Category Archives: Austin Market news

Austin Real Estate Forecast 2017 (Recapped from Ted Jones)

Dr. Ted Jones is the Economist for Stewart Title. (Twitter Handle is @drTCJ)

He gives a great presentation and holds your attention and packed with a few funnies along the way. This morning I wanted to re-cap some of the things he discussed and presented on regarding the future of Austin’s Economy.

Despite the election, Ted started off with reminding of us two things:

1. Brexit was the first sign that things were already changing and

2. Don’t let yesterday take up too much of today.

No matter the outcome of the election, traditionally speaking, each election year, right before the election, things typically slow down due to market uncertainty–then they pick right back up (again, regardless if there’s a conservative  or dem in the white house, statistics usually demonstrate this).

Let’s start with Millenials (they are an important part of our Economy, especially here in ATX):

Things to Know: The top 3 Markets with Millenials are:

  • Charlotte 30%
  • Houston 17.4%
  • Austin, Tx 16.4%

76 Million Boomers, 83 million Millenials between 19-35 and 91 million Millenials between 16-35.

75% of Millenials polled say they can live without the call function on their cell phones, 76% prefer texting>talking and 19% never check their voice mail. (guilty a lil, right here).

The above statistic is funny to me. I don’t think of myself as a Millenial, but according to the year I was born, I am. But I will say I have traits from the generation before and after me combined.

{Fun fact: 70% of Millenials prefer shopping in store v. online, due to instant gratification/satisfaction. This is why company’s like Amazon are trying to speed delivery, do drone drops etc–Millenials want it NOW.}

HERE is a great little article on best housing markets FOR Millenials.

Now, let’s talk Non-Renewals/Dead on Arrival/Items already going away:

  • Mortgage insurance deductability
  • Mortgage debt forgiveness
  • Residential energy savings
  • Obama care (or some form of it)
  • Wind and Solar tax breaks

Soon to Happen Changes/Items in the works ??:

  • US has the highest corporate tax rate and we are one of the Top Developed Countries
  • Capital Gains tax cut
  • Middle class tax changes (some up and some down)
  • Carried Interest Elimination
  • US Overseas corporate profit repatriation
  • Corporate tax cut (35%–>15%)

{Fun fact: in 2000 Germany corp tax rate was around 42% in 2016 they are now at 15.8%. Did you know that every BMW x3,x4,x5,x6 was made in South Carolina due to the corp tax rate? It is the largest plant and they make BMW for worldwide-read more on that here.}

Things to note: Currently, and for the last several years leisure and hospitality spending is at a rate higher than job growth–which means a steady market, when we see a drop in leisure and spending is when we hit a recession.

Top States with Job Growth:

  • Florida
  • Washington
  • Utah
  • Oregon
  • Nevada
  • Hawaii
  • Idaho
  • South Dakota
  • Georgia
  • California

Now let’s turn to the states at the bottom of this list (decline in job growth) and look at what they all have in common:

  • Alaska
  • Oklahoma
  • North Dakota
  • Wyoming
  • Louisiana
  • Kansas

They are all Oil and Gas based economy (ok maybe not Kansas, but what’s going on in KS…not a lot). Note, Tx isn’t on this list.

Tx is around 1.77% for job growth, we fall in the top half of the list. “This is the best oil turn down Texas has ever seen.” Jones said. And when you look at the greater Austin area: our market survives from: Tech, Education, Healthcare…Which leads me to…

2016 Stock Market Trends:

  • 13% up for Dow Jones Industries
  • 9.5% S&P500
  • 7.5% Nasdaq Composite
  • 45.2% crude oil

Mega Themes for 2017:

  • More Jobs before the election than ever before in History
  • Retail boom is on a 14 yr run
  • Entry level home buyers are returning
  • High end housing is retracting
  • Commercial Sales
  • Inflation potential (ie UPS increased rates 4.9% 12.26.16)
  • 2016 Commercial Sales were at an all time high in Austin Tx, this is different (above average) than the National record, and Austin is only at a 4% vacancy rate.
  • Rent has been increasing about 5% year over year.
  • Oil most likely stay about the same around $60/barrell (saving the average driver about $550/yr)

2017 Positives and Concerns:

  • Return of ARMs and Second rate loans
  • Faltering high end residential sales
  • Retracting commercial sales (Austin a little different)
  • Inflation
  • Midwest Land value increasing
  • Oil sub $60/barrel

Jones also predicted mortgage interest rates ranging from 4.7%-5.3%, but a 5yr ARM starts at 3.5% currently, “people will just have to get creative.”

Toward the end of the presentation we touched base on Property Taxes (and how outrageous they are and heavily based on our education system–another issue itself on how we pay and grade our teachers and schools, but I will digress).

What did I gather overall from attending Ted Jones’ Economic Forecast? In Sum:

  • Austin will be strong and steady this year, especially for those already here with jobs, he predicts Austin, Seattle and San Jose will not have a declining luxury market, however our (the company I work for, Realty Austin) Broker, Jonathan Boatwright differs on this a little, when he was quoted in the Statesman last week (article HERE and he says the numbers don’t lie)
  • Due to affordability in Austin, people will start getting a little more creative with their loans–perhaps 7 and 10yr ARMs (adjustable rate mortgages) for those who know they won’t be in a house for longer than that…these are for savvy, good credit buyers, wanting to get in their price point and save a quarter on the interest rate (the “scary” part is not knowing where rates will be in 7yrs)
  • Job growth is declining here in Austin (not by much, not rapidly, but it is becoming harder for those to find a job relocating here) Went from 5%-2%, so not by much, but slowing
  • We are NOT overbuilding. While it sometimes may seem like we are, we are still at 2.1mo of inventory. A balanced market is at 6mo of inventory and a seller’s market is usually around 4mo. So basically things are still pretty crazy here in Atx.
  • Will there be growth in 2017? Yes.
  • Will the Fed’s interest rate effect our market here in Austin? Not so much (they do correlate, but not impacted directly).

What’s Next? This is where I insert my plug. “If you are thinking of buying an investment property, leasing or selling your current place, buying your first home, selling a home…well get to it–call me.”

As always thanks for reading and I hope you found this re-cap informative!

-Ashley Brinkman

ashleybrinkman@realtyaustin.com-signature

 

Filing Your Homestead Exemption: Austin, Tx and surrounding areas

Did you buy a home last year?

Do you want a tax break?

Good, here is what you need to do to get that tax break…

First-write down on your “to do” list: File Homestead Exemption

Secondly, actually take about 10 minutes to do it.

Isn’t it funny how the most mundane tasks get put off and shoved to the side? When you put that stamp and send it in (or fill it out online) you think, “oh that really wasn’t so bad, afterall, why did I wait so long to do it?” {still on my to do list by the way}

So, my Austin area peeps:

Below are the links to information on how to download the necessary forms to claim your exemption-based on what county you purchased your home in:

  • Travis County 
    Mailing Address: P.O. BOX 149012, Austin, TX 78714-9012
  • Williamson County or File Online
    Mailing Address: 625 FM 1460, Georgetown, TX 78626-8050
  • Hays County
    Mailing Address: 21001 IH 35 North, Kyle, Texas 78640
  • Bastrop County or Call 512-303-1930 ext. 22
    Mailing Address: P.O. Box 578, Bastrop, TX 78602
  • Burnet County
    Mailing Address: P.O. Box 908, Burnet, TX 78611-0908
  • Llano County
    Mailing Address: 103 E. Sandstone St., Llano, Texas 78643

As Austin and surrounding areas home pricing increases, so will taxes. Typically (yet not always) your tax value is a bit behind your actual appraised value of your home.

