Austin Texas Real Estate Blog

Some analysts are worried about the increase in short sales.

A recent deluge of short sales is creating difficulties for home sellers and buyers alike according to most real estate analysts. Lenders are overwhelmed by the number of short sales requests and are taking far longer to process offers from willing buyers. This delay often causes buyers to withdraw their offers and contracts to fall through, necessitating the relisting of the home and further delays for anxious sellers. Banks and mortgage providers simply don’t have the staff in place to handle the increased volume of short sales, and further delays result when lenders must request necessary paperwork from investors and secondary lienholders.

Short sales occur when lenders agree to discount the remainder of a mortgage balance rather than foreclose on the property; the lending institution then puts the home on the market, and the bank collects the proceeds of the sale as payment in full for the outstanding debt. Because of recent market conditions, many homeowners have found themselves in serious financial difficulty; their home’s value has dipped, sometimes to less than the remaining mortgage debt. Typically the bank is willing to take the current appraised value of the home as full payment, even when this does not cover the entire amount of the mortgage. In some cases, however, lenders have been known to cancel contracts and raise the price of the property, sometimes to an unrealistic level. This is due in part to changes in the appraisal process, which have also led to serious underappraisals of properties in cities like Austin. The use of foreclosures as comparables is only one of the many deficiencies in the current system; in short sales especially, it can be difficult for lenders to obtain an accurate appraisal of the property’s true worth.

While Austin has seen fewer short sales than many other metropolitan areas, the continuing rise in short sales volume has some real estate experts worried. Short sales are expected to increase still more in response to the November 30, 2009 announcement of a federal program that provides financial incentives to sellers and lenders who avoid foreclosure through short sales. These transactions place an additional burden on all parties. Sellers must provide proof of economic hardship before their request for a short sale will be approved. Lenders must assume responsibility for paperwork relating to the sale of the home; buyers and real estate agents must be prepared for lengthy delays in processing and accepting offers and closing on the short sale property. The entire process takes much longer than traditional home sales, and can be further delayed if banks and buyers cannot agree on a mutually acceptable price.  While Austin’s real estate market remains comparatively stable, analysts are watching the situation closely to ensure that short sales do not drive down home prices in our area.

Inventory down, foreclosures down

Austin’s inventory of unsold homes decreased by about 20% over the last year, according to real estate analysts ZipRealty Inc. This is in contrast to several other housing markets, which are still seeing increases due to foreclosure and voluntary surrender of homes by financially insolvent owners. Austin joins cities like San Diego, Los Angeles, Las Vegas and Phoenix in reduction of outstanding home inventories over the last year. This shift may indicate the end of the buyer’s market that has been prevalent throughout the United States; while some urban areas will be slower to recover from the housing market downturn, the reduced inventory of homes will help drive up home values and increase the likelihood that homes already on the market will sell more quickly.

This news comes on the heels of RealtyTrac’s announcement that foreclosure filings are continuing to decrease. November 2009 marked the fourth straight month of lessened foreclosure activity throughout the United States; recent federal initiatives including the Home Affordable Modification Program and other Fannie Mae programs are credited with a large portion of the decrease in foreclosures and defaults. Much improvement is still needed, since it’s estimated that one out of every 417 homes is currently in some phase of default or foreclosure, presenting an overwhelming burden on the housing market during a crucial stage of its recovery. Nevada, Florida, and California have the dubious honor of holding down the top three spots in foreclosure proceedings compared with number of homes.

The reduction in unsold homes in Austin is expected to drive home prices higher and result in increased competition for available homes. The buyer’s market in Austin may be coming to an end, making this the best possible time to investigating home buying options before the prices return to their pre-slump values. Bargains are still available, but it’s necessary to act quickly before the home of your dreams is off the market for good.

If you’re a fan of being close to shopping, main arteries, and still love living in the away from the hustle and bustle of the city, 3210 Mocha Trail could be the perfect house for you. Willow Run at Wells Branch is a starter home community with a wide variety of homes from 150k to 225k where homes range from small basically outfitted single stories to larger two story homes complete with extravagant landscaping and hardwood floors. 3210 Mocha Trail is one of those drop-dead gorgeous homes. With hardwood floors throughout the first floor, lush, mature landscaping, a large deck, hot tub, and a dog run. Just seconds from I35, mopac, 1325 toll road, 183, and 45 toll road, this house will let you enjoy a quick ride home while everyone else battles traffic. Take a look and I think you’ll agree this home could just be the best thing out there under $200k.

You can view a panoramic virtual tour with more images at Realtour

For a private showing or more information contact REMAX Capital City at 512-795-4532.

House is the mirror of this floor plan.

Information provided courtesy of Alamo Title.

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.

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.

