Category Archives: Market Update

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

 

Austin Real Estate Market Stats April 2015 v 2016: Where did Austin Increase 33%?!

Hello, hello!

It has been a while since I shared some market updates with you, so I was doing a little researching–and decided to share some interesting finds on the Austin market (for the month of April, 2016 in comparison to same time last year) as the market is really starting to stir up, school comes to an end & the busy Summer begins from home projects and vacations, to buying and selling.

Some areas have increased from last April as much as 33%, some down 5%, to find out more about which hoods, and where your next investment may need to be…read on.

“The market is hot!” Bet you haven’t heard that yet? (sarcasm).

As I am sure you have noticed: VALUES ARE UP! Taxes are up! Rents are up. Highrises are going up, and travel times are going up…and my clients who purchased only three years ago… Are movin’ on up.

jeffersons

All signs of a booming metro (according to Forbes, Jan 2016) show how much our housing market has increased–and this blog is more so about in what particular areas…

First–to understand what areas I will be referring to in the charts below-You must know the Austin MLS areas. You can choose a particular area to see the stats. I did not break them up by zip code, there are several zips in an MLS area.

Secondly, if you would like data specific to you, not listed in this blog-let me know- I can get it for you. All data comes from the Austin Board of Realtors, based on MLS data (which 99% of home sales are entered into).

Let’s look at Austin as a whole, first. All the Austin Board of Realtors area coverage (from Austin to Dripping Springs, Wimberly and Kyle to Georgetown, Taylor and Cedar Park for example):

 Greater Austin

Median

Average

 

Apr 2016

Apr 2015

% Change

Apr 2016

Apr 2015

% Change

List Price

$282,000 $269,900

+ 4.5%

$343,647 $336,725

+ 2.1%

Sold Price

$280,000 $265,000

+ 5.7%

$338,844 $330,111

+ 2.6%

Square Feet

1,958 1,957

+ 0.1%

2,132 2,141 -0.4%

LP/SF

$141 $133

+ 6.3%

$167 $160

+ 4.7%

SP/SF

$140 $131

+ 6.5%

$165 $157

+ 5.1%

SP/LP

99.7% 99.4%

+ 0.3%

99.0% 98.7%

+ 0.2%

DOM

12 11

+ 9.1%

45 44

+ 0.6%

Note above I bolded “as a whole.” Because when you are just looking at Austin in general, and not including the 5 MSAs surrounding Austin, the numbers are lower.

Now, let’s get down to the Austin core…yep DT (downtown).

skyline2

How were prices in April of this year compared to 2016? (Also note we have a few more high rises in the works to be built DT as well as more apartment complexes that are projected and just opened in the last year downtown.

                   Median Average
 DT AUSTIN Apr 2016 Apr 2015 % Change Apr 2016 Apr 2015 % Change
List Price $397,500 $434,500 - 8.5% $509,920 $682,700 - 25.3%
Sold Price $387,500 $430,000 - 9.9% $497,007 $654,846 - 24.1%
Square Feet 831 1059 - 21.6% 960 1171 - 18.0%
LP/SF $506 $450 + 12.5% $523 $543 - 3.7%
SP/SF $489 $435 + 12.2% $510 $526 - 3.0%
SP/LP 97.9% 98.0% - 0.2% 97.5% 97.4% + 0.1%
DOM 23 21 + 9.8% 42 53 - 21.3%

Yes, you did see a decrease that I highlighted on percentage changed for our average sales prices, BUT not to be alarmed-as the stats are only comparing downtown to one month vs “the big picture.” Downtown still increased year to year and the other important thing to note is that the square footage listed in April was smaller than that of April 2015, therefore it skews the numbers to look as if there was a decrease–when there is really no area in Austin that has dipped in sales values. And while all signs point to the market steadily increasing–timing could be off in comparison. For example, more people put their expensive condos on the market April 2015 v 2016, but there may be an influx of listings coming the next few months.

longcenterDTview

CHECK OUT VOLUME IN APRIL ACCORDING TO HOUSING PRICES FOR GREATER AUSTIN:

