Austin Texas Real Estate Blog

As the cost of oil rises into the record books, businesses, regardless of size, are looking for ways to reduce consumption, and thereby improve the bottom line. Managing energy costs has become a new industry as companies such as LPB Energy Management in Abilene, Texas, come into being and carve out a niche for themselves, advising businesses on lowering energy consumption.

Construction comes into play first and foremost, with details such as which way the building faces, how air and sunlight moves throughout the day, and how best to take advantage of existing topography. In Abilene, costly alternative energy sources are not as in demand as the consumer doesn’t have the benefit of selling extra power back to the utility grid. So, innovations in design and construction are needed to meet the desire for greener, more environmentally friendly buildings.

LPB has provided advice in energy management to the Abilene Independent School District. As a result, more efficient lighting systems – those that incorporate motion detectors – were installed in AISD’s newest building, Craig Middle School. Motion detectors are an easy, low cost way to realize an immediate savings in energy costs. The motion detectors have an added bonus of being a security feature.

The heating and cooling system at Craig is monitored and controlled at the central maintenance office, meaning the system can be powered down at a specified time to save on energy when no-one is occupying or using the building. Eventually, all systems within the AISD buildings will be monitored and controlled in this way.

LPB monitors electricity, water, and natural gas usage for its clients and plays a large part in negotiating the best rates possible from regional providers, and saves its customers the headache of wading through contracts and rate negotiation.

Austin’s Econmic Outlook for 2008 - Healthy

December 13th, 2007 7:44 PM

With all the news about doom and gloom in the mortgage industry and a large portion of the country seeing slow sales, declining prices, and layoffs, it’s good to know that here in Austin we have a bright future ahead. A lot of people who are not familiar with the Texas economy and, in particular, not familiar with the cyclical growth of Austin/Central Texas, still seem to think that we’ll have a downturn in 2008. I disagree. The rational growth and limited investor speculation, along with a strong prosepct for job growth certainly make me feel better about this market than 2001-2004. Not that the early 2000’s were that bad, but they certainly weren’t great real estate wise.

The snipet below is from one of my favorite Austin Information sources, The Neal Spelce Letter (www.AustinLetter.com).

As 2007 draws to a close, the Austin-Round Rock metro area is in an enviable position, and when you examine the counties adjacent to the metro – especially those that make up the highly desirable and attractive Hill Country to the west – it looks even healthier economically.

A vibrant economy starts with jobs. When people are working, almost everything else falls into place. Sure, outside economic forces – such as tightened credit policies – have an impact. But, even then, tight credit may prove to be somewhat of a good thing if it keeps workers from getting deeper into debt.

The key point is that this part of Texas is a job mecca. For all practical purposes, anyone who wants a job has a job or can get a job. The five-county Austin-Round Rock metro area in October registered a miniscule 3.3% unemployment. And Travis County (Austin) with the largest population concentration had 3.2% unemployment.

The other four counties are also doing very well. Williamson County (Round Rock, Georgetown, Taylor) recorded 3.4% unemployment, Hays County (San Marcos) also came in at 3.4%, Bastrop County (Bastrop) tallied 3.5% and Caldwell County (Lockhart, Luling) notched 3.7% unemployment. All very, very solid.

And the job picture is even better in the adjacent Hill Country counties. While those counties are not officially included in the five-county Austin area, the population growth is surging west and many of their residents come into the Austin metro for shopping, health needs, entertainment and, yes, jobs. The Hill Country is very much a part of our trade area.

Consider Burnet County (Marble Falls) that abuts Travis County to the west. Its unemployment is an amazing 3.2%. Blanco County (Johnson City, Blanco) touches both Hays and Travis Counties and carries a 3.4% unemployment. And Gillespie County (Fredericksburg, Stonewall), adjacent to Blanco County’s western border, leads all the Hill Country and Central Texas with a 2.9% unemployment.

There is no other major metro in Texas with a better job picture than Austin-Round Rock and its neighbors. This isn’t to demean the others because the other biggies are all doing better than the very good 3.9% Texas state average. But it does reinforce how well Austin is doing.

Austin Market Update

November 27th, 2007 11:22 AM
Recently released from the Austin Board the update below is telling data about the Austin residential market slump that has gripped us for the last 3 months. The credit crunch, holidays, uncertain interest rates, and questionable consumer confidence have all played a role in slowing sales. While the 15% decrease may seem like a big hit, it’s important to remember that 2005 and 2006 were stellar years for real estate in Austin. We saw fast sales, steady increases in values, and a generally national trend bucking economy here in Austin. An interesting thing to note in the press release below is that while sales have slowed, median price has continued to rise. As an Austin homeowner, you can’t complain about that.

November 18th, 2007 9:40 PM

It’s pleasing to see that in these times of uncertain economic futures, that Austin is still vibrant and drawing people to it with its strong economy, job market, positive lifestyle and affordable cost of living. As a transplant myself, having lived in Connecticut for most of my life, I know what it’s like to live in a so-so place and then move to a place like Austin. Not to put down Connecticut, because it has its postives, but it’s nothing like Austin if you are under retirement age or less than affluent.

