Real Estate Information

Everyone seems to be focused on how to help home sellers get out of their "under water" situations... no question this is a service that is more badly needed than ever in Austin real estate.  Short Sales are the rage right now, and they should be... a Short Sale is better for the seller than getting foreclosed, it is less expensive for the lender, and the buyer purchases a home under market that is still well maintained.

Short Sales are a terrific value, but there is a group of consumers who cannot buy a Short Sale. How about those people who have credit issues, maybe even resulting from a Short Sale they have on their credit from the past?

Home buyers who are looking to take advantage of this market, these interest rates and possibly even buy a Short Sale cannot do so because credit is sooo improtant now. The only option for these buyers is owner financed homes, and there are sooo few of them even available... only about 1.2% of homes for sale offer owner financing.

The problem is that most people believe all the myths about credit and don't think they even have a chance... that is not always the case. Take a look at www.TruthBehindCreditRepair.com to learn the truths that most consumers don't even know.

In order to take advantage of these 4.5% interest rates and the incredible bargains that homes available for Short Sale offer today... at least find out the Truthg about your credit situation, and what it will take to put you in a position to buy a home... chances are you will be VERY surprised.

Don't look at only 1% of the homes on the market, only to pay an above market interest rate for your owner financed mortgage... take a look... no hassle no obligation... you could literally be looking at Short Sale homes to buy on a new mortgage in 45 days!  What else are you going to be doing in 45 days?

Many people selling their homes in the Austin area think that the very best source of buyers for their homes are people from California. Marketing to that group can be a pretty good strategy, as long as you realize you'd be focusing on the 2nd most likely state from which your buyers will probably move.

For quite some time, including this month, buyers are most likely to come to Austin from another location within the great state of Texas.  As a matter of fact, online search results show that prospects from Texas outnumber those from California every month this year by as much as 13 to 1 in some months.

Houston is still the most likely place a buyer will move from when coming to the Austin area. Dallas follows and of course Ft Worth is high on the list of Texas cities from which prospects are perusing homes in Austin. This make ssense of course, since those are among the largest cities in Texas.

What surprises most home sellers is that the highest county in CA on the list usually comes in anywhere from 6-9... while home buyers in the Austin area continue to move in from other cities in Texas.

Tennessee is 3rd to California when it comes to the number of prospects looking at homes in Austin online.

One of the reasons for this is simply that many Texans want to remain in the state, and Austin is considered the best place to be in Texas. Say what you want about those California buyers, we are HAPPY to have them, but if your home in on the market in the Austin Texas real estate market, more buyers are looking at Austin TX homes from Texas than anywhere else and your most likely buyer will be from Texas!

Well, it may seem like I harp on this fact enough that it would get kind of boring, but since it plays an important role in Austin area real estate activity, it should be noted at least periodically.

Before Austin home buyers purchase homes they typically go see those homes... before they go see those homes, they typically look online to determine which homes to see. 

So, logically we could determine how Austin area home sales will perform based on how many people are looking at homes online, correct.  Yes that is correct, so here is a summary of online traffic for Austin, TX homes:

During the time when the Federal home buyer tax credit was in place, online traffic was very high... our personal web sites and national directories were experiencing more visitors than at any time in 2009 and 2008.  What happened during the months that followed this online traffic was, you guessed it, higher home sales.

Now, after the Tax Credit deadline on April 30, online traffic began declining rapidly and by mid May was at the lowest point we had seen in all of 2008 and 2009. The results was fewer home buyers viewing homes in person, and fewer home sales than in March and April of course. I do expect to see home sales fall in June 2010 from June 2009 based on this information.

Many local agents and home sellers have ecome concerned about the lack of online traffic and especially the lack of home buyers seeing homes in the Austin area. The good news is that over the last 10 -14 days, that online traffic has steadily climbed back to the levels we saw in 2008 and 2009 before the Tax Credit.  Hopefully, we will see home sales remain steady as well, because let's face it, being in a soft market, that just happens to be the best soft market in the U.S. is not something to complain about!

Austin real estate is usually a predictable market... MLS areas closer to central Austin tend to do better than the suburbs, but then as we all know, things always change!

For the first time since I have been following this statistic, there are 3 suburban areas in the Top 10 "Hot" areas in the Austin MLS! Simply put, the number of home sales last month compared to the number of homes actively for sale was higher in these areas than the vast majority of the Austin MLS.

