Austin Recession Proof?

Recession Proof Austin

According to Forbes magazine, Austin is ranked #3 in recession proof cities; right behind San Antonio (#2) and Oklahoma City (#1). The reason for the high ranking is because of low unemployment and affordable housing costs. Unemployment in Austin, Texas is 3.6% percent down from 3.8% at this time last year and the median price of a home is still under $200,000 in most areas of Austin.

Recession Proof Austin is the Place to Buy

Austin was ranked by Entrepreneur magazine as one of the top places to buy a home. Reporter Danielle Babb based her decision on the fact that Austin and Round Rock have seen incredible job growth and stable home prices even though most of the country is in a downturn. She also cited that jobs are continuing to grow here, which is a strong factor for keeping prices stable and inventory low.

Other cities that were on the list were Mission Viejo, California, Palm Beach, Florida and Las Vegas, Nevada. Palm Beach and Las Vegas were citied because of their number of foreclosure homes in 2007 making their market on the low cost end moving back up.

Recession Proof isn’t Only Reason Austin’s Great

Austin is a great city to live in with everything that is has to offer: live music venues, top notch festivals, hike and bike trails galore, rock-climbing, lake living, great shopping and great food. Within the city limits itself, you have several parks and lakes such as; Lady Bird Lake (also known as Town Lake), Lake Austin, Barton Springs Pool, Barton Creek Greenbelt, and Zilker Park.

Many celebrities and world-class athletes have made Austin their home because of the laid-back and welcoming atmosphere of the residents and because of the plethora of outdoors and athletic activities that this community supports with fervor.

The Advantages of FHA Loans

In many regions of the U.S., FHA loans have not been utilized for years, so a lot of real estate agents and mortgage originators aren't familiar with this great resource. The following are a just a few of the recent changes that have made FHA loans a more attractive option again for some consumers looking to buy a new home or refinance an existing one:

1) Congress passed the Stimulus Act of 2008. During the recent housing boom, home values surpassed FHA loan limits in many regions of the U.S. The recent enactment of this important legislation, however, increased FHA loan limits up to $729,500 in many high-cost regions of the U.S. through the end of the year. FHA loan limits vary by county, so give us a call for loan limits in your area.
2) The FHA changed its appraisal and fee negotiating guidelines. In the past, many sellers steered clear of FHA loans because the appraisals were too strict and certain fees were non-negotiable. The FHA has greatly loosened these guidelines to make it easier for both buyers and sellers.
3) FHA loans are much cheaper now. Because FHA loans are federally insured, they tend to trade at a higher premium in the secondary market. This means lenders can often charge a lower rate.

Other FHA Benefits:

• FHA loans are not credit-score driven. Borrowers can have a lower score than other products and still qualify for a good rate.
• FHA loans require as little as 3% down.
• FHA loans allow down-payment assistance programs. This allows the seller to cover the buyer's down payment and closing costs. This means borrowers, especially first-time buyers, or move-up buyers with limited funds, have a real opportunity of getting into a home with little or no cash at closing. For sellers, this means you can offer concessions that make marketing your home much more attractive without having to lower the price of your home again.

FHA loans allow a) Sellers to finance all of the buyer's costs to close; b) Homeowners to take cash out up to 95% of the home's value; and c) Homeowners to consolidate a first and second loan up to 97% of the home's value

What Do Interest Rates Really Mean?

Financing Solutions with David Reed

What interest rates really mean

The Fed did this! The Fed did that! Rates are up! Rates are down! Aaaagggh! Okay, now exhale. In turbulent economic times the media can’t wait to report what interest rates are doing. Pundits prognosticate, forecasters forecast and soothsayers sooth. When should you buy a home based upon interest rates and when is it the right time?

The fact is that interest rates, while important, have little impact when it comes to buying a home. Alright, alright, I’ll admit: it’s important…but it’s not a deal-killer.

There is a fixation on what rates are doing. A fixation on what rates will be in the future and what rates were in the past. I’ve heard potential home buyers tell me, “I’m not sure I want to buy now because rates are ¼ percent higher now and I think I’ll wait.” I say, “Wait for what?” I say let’s not look at the rate but instead concentrate on what that rate actually represents … your monthly payment.