**Remember your tax value and assessed home value by your lender are two different things. And as some say– You want the taxing authority to think you live in a shack and your loan provider to think you live in a mansion (wink, wink)**

So at the start of the year, by April 1, you need to have your homestead exemption filed if you are currently living in the home you purchased the year prior.

EVALUATION PHASE:

Jan-late March is the evaluation phase. Around April you will get a letter in the mail with your tax appraised value if:

  • the appraised value of the property is greater than it was in the preceding year $1,000 or more;
  • the appraised value of the property is greater than the value rendered by the property owner; or
  • the property was not on the appraisal roll in the preceding year

EQUALIZATION PHASE: 

April through July for the most part–

After you get the letter in the mail, you may protest your taxes.

If you paid less for your home than what the taxing authorities are saying it is worth, it is fairly easy to get your taxes reduced by showing them your final closing statement.

**However!! Fun Fact: Texas is a Non-disclosure state! So let’s say after you close on your home you get a piece of paper in the mail, it looks official and it asks, “What did you pay for your home?” send this back in to us…You, as a Texas Resident do NOT have to report what you paid for the home.**

There are two hearings to arguing your taxes-an informal and a formal. Basically if you don’t get your way in the informal (which you can send in the piece of paper- ON TIME), you can request a formal. You present your comparable sold properties and explain your case as to why you should not be taxed as much as you were. (This is where I come in! As your/a realtor, I can try to help you find homes similar to yours and what they sold for to help your case).

DISCOVERY PHASE

And finally August through the end of the year is the discovery phase for the following year.

After the inquiry/protest season concludes, the appraisal process transitions to the data collection and analysis phase. During this time, appraisers may be seen throughout the County in neighborhoods and commercial areas as they are measuring new residential or commercial construction, reviewing and updating characteristics of existing construction and/or land parcels, and reviewing, updating, or adding inventory of present or new businesses. Yearly updated aerial imagery, digital field devices for data collection, and GIS analysis tools are utilized to assist in staff efficiency, and ensure proper valuations and equitable results during the assigned/limited time for this phase. This process requires collection and analysis of three types of data:

General data, which affect values on national, state/regional, or neighborhood levels.
Specific data, about the site and improvements of a property.
Comparative data, which regards recent sales, cost, and income information for similar properties.

If this is still all over your head, this chart may help explain and is where I got most the information above from (along with past experience): Here is a great Tax Calendar visual to explain.

When your tax bill comes due, depending how your loan is set up will depend on how you pay it. If your money is with an escrow account–meaning you make a payment to your lender that covers: PITI–> principal, interest, taxes,  (home owner’s) insurance. If the value of your home goes up, so will your payment, as your lender will try to “pad” your escrow account so you don’t end up owing more when your bill comes due. Some home loans allow you to make your payment online–and choose if you want to pay extra and if it goes toward your escrow account or principle, which is nice. Or if you don’t have an escrow account (not required for those who put down more than 20%) you can manage your taxes yourself and pay the bill as it comes due.

Hope some of that information helps and if any additional questions, feel free to drop me a line.

AshleyBrinkman@realtyaustin.com

As always, thanks for reading!

I Own Scissors, but Don’t Cut My Own Hair: An Agent’s Insight to the Austin, Tx Seller’s Market

Hello there blog readers of mine! (All two of you).

I know you look forward to my blogs about my bad dates and theories of my generation and what not, but due to the non-existant dating life I am going to write about something that has been time consuming lately (and I am not complainin’): Real Estate! So stay with me on my rant and hopefully learn a little about this crazy market we are in.

Currently we are going into Summer Months in Austin Tx and yes, it is still a hot seller’s market, with low inventory, but here is what is just starting to baffle me as an agent….

Just because I own a pair of scissors doesn’t mean I try to cut my own hair (or other people for that matter). And just because I know how to run doesn’t mean I am capable of teaching someone how to train for a race–so why, oh why on Earth if you don’t have a Real Estate License would you try to sell your home on your own???

haircutter

Oh you want to save money?…I get it. Well know this–most people who do NOT use an agent to sell their home end up getting less for their home and it sits on the market longer. Not only that, but when you represent yourself you are more liable than ever before. Hello lawsuit!lawsuit

I just want to give this example because I think it is a good (smart) one. My broker calls me into his office to chat recently. Mind you, he has 20 something years of real estate under his belt AND he is a real estate attorney. He says, “Hey I am thinking about listing my house soon and I want you to come take a look and tell me what you think.” I responded puzzled, “Why are you asking me? You know your home and neighborhood and how to sell it.” And he responded with a very honest answer, “You know how sellers are-we always think our homes are worth more than what they actually are. I need an honest, professional opinion. Plus I have a few things I want you to tell me if you think I should paint, stage, where to put things etc.”–all that coming from someone IN the business. While some real estate agents do list their own homes (and in Tx you must disclose if you are affiliated with the selling party or the actual home owner) the last brokerage I worked for would not allow owner/agent relationship, you would sell it under someone else in the office–which is smart.

FSBOI know, I know–you think real estate agents just take some photos, move a few pieces of furniture and stick a sign in the yard and they are done with it. There is so much more to it than that (well for the good agents anyway)! And actually in this market, it is even more pertinent to have an agent with diligence, market knowledge, an agent great at marketing your home in non-traditional ways and has a “pre-marketing plan”, a proactive one that foresee road blocks (like buyer’s financing and appraisal or title issues).

Another example I recently encountered: I am representing a buyer on a duplex. We were in multiple offers. We won. A few weeks later–appraisal comes back higher than contract price! Yessss!! (Always a good feeling to walk in with equity). This listing agent is a discount broker. He didn’t use professional photos and I don’t think he even pre-marketed the duplex. Did we go under contract after only two days? Yes. But do you think if he would have marketed the home more professionally and tested the market price prior to putting it in the MLS he would have had higher offers on the table that would have matched what the appraiser said it was worth? Possibly. (Just a theory, but no way of actually knowing).

comingsoon

It makes me wonder, though: Does an agent do as good of a job when he/she is taking that big of a discount? And furthermore, if he is discounting himself does he:

1. Value himself as a professional or his time?

2. Is he so busy being a discount broker that he has time to market my home, others and take care of everything?

3. Can he even afford an assistant or professional photographer?

4. Does he even have experience?! Maybe he is cheap because he is new and doesn’t know what he’s doing!?

I am not going to lie, when I first got into this industry, you could have paid me $500 to list your home and I would have been ecstatic–and that was in a bad market!! But as time and experience have taught me: time is money. And my work is valuable.