Round Rock West, Round Rock East, and Cedar Park/Leander North all placed in the top 10 for all the 60 MLS areas in Austin! 

Now keep in mind that although we'd love to believe that homes sales in these areas skyrocketed last month, that is not actually what happened... most areas of the Austin market that usually place higher actually performed at a lower level than typical.

That's not all bad news, because these areas remained stable and did not fall off in performance, thus their high placement in the "Hotness" Ratio.

Although the Cedar Park/Leander real estate market has placed higher than pother suburbs ovet the long term, Round Rock West and Round Rock East are relative newcomers to these high ratings.

Although you  might think that lower priced MLS areas are the ones probably doing better, that is not the case... (that's why you read blogs like this) fully 50% Of the Top Ten "Hot" areas are higher priced areas including Westlake and Northwest Austin.

Predictable is getting a little harder than it used to be, but keep reading this blog and we'll do our best to let you know what and why we can make some predictions.

Make it a Powerful Day!

Homes sales in Mary 2010 from the Austin Multiple Listing Service show that home sales increased approximately 24% compared to May 2009. 

This is 1st month we have seen post tax credit sales results, so keep this in mind...  The number of sales actually reflects the number of homes that closed on May, meaning they went under contract in March or April. Therefore, home sale statistics from May are still a reflection of the tax credit on home sales in the Austin market.

A prediction for how June sales will fare is the number of homes that went under contract in May and are due to close in June, or possibly July. The number of homes placed under contract in May fell 34% from a year ago.

Unfortunately this is an indication of slower sales forthcoming, but is not unexpected, as the tax credit was nothing less than a phenominal incentive for home buyers. It would have been an incredible shock if sales had maintained the same pace as when the tax credit was available.

Austin's median home prices decreased 2% for May 2009. Once again, since lower priced housing was the rule, considering the avalanche of first time buyers in the market, this is a pretty minor decrease.  

The number of homes for sale in the Austin real estate market increased from last year, just over 13%, a result of fewer homes going under contract in May.

An innovative, yet quite accurate reading of the future real estate market stems from a source we did not have access to only a few years ago.  Austin home sales are usually a result of home buyers visiting web pages of homes before even visiting a home in person. Therefore it makes sense that the more people who look at our web pages, the more people who will look at our homes in person, and thus, the more homes we will sell.

Can it be that easy... well, yes.  It is proven that web traffic has a direct correlation to home sales, and that is probably true in nearly every market.  Having followed our web traffic in the Austin real estate market for some time, I can say with confidence that home sales in Austin and surrounding areas will be less next month than they were last month.

That is simply because visits to homes on our web pages is approximately 31% less this month than last.  Here is more support... during the months prior to the federal home buyer tax credit web traffic was higher than it had been in over two years, and guess what?  Sales were higher in each of those months than they had been in over two years!

There is no question that this is not a perfect predictor of Austin home sales, but along with other factors, this simple, yet effective process of home buyers going online, then to physically see the homes and then to written purchase offers just makes sense.

So where are we now? Well web traffic is similar to what it was a 12-24 months ago, so it seems our post-tax credit real estate market in Austin will be similar to the market of 2008-2009, and though not the best real estate market we have experienced, its a whole lot better than being somewhere else!

I have mentioned in previous blogs that Short Sales are one way that I keep track of current market strangth.  Yes, there are several factors that can be used to stay abreast of market strength, suhc as number of home sales, amoun of inventory and others.

The reason I feel that the number of home available for Short Sale on the market is so important is because this tells us how many home owners in the market are currently in distress.  This is similar to following the number of foreclosures of course, but more accurate I believe.

I use Round Rock Short Sales as my measuring stick because Round Rock is Austin's most substantial suburb, and one of Austin's most important employers, Dell, is located in Round Rock. Round Rock real estate follows Austin closely as a result.

So, here is the latest... as of today one in every 16.7 homes for sale in Round Rock is a Short Sale. This is AWESOME news because only 3 months ago that figure was 1 in 15, and 6 months ago it was 1 in 13.  We have seen steady progress in the number of homeowners who need assistance through a Short Sale.

Understanding that Short Sales are used not just when home owners are facing foreclosure, but also when they have seen dramatic change such as job loss, causing them to fall behind on payments, and the realization that they cannot catch up is reached.

As an indicator of market strength, the percentage of Short Sales in any given market will tell you whether your market is gaining strength or deteriorating.  The Austin real estate market definitely seems to be improving, even if it is slow and steady.