Price Range Quantity DOM Price Range Quantity DOM
$149,999 or under 207 46 $500,000- $549,999 90 48
$150,000- $199,999 424 26 $550,000- $599,999 60 53
$200,000- $249,999 517 29 $600,000- $699,999 94 73
$250,000- $299,999 425 49 $700,000- $799,999 52 56
$300,000- $349,999 312 46 $800,000- $899,999 28 41
$350,000- $399,999 260 51 $900,000- $999,999 25 53
$400,000- $449,999 176 71 $1,000,000 or over 47 67
$450,000- $499,999 138 53 Total: 2,855 45
Apr 2016 Apr 2015 % change 2016 YTD 2015 YTD
Sold Listings 2,855 2,847 +0.3% 9,527 9,244 +3.1%
Volume $967,399,611 $939,825,174 +2.9% $3,141,290,016 $2,950,183,540 +6.5%

As I mentioned above, some of the decreases I am seeing in specific central Austin areas (downtown, clarksville, west lake etc.) more so have to do with scarcity of inventory and higher prices than lack of desirability. Some of these areas take very specific buyers; for example, the average sales price in charming Clarksville is $910k!

INVENTORY 1B Apr 2016 Apr 2015 % change 2016 YTD 2015 YTD
Sold Listings 24 28 -14.3% 69 94 -26.6%
Volume $11,928,174 $18,335,700 -34.9% $45,552,206 $58,488,050 -22.1%

Let’s talk about North Austin (aka: area 2n; aka 78758, 78753). With the growth of the Domain and many tech companies moving and expanding in North Austin, it is no wonder over one year’s time the average sales price has shot up 19.5%!

Area 2N April-16
Median Average
Apr 2016 Apr 2015 % Change Apr 2016 Apr 2015 % Change
List Price $230,000 $199,900 + 15.1% $226,642 $187,470 + 20.9%
Sold Price $237,500 $206,390 + 15.1% $227,839 $190,629 + 19.5%
Square Feet 1425 1415 + 0.7% 1446 1363 + 6.1%
LP/SF $148 $131 + 12.7% $155 $135 + 14.8%
SP/SF $153 $138 + 10.8% $156 $137 + 13.8%
SP/LP 100.4% 100.7% - 0.3% 100.5% 101.3% - 0.8%
DOM 4 4 0.0% 33 10 + 229.2%

Click HERE to see the map breakout of areas. This is also the area I personally live in (what! what!) want to know more? Contact me!

domain growth

Let’s explore some more areas and evaluate home prices…read on…

When you head North east to the MLS area: NE (out toward Parmer and 290… near Samsung…and yes an old landfill) you have some new developments on the rise. If you are commuting to N. Austin, I think this can be a great buy for those who:

1. Solely want new construction (various builders and neighborhoods) at an affordable price and/or

2. As an investment–the area only has more acreage and room to grow with easy access to large companies, toll roads and highways and if staying E. not too bad of a commute into central Austin. Great for rental property or to live in, and hold.

Area NE
Median Average
Apr 2016 Apr 2015 % Change Apr 2016 Apr 2015 % Change
List Price $225,000 $192,900 + 16.6% $239,439 $199,669 + 19.9%
Sold Price $226,021 $193,900 + 16.6% $237,895 $198,490 + 19.9%
Square Feet 1739 1928 - 9.8% 1876 1939 - 3.2%
LP/SF $134 $111 + 20.7% $131 $107 + 22.4%
SP/SF $134 $109 + 22.6% $130 $107 + 21.8%
SP/LP 100.0% 100.0% 0.0% 99.6% 99.7% - 0.1%
DOM 6 5 + 20.0% 16 19 - 13.8%

Which neighborhoods and builders am I referring to exactly in NE Austin? Check out the homes in this area above: HERE. There are a lot of new neighborhoods (and some only a few years old, still growing in this area). This area mainly comprises 78754 and 78753 and extends East to Manor. Some of the neighborhoods are Bellingham Meadows. Enclave of the Springs, Walnut Creek Enclave, Stirling Bridge, Parkside at Harris Branch, Pioneer Crossing, Pioneer Crossing West. In price points ranging from the affordable starter home, $205k, only a few years old to brand new homes you can pick finishes etc. around $350k. (here’s an old blog on purchasing new construction HERE).