Year after year you sign a new lease and move into or extend your time in an apartment. In time this can become tiring, particularly if you don’t have to or want to move anywhere else. Finding a permanent home is often more appealing. For some living situations, a house is too big, while for others it fits perfectly. Assuming you fit into the first need, something small but permanent you have options, the two most popular are co-ops or condo’s.

A condominium you own the four walls around you, from front door to back bedroom. Often in a similar layout as would be an apartment complex. You hold tax and title responsibilities, and like a house, when you buy it you are responsible for everything inside. All repairs, appliances and possible concerns are your concern, an obscure corporate entity. The benefit is that you are building equity and own a solid location for you and your budget.

A Co-Op option is a multi-family dwelling. Instead of owning the living space, you would have a share in the entire community project. This makes your position a vested one in the corporation organizing the community. The monthly fee assessed to each member covers the utilities, grounds care, as well as a handy man who can tend to all of the items in your home and outside associated with the co-op. All taxes are also covered by the monthly fee, making it simple to plan for.

Either option comes with benefits and limitations. Take a moment to discuss your needs with your real estate expert and you will find direction toward the best fit for your needs.

Real estate is a business that many don’t realize can be made very simple for a buyer or seller by selecting the right person to represent you. Sounds like over simplification? It isn’t in the least. Real estate is a very involved process that includes knowledge of local and state laws alongside any applicable federal information. This means that as a buyer or seller you have a significant amount of research to do, particularly if you are considering approaching a home purchase or sale on your own. To make things work in your favor, it is beneficial for you to have all of the facts or the right person to help you through the process.

The best lessons are learned from experience. Thus your more valuable ally is an experienced real estate broker who can show you their success record. This is the cornerstone for a successful real estate sale. It is this experience that will set a real estate agent apart from the crowd. In Austin, there are a plethora of realtors who have been working in real estate for 3 or more years, part time, and only a few who have been successfully working and selling homes full time. Obviously the person with the full time record will have the success rate you are looking for.

The next crucial fact is that your agent or broker should also be communicative. If you encounter a situation that requires attention you should feel comfortable calling them. There should be no reason for a lack of communication, even when standard office hours have passed. Having a person you can develop a solid and open basis of communication will enable you to understand every step of the home selling or buying process.

Your best solution would be to contact someone like Affinity Properties to represent you and aid you to your success.

When you are shopping for your home, you need to do everything you can to assure the best results for your investment. One crucial area in your new home search that should never be overlooked is your home inspector. The home inspector should be a valued and treasured member of your home buying team. Just like your real estate agent, the home inspector will provide you with the best knowledge available regarding your choice.

Before contracts are signed, and a home is purchased the home inspector will review the house and clearly identify any issues big or small that can cause trouble down the road. This arms you with knowledge at the bargaining table. If you find that you are going to repair part of the roof after you move in, you can negotiate that into the purchase of the home. This also allows you to know if your investment is worth what the appraiser anticipates it to be at.

Most agents have an inspector they will contract with, however you are not limited to their inspector. You can take the time needed to find someone who can and will contract with you to inspect your home, or home choices. You need to be assured your home inspector is looking out for you, so selecting your own will empower this for both you and the inspector. This avoids any potential surprises or undesirable replacements after move in.

Working with your home inspector is an essential aspect of buying your new home. They help in defining the home’s quality, and assuring you are getting the best deal in the end. Prior to signing your contract, make sure that each person on your home buying team, including your home inspector, has had the opportunity to review the documents. This will help to make your new home a wonderful experience.

Of the major metropolitan areas across the United States of America with a potential labor force above 750 thousand, only 1 has gained jobs since 2008. That incredible achievement was reached in Austin, Texas. The National Bureau of Labor released the results comparing Apr. 2008 and Apr. 2009, and for the 3rd month in a row, Austin bested all others in job gains. The current unemployment rate for Austin, Texas is 5.8 percent down 3.6% from the national average of 9.4 percent. Only the 38 top metropolitan labor force cities were involved in this survey.

The significant job increases for 2009 have been in the industries related to Restaurants, Retail, and Hospitality. These services are provided direct to the public and even through a recession they are seeing modest growth opportunities. Direct impact on Austin’s job market, goods producing industries and technology based industries are down across the region. The jobs in the direct to consumer industries mentioned above, compensate significantly for those jobs lost.

The lowest unemployment rates in Texas are Austin with 5.8 percent and San Antonio with 5.4 percent. After that the next closest job healthy cities are Huston at 6.3 percent and Dallas-Fort Worth with 6.6 percent. Both are still below the national average, as are many smaller metro area’s who are reported at 8 percent and above unemployment. This proves the value that the Austin Metropolitan area offers to their residents and new home owners.