The Austin real estate market, along with a number of other cities in the state of Texas, was hit quite hard by the economic recession. Austin, along with every other large city in the United States, is composed of residential and commercial sectors of real estate, which are affected in different ways by adverse economic situations. It appears that the Austin real estate market has experienced a divergence between the status of the commercial real estate market and residential real estate market, with the former trending upwards and the latter moving downwards. It also appears somewhat confusing because of the interactive effects of the different parts of the market, such as the artificial inflation of sales statistics by foreclosures.
According to a July 21, 2009 article in the American-Statesman, home sales in the Austin real estate market reached their highest levels in an entire year. The piece, written by Claudia Grisales, “Austin-area sales of existing homes hit the highest level in a year last month, according to figures Monday from the Austin Board of Realtors. Last month, 2,135 single-family homes were sold in the area, down 4 percent from a year earlier. That was the smallest decline since a 2 percent drop in July 2007, when the market began to soften amid an emerging national mortgage crisis.” A July 20, 2009 article in the Austin Business Journal added that “The year over year sales volume gap is shrinking each month, according to a report from the Austin Board of Realtors.”
Another article in the Austin Business Journal found that “Austin area residential foreclosure postings for the upcoming August auction are at their lowest level in five months.” Simply put, the residential portion of Austin real estate is in slowly improving shape, thanks to a number of local efforts, federal bills, and the natural ebb and flow of the market. On the other hand, a July 14th article stated that “Foreclosure postings filed on commercial real estate for January through July foreclosure auctions in the Austin metro area jumped 139 percent over the same time period last year, according to data from Addison-based Foreclosure Listing Service Inc.”
Thursday, August 6, 2009
Tuesday, August 4, 2009
Monday, July 6, 2009
Month In Review - June 2009
Units for Sale: (compared to June 2008)
New listings were down 22.82%.
Pendings were up 4.09%.
Solds decreased by 8.10%.
As for Average Prices:
The "New Listings" average list price is down 1.02% to 312,793. In June 2008 the average list price was $316,001.
Sold average sales prices decreased 7.52% to $247,041. For June 2008 it was $267,130.
DID YOU KNOW?
That we had 12,711 active listings during the same week in 2008? Today there is 11,603 active listings! That is 8.72% decrease from last year.
New listings were down 22.82%.
Pendings were up 4.09%.
Solds decreased by 8.10%.
As for Average Prices:
The "New Listings" average list price is down 1.02% to 312,793. In June 2008 the average list price was $316,001.
Sold average sales prices decreased 7.52% to $247,041. For June 2008 it was $267,130.
DID YOU KNOW?
That we had 12,711 active listings during the same week in 2008? Today there is 11,603 active listings! That is 8.72% decrease from last year.
Mortgage Interest Rate Myths
This may come as a shock to many borrowers, but it's absolutely true. Mortgage interest rates are not set by the Federal Reserve and, contrary to popular belief, mortgage rates are not directly tied to the yields of US Treasury bills, bonds, or notes – including the 10-year Treasury Note. That's right. Despite what you might hear in the media, mortgage interest rates are actually set by lending institutions, and are based solely on the performance of mortgage-backed securities.
For years now, the media and inexperienced loan officers everywhere have suggested that the 10-year Treasury Note, a government-backed security, is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true. The graph on this page, which shows interest rates for 30-year fixed-rate mortgages and the yield for the 10-year Treasury Note for 13 months, clearly demonstrates this fact.
At a quick glance, yes, it's easy to see why the mistake is made. As you can see, for 11 out of the 13 months recorded in the graph, the yield of the 10-year Treasury Note and interest rates for 30-year fixed-rate mortgages did follow a somewhat similar long-term path, despite obvious short-term divergences. However, take a closer look at the drastic change that occurs from January through March 2008. What's interesting about this graph is that, during this period, the Federal Reserve had cut interest rates six times, from September 2007, to March 2008, and yet mortgage rates were actually higher in March 2008 than they were a year before. Not only does this demonstrate that the yield of the 10-year Treasury Note is not pegged to mortgage interest rates, it also reveals that mortgage interest rates are not set by the Fed either.
For years now, the media and inexperienced loan officers everywhere have suggested that the 10-year Treasury Note, a government-backed security, is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true. The graph on this page, which shows interest rates for 30-year fixed-rate mortgages and the yield for the 10-year Treasury Note for 13 months, clearly demonstrates this fact.