I will say often to all my friends and clients that trusted in me with their real estate transactions in my wee-early real estate days I: 1. Appreciate you having faith in me and am grateful for your business!!! and 2. I Apologize because I know so much more now than I did then!!

Sadly, that SAME broker from the duplex deal had a sign in the yard of a home I recently met with the owner prior and told him EVERYTHING he should do to get his home ready to market (so he did that, then hired someone cheaper…sigh). So, yes people like to save money, but sometimes it is worth it to pay more, get more and have to do less if you ask me (and that goes with a lot of things in this world, huh?–like a pair of sunglasses, a good cutting knife or a car-for example). A home worth over $400,000 (that’s been owned for almost 10yrs) and the owner thinks it is smarter to save a few by hiring a discount broker. Yes, I am bitter! Don’t get me wrong, I have and still do discount my commission when appropriate to the situation, but I don’t advertise myself as the “1% girl” or “flat fee gal” Some brokerages don’t even allow agents to discount themselves unless it is their own transaction.  I know it is a seller’s market, but I keep seeing people get real greedy or maybe it is high optimism? In fact, last week there roughly 500 price reductions in the MLS (Multiple Listing Service). That is A LOT of price drops. Maybe the market is cooling off? Highly doubtful. Perhaps the overly aggressive pricing is starting to correct itself.  Sometimes we agents have to stand behind our work and listen to the words of L’Oreal: “You’re Worth It.”

You’re darn right I am!

youreworthitIn this world of Wiki, Google, HGTV I guess we are all experts. And in a town of 7,000 real estate agents or something crazy like that, I guess there are a lot of people to choose from. Be smart out there folks, do your research, and shop: rates, agents, plumbers, insurance–everything–you will be glad you did in the end. And just because it is the lowest price DOES NOT mean you are getting the best value (think we all know this by learning a lesson one way or another).

htvfunnyYou can find more about Ashley by clicking here and you can start your Real Estate home search here! Realty Austin has fantastic agents to help you find a home, guide you in the process and a great support team to help market your properties to get them SOLD! Also voted Best Places to work in Austin three years in a row according to the Austin Business Journal!

What to Expect when Buying New Construction (in an Austin seller’s market)

Hello again!

I’ve had a few clients in the past few years buy new. Meaning from a home builder or custom builder or condo developer. And being that I now have gained some experience on “the other side” (meaning, representing new projects/the listing agent) I wanted to take some time to write a blog on what to expect when purchasing a new home (in a seller’s market). I add the parentheses because when the market is “bad” or a buyer’s market, builder’s are offering incentives, upgrades, decorating allowances, raffles for a new car. BUT in Austin Tx currently we are in a seller’s market, with this inventory being low, what can you expect as a buyer now that housing is in demand? Well..read on!

Since every builder contract is different (and none of them are the standard TREC <Texas Real Estate Commission> promulgated form) I am not going to go through the nitty gritty details, but basically give you a sum up of what to expect in that contract and when building a new home (or buying one from a builder that is a “spec” home). A spec home is a homet hat has already been started by the builder-lot, floorplan and decor already chosen. Most the time when you choose to use a builder to buy you pick the lot, floorplan and then go to a design center for upgrades etc.

(and use some real life examples!)

Below: Jordan at the closing table-yes, he sent me a selfie, because I couldn’t make closing! Bought his new place in Edgewick, stand alone condo with detached garage! soldJordan

This is a photo of Ashley, below-just closed on her home with Milsetone Builders off Riverside that was built from the ground up-with her input! That area has blown up, she is so happy she bought there when she did!

soldAshley

#1–A Builder’s contract will state that they are allowed to make changes to the property as they deem necessary.

This is important to know, because recently I had some clients (ok, pickier than normal clients) who were very angry that the developer said there would be 4 trees (according to the brochure) and there were only 3 actually planted. These things happen. Does a builder try to purposefully deceive a customer? Of course not, but often times what “they thought” would work, doesn’t once they cross that bridge.

cardinalln

#2–a Builder’s contract is going to cover THEIR butt, not yours. Basically it will state things (in legal jargon) like: the builders have up to xx amount of years to complete the project.

I have another client who was supposed to close in October, ok November, ok late December….well you get the idea, it is March 2014 and we are still not closed.  This definitely has put a cramp in her lifestyle (and wallet, as rent continues to increase-especially when you go month to month)

Now, does a developer or home builder purposefully try to deceit people or make unrealistic timelines? Absolutely not. Do they want to sell the homes as quickly as possible? Of course. But it happens quite often that inspections hold up, Texas has freeze days??, labor shortages, City inspection hold ups (again), permits expire (or they don’t really but some dummy in the office doesn’t know what he is doing) and so on and so forth. Delays are constant. I wish they weren’t, but I have NEVER had a builder complete in the amount of time they said they were originally going to finish a home in. I promise. I wish it wasn’t so, but just the way things go.

So the #1 characteristic you have to possess (in my opinion) going into a new build is PATIENCE. Projects always take longer than anticipated, possibly a few changes along the way. I have been telling my clients (in this busy seller’s market) it is easier to sign a six month lease while your home is being built and break it/sub lease it later in this hot renter market, than to continue to pay increased rent prices month to month.

#3 A Builder almost NEVER pays Title Policy.

If you have bought a home before, more often than not a seller will pay for the buyer’s title policy. Now, in this hot seller’s market, there have been times when I have advised buyer’s to pay for the title policy to have the edge over another offer, which has worked to our advantage. I have only seen a builder for a new home/project pay for a title policy (which usually equates to a little less than 1% of the purchase price) maybe twice. Have I tried to negotiate this almost every time? Of course! But the advantage a new home builder has is that his product is rare and if it is in a buyer’s price range and they REALLY like it, they will pay the title policy vs back out completely. In the times the seller has paid for a title policy, I will add– the buyer didn’t ask for any other concessions, appliances, had strong financing and was at the asking price. So there ya have it.

DSC_0048Above: finishes the buyer’s get to choose at a project I am listing (Towns on Cumberland)

#4 A Builder will have little to no incentives for you as a buyer.

I say rule #4 with the intent of someone understanding the current market state, especially in Central Austin. As housing becomes scarce, pricing has increased and incentives to get people to buy have decreased. Why? Because a builder doesn’t have to offer allowances and upgrades when his product is in demand. I am not saying it doesn’t happen at all, it does, but usually at the start of a project. Asking price is usually final unless a builder is at the tail end of his inventory and ready to close up the project.

Some examples: I had a buyer purchase from Pulte up in North Austin. If he signed by the end of the week he would receive $2000 extra in his upgrades. Done.