Austin sports some of the best weather, most affordable living, and most to do for those who have an interest in the outdoors, want to retire with a mind for making the most of their nest eggs, or have the desire for southern living in a progressive and diverse town.

I’m not much one for statistics, but below are some great details about Texas’ and Austin’s recent population growth! The snipet is from one of my favorite Austin Information sources, The Neal Spelce Letter (www.AustinLetter.com). If you don’t have a subscription, and you are interested in keeping abreast of the Austin events, I suggest you get a copy!

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Here we grow again! Anyone looking around Austin knows the area is in the midst of a growth boom. But it is bigger than just Austin. Texas has had a larger numerical increase than any other state – at a growth rate (12.7%) twice that of the nation.

No matter where you go in urban and suburban Texas, it’s hard to get away from this growth (though we’ll mention some pockets of slow-and-no-growth in just a minute). If this trend from 2000 to 2006 continues, Texas is likely to add another 3.6 to 4.0 million people by 2010 – boosting its total population to more than 25 million, according to highly-regarded Steve Murdoch, who has made a career out of studying Texas population trends.

Austin’s population growth this century has been truly phenomenal. As an example, Dallas is the nation’s ninth largest city. Yet Austin added 18,600 people from 2005 to 2006 while Dallas added fewer – nearly 17,000. And Dallas was the eighth fastest-growing city in the nation.

Austin was the 6th fastest-growing city in the nation from 2005 to 2006 – by actual count, not by percentage (that favors smaller cities). This population explosion is happening all around us – in contrast to the rest of the nation. Texas had five of the ten cities with the largest numerical increases from 2005-2006. No other state had more than one.

In percentage terms, the nation’s fastest-growing place from 2000-2006 was in the Austin metro area – Hutto, in Williamson County, which grew by 666%! Also in the Austin metro, Kyle, in Hays County, was in 5th place, growing 289%.

Another one bites the dust!

November 13th, 2007 9:05 AM

Condos, Condos, Everywhere. The snippet below from the Austin Business Journal is another sign of the over development of downtown Austin. With thousands of condo units already developed or in progress, this won’t be the last development to abort or change use.

Several developments that we have worked with personally are seeing extremely slow going right now. As a buyer, now might be the time to get out there and see what kind of deal can be struck. The sellers are waiting and willing. If you’d like excellent representation give us a call. We’ll negotiate a great deal for you.

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.

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The excerpt below from The Neal Spelce Austin Letter (www.AustinLetter.com)

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.”

No Expanded Austin Trash Mound!

November 1st, 2007 6:28 PM

I’m a supporter of Texas Campaign for the Environment and today I got the snippet below from their mailing list. If you haven’t been following the battle that BFI (a large waste management company) and many residents of northeast Austin have been waging you’ll be glad to know that the residents and environmental activists have won. The proposed deal would have expanded the landfill 75 feet into the air. If you’ve ever driven out 290 east and seen the 90 foot high mound that is the landfill, you know how much of an eyesore (and nosesore) expanding the land fill to a massive 165 feet would be. Smells are already a complaint of the neighbors who live in nearby subdivisions like Harris Branch. In the past the state has agreed with the residents and fined BFI.

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Victory on the Landfill Deal!

Thanks to an outpouring of opposition from the public, a 3-member majority of the Travis County Commissioner’s Court voted down a deal with BFI on Tuesday. The deal would have paved the way for an expansion of seven-stories of trash on top of its eight stories of trash at its problem landfill in Northeast Travis County. Commissioner Margaret Gómez joined outspoken opponents of the deal Commissioners Ron Davis and Sarah Eckhardt to reject the agreement.

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You can read more about the landfill and the recent victoy here.

Travis County scuttles embattled landfill deal; Commissioner Gómez changes vote after public opposition
Travis County commissioners voted Tuesday to withdraw a deal that would have paved the way for a landfill expansion just east of Austin. (Austin American Statesman)

Travis residents rail against deal on landfill expansion
Travis County should not cut a deal with a landfill east of Austin that wants to expand, neighbors and environmental activists told county commissioners Tuesday.(Austin-American Statesman)

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.