And how is East Austin (area 3, aka 78723) fairing in home sales? Well, there is no doubt about it, the development of Mueller has increased housing not only in the diverse and eclectic, new community (that is still developing), but the surrounding neighborhoods such as Windsor Park, The Grove, University Hills, Cherrywood and St. John’s have all seen an increase in sales due to Mueller.

There are plenty of homes built in the late 60’s, updated and renovated, but like many areas of Austin–tons of new (and not so “affordable” developments can be found…like, HERE)!

Median Average
 AREA 3 Apr 2016 Apr 2015 % Change Apr 2016 Apr 2015 % Change
List Price $375,000 $309,900 + 21.0% $371,796 $315,289 + 17.9%
Sold Price $372,500 $300,000 + 24.2% $370,279 $311,335 + 18.9%
Square Feet 1579 1508 + 4.7% 1593 1483 + 7.4%
LP/SF $244 $207 + 18.0% $238 $216 + 10.2%
SP/SF $244 $206 + 18.4% $238 $213 + 11.8%
SP/LP 100.0% 100.0% 0.0% 99.7% 98.6% + 1.1%
DOM 8 11 - 31.8% 41 43 - 4.0%

Perhaps two of the hottest Austin areas are South of the river and East of 35 (78741 and 78744).

One area in particular, {in my opinion that is undervalued and coming around–great rental investment opportunities} I have been telling many people who want to invest in is: 78744..or aka Area 11 on the map, check out what homes you can find HERE.

Median Average
Apr 2016 Apr 2015 % Change Apr 2016 Apr 2015 % Change
List Price $199,900 $190,303 + 5.0% $211,912 $174,797 + 21.2%
Sold Price $203,110 $186,393 + 9.0% $211,246 $172,907 + 22.2%
Square Feet 1313 1466 - 10.4% 1590 1545 + 2.9%
LP/SF $144 $120 + 20.0% $139 $116 + 20.2%
SP/SF $149 $120 + 25.1% $139 $114 + 21.4%
SP/LP 100.0% 99.4% + 0.5% 99.8% 99.2% + 0.6%
DOM 8 17 - 51.5% 30 59 - 48.7%

You can find everything from grandma’s house to new construction in this area, above, that’s for sure.

 

However, if you are willing to spend a bit more—and you heard the news of Oracle relocating to East Austin on 27 acres, East of DT, overlooking Lady Bird lake… then this may be the area for you, (but the cat is out of the bag on this area–as it has increased already since last year 33.2%). Holy moly…one of the largest increases of all the Austin areas. With the boardwalk completion, easy access to airport, DT, ACC campus and more, it is no wonder people are choosing to invest in this area.

Median Average
 Area 9 Apr 2016 Apr 2015 % Change Apr 2016 Apr 2015 % Change
List Price $242,450 $224,500 + 8.0% $251,058 $193,749 + 29.6%
Sold Price $242,750 $217,000 + 11.9% $253,746 $190,471 + 33.2%
Square Feet 1122 1245 - 9.9% 1233 1239 - 0.4%
LP/SF $206 $159 + 29.8% $209 $153 + 36.2%
SP/SF $206 $143 + 44.2% $210 $150 + 39.9%
SP/LP 100.0% 97.6% + 2.5% 100.4% 97.9% + 2.6%
DOM 5 20 - 75.0% 9 37 - 75.2%

 oracle campus(Artist’s drawing of Oracle campus above)

When evaluating the sold prices from April 2015 to 2016, here’s a few popular areas and if you’d like more specific info like I have above-feel free to contact me and I will send it over (it is just too much to put into one blog).