At a quick glance, yes, it's easy to see why the mistake is made. As you can see, for 11 out of the 13 months recorded in the graph, the yield of the 10-year Treasury Note and interest rates for 30-year fixed-rate mortgages did follow a somewhat similar long-term path, despite obvious short-term divergences. However, take a closer look at the drastic change that occurs from January through March 2008. What's interesting about this graph is that, during this period, the Federal Reserve had cut interest rates six times, from September 2007, to March 2008, and yet mortgage rates were actually higher in March 2008 than they were a year before. Not only does this demonstrate that the yield of the 10-year Treasury Note is not pegged to mortgage interest rates, it also reveals that mortgage interest rates are not set by the Fed either.
Tuesday, June 16, 2009
In Review
The number of active listings are down 7.75% from last year.
The number of new listings are down this week 27.55% (compared to 6/8/08 - 6/14/08).
Pendings are up this week 11.66%.
Sold residential units are up 4.07% compared to the same week last year.
WEEK IN REVIEW
Units for Sale:
June 7 - June 13, 2009
(compared to the same week in 2008)
New listings down this week 27.55%
Pendings are up 11.66%
Solds up 4.07%
As for Average Prices:
June 7 - June 13, 2009
The "New Listings" average list price is up 3.29% to 311,515.
Sold average sales prices decreased 5.28% to $260,065. In 2008 it was $274,564 for the same week.
The number of new listings are down this week 27.55% (compared to 6/8/08 - 6/14/08).
Pendings are up this week 11.66%.
Sold residential units are up 4.07% compared to the same week last year.
WEEK IN REVIEW
Units for Sale:
June 7 - June 13, 2009
(compared to the same week in 2008)
New listings down this week 27.55%
Pendings are up 11.66%
Solds up 4.07%
As for Average Prices:
June 7 - June 13, 2009
The "New Listings" average list price is up 3.29% to 311,515.
Sold average sales prices decreased 5.28% to $260,065. In 2008 it was $274,564 for the same week.
Monday, June 1, 2009
Energy Conservation Audit and Disclosure (ECAD) Ordinance
The Energy Conservation Audit and Disclosure (ECAD) ordinance requires that before the sale of their home, owners of a single-family home must have an energy audit performed on the property. This new audit has taken affect today, June 1st, 2009.
If a home needs an audit, the seller must provide a copy of the audit to the purchaser or prospective purchaser. The auditor must provide a copy of the audit to Austin Energy.
Note: Austin Energy has conducted training sessions with many Austin area real estate brokers and agents. These real estate professionals can provide sellers with valuable additional guidance and information about the disclosure requirement and its operation.
Exemptions
Homes meeting any one of the following conditions do not need an audit. The home:
* Is less than 10 years old at the time of sale
* Has received at least three energy-efficiency improvements or a total of $500 in rebates through Austin Energy residential energy-efficiency offerings within 10 years before the sale
* Has received free energy-efficiency improvements through Austin Energy residential energy-efficiency offerings within 10 years before the sale
* Is a condominium
* Is manufactured housing (a mobile home) built on a permanent chassis and designed for use without a permanent foundation.
* Changes ownership and the transfer of the title occurs under one of the following:
o Foreclosure sale, trustee's sale, or deed in lieu of foreclosure
o Pre-foreclosure sale, in which the seller reached an agreement with the mortgage holder to sell the property for an amount less than the amount owed on the mortgage
o Threat or exercise of eminent domain
o Gift from one family member to another family member without consideration
o Court order or probate proceedings
o Decree of legal separation or dissolution of marriage or property settlement agreement incidental to such a decree
Definition of a Single-Family Home
The ECAD ordinance defines a single-family home as a building comprising fewer than five dwelling units. (If your building has five or more dwelling units, see ECAD Ordinance for Multifamily Properties.)
Variances
A home may receive a variance if it meets one of the following conditions:
* No later than six months after the sale, the buyer applies for a permit to demolish the home. The seller and buyer must enter into a binding agreement in which the buyer agrees to apply for a permit to demolish the home no later than six months after the sale. View the Variance Application for Residence Demolition.
* No later than six months after the sale, the buyer applies for a permit to substantially remodel the home. The seller and buyer must enter into a binding agreement in which the buyer agrees to file an application for a building permit to substantially remodel the above-referenced property no later than six months after the sale and in which the buyer agrees to complete an energy audit within a specified time after the remodel is complete. View the Variance Application for Residence Substantial Remodel.
* The buyer qualifies for and agrees to participate in the Austin Energy Free Weatherization Program or an equivalent Austin Energy program, no later than six months after the sale. View the Agreement to Participate in the Austin Energy Free Weatherization Program.
To apply for a variance, email either the the Variance Application for Residence Demolition form or the Variance Application for Residence Substantial Remodel form, or print out the appropriate one and send it to:
Director of Energy Efficiency Services
Austin Energy
811 Barton Springs Road, 3rd Floor
Austin, TX 78704
Energy Efficiency Records
Austin Energy will provide homeowners or prospective buyers with information on the energy-efficiency improvements received by a home through Austin Energy programs. This information includes dates of energy-efficiency improvements or rebates, and dates and details of free energy-efficiency improvements. Call 974-7827 or email Austin Energy with the address of the home and your telephone number.