Another builder (and most builders, honestly) will have a preferred lender. Do you have to use this lender? No. But most likely the builder will have established a working relationship and the lender is already familiar with the project, the people and have solidified a routine to get the loan done. For using their preferred lender the builder will most likely pay title policy or offer some kind of closing costs paid for at the close of the loan, etc.

drwallSansoneProgress (this home finished months after it’s projected date–it happens).

finishedSansoneBut buyers are super happy with the finished project (couldn’t even fit the whole house in my wide angle lens): Teravista, Round Rock by Partners in Building

However, neighborhoods perhaps farther out in a VERY newly developing area that may take years to grow etc. could possibly be offering more incentives and bonuses for your extra long commute and factor incentives for you. The fact you will be living in a construction zone for the next few years–you deserve a few upgrades. There are pros, however to buying further out– If you can hang tight in this busy market, you will be happy with the equity you start to acquire in your new home. You need to make sure you want to be there for a while, though, because often times if someone tries to sell a year later the home is worth just as much as a new home down the street. Be sure you pay attention to “what is to come” and what “can’t” be put next to you, too!

I hope this blurb about what to expect doesn’t sound like a “crappy deal” or like I am being pessimistic. I consider myself a realist, ha. I also hate when I don’t fully explain to buyers what they may run into when buying a new project. This isn’t to discourage one of NOT buying new, but just educate one on how it can be different from purchasing from a seller. Buying new can be great! Modern finishes, the ONLY one that has lived in a place, your own finishes (tile, backsplash, flooring, constructed floorplan) all picked by you. A new community with like-minded people in an up and coming (or already established, hip) area. Do what is best for you, but know what you are getting into!

resizedSome buyers prefer to buy old charm and fix up (Heidi and Brian above)…

JT4And some prefer starting their family in a new home (Jennifer and Travis above).

But whatever you decide, be happy with your new home!

Start your home search here and register! Read more about Ashley here and how she can help you with your real estate needs!

Happy house hunting, let me know if I can be of help and as always, thanks for reading!

-Ashley

The Easy Life of Being a Real Estate Agent (or so you think?)

An Inside look at what being a real estate agent is all about (for me, anyway).

No, it’s not rocket science. I don’t work 80hrs a week like a lawyer, and I don’t save lives. But I wear a bunch of hats and it can be stressful, unstable, time consuming and plain exhausting. So, hear me out.

Randomly this week, the exact same day, actually, I got two messages from  facebook pals that wanted to have coffee with me and pick my brain about being in real estate. Over the past few months I have met several people who were referred or wanted to chat about getting into the business. If you follow my facebook, or my instagram, or you just know me–you will know that:

1. I am pretty honest and

2. I keep pretty busy! So I thought I would take the opportunity to write some pros and cons and an HONEST reflection of what being an agent is like, and possibly de-bunk a few myths.

1. Myth #1: Real Estate agents just roll in the dough. Some do, sure. They also most likely have been doing it for more than 5yrs or may sell luxury with bigger pay checks at closing. What you forget is HOW LONG and how much time, money and energy it takes to get to the point of “rolling in the dough” Just like with any start up business, real estate is like that. You start operating as a business.

rollinginmoney

The average real estate agent makes $5k their first year of real estate. Yep. Can you live off that? I can’t. I always tell people who want to get into real estate either–be prepared to have a second job (I waited tables nights and weekends when I first got into real estate and tried to be at the office in the day, on top of showing houses and leases on weekends etc). OR you better have at least a year of savings to live off and live frugal as you build your business.

Let’s break out the numbers a little, a brief example if you will: Your friend wants to buy a house (Yesss!) And they trust you to handle their transaction. After three months of looking you sell them a $300,00 house.

Great. $9,000 in your pocket right?

Wrong.

Let’s say your broker takes half because they give you an office and signs and a lockbox and marketing. There is also probably a transactional fee, franchise fee AND errors and omissions insurance. But for number’s sake we will keep it at half going to those items.

So now you have $4,500, right?

Wrong.

That isn’t taxed and you are self employed now, so take 20% of that and pay the IRS or put in an account to pay taxes quarterly. So now you have $3,600 right?

Wrong.

You have to always invest in yourself, they say on average about 10% should be for marketing, so $360 (which only pays for one mail out of post cards that tell everyone in that area you just sold a home) So there ya have it, three months of weekends and evenings showing houses, setting appts, using your gas, putting miles on your car for $3,200 in your pocket.

BUT don’t forget health care. There are no benefits when you are with a broker. There is no 401k matching like in the corporate world oh no, no, no. You basically have to become (or invest in) a CPA and financial planner because you are now running your life and finances like a small business, and perhaps some of you already do-which is great.

 

2. Myth #2: Real Estate Agents just stick a sign in the yard and take photos and boom it is sold, easy money.

Listings are not an easy item to obtain. They not only take knowing the right people, continuous marketing to specific areas, researching sold prices and activity, viewing houses in the area, setting up property tours etc. but someone is paying you to sell their home–Most likely their number one financial asset.  Let that sink in. That’s a scary thing when looking at the big picture. What if you price it too high and it sits forever? What if you price it too low and they needed more for it? What if you didn’t do your due diligence and cross all your t’s and dot all your i’s on the contract? Or forget to disclose something you were supposed to and now the new buyer is having issues…who will they come back to sue?

4502finley

When I first got into real estate I thought: “I know so many people, surely they will work with me.” Not the case. There are somewhere around 9,000 agents in Austin!! I have heard statistics that we have more licensed agents per capita than any other city (cat has been out of the bag on how hot Austin is for a while now). Growing a thick skin became part of the job. Finding out some of your best friends got married and bought houses through people they saw weekly at church or lived across the street from a Realtor was a tough, but realistic part of the business. I always thought well maybe I shouldn’t tell them I am still working my second job. I would think: “No one wants to work with an agent who has to have another job. Don’t they know I am busting my butt trying to make it in this business?!” Time. It all takes time, persistence, and experience. It is hard to get that first deal, but when you do (and mine was a $90,000 condo on the east side) it is such a good feeling, but the momentum must continue and the steps that lead to success are more than I care to go into right now, so I will spare the details.

Like most economic models, I would say 90% of the agents make 10% of the money and the top 10% of agents make 90% of the money.

For me, it isn’t about the money as much as it is about helping others. And it isn’t always the easiest, but if I can help them in some way–a referral, selling them their first home, walking them through the process, telling them where they should go eat–and if they are happy. I am happy.

happyclients stuarts

3. Myth #3: Real Estate agents make their own leisurely schedules and don’t even work 40hrs a week!

I will agree that some of the more successful agents possibly don’t work 40hrs a week, but that’s because at some point in time they put in 60+ a week and now pay salaries of 3 people working under them.  But being a real estate agent is much like any entrepreneur. And Austin is a city that is full of them. Any one you know that has a successful business didn’t get there by slacking off and watching Ellen every day and sleeping in. Definitely not. And once you get going in business you don’t really want to stop. (OK a few agents I know are totally content with a few deals a month, and don’t want to grow and expand their business–but it is rare).

I know I feed to this myth because I post facebook photos of me traveling to countries, US cities, going to concerts, making gift baskets for clients, grocery shopping in the middle of the day. Are all these fabulous items perks of making my own schedule: ABSOLUTELY.

WHAT YOU DO NOT SEE: I sometimes stay up until 2am on the MLS or brainstorming about business or getting caught up on an expense log or mileage (if you are a client reading this you probably know, because have received an email at 1am of a property you might like or a reminder of some sort). I have never been much of a morning person and find I “get in the zone” with little distraction and lack of cable, to where I can get things done late night (sadly).