  • Round Rock East and Round Rock West had about a +4% change for April 2015 v2016 (RRW was a little less than RRE with all the growth out East of Austin, w toll roads etc)
  • Pflugerville experienced a +5.8%, average sales price under $230k, so quite affordable!
  • NW Hills and Great Hills in Austin jumped +13.5% w/ avg sales price around $544k
  • The 78745 (or area S of Ben White, N of Slaughter-ish area) is steadily increasing, +4.8%
  • 78703 (aka Clarksville or a very desirable central Austin location near DT) actually decreased -5.1%, yet the average sales price in this area for a home in April 2016: $910k
  • The UT area (78705, or campus better yet) decreased in April as well, -3.4% w/ avg sales price around $290k
  • While DT showed to be down-24.1% in Apr 2016 v 2015, it also decreased in listings volume by 36%, what does $510/sq ft buy you? Check it out…HERE.
  • Cedar Park is still growing quite a bit, with an increase of +9.7% and avg sales price at $317k where you can get on avg 2300sq ft too!
  • Northern part of Cedar Park & Leander, due to all the growth in N. Austin are at an average sales price of $280k and up +11.7% from 2015 (examples of homes/area HERE)
  • Hays County experienced the largest annual gain in home sales in April 2016, with single-family home sales jumping 17.8% year-over-year to 338 home sales.
  • Williamson County was the only county in the Austin-Round Rock MSA to experience a decline in home sales in April 2016, with single-family home sales dropping 5.1 percent year-over-year to 816 home sales.

While I didn’t touch much on affordability in this blog, it is still a large issue in our growing metro areas.

Housing affordability includes not only a home’s sale price, but the homeowner’s ability to continue to afford the home as property values rise from year to year. “The Austin Board of REALTORS® encourages homeowners to learn how their home is being appraised and all property tax exemptions they might qualify for. A Central Texas REALTOR® can help homeowners contest their assessment by identifying comparable properties and gathering the necessary background information to formulate an appeal.” -Aaron Farmer, ABOR President

Anyway, thank you for reading–I hope you found these charts helpful and if you have any questions about your specific area, market stats, neighborhood stats, school ratings, home values, etc, please do not hesitate to reach out! To read more about me and contact me click here.

Ashley Brinkman, ABR, GRI @ Realty Austin.

Austin by the Numbers

I went to a really interesting and fun meeting today with the Platinum Top 50 Finalists and Winners. It is nice to be in a room filled with successful people I look up to and can learn a lot from.

We floated around the tables and had 15minutes to discuss various Real Estate topics.

One round we were given 10 questions, “How well do you know Austin” …I was shocked, our table did not fair well, actually not many of us in the room did -how embarrassing, we are Realtors! (but I blame it on the numbers being very close to choose from, ha)

Below are some of the things I learned and wanted to share (and a few pop quiz questions for you as well)

Austin by the Numbers: General information on our parks, demographics and more…

  • In the Austin metro, 40% of adults have at least a bachelor’s degree, compared to 29% nationally, putting Austin in the top 10 among the largest Metros!! (Woohoo, go college!)

utcollegegraduation

  • Austin area households enjoy diverse options in education, including 29 public school districts, 17 charter schools and over 100 private schools

 

  • The Council for Community and Economic Research indicates that living cost in Austin are 6-7% BELOW the national average (in 2013…ha wonder if that has changed these past two years!)

 

  • The National Association of Realtors reports that the median home price in Austin was $222,900 in 2013 while the national median was $197,400

DSC_0174

Here is one for YOU! (don’t cheat!)

  1. According to the census metro Austin’s population grew to nearly ____ in 2013 and is expected to reach ____ by the year 2020.

A. 1.7 million/ 2.0 million

B. 1.8 million/2.2 million

C. 1.9 million/2.3 million

D. 2.0 million/2.6 million

  • In 2013 the median household income in Austin was $61,750 compared to $52,250 nationally
  • The Parks and Recreation Dept. operates 12 off leash areas for you to enjoy with your dog and 2 skate parks

bulldog

Another one for you:

lovesurprises

  1. City of Austin operates 50 public school facilities, which includes _____ neighborhood pools, 3 wading pools, ____ municipal pools, 11 splash plads, 1 rental facility and Barton Springs Pool

A. 20/ 14

B. 23/11

C.24/10

D. 28/6

(answers to quiz Qs at very bottom, don’t cheat)

  • Over 19% of all residents in Austin live in poverty–according to City of Austin’s annual (2014) Economic Development Report (this makes me sad, and is a hot item we talk about here in Austin)
  • 19% of Austinites are foreign born
  • The city of Austin owns 6 golf courses and one short practice course all focused on a great golf experience at an affordable price.

As always thanks for reading! wink, wink!

kristinwiigwink

Answers to the above quiz: 1.) C 2.) D *Did you get them correct?*