ECAD Exemption List
Austin Energy also makes available to homeowners a useful ECAD Exemption List.
Single-Family Home Audit
If the home is not exempt or does not qualify for a variance, it needs an ECAD audit.
ECAD Auditors
The ECAD audit must be performed by an auditor who is a certified Residential Energy Services Network (RESNET) Rater or a Building Performance Institute (BPI) Building Analyst Professional. See a list of certified ECAD auditors who have registered with Austin Energy.
What the Auditor Does
An ECAD audit takes about one hour per thousand square feet of property. The ECAD auditor:
* Inspects and measures the attic insulation in multiple areas
* Pressure tests the duct system and assesses its condition and adequacy
* Examines heating and cooling equipment
* Inspects weather stripping around exterior doors, plumbing penetrations beneath sinks, and air tightness of attic entries
* Identifies and measures the amount of glass in windows that receive more than one hour of direct sunlight each day
Audit Costs
ECAD audits are comprehensive and require specialized equipment for testing the duct system. The estimated cost of an audit is from $200 to $300 for a typical single-family home, 1,800 square feet or smaller, with one air-conditioning system. Auditors set their own prices.
Audit Results
After the audit, the auditor provides the homeowner with the audit report. It includes:
* Condition and estimated R-value of the attic insulation
* Percentage of air leakage from the duct system and the system’s general condition
* Age, efficiency, and overall condition of the heating and cooling equipment
* Air leakage around exterior doors, plumbing penetrations beneath sinks, and attic entries
* Total square feet of glass and location of windows receiving more than one hour of direct sunlight each day
* Opportunities for improving the energy-efficiency of the home
Within 30 days, the auditor sends the audit to Austin Energy, and we enter the information into a database. Austin Energy also runs spot checks of ECAD audits to ensure the quality of the program.
Energy-Efficiency Improvements
The ECAD ordinance does not require homeowners to make energy-efficiency improvements. However, Austin Energy offers rebates and low-cost loans to homeowners who want to improve their home’s energy efficiency.
Enforcement
Non-compliance with the ECAD ordinance is a Class C Misdemeanor. Reported violations will be forwarded to the City of Austin Legal Department for review and action.
If a home needs an audit, the seller must provide a copy of the audit to the purchaser or prospective purchaser. The auditor must provide a copy of the audit to Austin Energy.
Note: Austin Energy has conducted training sessions with many Austin area real estate brokers and agents. These real estate professionals can provide sellers with valuable additional guidance and information about the disclosure requirement and its operation.
Exemptions
Homes meeting any one of the following conditions do not need an audit. The home:
* Is less than 10 years old at the time of sale
* Has received at least three energy-efficiency improvements or a total of $500 in rebates through Austin Energy residential energy-efficiency offerings within 10 years before the sale
* Has received free energy-efficiency improvements through Austin Energy residential energy-efficiency offerings within 10 years before the sale
* Is a condominium
* Is manufactured housing (a mobile home) built on a permanent chassis and designed for use without a permanent foundation.
* Changes ownership and the transfer of the title occurs under one of the following:
o Foreclosure sale, trustee's sale, or deed in lieu of foreclosure
o Pre-foreclosure sale, in which the seller reached an agreement with the mortgage holder to sell the property for an amount less than the amount owed on the mortgage
o Threat or exercise of eminent domain
o Gift from one family member to another family member without consideration
o Court order or probate proceedings
o Decree of legal separation or dissolution of marriage or property settlement agreement incidental to such a decree
Definition of a Single-Family Home
The ECAD ordinance defines a single-family home as a building comprising fewer than five dwelling units. (If your building has five or more dwelling units, see ECAD Ordinance for Multifamily Properties.)
Variances
A home may receive a variance if it meets one of the following conditions:
* No later than six months after the sale, the buyer applies for a permit to demolish the home. The seller and buyer must enter into a binding agreement in which the buyer agrees to apply for a permit to demolish the home no later than six months after the sale. View the Variance Application for Residence Demolition.
* No later than six months after the sale, the buyer applies for a permit to substantially remodel the home. The seller and buyer must enter into a binding agreement in which the buyer agrees to file an application for a building permit to substantially remodel the above-referenced property no later than six months after the sale and in which the buyer agrees to complete an energy audit within a specified time after the remodel is complete. View the Variance Application for Residence Substantial Remodel.
* The buyer qualifies for and agrees to participate in the Austin Energy Free Weatherization Program or an equivalent Austin Energy program, no later than six months after the sale. View the Agreement to Participate in the Austin Energy Free Weatherization Program.
