Friday, January 05, 2007
by Stuart Sutton
Though not necessarily unusual, there was a tremendous amount of real estate activity the last week of 2006 and into the first week of 2007. What is most interesting, however, is that many of the inquiries are about homes that seem to have been on the market a little longer than average. The most phone calls from buyers and agents this past week were regarding the 2 homes that have been on the market for the longest period of time.
Since December was a torrid month for sales, but few homes were placed on the market, the number of homes for sale is down. Believe it or not, the first quarter of 2007 will probably be a good time to have a home for sale. March and April are busy months for sellers to place homes for sale, meaning that there will be more competition in Spring, as is typical every year. The difference is that the first quarter looks to be busy in 2007, while it is usually a slower period for sales in most years.
Judging from December and the initial burst of activity, the 1st quarter of 2007 should be strong.
Tuesday, January 02, 2007
by Stuart Sutton
Is 2007 going to be a new market? Let's summarize 2006:
The hottest areas in Austin were South, Central, and Northwest, with other areas of Austin, such as Southwest and North Austin coming in close behind. Of the suburbs, Cedar Park was the hottest, but lagged far behind Austin itself, while Pflugerville, Round Rock and Georgetown followed. There are approximately 53 areas defined in Austin's Multiple Listing Service, and we'll have more definite information available soon, but it's as if there are two markets, Austin itself, and the suburbs of Austin.
While homes are staying on the market for only a few days in area 10 (South Austin), making it a sellers market, it is taking nearly 3 months to sell homes in Round Rock, keeping it on the edge of being a buyers market.
Why two markets within one area? One reason is the larger percentage of foreclosures in the suburban areas. That is expected to diminish in 2007, closing the gap somewhat between the outlying areas and Austin. However, that is the reason most investors are buying in the suburbs. The negative is that will increase rentals in those areas, but the positive is that most are paying close to asking price.
If 2007 follows the latter part of 2006, it will be an active market, and only hind-sight will truly tell whether 2007 will be a "hot" market. My definition of a 'hot" market now is simply that the entire market becomes the same sellers market.
Friday, December 29, 2006
by Stuart Sutton
Yes, 2007 should be a positive year for home owners in the Austin Texas real estate market. It should also be a stronger year for home owners in surrounding areas such as Round Rock, Georgetown, Cedar Park, Leander and Pflugerville.
Austin, Texas is a great real estate market right now, with some areas such as Northwest Hills, and portions of Westlake having so little inventory that a well-priced home will sell in a matter of days. We actually have buyers looking for homes in these areas, with one in particular having been looking for over a year to find the right home.
The outlying areas are a little weaker, but appear to be gaining strength. One indicator that supports this are the number of foreclosed homes, which have a big impact on home values. There were fewer foreclosed homes sold in 2006 than in 2005 and predictions are that this trend will continue in 2007.
If you own a home in this market, you either have experienced strong appreciation over the last 2 years, or you can expect to experience it in the next couple of years according to experts.
Wednesday, December 27, 2006
by Stuart Sutton
According to recent history, the Austin real estate market may just be THE place to invest your reeal estate dollars. Although experts predict San Antonio, Dallas, Ft. Worth, Houston and even McAllen will perform better in 2007, investors who have chosen Austin as the market to believe in are betting that it will continue to perform at similar levels as the past couple of years.
What makes so many investors believe in the Austin, Texas real estate market, and why will the other Texas markets mentioned above still be hot for investor money from around the country and the world? Its simply because the possibility of cash flow and appreciation are better in Austin and other Texas markets than anywhere else right now.
Want examples? Well, how about a 2,800 square foot single family home in an executive class neighborhood that just sold for $184,900? How about a foreclosed 3,000 square foot home in a neighborhood just blocks from the elementary, the middle school, 3 pools, 4 parks, that appraised for $220,000 and just closed for $183,500? How about a 1450 square foot, 3 bedroom home priced at $119,900 that will probably rent for $950? How about a duplex that closed for $138,500 that rents for $1250?