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You also do not see me taking phone calls while on vacation, managing things when “shit hits the fan” constantly checking email. I have been on trips with friends where I get that “roll of the eyes” because I am on the phone, writing an offer, answering a question and not helping load the van for camping or enjoying the baby seal watching on the beach. It’s a balancing act- despite balance always being an idea, but not really ever achievable.  I also always have to make sure I have wifi wherever I book (and usually I take a little time to sit down and get work done and check in with clients etc while I am away). Can I hire an assistant? Sure. But the other issue with being your own boss is 1. No one does it like you do ;) and 2. You have to pay an asst.–so you better be at the level that you can afford to pay someone to help (one day….one day). This again takes TIME like with most successes in life.

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I try to remain  positive in life in general (sure I rant, ha see last blog post) but I also think of myself as a realist.  I try to depict positivity for my work life/ethic, and to be honest–it isn’t always sunshine and rainbows. But who wants to work with an awful/negative person??

There are hiccups.

There are disappointments.

There are angry client emails frustrated with builders or lenders and taking it out on you.

There are legal items you have to be aware of or they can bite you in the butt and come close to being sued.

There are things you just flat out don’t know and beyond your scope of experience that take time or research, and finding someone who can help you help your clients can be a challenge. EVERYONE is busy.

So while my travel photos and happy client photos may seem all peaches–sometimes there was a dark, rocky road before we got to that point. If you are a people pleaser, it may not be the best career for you, because as I mentioned before–the skin has to grow pretty thick. We can waste a lot of time and energy pleasing others and bending over backward for them, when really they are never going to be happy anyway.

As a side note: My life looks pretty awesome because, well, it is– but it is just me. I have no kids to mother, no day care/school/clothing expenses…my mouth is the only one to feed. I have no husband to take care of or plan my schedule with. It is just me! I look up to successful agents that somehow manage 3 kids, still managing to cook for them, run the house, still make time to train for half marathons, run a business, take vacations and get it all done, it’s impressive and I hope to one day be at that level.

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I certainly didn’t cover all the bases and don’t want to bore (or scare) you with the nitty gritty details, but hopefully I provided enough insight and de-bunked a few myths of #realtorlife. Thanks for reading.

Austin Texas: A Seller’s Market in 2013: What does it mean for buyers?

Last year as predominantly a buyer’s agent I had time for my clients to gather 3-6 homes they wanted to view for our appointment a few days in advanced. We’d go out, take a look, decide what offer to make on which property. I was able to negotiate for them, get seller’s to pay closing costs (depending on the deal of course) and I was able to make everyone happy–my main common goal in my career (and life–in general).

marah and Nick

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This year is a different story! I knew it was coming too. As the last quarter or so started to dwindle down in inventory in 2012 I noticed that 2013 would be very different. Each week I would read statistics from Title Co. regarding the decline in listings, the increase of people moving here. Yep. The cat was out of the bag that Austin is a cool town to live in. And as this IT, green, outdoorsy, fun, young, semi-alcoholic filled, laid back, intelligent city started to attract more people, the prices started to rise and people who are currently living here want to stay here.

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Now it is 2013 and we are in a shortage. In case you hadn’t heard, Austin is in a Seller’s market. I do not look like a buyer’s agent Rockstar any more. I am in a secret Facebook group with agents who share Pre-MLS listings, I have even sent out letters to home owners where my buyers are looking to see if they want to sell. I haven’t started door-knocking yet, but I am strongly considering it. The one thing I am trying to maintain is a positive attitude. Has it been easy, no? But really, is it ever in this business? No. But I think with persistence, knowledge, staying in the loop with other agents and thinking of my client’s needs, I can still manage to make my clients happy, but honestly it may have taken them losing out on a few properties to get to a point of aggressiveness. Hard to compete with cash in this market too. It is still a great time to buy if you ask me, however. Maybe you aren’t getting the “deal” you necessarily dreamed of, however securing a low interest rate and purchasing when Austin is projected to be the next best city for the decade isn’t such a bad deal.

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Will we have a bubble? People keep asking me if we are going to burst, like California did. I am no Economist, but based on what I read and hear, here are my over all thoughts:

  • We have steady job growth here (this isn’t a dot.com era where a bunch of companies keep popping up out of nowhere, many various markets are expanding and growing).
  • We have a diverse job market, maybe not as diverse as Houston (which is also doing really well, interesting article on why Houston should be the capital-read here)
  • Projected to be the next best city of the decade (wow!)
  • Consumer confidence is at a 5yr high currently

I feel like I have now been in various cycles of the real estate market. From the absolute bottom, when there was virtually no activity, to when it picked back up and was booming and now the extreme-a competitive rental and buyer’s market. This ever-changing market definitely keeps me on my toes. Being that I work with a lot of buyers, a lot of my blogging and advice is geared toward just that. If you have any questions regarding buying or selling in Austin, Tx please don’t hesitate to ask.

welcome home

As always, thanks for reading! (And yes I took all those photos myself, around Austin etc.!) Start your real estate search here today and let me know if I can be of any help!

ashley3-Ashley

Pease Place: A Green Condo Project close to DT, Austin Tx

While I have had fun bloggin’ about my Euro-trip I interrupt mid-trip to bring you work related items.

You know what’s funny, I think of topics on a daily basis. But the time it takes to type, upload photos (and edit them to be appealing etc) is so exhaustively time consuming. BUT I digress. This is important. This is biz…And these are nice condos and YOU need to know about them, so here goes my sales spiel….

PEASE PLACE CONDOS 1603 Enfield, Austin Tx 78703

HIGHLIGHTS:

  • 25 units total 3 floors (more units on 2nd and 3rd floor)
  • Currently as of 12.11.12 we have 8 units under contract, 6 to close before the holidays (fingers crossed)
  • We do not yet have C of O’s yet (certificate of occupancy, but are so close) THEN we will have staged models, sales office fully set up and able for those to move in, check out etc!!
  • What’s currently available?: 13 1br unique floorplans, 2 2br 2ba corner units, 2 studios (both different floorplans under $200,000
  • This is a 4 star green project. Note that not all Builders are certified Green builders, so it is good to know the energy efficiency and sustainability of this project is what makes it unique.

“Green” Features

  • Igneous stone countertops (recycled quartz)
  • Porcelain tile by American Olean in bathrooms
  • Bosh and Whirlpool energy eff. appliances throughout units (varies)
  • Mohawk wood flooring
  • LED lights throughout
  • Solar panels on roof make for low electric bill!
  • Tankless hot water heaters in every unit
  • Open cell spray foam insulation
  • Gas cooking and water

I have had the pleasure of walking the units and showing them to several prospective buyer and those in the neighborhood who are excited to see what the Butler family has financially backed now, (the eye sore that sat for 6yrs is finally being finished-and done right) the new layouts, and the high end finishes.

While we don’t have the units fully staged and completed YET, we are coming along, but wanted to share while we are still at entry level pricing and our reservations are turning into contracts of what the finishes and floorplans look like.

