According to the Urban Land Institute, Austin is one of the real estate hot spots for 2010 development. Along with Washington, D.C., Boston, San Francisco and New York City, Austin is expected to see a surge in commercial development in coming years; the study indicates that 2010 will be one of the best times [...]
According to the Urban Land Institute, Austin is one of the real estate hot spots for 2010 development. Along with Washington, D.C., Boston, San Francisco and New York City, Austin is expected to see a surge in commercial development in coming years; the study indicates that 2010 will be one of the best times to buy, coming as it does at the expected bottom of the cyclical market. For those in a position to acquire real estate at this advantageous time, the return on investment is likely to be exceptionally high; 2010 may well be the year to watch in terms of commercial real estate investments.
Austin’s low rate of state tax and continuing commitment to corporate investment is credited with a large part of its economic stability and potential for growth. Its position as the capital of Texas provides robust support for its local economy, while its highly desirable residential environment has helped to keep housing prices stable during recent housing industry downturns. Austin’s high-tech industrial base also contributes to the overall real estate market stability, ensuring high demand for commercial and residential real estate continues well into the future.
The study also outlines some strategies for commercial real estate investors throughout the U.S. market. One of the most crucial is, of course, to invest in high-growth areas like Austin; this ensures the ability to attract and retain high-quality tenants for commercial properties. Additionally, investors should be highly selective in their choice of properties. Class A properties offer higher quality in materials and manufacture, and therefore represent a better long-term investment than other buildings. Location remains a key element to return on investment; cities like Austin offer investors a much better chance for a high rate of return on their initial investments. The study also recommends sticking to a cash basis for all real estate transactions; this will allow investors to take advantage of exceptional opportunities as they arise. Finally, the Urban Land Institute study recommends patience; by remaining steadfast and purchasing wisely, investors will be set to reap the profits when the commercial real estate rebounds over the coming years.
Austin’s real estate market offers unique advantages to investors and homebuyers. The commercial real estate picture in Austin is already showing signs of recovery, making this an optimal time for investors to jump into the market and take advantage of current low prices. Austin’s combination of desirable residential areas and robust economic growth makes it the perfect arena for commercial real estate investment in today’s market.
Since mortgage interest rates have constantly kept themselves at approximately 5% for fixed rate mortgages, the idea of home refinance is attracting numerous homeowners. Refinancing to a lower rate would reduce your monthly mortgage payments. The present day economy and troubled real estate market pose a number of risks to the homeowners.
When the real estate [...]
Since mortgage interest rates have constantly kept themselves at approximately 5% for fixed rate mortgages, the idea of home refinance is attracting numerous homeowners. Refinancing to a lower rate would reduce your monthly mortgage payments. The present day economy and troubled real estate market pose a number of risks to the homeowners.
Home refinance cash
When the real estate market is down, you should always try to refinance your mortgage. If you’re facing problems with your adjustable rate, higher mortgage payments, reduced equity or lower income, then home refinance is a useful means to get rid of your anxieties. When property values are going down and lenders are making stricter guidelines, it becomes more difficult to take out a new loan. Hence, if you get the chance to refinance even in this market condition, you must not lose it by any means.
What is home refinance?
When you go for refinancing, your existing mortgage is substituted by another mortgage with more affordable loan terms. Since you’re taking out a new loan, you normally have to pay the following fees:
- Escrow fees
- Title insurance
- Points (optional)
- Lender fees
- Credit reporting fees
- Appraisal fees
- Any amount necessary to get your tax and insurance obligations current
What the importance of home refinance is in today’s real estate market?
Homeowners resort to refinancing for various reasons, but following are some of the most familiar ones why refinancing is important in the present day real estate market:
Refinancing helps you save money by reducing your interest rate
If the interest rate of your existing mortgage is more than the prevailing market rate, you would save by refinancing.
Refinancing can reduce monthly payments
Even though the interest rates do not go down, home refinance can reduce your monthly payments by beginning a new loan term. For instance, if you obtained a 30-year FRM for $300,000 10 years back, you might just owe around $250,000 at present. However, if you refinance it to another 30-year FRM for $250,000, then you have a complete 30 years to pay it back. It signifies that your monthly payment would be lower. Had you retained your previous loan, you would have paid it off in 20 years. The drawback of reducing your monthly payments is that you would end up paying more on interest.
Refinancing lets you switch loan types
If you have an ARM Adjustable Rate Mortgage, your monthly payment might go up when the rate is adjusted. You might need to shift to a fixed rate mortgage that has a steady payment.
Home refinance helps you receive cash
When you go for a cash-out refinance, you obtain a new mortgage for an amount which is higher than you owe on your existing mortgage. Subsequently, you walk off by taking the difference. A cash-out refinance is quite hard to obtain in recent times though several homeowners opted for cash-out refinancing to fund home improvements in the last one or two years. For getting a cash-out refinance, you should have substantial equity in your home since it is likely the bank wouldn’t lend you an amount which is higher than your home value.