I could give you an endless list, and although we are a little spoiled in Austin, investors from others areas of the U.S. find these kind of deals impossible to find elsewhere.
The other reason? Our markets are appreciating and experts predict a continuation of that trend. Each and every month of 2006 showed double digit or close to double digit increases in average home prices over 2005.
Are there other markets that make sense? Sure, but timing is not an easy thing to master, and the Austin Texas real estate market does not require a mastery of timing. The deals are there, the market allows cash flow, and the possibility of appreciation seems imminent. In 2007, this could be the easiest invesment decision you make.
Friday, December 22, 2006
by Stuart Sutton
As on of only 2 agents in the Austin, Texas market, we have had the unique opportunity to assist referrals from Dave Ramsey's nationwide radio show. If you are unfamiliar with Dave Ramsey, check out DaveRamsey.com. He is the nations strongest advocate for getting out of debt and changing your life. However, he is not one of those guys who recommends paying off credit crads with one of those "get out o debt" schemes, nor does he show you how to file bankruptcy.
Dave is all about managing your income and debt, and climbing out of the hole that most Americans have found themselves in, a huge mountain of debt. He shows you the plan, describes in detail how to follow that plan and helps consumers take control of their lives.
His first book, Dave Ramsey's "Financial Peace Planner" is a must read.
We follow and subscribe to Dave Ramsey's philosophy and hope you will consider what Dave teaches, it can change your life!
If you'd like to know what Dave recommends regarding buying a home, we'd be happy to help
Sunday, December 10, 2006
by Stuart Sutton
I just sold a home to a buyer who was curious about the neighborhood and its potential for appreciation. Although there are several sources of information that will impact a home's value, major roadways, shopping, new schools etc., the history of a property is a good way to determine what the future might be.
We accessed past sales data and the buyer realized that this particular home had sold for approximately 44% less 7 years ago. Without getting too mathematical, that home looks to be worth about 44%% more over an 7 year period.
Though that is not the kind of appreciation that many west coast real estate owners have received, its hard to argue with the fact that the Austin, Texas real estate here is still a terrific investment. Remembering the fact that the Austin market had a 3 year down turn, those statistics turn out to be pretty darn good.
Patience is often the key to turning a good profit in real estate. The buyer discussed above plans to hold his property bought in Round Rock and Austin for about 10 years, and expects to do quite well. Since he is a seasoned and quite educated investor, his plan appears well founded.
Friday, December 08, 2006
by Stuart Sutton
October, 2006 continued the trend seen this year in the Austin, Texas real estate market. Every month in 2006 has resulted in improved real estate sales, including October which showed approximately an 8% increase in home sales over October 2005. Austin area home prices for October 2006 were approximately 9% higher than in October 2005.
The only statistic that showed a lack of improvement in October was the number of homes for sale, which increased over October, 2005. More homes on the market may be a little better for buyers, but it is a negative for potential appreciation. That may change, however, as December has been a huge sales month in only its first week. We'll know more when the December statistics come out.
Overall, we'll see year end statistics that show a strong, positive real estate market in the Austin, Texas area. Although predictions for 2007 are modest in terms of market appreciation, we need to realize that they are better than most areas of the country, which are predicted to depreciate in value.
Note: 5 of the top 10 markets in the country for 2007 are predicted to be in Texas!! Houston, Dallas, Ft Worth, San Antonio and McAllen are all on the list!
Monday, December 04, 2006
by Stuart Sutton
The single, most often asked question this time of year, is "Should we wait until Spring to sell?"
If the market is following a strong trend one way or another, you might decide based on that information. Example - Waiting would be best because values are skyrocketing and you'll have more equity in Spring, Example 2 - You should sell now because interest rates are climbing fast and your home will be less affordable in Spring. Though predictions are, well unpredictable, sometimes a srong trend can be indentified.