Area	#New	Avg LP	#Pend	Avg LP	#Sold	Avg SP	%SP/LP	Avg Days on Mkt
10N	52	$463,952	30	$335,121	38	$502,158	98.93%	98
10S	84	$395,897	60	$368,219	57	$401,979	98.57%	46
1A	46	$837,108	36	$372,488	37	$667,636	98.33%	252
1B	81	$195,137	36	$707,079	25	$609,679	96.73%	77
1N	70	$582,228	40	$537,507	40	$455,508	97.76%	104
2	72	$512,270	34	$472,970	33	$548,838	96.95%	103
2N	47	$345,934	29	$325,761	35	$346,603	98.83%	106
3	72	$421,847	28	$368,706	23	$362,022	96.79%	72
4	66	$844,390	24	$787,412	27	$329,686	97.63%	46
5	92	$511,204	15	$366,514	24	$364,930	96.17%	291
6	99	$677,818	27	$549,229	33	$561,712	97.54%	39
7	31	$994,268	10	$1,040,000	9	$496,685	98.28%	74
8E	41	$578,936	14	$1,354,966	19	$1,060,463	93.67%	54
8W	39	$160,316	22	$711,320	29	$852,977	95.15%	49
9	34	$351,885	14	$297,865	21	$270,677	98.53%	114
CLN	115	$212,546	86	$168,874	87	$169,974	97.20%	43
CLS	147	$628,771	78	$426,071	79	$251,571	96.62%	53
DT	30	$558,536	9	$320,744	8	$403,221	90.22%	77
LN	59	$549,619	22	$310,226	43	$243,502	95.72%	71
LS	181	$944,362	57	$490,624	63	$606,716	92.79%	94
N	53	$414,441	47	$380,291	44	$390,304	98.36%	87
NW	82	$495,366	42	$539,346	54	$466,163	98.11%	87
PF	199	$387,950	132	$301,977	116	$170,911	96.26%	60
RN	65	$718,507	30	$559,245	42	$492,212	96.09%	83
RRE	176	$400,760	123	$192,152	127	$352,124	96.61%	70
RRW	161	$446,453	110	$250,292	102	$418,146	95.35%	115
SWE	63	$526,357	51	$499,257	54	$425,718	97.89%	83
SWW	81	$595,121	51	$322,080	52	$555,631	97.68%	61
UT	19	$951,347	9	$289,416	7	$260,271	98.65%	36
W	50	$180,657	17	$498,438	17	$552,914	98.69%	5

October 30th, 2007 10:54 AM

As a Realtor in Austin’s ever changing market, I often get questions about the bubble. Sometimes, I even get the uninitiate investor’s summary of a plan that involves waiting for the bubble to break and then swooping in and offering seller’s pennies on the dollar for their real estate. I RUN, not walk away from these investors.

As far as I can tell, there is no bubble in the Austin/Central Texas real estate market. We tend to see regular, steady appreciation in our market. We have a reasonable amount of inventory, property taxes high enough to keep rampant speculators at bay, and a strong economy and work force that is supporting our growth. That said, the Austin Texas real estate market does fluctuate from a buyer’s market to a seller’s market to a balanced market. Like most markets a broad generalization such as “Austin is a buyer’s market” is usually wrong. The market can be segmented various ways and those segments are whatreally shoudl be commented on. As an example, ACTRIS (the Austin Central Texas Realty Information System - our MLS), shows over 15 months of inventory for homes over $1MM and only 4 months of inventry for homes up to $100k. Clearly both market segments are different for the buyers and sellers playing in those markets.

The excerpt below from The Neal Spelce Austin Letter (www.AustinLetter.com) supports the idea that we’re not facing a dwnturn in the market.

Austin area home values, as reflected by sale prices, continue to rise. This is in sharp contrast to the housing downturn in the former go-go states along the east and west coasts. For years we’ve been telling you of the insane skyrocketing of home prices on the two coasts. Others likened it to an ever-increasing bubble that was sure to burst when it was stretched beyond reality. In some cases, home prices soared 20%-30% per year in the first part of this decade. Well, no surprise, the bubble did burst and this was a trigger to the current housing crisis in those cities and states.

The Austin metro was different. New home prices have steadily increased over the past three years, not skyrocketed.Mark Sprague, the Austin area partner for Residential Strategies Inc. (RSI), points out the median home price in the 3rd Qtr 2005 was $181,108, in the 3rd Qtr 2006 was $197,103 and in the 3rd Qtr 2007, it was $208, 583. “The area median new home price is up 5.8% for the past 12 months,” he noted. Bottom line: there is no bubble to burst in the Austin area.

Another factor to consider is the number of vacant, developable, lots. Currently, Sprague estimates there are 26,058 lots and at the current absorption rate, this represents a 22.3 month supply. RSI, a market research and consulting firm, considers a 24-month supply to represent equilibrium. As Sprague put it: “The fact of the matter is that, although the housing market has slowed over the past year, Austin doesn’t have the problematic excesses of lot and housing inventories that are prevalent in most other major markets of the United States.”

January 26th, 2008 2:31 PM

If this agent did truly withhold information then s/he is getting what they deserve. Truth and honesty are the most important qualities that a fiduciary has to his/her clients.

Many people may feel they overpaid for a home they bought during the housing boom, but one California couple is trying to do something about it. According to the New York Times, Marty Ummel and her husband Vernon, of Carlsbad, are suing their real estate agent, claiming he withheld information that similar homes in the neighborhood were selling for less than the home they eventually bought. Real estate lawyers say the case, which goes to trial on Monday, brings into question the valuation process and could be “the first of many similar cases in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase,” the Times reports. Wed, Jan 23, 2008