Though most borrowers have a tendency towards keeping their existing mortgages, refinancing in a tough real estate market can better your financial condition in various ways.
Thanks to guest blogger: Peter Gomes!
Maybe you’ve been hearing about the new tax credit designed to give money back to buyers who help create jobs and turn the economy around by buying a new (to them) home. Well, you’d have to be living under a rock not to have heard about it, but we digress. The first program was [...]
Maybe you’ve been hearing about the new tax credit designed to give money back to buyers who help create jobs and turn the economy around by buying a new (to them) home. Well, you’d have to be living under a rock not to have heard about it, but we digress. The first program was for first time buyers only. Now the program has been expanded and also includes move-up buyers who have owned their primary residence for 5 consecutive years. Unfortunately, there’s a ton more detail, but fortunately you can watch this video and get the gist!
Summary of Tax Credit Details:
The homebuyer tax credit expansion measure includes these provisions:
• Extends the $8,000 first time Homebuyers Tax Credit and creates a new $6,500 tax credit for homeowners buying a new home by July 1, 2010.
• Homebuyers with contracts as of April 30 qualify for the credit so long as they close the transaction within 60 days.
• The full credit is available to homebuyers with incomes of up to $125,000 for a single return or $225,000 for a joint return.
• Not available for homes costing over $800,000.
• Homebuyers who already own a home are only eligible if the home they are leaving has been used as a principal residence for five consecutive years in the last eight.
• Provides authority to the IRS to provide greater oversight while processing the return and requires that the taxpayer claiming the credit be 18 or older.
• Members of the military, military intelligence and foreign service who are on qualified extended official duty are not subject to the recapture fee and individuals who have been deployed overseas for 90 days or more in 2008 or 2009 can claim the credit through April 30, 2011.
If you want more information you can contact us or check out the Federal Housing Tax Credit website.
What Did Interest Rates Do This Week?
** based on Freddie Mac weekly average survey **
30-yr Fixed – Slightly Lower
This Week: 4.91%
Last Week: 4.98%
1yr Ago: 6.14%
15-yr Fixed – Slightly Lower
This Week: 4.36%
Last Week: 4.40%
1yr Ago: 5.81%
Jumbo Fixed (Average 30-yr Fixed)
Last Week: 5.75%
Previous Week: 5.895%
Highlight of This Week’s Major [...]
What Did Interest Rates Do This Week?
** based on Freddie Mac weekly average survey **
30-yr Fixed – Slightly Lower
This Week: 4.91%
Last Week: 4.98%
1yr Ago: 6.14%
15-yr Fixed – Slightly Lower
This Week: 4.36%
Last Week: 4.40%
1yr Ago: 5.81%
Jumbo Fixed (Average 30-yr Fixed)
Last Week: 5.75%
Previous Week: 5.895%
Highlight of This Week’s Major Economic Reports
Trading activity in the bonds market, as well as the release of new economic data, was light during this holiday-shortened week. One bright note, however, was that the government reported the latest unemployment benefit claims dropped by 12,000 last week, which conveys (in the past four weeks) the emergence of a slight improvement in the job market. Of course, we’re still far from a full recovery in the labor sector, but we’ll take any good news we can get.
Additionally, the Fed just hit the $1 trillion milestone for its purchase of mortgage-backed securities. This program has kept mortgage rates remarkably low throughout the year, and the Fed is committed to spending the full $1.25 trillion through the end of March 2010. Once this program ends, all expectations are that mortgage rates will start to climb to more closely align with yields on US Treasuries.
What to Look for Next Week
Inflation and housing take center stage next week. The latest Retail Sales figures are also due out, and it’s expected to post a slight gain from the previous month.
Short-Term Rate Outlook
Relatively Unchanged
Stay Informed: What’s in the News
“Texas Cities Dominate List of Top Performers” from Milken Institute via Texas A&M RECON
Texas metros, led by number one Austin–Round Rock, claimed four of the top five spots and nine of the top 16 in the 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index.
Also making the list were Killeen–Temple–Fort Hood (2), McAllen-Edinburg-Mission (4), Houston–Sugar Land–Baytown (5), San Antonio (11), Fort Worth–Arlington (12), Dallas-Plano-Irving (13), El Paso (14) and Corpus Christi (16).
Austin–Round Rock was the first metro to ever be ranked number one twice on the index, the last time being in 2000.
But it doesn’t stop there. Nine other Texas metros made the top 25 out of the 124 smallest metros that were studied.
Those were Midland (1), Longview (2), Tyler (4), Odessa (5), College Station–Bryan (14), Texarkana (17), Waco (18), Laredo (20) and Abilene (21).
Leaders in this year’s index, which ranks U.S. metros based on their ability to create and sustain jobs, are all metros that succeeded in avoiding the worst of economic declines driven by falling housing markets and job losses in manufacturing and global trade.
Regional economic factors also strongly influenced the rankings this year, with the oil and gas sector, technology and alternative energy providing stability among metros in Texas, North Carolina, Washington and Louisiana.