In the Austin, Texas area real estate market, expecially in suburbs such as Round Rock, Georgetown, Pflugerville, Cedar Park, Leander, Lake Travis etc, the market is steady, reaulting in the answer, "That is a personal decision." Waitng won't hurt you and selling now would be just fine.
Arguments for waiting -
The 4th quarter is typically the slowest statistically for real estate sales.
Spring is statistically the best time for real estate sales.
The yard and landscape will be green and attractive in Spring.
You won'y have people wandering through your home during the holidays.
Arguments for selling in December -
Buyers are serious... you'll have fewer byuers look at your home, but they will be serious buyers.
The 4th quarter is the most active for corporate relocation - serious buyers again.
The home will look cozy and homey with all the decorations.
You'll have less competition, as there are fewer homes on the market this time of year.
I sold 4 homes this first weekend of December, all scheduled to close prior to the end of the year, and had an "above average" weekend of activity from showings, and inquiries. So the next time you wonder about timing, be aware that the 4th quarter can be a great time to have a home for sale, but if you'd personally rather wait unitl Spring, you are ok doing that as long as you take the current market conditions into consideration at that time.
Sunday, December 03, 2006
by Stuart Sutton
Why are multi-family properties so popular with investors? Because mutli-family properties increase potential cash flow, and reduce cash flow risk. What that means is simply this... in the Austin area real estate market, a single family home that costs $135,000 will rent at approximately $1,000 per month, while a duplex that costs $135,000 will rent at approximately $600 per side, or $1,200. I could continue with examples of 4-plexes and 8-plexes, but will keep the example simple. As you compare more units, the cash flow becomes stronger.
You also have the diffusion of vacancy risk. If you have a single family home and it becomes vacant, you have zero income, if you have 1 side of your duplex become vacant, you still have $600 rent coming in, and that ratio is even better wtih 4-plexes and large mult-family properties.
Multi-family is not only good as investment property, we highly encourage owner occupants to buy multi-family property and to live in one unit. Especially when the buyers are just starting, maybe buying their first property, a multi-family property such as a duplex will decrease their monthly payment, and give them additional tax benefits. In addition, it will give them a terrific investment when they move out of it and into another property after a year or two.
Saturday, December 02, 2006
by Stuart Sutton
There are so many easy to change, inexpensive to repair, even no cost items that can be done to increase the perceived value of your home. Let's start with attitude... realize that you are tryng to sell for top dollar to a body of consumers who have pre-conceived ideas about what they want to buy. Think from their point of view and present your home to satisfy their desires, not your own.
Having been involved in the Austin area real estate market since 1981, I cannot begin to tell you how many sellers cost themselves money when selling simply because of attitude. Let's consider a common example... a home that needs carpet. The seller who responds with "I am not doing anything else to this house.", or "I am not putting in new carpet because the buyer will want to choose their own." has just cost themselves thousands of dollars. The reason is because when a buyer walks into a home that needs new carpet, they are immediately distracted by the need for carpet. They focus on the fact that they are going to have to invest in carpet, and believe me, they ALWAYS estimate the cost higher than it actually is. The attitude when they walk in the home initially is critical to their resulting offer.
When carpet is available from companies that will wait until closing to be paid, there is no excuse, including, I can't afford it.
Other items that make a huge difference:
1) Paint off color rooms... a gallon of paint is $15
2) Add landscaping to the yard. I have actually seen a home sell for over $5,000 more than a similar home because its appeal was so strong due to the meticulous landscaping.
3) Add landscape outlining such as bricks or stones outlingin the landscape beds, and even along sidewalks.
4) Landscape around trees with flowers and landsacep outlining.
5) Repair any small items that the buyer can easily observe
6) Paint trim a slightly different color than the siding. This gives a more meticulous, more expensive look to the home.
7) Update counters, or appliances or both.
These are just a few ideas and most cost very little. I will submit to you that it truly begins with attitude. Don't take the point of view that it is your house and it is just fine the way it is. If you are ok with getting average returns, that is fine, but if you want Top Dollar, prepare your home for the buyers!
