estate definitions available. With such in mind a definition and understanding will aide in limiting or eliminating the confusion. This will allow any home buyer or seller to know what questions are best to ask the real estate agent about.
With the Term Foreclosure in the news almost daily, it is a good place to start. Foreclosure is defined: The legal approach taken by a lender which deprives a borrower of the property purchased through a loan arrangement. This is not a haphazard legal process. This legal approach is never started unless the borrower is grievously behind on their payments, and the property purchased maintains value. Typically foreclosure ends with a forced sale of the mortgaged property, either by public auction or by private arrangement through a real estate agent.
An option out is called a deed in lieu of foreclosure. The borrower signs the deed to the mortgage lender instead of following through a foreclosure procedure. This allows the borrower to avoid the paperwork being filed for the foreclosure. This saves the borrower the taxing issue of creating a public record of the foreclosure process. The debt itself will likely appear on credit reports, however because it is not going into court, it saves money, time, and public records of the foreclosure of the given property.