Let’s look at what an interest rate move of ¼ percent really does to a $200,000 mortgage. Say a 30-year interest rate at 6.00 percent “jumps” to 6 ¼ percent. Shall we sit on the sidelines, thinking such a move is suddenly unaffordable? No. The payment on a $200,000 loan “jumps” by about $32 a month!

Now let’s get a bit more draconian and look at a ½ percent increase and the monthly payment increases by $64. Putting that into daily financial terms, $64 is about a tank of gas. While not insignificant, it’s hardly a reason to stay on the sidelines of home ownership. Right now, buyers should have more urgency than ever. Home prices have declined enough to make buying more affordable than it’s been in recent memory and interest rates (whether at 6 percent or 6 1/4 percent) are historically low. It’s time to act.

Are rates important? Sure they are. But are they the end-all? Heck no. Interest rates over the past few years have been in a very tight range, with few major swings. Just remember what interest rates represent, your monthly payment, and pay less attention to the headlines.

Written by David Reed, author of Mortgage 101 and Mortgage Confidential.

Villa Muse Talks Officially End with City of Austin

You may remember reading a couple of months ago that the “Titanic-size” Villa Muse development project was in trouble and going under fast; a statement made by Villa Muse last week confirms the ship has sunk – at least in Austin.

After Austin City Council refused to release some 2,000 acres in East Travis County from its jurisdiction, it is now being reported that Bastrop, despite its efforts to keep the dealings hush-hush, is courting the film-based developers. Villa Muse says it is also considering several other cities, all in Texas, with hopes to break ground before the end of the year.

Though the $2.5 billion mixed use commercial and residential project promised to bring up to 110,000 jobs and growth in the film industry, City Council looked long-term at the plans and ultimately ruled that 40 years of freedom from city regulations and environmental protection rules was not a risk worth taking for the city of Austin.

It remains unclear as to what will happen with the option Villa Muse holds on the original land east of Austin in Manor. Other cities with strong possibilities include Kyle, Cedar Park, Leander, and other outlying areas.

Year-To-Date Sales Comparison Through April 2008

Having a Greener Home

With all the concern about the environment, it is no wonder that more and more people are interested in making their home more green. The list below will provide you with several small changes that will make a big impact.

Green Home: Tip One

One of the easiest ways to make your home more green is simply turning down your thermostat. By lowering your thermostat one degree in the winter and raising it one degree in the summer, you can reduce your energy costs by almost five percent.

Green Home: Tip Two

Appliances use the more energy than anything else in your home; unless, of course, you have Energy Star qualified appliances. These appliances answer to a higher standard of energy efficiency than non-Energy Star appliances. The qualification guidelines for these home appliances are set by the Environmental Protection Agency and the United States Department of Energy. Using these appliances will save you somewhere around $75 per year on your energy bill.

Green Home: Tip Three

At one point you will decide to pull up that wall-to-wall carpeting and want to put down some nice hardwood floors. If you choose to upgrade your home in this manner, make sure you use flooring that comes from rapidly renewable resources (i.e. bamboo) and is solid wood.

Green Home: Tip Four

You know that window in your house, the one that you can feel the nice Austin breeze blowing through it even if it is closed. That window represents wasted money and energy if you are running the air conditioning or if your heat is on. Going around and checking the seal around your windows and doors is a great way to help make your home a green home. Save money and conserve energy by caulking all cracks and leaks in your house.

Green Home: Tip Five

The final tip for making your home a green home is replacing your light bulbs. All of your light bulbs. Using just five compact fluorescent bulbs will reduce energy use by 75% and could save you up to $100 on your yearly electric bill. If you think that’s great, using compact fluorescent bulbs also helps in removing greenhouse gases from the air.

Austin Real Estate Statistics for April 2008

FORBES.COM ranks Austin as #3 in America's Recession-Proof City, even if our sales are still down, we are still in good shape.

In Central Austin, the residential sales are down 15% compared to last April (2007). In Lake Travis ISD, residential sales are down 13% compared to last April. Last year, June had the most sales at over 3,000 listings in both Austin and Lake Travis ISD (over 110). Let's be hopeful that more sales will happen this June.