Photo above of the top floor 2/2 unit. Already has upgraded glass tile back-splash and wood floors throughout.

Floors are taped up in attempt to keep it clean, but this give you an idea from the balcony door looking into the kitchen area the layout. No bedroom walls are shared. The guest bedroom has two large closets.

Top floor balcony wraps around living area and master-it is the largest balcony in the building. There are only two 2br and they are both corner units on the NW side of the building.

Master bedroom has lots of light, steel beams in ceilings as well and recessed lightng for bedside table lamps. Did I mention all interior lighting is LED in the complex?

Mohawk wood floorin–not in all units currently because it is an upgrade option, if you prefer carpet in bedrooms that is fine too!

Tankless hot water heater in every unit. Here is the control for one above. The actual water heaters are located on the roof. Every unit has connections, even the studios! Some have stackable and others full size. Most have stackable features to maximize space.

We have two studio units left. One on the ground corner floor, the other on the third floor. This one is a third floor unit and almost has a one bedroom feel due to lay out and partitioned wall. Wood flooring throughout and huge bathroom that you can add extra shelving for storage if need be.

Above is a one bedroom, this is one of the larger units. Huge pantry, bathroom connects to master and living and balcony over looks Enfield.

As you can see flooring not yet installed-that is so the buyer can choose! Carpet or wood flooring. Also choice of tiling in kitchen as backsplash as well and mirrors for the bathroom… if they had something particular in mind-we can do a custom quote and look into making it happen.

Another one of my favorite units is on the back side of the building, with DT views from the balcony. Has a nice open feel, but designated areas where I could envision a dining table and living area. And there is a linen closet and closet for WD which is nice-right next to the kitchen.

views from unit #314 1br 814 sq ft

This is the outside of #315, a very nice 1br unit. Definitely a one of a kind as it is the only one bedroom that has the steel beams and vaulted ceilings…see more photos below.

This unit is also fully decked out and currently priced at $316,500, which is a great value. Please note all pricing subject to change (and soon at the rate we are going!)

So, if you are interested in these wonderful condos, feel free to shoot me an email, call to set up a tour or swing on by as our on-site office will be open on a more regular basis. Look for updated photos on our facebook page, and website as we start to sweep up, stage the model and get units closed prior to the holidays! Thanks for reading as always.

Want to see more Austin homes? Start your search here! And if I can help you, read more on me here!

Austin Real Estate Market Update

Austin is heating up…literally and figuratively.

While we are now in June (May figures still being accounted for) you can see that Austin has increased from the 2011 year for its 5th straight quarter. The amount of listings is down, sales volume and sales prices have increased from previous year.

Everyone seems to be moving here and I can tell this because…

1. Those living here don’t want to leave, too many are moving here so, it is officially a seller’s market.Read more here!

2. I no longer meet people from Tx when I am out, they are all college graduates from Michigan, Wisconsin, Illinois and other cold states where people hate the brutal winters.

3. Traffic has gotten worse on MoPac and IH-35. (Attention large companies–let everyone work from home one day a week or change your hours from 10am-8pm please!)

4. Rental rates are ridiculously high, and hard to come by anything. You used to be able to find a central Austin 2br bungalow for about $1000-ha! Not anymore. And if you currently live and pay that now, consider yourself lucky. Dallas based real estate marketer forecast named Austin as one of the best markets to invest in rental property.

Is buying right for you? It just may be. Here’s what you need to get started:

  • A good credit score. You will want to be 620 or higher, if you aren’t don’t be discouraged, often times there are small things you can do to bring up your credit score!
  • MONEY DOWN! An FHA loan is 3.5% down, a conventional loan is often more, most people have a goal of 10%, depending on your rate and money down you can avoid mortgage insurance.
  • If you served for the military or are considering buying in a rural area,you may be eligible for a VA loan or USDA loan which means 0%!
  • First step is knowing your finances-what do you have saved up for a home? Closing costs? Insurance? Repairs? Know what you are willing to put toward a home, and what you need to save for later.
  • Talk to a lender. You will need the following information for a lender to help you figure out what is realistic for your budget.
    • Past Two Years Tax Returns
    • Past two years W-2
    • Last two month’s paystubs
    • Last two month’s bank statements
    • Credit Report-or a lender can pull this for you and help you increase score if need be
  • Feel free to ask me who you can talk to before you get excited and start looking up dream homes online. (Often times people start browsing homes not even knowing what it costs to buy a home or what they can afford each month). Only to be let down when they find out that home is out of their monthly budget.
  • Let the search begin! I am not going into further details, I do have a more extensive blog on the buying process, which you can check out here! But hopefully these tips can get you started!

Ashley’s Reason’s to Buy Now in Austin, TX (in 2012):

  1. You aren’t getting any younger!
  2. Austin Market is booming, already missing out as it is now a seller’s market
  3. Austin has always been a great rental market, should you decide to hold on to a property or get transferred for work
  4. Interest rates are slowly increasing
  5. Inventory is decreasing
  6. Sales prices are rising-making it more difficult to purchase in the future, especially with less options on the market
  7. For some, it can be about the same cost as renting, and in the future it will be less expensive than renting
  8. You will feel more like an adult
  9. Tax breaks!
  10. You will learn more “at home projects” and start watching HGTV on a regular basis
  11. Owning is sexy.
  12. The aforementioned point was a marketing tactic targeting your vanity, and if you aren’t a home owner it probably bothered you a little.
  13. I cannot think of any other points, so #11 and #12 and this point are just to make the list look longer.

Hope you found this information of use to help you in goal setting to become a home owner. Here are some of my past clients and now… happy home owners:

 

 

 

 

 

How to buy your first home: A Breakdown of the Process of becoming a Home Owner

Even though these steps are already listed on another tab on my website, I thought it couldn’t hurt to also blog about the steps since I seem to be working with so many buyers right now, which is great because it is only January, interest rates are still low and Austin is still doing great!

I love working with buyers.

There’s always a few obstacles, but there’s something about researching to find the best option for my clients that I love (of course, there are always those who have already done their homework online and know what they want), but I’d say the hardest part is the “break up.” I mean it is kind of awkward. You spend so much time emailing, discussing options, driving and looking at properties together, then you make an offer, wait until it closes and then that’s it. I don’t really see or hear from my clients anymore but always want to and try to keep in touch. I guess it could be considered a “friendly/on good terms” breakup, and those are the best kind.

First off, before the 8 steps, can I just add that due to the financial situation we are in (the “lending crisis”, the “housing crisis” you hear mentioned on the news), lending regulations and guidelines have strengthened and there is a lot more red tape that comes into play when getting a home loan. Austin and Texas in general have remained strong and economically are better off than the rest of the US…so that is always good to hear.

For example: you will want at least 3.5% saved up to put down on a home…and really, you want more, for 1. reserves and 2. closing costs.
How will I know what I am approved for? 
A lender will tell you based on income, debt to income ratio and overseeing your credit and employment history as well.
Is it ok if I talk or shop more than one lender?
Absolutely. You can always start with your bank (if you have banked with them for a long time), but in my personal experience have found it is better to deal with a mortgage broker. Often times I recommend a few lenders to any first time buyer, whom they feel more comfortable with regarding confidence, personality and rates is up to the buyer to move forward with in helping them process their home loan.

