Austin Texas Real Estate Blog

The old saying “April showers bring May flowers” is very true when it comes to the real estate market. Buyers seems to go underground at the first hint of cold weather and emerge, like so many Punxsutawney Petes as the ground and air thaws and the weather is more friendly toward house hunting activities.

According to this article in the Realty Times, the housing market in the nation as a whole is beginning to shake off the winter doldrums, as well as the residue of a burst real estate bubble, and starting to show a positive trend once again.

Austin is right up there with the fastest-selling inventories – houses average 67 days on the market.

Prices are beginning to rise slowly, indicating a healthy seller’s market, but also a good buyer’s market as inventory is still somewhat high and buyers have their choice of properties at still reasonable prices.

In its continued penchant to buck against national trends, average sales prices of homes in the Austin area rose almost 2 percent in April, with prices up about 12.5 percent over 2007. Average price of a home in Austin stands at just under $267,000.

Another event that is having a huge effect on the real estate market trend is the drastic rise in gasoline prices. This has had the social effect of potential home buyers considering what a commute would mean to their pocketbooks as they look at the choices between rural and urban home locations. Many energy-conscious consumers are beginning to cast an eye toward home-owning possibilities in the downtown area. A number of luxury apartment and condominium projects are underway in downtown Austin, and prospective homeowners are eagerly awaiting completion of these projects as they look toward a more urban and energy-efficient lifestyle.

A unique planned community in Port O’Connor offers not a site for your home but one for your boat as well, with lots starting in the $100,000 range, and ready access to prime fishing waters. The Caracol coastal master-planned community is located along the Intra-coastal Waterway near Port O’Connor on the Gulf of Mexico. It’s convenient to Houston, Austin, and San Antonio, and yet far enough away to be a relaxing vacation destination. With the Gulf in the backyard, a homeowner in this gated community can park the car in the driveway and the fishing boat at the slip.

Port O’Connor is known world wide as a prime close- and deep-sea fishing location. Just off shore, the waters teem with red snapper, king fish, tarpon and jack fish. Farther out, tuna, dolphin, and blue martin are abundant. Port O’Connor hosts the annual Poco Bueno fishing tournament that attracts sport fishermen from all over the globe.

The planners building Caracol aim to provide a second home for serious fishermen in an upscale gated community. Construction has begun and, when completed, the development will boast 74 home sites in various sizes, ranging from 40 to more than 100 feet of waterfront. Future development plans include a mid-rise condominium with a marina attached. There will also be a community pool and pavilion, which is currently in progress.

Caracol is a joint venture of Trend Development, Inc., and Forestar Real Estate Group. Trend Development is a privately held real estate development company with several large-scale projects in progress throughout Texas. Forestar Real Estate Group operates in two areas: real estate and natural resources. The real estate segment holds interests in ten states. The natural resources part manages oil and gas resources and wood fiber sales from land located in Georgia.

Housing Starts Down in Austin

November 9th, 2007 8:55 AM

In the last two weeks, I’ve seen a slowdown in the amount of traffic visiting my listings and the listings of my officemates. It is getting to be holiday season so part of the slowdown is to be expected seasonal decline in activity. When the buyer pool and activity declines you can imagine what most seller’s do. Price reductions are more common, seller concessions are often offered, and best of all buyer’s can get a good deal on the home of their choice. This is not to say right now you can make a 30% off offer on a home and expect the seller to thank you for your efforts, but with less competition, as a buyer, you’ve got a better chance of being the only person offering on the home and of having a reasonable seller.

If you’re a seller, you can make this market work for you. First you must realize that if you are moving within the Austin area, you’ll get less for your home, but you’ll pay less for your new home. Oftentimes seller’s and buyers see the market only from the position that they are in at any given time. It’s important to look at the market from all positions that you will be in as you calculate your bottom line and prepare to start negotiating to both buy and sell your home.

Below is a great summary of what the Austin market looks like and will look like in th enear future.

One of the reasons the Austin housing market is better than most other metros is the vibrant job market. But because new home construction is slowing, the number of construction jobs is diminishing. It’s a dichotomy that will impact the remainder of this year.

Large homebuilders, especially those with corporate offices elsewhere, are feeling the pinch of sliding sales in other states and are re-trenching here as well. It’s part of the corporate cut-your-losses-system-wide philosophy. Builders are reducing starts of single-family homes, townhomes and condominiums. How much has homebuilding dropped? Consider:

According to Eldon Rude, director of Metrostudy’s Austin Division, builders continued to reduce starts in the 3rd quarter. Metrostudy recorded 3,700 starts during the 3rd quarter of 2007. This is down 27% (1,361 units) from the 3rd quarter 2006. The annual starts rate was 14,436. This is down 23% (4,235 units) from the 3rd quarter 2006.