Next time... changes that will affect Short Sales, home owners and the market.

According to the Multiple Listing Service (MLS) report by the Austin Board of REALTORS®, the volume of Austin area home sales in April 2010 was 2,043, up 31 percent from the same month in 2009. In the same period, pending sales increased 47 percent to 2,813. The median price of real estate in the Austin area remained unchanged in the same time period at $190,700.

Obviously this is in large part due to buyers trying to beat the April 30 tax credit deadline. If the tax credit had to end, I feel that April 30th was a perfect time, becuae the momentum rom the tax credit and the seasonal increase in home sales in Spring should help Austin real estate continue its improvement.

Another terrific sign is that sales of condos and townhouses in Austin remained strong in April 2010, increasing 63 percent to 213 sales as compared to April 2009. Once again, the tax credit is what helped propel this increase on condo sales.  Since the median price for condos and townhouses is approximately $30,000 less than the median price for a single-family home, condos and townhomes can be a more affordable alternative for first-time buyers.

In April 2010, Austin homes sold faster, as the days on the market for single-family homes decreased 13 percent to 69 days as compared to April 2009. Additionally, the month’s supply of inventory in April was approximately 6.5 months, which represents a balanced market. (Economists use 6.5 months as their "Normal market indicator... anything below that moves toward a sellers' market and anything above moves toward a buyers' market.)

April 2010 Statistics in summary:

• $485,772,282 – Total dollar volume of single-family properties sold, a 33 percent increase from April 2009.
• $190,700 – Median price for single-family homes, unchanged from April 2009.
• 2,043 – Single-family homes sold, a 31 percent increase from April 2009.
• 10,749 – Active single-family home listings on the market, a nine percent increase from April 2009.
• 2,813 – Pending sales for single-family homes, up 47 percent from April 2009.

We are watching the Austin market closely for post-tax credit trends.  We have already seen internet traffic slip to similar levels as before the tax credit... not necessarily a bad thing, as sales were steady in 2008 and 2009.  Its too soon to tell, but we will keep a close watch!

OK, statistics never lie, or do they?  Well we could all agree that they may be misleading couldn't we?

Austin home sales were up in 2010 compared to 2009 for each of the first 3 months of the year.  That's certainly not a lie, nor is it misleading, and it is great news for home owners and home buyers.

The number of homes available for sale in the Austin real estate market is very nearly the same as 2009... more good news because Austin does not have a glut of homes for sale, thus creating a decrease in home values.

When we refer to the old "Supply and Demand" theory economists love to reflect on, it would seem that Austin real estate is in great shape. As a matter of fact, economists define a normal market as a 6.5 month supply of homes for sale and we have a 6.6 month supply... how normal can you get?

Year to date, home sales reflected in the Austin Multiple Listing Service increased 17.1% over the same period in 2009. Still sounds good right?

No, none of this seems like statistics lie or even misleading. However, statistics can be situational... meaning that these stats are as good as they are because the first 4 months of 2010 come prior to the Federal Tax Credit deadline on April 30.  This incentive resulted in a very strong real estate market for the first 4 months of 2010. 

Would the market have improved over 2009 if the tax credit had not been a factor?  I believe it would have, but its virtually impossible to know how much improvement we would have experienced.

Now comes the next phase in Austin home sales, and all over the U.S. for that matter... how will real estate perform after the tax credit is no longer an incentive to purchase a home? 

Stay tuned... I am watching it VERY closely!

A great indicator of our market strength is a reflection of the number of Short Sales available in the market, and one suburb where Short Sales have been prevalent is Round Rock. 

Properties available for Short Sale in the Round Rock, Texas real estate market are down slightly from six months ago.One in 13 homes for sale in Round Rock Texas were available via Short Sale in October of 2009.  Today only about 1 of every 15 homes for sale is a Short Sale in Round Rock.

This is a good sign for local home owners, since it means fewer homes will be selling at discounted prices in the immediate future. If fewer homes are selling at discounted prices, then we are one step closer to seeing Austin property values appreciate once again.

March of 2009 saw the same median price as March of 2010... that's right, no change in 1 year.  I would be happy to predict that will change in March of 2011 and Austin's median home prices will increase, except for one major factor... the federal tax credit.  After April 30, Austin real estate will have to perform without the incentives of tax credits to first time and move up home buyers. 

I'll say it anyway... by March 2011, we should be able to see this market improving, including but not limited to increasing median home prices.