What are closing costs? And what do they usually run me?
Closing costs are “the cost of doing business” and the money you need to bring at closing (when signing a million documents to your new home purchase).
Estimate for closing costs 4-6% of the sales price. It will vary if a seller or buyer pays for closing. Often times if a seller refuses to pay for closing costs, a buyer can roll it in to the price of the loan, should they not want to bring that much to the table (aka closing).

What else will I need to prove to buy a home?
Depending on the loan program, you will need a credit score around 640. If your credit is lower, than often times it can take someone reviewing your credit report, and anywhere between 3-9mo to establish better credit.
Tips for maintaining great credit: Several different lines of trade (i.e credit card, car payment, furniture lines). Paying on time (this is the BIG one, that can really hurt you if late). Paying over the minimum amount. No delinquencies. Keeping your credit card balances at 30% or less of the total limit. If you have a credit card open, but never use-charge at least one item per month on the card and pay it off. Lines of trade that aren’t recent (the longer established lines of credit show that you can month after month manage credit, pay on time and be responsible for your charges). No debt in collections.

What are some other costs, as a buyer, I will be expected to pay?
Once you find the home you like, it is a very good idea to get in professionally inspected. You are looking at a few hundred dollars, depending on the size of the home, and arranged between the buyer and inspector. Even if the home was recently pre-inspected, it is always a good idea to still get another inspection.
Also, the appraisal. Once under contract and inspection looks good, the lender will need to make sure the home they are about to lend on appraises for that amount, this is usually charged to the buyer as well and arranged between buyer and lender.

You will also need proof of income. Independent contractors and small business owners/people who work for themselves, need to have income proof of at least two years to buy a home. Steady income can be hard to prove to receive a loan, so make sure you keep an accurate track record of your finances, while also accounting for taxes and saving for your first home purchase. You also don’t want to make a big career change right before you buy (after perhaps), but if you do decide to make a change, it is much easier and more explainable if in the same field.

So, you have had steady income, your credit looks stellar, you are tired of apartment living and rent going down the drain, what’s next?

Steps To Buying Your First Home:

1. Decide to Buy
  • There is never a wrong time to buy the right home. The key is finding a good buy and taking the time to carefully evaluate your finances.
  • A home purchase is an important step in the path to long-term wealth. Purchasing your own home is a great investment that provides specific financial advantages, including equity buildup, value appreciation potential and tax benefits. It’s also an automatic savings plan that you cannot get from renting!
  • You don’t have to know everything. Let me help you and walk you through the process.
2. Hire an Agent
A great real estate agent will:
  1. Educate you about the current conditions of the market.
  2. Analyze what you want and what you need in your next home.
  3. Guide you to homes that fit your criteria.
  4. Coordinate the work of other needed professionals throughout the process.
  5. Negotiate with the seller on your behalf.
  6. Check and double-check paperwork and deadlines.
  7. Solve any problems that may arise.
3. Secure Financing
Ultimately, your lender will pre-approve you for a certain amount, but YOU will decide what you’re comfortable paying every month. Remember, your lender only sees your finances on paper. It’s up to you to decide how much you’re willing to stretch your budget in order to get into your dream home.

Be sure to follow these six steps to financing your home:
  1. Choose a loan officer (your agent may be able to recommend a few)
  2. Complete a loan application and get PRE-approved.
  3. Determine what you want to budget monthly and select a loan option.
  4. Submit to the lender an accepted purchase offer.
  5. Get an appraisal and title commitment.
  6. Obtain funding at closing.
4. Find your Home
So you are pre-approved and ready to begin your search. But how or where do you begin? There are a lot of homes out there and diving in without a guide can become overwhelming and confusing. A great agent will help you more accurately pinpoint homes that fit your criteria and budget. The right home will meet all your important needs, and as many of your additional wants as possible. An agent can guide you in the right direction if you are unsure.
You’ll learn as you look at homes, your priorities will probably adjust along the way.
5. Make an Offer
Once you’ve found a home you love, the next step is making a compelling, educated offer. While emotions are probably in high gear once you’ve found a home you love, it’s important to remember that a home is an investment. Your agent will research similar properties in the neighborhood to help you determine the market value, and fair price, for your home. Look to your agent to explain and guide you through the offer process.
  • 3 basic components of your purchase offer: price, terms and contingencies.
  • Price is the dollar amount you are approved for, willing and able to pay.
  • Terms cover the other financial and timing factors that will be included in the offer.
  • Contingencies are clauses that let you out of the deal if the house has a problem that didn’t exist or which you weren’t aware of when you went under contract. They specify any event that will need to take place in order for you to fulfill the contract.
6. Perform Due Diligence
Just because you love a particular property doesn’t mean that it’s perfect. In fact, this is where reason has to trump emotion. You’ll need to have a property inspection (which your agent can recommend a few, and they will go over their full report in detail and any hidden issues). This way you’ll know what you are getting into before you sign closing papers.
  • Your main concern is the possibility of structural damage. This can come from water damage, shifting ground, or poor construction when the house was built.
  • Don’t sweat the small stuff. It’s the inspector’s job to mark everything discovered no matter how large or small. The inspectors report may be long, but, things that are easily fixed can be overlooked for the time being.
  • If you have a big problem show up in your inspection report, you should bring in a specialist and if the worst-case scenario turns out to be true, you might want to walk away from the purchase.
  • Even if your home passes inspection, you’ll still need to buy a home owner’s insurance policy that protects you against loss or damage to the property itself and against liability in case someone sustains an injury while on your property.
7. Close
Once you’ve made your offer and have completed the inspection process, you’re in the “home” stretch! But, in order to ensure that you don’t put your closing date, or your mortgage at risk, you have a few pre-closing responsibilities that you’ll need to be mindful of. These include:
  • Staying in control of your credit and finances. If you are tempted to make any large purchases during this time, it’s best to talk to your lender first.
  • Keeping in touch with your agent and lender, returning all phone calls and completing paperwork promptly.
  • Communicating with your agent at least once or twice a week, and verifying with your lender that all mortgage funding steps are completed.
  • Conducting a final walk-through of the home with your agent.
  • Confirming with your agent, home insurance professional, and lender that you have the settlement statement, certified funds, and evidence of insurance lined up prior to closing.
8. Protect Your Investment
Congratulations, and welcome home! The home-buying process is complete, but just like any big process, there’s a maintenance plan! It’s now your responsibility, and in your best financial interest, to protect your investment for years to come. Performing routine maintenance on your home’s systems is always more affordable than having to fix big problems later. Be sure to watch for signs of leaks, damage, and wear.And remember, just because the sale is complete, your relationship with your agent doesn’t need to end! After closing, your agent can still help you – providing information for your tax returns, finding contractors and repair services, tracking your home’s current market value and when you are ready to buy again and sell!