Another factor helping Texas metros move up in the rankings is the state’s favorable business climate and its ability to attract jobs and corporations away from higher-cost states.
“Economists See Fed Raising Rates Near Midterm Election” from The Wall Street Journal
Economists in the latest Wall Street Journal survey, on average, expect the Federal Reserve to raise interest rates around September 2010, a politically sensitive time considering midterm elections will be right around the corner and unemployment is forecast to still be over 9.5%. The 52 surveyed economists—not all of whom answer every question—on average expect the unemployment rate to rise to 10.3% by the end of this year from its current 10.2%, and they expect it to stay above 9.5% through 2010. The respondents expect job growth to return over the next 12 months, but the forecast calls for an average of about 50,000 jobs to be added per month over that period. The economy needs to add about 100,000 jobs a month just to keep up with new entrants to the labor force.
“Foreclosures: ‘Tide may be turning’” from CNNMoney.com
Could the foreclosure plague be ending? Foreclosure filings were down 3% in October, the third consecutive month-over-month dip, according to RealtyTrac, the online seller of foreclosed homes. To be sure, foreclosure rates are still elevated from a year ago: They’re up 18% compared with October 2008. But the month-over-month decrease followed a 4% drop in filings during September and a 1% fall in August.
“5% of Americans Plan to Buy a Home Next Year” from CNBC.com
Just one in twenty Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West, according to a survey released Wednesday. Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes.
“The Recession’s Over, but Not the Layoffs” from The New York Times
The Great Recession is over — not officially, but by popular acclaim — and in this accepted fact we are invited to take comfort, even as the unemployment rate last week rose into double digits for the first time in a quarter-century. Experts have long assured us that economic life is governed by the business cycle, a repeating loop of downturn followed by expansion, as reliable as the seasons. In this context, worsening joblessness is like a punishing blizzard in April: Misery notwithstanding, the calendar promises spring.
“Texas Employment Feeling Pinch” from Texas A&M Real Estate Center
The Texas economy lost 292,700 nonfarm jobs from September 2008 to September 2009, an annual job loss of 2.8 percent.
Over the same period, the U.S. economy lost more than 5.7 million jobs, or 4.2 percent of its total nonfarm jobs.
The state’s seasonally adjusted unemployment rate rose from 5.1 percent in September 2008 to 8.2 percent in September 2009, while the U.S. rate rose from 6.2 percent to 9.8 percent during the same period.
Only three Texas industries (education and health services, other services, financial activities) and the government sector had more jobs in September 2009 than in September 2008. Eight other industries experienced net job losses over the same period.
Only one Texas metro area, McAllen-Edinburg-Mission, posted a positive employment growth rate from September 2008 to September 2009. Twenty-five metro areas had net job losses.
The state’s actual unemployment rate in September 2009 was 8.3 percent. Lubbock had the lowest unemployment rate followed by Amarillo, Midland, Abilene and College Station–Bryan.
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
A recent survey has good news for those living in college towns like Austin. The annual Coldwell Banker College Home Price Comparison Index listed Austin as the 59th most affordable college market in the United States, making it even more desirable for home buyers and investors. Real estate professionals have long been aware [...]
Choose Austin for college and your piggy banks will be happy
A recent survey has good news for those living in college towns like Austin. The annual Coldwell Banker College Home Price Comparison Index listed Austin as the 59th most affordable college market in the United States, making it even more desirable for home buyers and investors. Real estate professionals have long been aware of the advantages of buying in a college town; typically, these markets offer long-term stability, high demand, and a wider range of services and local businesses than other comparable metropolitan communities.
College towns in the Midwest offered the best bargains with average home prices starting at $121,885, while the West Coast was priced out of reach for most with the highest average prices topping out at $1,489,726. Austin is competitive with a 2009 average price of $226,642, making it a very affordable real estate market for first-time buyers and investors alike. In comparison to other U.S. cities, Austin has escaped the brunt of the recent housing industry problems, making it even more desirable to real estate buyers.
Those of us who already live in Austin are well aware of the benefits this college town provides to its residents. Beautiful views, an extensive park system, world-class dining and down-home barbecue are only a few of the unique advantages of living in Austin. Because Austin is the capital city of Texas as well as the home of the University of Texas at Austin, the presence of both the government and higher education sector provides additional services and benefits to residents that might not exist without their support. Austin adds to these advantages a vibrant, growing local economy that has its roots in the high tech and medical sectors, ensuring its residents have access to cutting-edge health care services and the latest advances in medicine and technology.
Austin’s college town status and stable economic conditions have made it a desirable location for real estate investment; homes in Austin have retained their value remarkably well during the recent housing industry slump. Demand remains high, spurred in part by the constant need of college students for housing and the overall desirability of Austin communities. Austin’s position as one of the greenest cities in America also attracts buyers and investors, ensuring the housing market has a stable base and that home values remain high. As the national economic situation continues to improve, it seems likely that Austin will continue to reap the benefits of its status not only as a college town, but as one of the best places to live in all of the United States.