New home prices range from around $100,000 to the multi-millions. Are all price points impacted the same? Those that are, are not necessarily for the same reasons. The tighter mortgage loan policies are having an impact on the low end. Rude said: “a sharp reduction in starts priced below $200,000, especially in starts priced under $150,000, indicates where tighter credit policies have had the most impact.”

But this is not all. Within the Austin metro “move-up market,” (homes priced between $250,000 and $500,000) demand has also slowed and builders have reduced production in recent quarters. Rude observed that “buyers in this price range have become increasingly cautious about making purchase decisions.”

What does the future hold? “The Austin area will experience less demand for new homes in upcoming quarters,” Rude predicts. Rude’s reasons: “A sharp decline in relocation buyers, a competitive resale market and more hesitant home buyers are factors leading to the slowdown – as are decisions by corporate offices by the region’s largest builders.” He says “these decisions play a role in land acquisition, pace of starts, marketing and staffing.”

The good news? Rude echoes what we have reported previously: “Austin experienced only moderate appreciation in new home pricing in recent years, and this will, to a large extent, insulate the area from large price reductions that will plague the new home and resale markets in other parts of the country.”

October 31st, 2007 7:31 PM

Here’s some interesting data that I put together from the ACTRIS MLS system and thought that I’d share.

The areas correlate to the MLS areas for Austin. I’ve selected only the areas that I work in so my apologies in advance if you are interested in another area.

Then you’ll see the # of newly listed properties in that area. The properties include single family homes, condominiums, townhomes, lofts, and garden homes.

The average list price(LP) is pretty self explanatory, but for the sake of completeness it’s the average prices that sellers want to get for their homes.

The #Pending column shows the number of homes that have received and accepted an offer. These homes are not guaranteed to close and usually about 7% will fall out and start the sale process over. Note that under certain circumstances, such as the recent sub-prime correction in lending standards, as many as 40% of the contracts may fall off.

The second average list price (LP) column shows the average list price of homes that were put under contract.

# Sold represents the number of homes that have closed escrow and are now owned by a new person or entity.

The Average sale price (SP) column shows the average price of homes that were closed and transferred to a new owner.

The %SP/LP column depicts the ratio of sale price to list price. This column shows on average how close to list price sellers and buyers are able to agree on a purchase price. You should NOT use this to determine how much or little you should offer! Your real estate agent can help you with determining the market value of a subject property and help you factor in any other considerations, such as non-realty items, seller paid closing costs, duress on the part of either party, etc. Look for another blog post to go over all the ways that you should not attempt to value property and the ONLY ways that really matter for most residential purchases.

Average days on market (often referred to DOM by real estate agents) are how long the properties were on the market before they sold. It does not include the days that the property is in escrow, but instead is from the first date the property was listed until an offer was accepted and the property was listed as sale pending status.

Market Activity Report - Totals by Area (Residential)

October 31st, 2007 7:31 PM

Here’s some interesting data that I put together from the ACTRIS MLS system and thought that I’d share.

The areas correlate to the MLS areas for Austin. I’ve selected only the areas that I work in so my apologies in advance if you are interested in another area.

Then you’ll see the # of newly listed properties in that area. The properties include single family homes, condominiums, townhomes, lofts, and garden homes.

The average list price(LP) is pretty self explanatory, but for the sake of completeness it’s the average prices that sellers want to get for their homes.

The #Pending column shows the number of homes that have received and accepted an offer. These homes are not guaranteed to close and usually about 7% will fall out and start the sale process over. Note that under certain circumstances, such as the recent sub-prime correction in lending standards, as many as 40% of the contracts may fall off.

The second average list price (LP) column shows the average list price of homes that were put under contract.

# Sold represents the number of homes that have closed escrow and are now owned by a new person or entity.

The Average sale price (SP) column shows the average price of homes that were closed and transferred to a new owner.

The %SP/LP column depicts the ratio of sale price to list price. This column shows on average how close to list price sellers and buyers are able to agree on a purchase price. You should NOT use this to determine how much or little you should offer! Your real estate agent can help you with determining the market value of a subject property and help you factor in any other considerations, such as non-realty items, seller paid closing costs, duress on the part of either party, etc. Look for another blog post to go over all the ways that you should not attempt to value property and the ONLY ways that really matter for most residential purchases.

Average days on market (often referred to DOM by real estate agents) are how long the properties were on the market before they sold. It does not include the days that the property is in escrow, but instead is from the first date the property was listed until an offer was accepted and the property was listed as sale pending status.