I reiterate these steps on my website as well, and maybe all this reading can seem quite overwhelming, but so long as you are ready to take on the financial responsibility, and can afford to, as I mentioned before–there’s never a bad time to buy the right home. You can find reviews from some buyers (first time as well), by clicking on my reviews on the Zillow website here! First time and in the Austin area? Call me, I am happy to help and walk you through the process. I love helping buyers.

Austin’s Economic Forecast 2012

I am no economist, however if you know me at all, you know I carry a spiral with me just about everywhere (I know it’s no iPad) and inside that trusty spiral are some notes. I take notes when on the phone, when I randomly think of something while driving (I mean while stopped at a red light of course), and for my infinite to do list…(aka Success list as a motivational speaker once told me it should be called). Anyway, without further a d0 (thanks Tim for the grammar correction, I can’t believe I graduated college), here are some notes on the Economic Forecast for 2012 meeting I attended a few weeks back, and the trends we have seen the past few years in Texas and Austin especially. Since I am such a list maker, a lot of this may be bulleted, please remember I went through a bunch of slides pretty fast with graphs and charts.

I know it isn’t the most exciting information in the world, but it sure is important!

  • Officially the Recession of 2007 has been declared over. Does it feel like it, perhaps not, but it is.
  • New home construction is what took us into the recession, but it will be what takes us out
  • Our economy won’t recover until the housing market recovers
  • Most election years are slow (this I can tell you from personal experience) then not necessarily based on who is elected, but what they promise to do will determine how the housing market will turn around

Hurdles for 2012:

  • Tepid growth in private sector
  • home prices declining
  • Government restrictions from falling revenues
  • Commercial Real Estate (RE) still dragging due to lending and regional banks
  • Uncertainty in the Gov. due to lack of confidence re: actions, regulations, taxes, national debts and deficits, global disruptions
  • Credit contractions for consumers and businesses
  • Confidence in RE increasing in value still down, consumers making lifestyle choices over investment opportunity

Reasons for Optimism!: Why I am happy to be a Texan

  • Tx job growth is double the National rate
  • Relentless population growth in Texas
  • Government budgets finally getting real
  • Pent up demand due to: retiring, moving to a new location, buying a house, relocating biz to Tx, expanding a business
  • Texas Recession was 2009: 2010 and 2011 have been recovery years
  • Texas is the fastest growing state 2000-2010 (21% increase)
  • Projected: 40yrs 13.9million people, 703k per yr (2000-2010)
  • Austin, Tx has increased 37% since 2000, 6.8% of Texas and projected at almost 50k ppl per year moving to Austin, TX
  • Texas is a young state: 27% of Texas is 18 and under, only less than 10% is 65+

Forecast Factors…a Closer look at Age:

  • Generation Y is much bigger than baby boomers
  • Generation i–> what they are calling the next group because they will have come into this world not knowing what it was like to not have internet (crazy, huh?!)
  • Baby Boomers: Home Ownership Grows (since the ’70s)
  1. It was the “American Dream” for the Boomers
  2. Last serious time of deflation of home owning: 1930’s
  3. Loss equity in real estate
  4. Because of Boomers Gen X and Gen Y have shifted attitudes due to seeing their parents lose value in their home
  5. Since 2007 we see more people “doubling up” moving in together even after college, or back in with parents

Boomers Own–> Gen Y Rents

  • 25-35 yr olds > 50% are already home owners
  • Took advantage of tax credits, interest rates, and timing in the market/opportunity

Austin, TX  Breakdown:

  • Echo Boomers: Gen Y 16-34 (31.8%)
  • Baby Bust: Gen X 35-46 (17.6%)
  • Millenials: Gen i
  • Austin owner occupied units have become younger and foreclosures are declining
  • Because Tx is a non-judicial foreclosure state, we really are declining here compared to other states
  • 550days!!!!!–> National average of days before foreclosures happen

A Closer Look: Households in #s:

  • In the 1960s–40% of people had 4ppl in a HH (household not happy hour)
  • In 2009–30% had 2 person and 31% had 1 person per HH
  • Also noted–married couple decline in HH types

Current Housing Issues:

  • Low demand and high supply=weaken home values (I really don’t see how this applies in Austin so much…rental market was tight due to influx of people, with more coming-where are we going to put them all??)
  • Gov stimulus efforts prolong market recovery (tax credits and mortgage workouts)
  • Lenders in Difficulty: Told to make loans, but are punished for making RE loans or CRE loans
  • Renting a more viable option to buying (only if you can’t qualify and it makes sense financially)
  • FHA essentially a sub prime lender

Overall Texas Housing Markets Info:

  • 2010 sales decreased from 2009: The Good News?: After flattening we’ll increase
  • All metro areas in Tx after tax credit home sales went down
  • End of 2009 and beginning of 2010 we see an increase in sales due to the tax credit (these factors will always need to be examined closer when comparing year to year housing prices)
  • Homes sales haven’t increased, but employment has
  • National delinquency is much higher nationally
  • Foreclosures: 2Q2011:      US: 4.43       TX:1.87

AUSTIN, TX:

  • Top 10 in US metro areas for healthy housing, in fact all 4 major markets in Tx are in the top 10, alongside North Carolina
  • 2011 Home sales up in Austin (19k-21k)
  • Median price of homes: Up 2% from 2010, $192,800
  • Historically 4% increase
  • Rest of the US is down
  • “Flat is the new Up!” (referring to charts where our prices and values stay steady, because at least they aren’t declining!
  • Generally strong market due to Supply and Demand
  • Multi-family building permits up in June

In conclusion, I hope you took a little from those notes (I know they were somewhat overwhelming). I always think it is interesting to analyze numbers based on sales, housing prices, building permits and growth, alongside cultural changes. Generation Y shifting in attitudes, each generation becoming more entitled… more need for instant gratification and honestly, in my opinion, lacking financial self discipline and money smarts. With lending regulations being as tight as they are, I feel it is our responsibility to start informing and educating those younger than us the importance of paying on time, income to debt ratio and saving money, and that they don’t have to have the best of everything right now. Ok I will get off my soap box, because I am such a great parent and all…

So, really now, in conclusion Texas is doing great. Overall we will see steady until after the election of 2012. Rates will remain low for a while (not forever), Texas and local markets will continue to grow and make modest improvements and there will be some enthusiasm come Spring 2012. In Austin, due to tight lending regulations, while there have been some multi-family building permits approved, this doesn’t necessarily mean they are getting done. While there being an influx of young people moving here, they are more likely to be renters and studies have actually shown that more unemployed college kids move to Austin (live off parents and savings) because they hear how great Austin is (Great! More unemployed college kids stimulating the local Austin economy with their parents’ money, awesome!) Austin, known for its Technology sectors will still increasingly grow…a youthful city at that. Being there will be so many moving here from other places, I predict rental market to still be high, and decent places with desired location to still moved fast. If you have been paying the same amount in rent for the past two years…consider yourself lucky! I also predict (based on what I have seen and read) the same shift toward people “doubling down” and rooming together. I hope you found this Economic Forecast of 2012 interesting, rewarding and something to take home. Call me if you are ready to buy while the rates are low and the rents are high and as always, thanks for reading!

Ashley Brinkman/Realtor/Prudential Texas Realty/512.665.8787