To apply for a variance, email either the the Variance Application for Residence Demolition form or the Variance Application for Residence Substantial Remodel form, or print out the appropriate one and send it to:
Director of Energy Efficiency Services
Austin Energy
811 Barton Springs Road, 3rd Floor
Austin, TX 78704
Energy Efficiency Records
Austin Energy will provide homeowners or prospective buyers with information on the energy-efficiency improvements received by a home through Austin Energy programs. This information includes dates of energy-efficiency improvements or rebates, and dates and details of free energy-efficiency improvements. Call 974-7827 or email Austin Energy with the address of the home and your telephone number.
ECAD Exemption List
Austin Energy also makes available to homeowners a useful ECAD Exemption List.
Single-Family Home Audit
If the home is not exempt or does not qualify for a variance, it needs an ECAD audit.
ECAD Auditors
The ECAD audit must be performed by an auditor who is a certified Residential Energy Services Network (RESNET) Rater or a Building Performance Institute (BPI) Building Analyst Professional. See a list of certified ECAD auditors who have registered with Austin Energy.
What the Auditor Does
An ECAD audit takes about one hour per thousand square feet of property. The ECAD auditor:
* Inspects and measures the attic insulation in multiple areas
* Pressure tests the duct system and assesses its condition and adequacy
* Examines heating and cooling equipment
* Inspects weather stripping around exterior doors, plumbing penetrations beneath sinks, and air tightness of attic entries
* Identifies and measures the amount of glass in windows that receive more than one hour of direct sunlight each day
Audit Costs
ECAD audits are comprehensive and require specialized equipment for testing the duct system. The estimated cost of an audit is from $200 to $300 for a typical single-family home, 1,800 square feet or smaller, with one air-conditioning system. Auditors set their own prices.
Audit Results
After the audit, the auditor provides the homeowner with the audit report. It includes:
* Condition and estimated R-value of the attic insulation
* Percentage of air leakage from the duct system and the system’s general condition
* Age, efficiency, and overall condition of the heating and cooling equipment
* Air leakage around exterior doors, plumbing penetrations beneath sinks, and attic entries
* Total square feet of glass and location of windows receiving more than one hour of direct sunlight each day
* Opportunities for improving the energy-efficiency of the home
Within 30 days, the auditor sends the audit to Austin Energy, and we enter the information into a database. Austin Energy also runs spot checks of ECAD audits to ensure the quality of the program.
Energy-Efficiency Improvements
The ECAD ordinance does not require homeowners to make energy-efficiency improvements. However, Austin Energy offers rebates and low-cost loans to homeowners who want to improve their home’s energy efficiency.
Enforcement
Non-compliance with the ECAD ordinance is a Class C Misdemeanor. Reported violations will be forwarded to the City of Austin Legal Department for review and action.
Wednesday, May 20, 2009
Austin Market News
Anyone looking for real home appreciation in a market that defies the 'bubble burst' reverse trends we hear about in the coastal (big city) markets across the States should strongly consider Austin as a prime Real Estate investment.
We continue to see a solid upward trend in Austin. These are great times to sell as price appreciation is on its way up, but even better to get in on buying a home while there is time. Austin offers an exciting (undervalued) home price scenario (Austin homes were recently ranked about 5% undervalued according to USA Today). The reason investors and buyers from abroad are considering the Austin real estate market as investment and personal ownership is because Austin has been unaffected by the market 'bubble' (in fact it has been undervalued the last 4 years) and promises strong growth with its improving infrastructure and continued investment by high tech companies, the most recent example of which is Samsung who are currently building an enormous headquarters in North Austin.
While new home builders continue to produce at a healthy pace, the rising costs of materials have hurt their ability to compete with resale homes, so we are seeing a push toward buying resale homes as they offer more for less and don't have to worry about increased building costs. It's about time (our sellers are thinking!)
We continue to see a solid upward trend in Austin. These are great times to sell as price appreciation is on its way up, but even better to get in on buying a home while there is time. Austin offers an exciting (undervalued) home price scenario (Austin homes were recently ranked about 5% undervalued according to USA Today). The reason investors and buyers from abroad are considering the Austin real estate market as investment and personal ownership is because Austin has been unaffected by the market 'bubble' (in fact it has been undervalued the last 4 years) and promises strong growth with its improving infrastructure and continued investment by high tech companies, the most recent example of which is Samsung who are currently building an enormous headquarters in North Austin.
While new home builders continue to produce at a healthy pace, the rising costs of materials have hurt their ability to compete with resale homes, so we are seeing a push toward buying resale homes as they offer more for less and don't have to worry about increased building costs. It's about time (our sellers are thinking!)
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