Wednesday, December 23, 2009
Friday, December 4, 2009
Did You Know 4.0
Interesting video about the surge and changes in technology. If you've got a spare 5 minutes...check it out!
Monday, November 23, 2009
Austin Noted as Hot Spot for Younger Population
According to a report by the Wall Street Journal, Austin has been ranked fifth among cities where the younger population, particularly college graduates, is likely to gather in post-recession times. Austin was noted for having tech and art savvy individuals and also for its cultural appeal with attractions like Austin City Limits and South by Southwest. Washington, D.C. and Seattle tied for the top spot on the list. Dallas ranked ninth.
In addition to being a magnet for the younger crowed, Forbes has named Austin as one of the top recession-proof cities for retirees. Factors used to determine the rankings include home prices, average housing expenses and the overall cost of living. Noted for pleasant weather and a positive economic outlook, Austin ranked sixth overall on the list.
Tuesday, November 17, 2009
Texas Cities Outperform!
Texas cities are outperforming others! This information is from the Real Estate Center at Texas A&M. I believe it tells what we already know, but I think the stats are interesting…and do have direct relation to our real estate market.
Texas metros, led by number one Austin–Round Rock, claimed four of the top five spots and nine of the top 16 in the 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index. Also making the list were Killeen–Temple–Fort Hood (2), McAllen-Edinburg-Mission (4), Houston–Sugar Land–Baytown (5), San Antonio (11), Fort Worth–Arlington (12), Dallas-Plano-Irving (13), El Paso (14) and Corpus Christi (16).
Austin–Round Rock was the first metro to ever be ranked number one twice on the index, the last time being in 2000.
But it doesn’t stop there. Nine other Texas metros made the top 25 out of the 124 smallest metros that were studied. Those were Midland (1), Longview (2), Tyler (4), Odessa (5), College Station–Bryan (14), Texarkana (17), Waco (18), Laredo (20) and Abilene (21).
Leaders in this year’s index, which ranks U.S. metros based on their ability to create and sustain jobs, are all metros that succeeded in avoiding the worst of economic declines driven by falling housing markets and job losses in manufacturing and global trade. Regional economic factors also strongly influenced the rankings this year, with the oil and gas sector, technology, and alternative energy providing stability among metros in Texas, North Carolina, Washington and Louisiana.
Another factor helping Texas metros move up in the rankings is the state’s favorable business climate and its ability to attract jobs and corporations away from higher-cost states. One thing a lot of people may not realize is how business friendly Texas is compared to other states. This is why we enjoy the inbound migration of so many businesses fleeing places like California, where regulation and high taxes are increasingly burdensome to business owners and employers. So, while things are a bit sluggish overall in Texas and Austin, we are doing comparatively well compared to other regions. Yee-haw!
Texas metros, led by number one Austin–Round Rock, claimed four of the top five spots and nine of the top 16 in the 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index. Also making the list were Killeen–Temple–Fort Hood (2), McAllen-Edinburg-Mission (4), Houston–Sugar Land–Baytown (5), San Antonio (11), Fort Worth–Arlington (12), Dallas-Plano-Irving (13), El Paso (14) and Corpus Christi (16).
Austin–Round Rock was the first metro to ever be ranked number one twice on the index, the last time being in 2000.
But it doesn’t stop there. Nine other Texas metros made the top 25 out of the 124 smallest metros that were studied. Those were Midland (1), Longview (2), Tyler (4), Odessa (5), College Station–Bryan (14), Texarkana (17), Waco (18), Laredo (20) and Abilene (21).
Leaders in this year’s index, which ranks U.S. metros based on their ability to create and sustain jobs, are all metros that succeeded in avoiding the worst of economic declines driven by falling housing markets and job losses in manufacturing and global trade. Regional economic factors also strongly influenced the rankings this year, with the oil and gas sector, technology, and alternative energy providing stability among metros in Texas, North Carolina, Washington and Louisiana.
Another factor helping Texas metros move up in the rankings is the state’s favorable business climate and its ability to attract jobs and corporations away from higher-cost states. One thing a lot of people may not realize is how business friendly Texas is compared to other states. This is why we enjoy the inbound migration of so many businesses fleeing places like California, where regulation and high taxes are increasingly burdensome to business owners and employers. So, while things are a bit sluggish overall in Texas and Austin, we are doing comparatively well compared to other regions. Yee-haw!
The Austin Market - Week In Review
The number of active listings are down 10.95% from last year. The number of new listings are up this week by 3.03% (compared to 11/9/08 - 11/15/08).
Pendings are down this week by less than 1%.
Sold residential units are up 69.80% compared to the same week last year.
The Week in Review
Units for Sale:
Nov. 8 - Nov. 14, 2009
(compared to the same week in 2008)
New listings up this week 3.03%
Pendings are down this week 0.96%
Solds are up 69.80%
As for Average Prices:
Nov. 8 - Nov. 14, 2009
Sold average sales prices decreased 1.04% to $257,399. In 2008 it was $260,099 for the same week.
Pendings are down this week by less than 1%.
Sold residential units are up 69.80% compared to the same week last year.
The Week in Review
Units for Sale:
Nov. 8 - Nov. 14, 2009
(compared to the same week in 2008)
New listings up this week 3.03%
Pendings are down this week 0.96%
Solds are up 69.80%
As for Average Prices:
Nov. 8 - Nov. 14, 2009
Sold average sales prices decreased 1.04% to $257,399. In 2008 it was $260,099 for the same week.
Friday, November 13, 2009
Long-Term Rates Fall to Lowest Level in Five Weeks
Freddie Mac today released the results of its Primary Mortgage Market Survey® in which the 30-year fixed-rate mortgage(FRM)averaged 4.91 percent with an average 0.7 point for the week ending November 12, 2009, down from last week when it averaged 4.98 percent. Last year at this time, the 30-year FRM averaged 6.14 percent.
The 15-year FRM this week averaged 4.36 percent with an average 0.6 point, down from last week when it averaged 4.40 percent. A year ago at this time, the 15-year FRM averaged 5.81 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.29 percent this week, with an average 0.6 point, down from last week when it averaged 4.35 percent. A year ago, the 5-year ARM averaged 5.98 percent.
The one-year Treasury-indexed ARM averaged 4.46 percent this week with an average 0.6 point, down from last week when it averaged 4.47 percent. At this time last year, the 1-year ARM averaged 5.33 percent.
"Mortgage rates eased further over the week, helping to promote an affordable home-purchase market and stimulate refinance," said Frank Nothaft, Freddie Mac vice president and chief economist. "This comes at a time when house price declines are moderating and consumer demand for prime mortgages at commercial banks has picked up."
"The National Association of Realtors® reported that national median sales price of existing homes fell 11.2 percent in the third quarter relative to the same period last year. Moreover, almost 20 percent of the top metropolitan areas experienced positive annual growth, compared to only about 12 percent in the first quarter of this year."
The 15-year FRM this week averaged 4.36 percent with an average 0.6 point, down from last week when it averaged 4.40 percent. A year ago at this time, the 15-year FRM averaged 5.81 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.29 percent this week, with an average 0.6 point, down from last week when it averaged 4.35 percent. A year ago, the 5-year ARM averaged 5.98 percent.
The one-year Treasury-indexed ARM averaged 4.46 percent this week with an average 0.6 point, down from last week when it averaged 4.47 percent. At this time last year, the 1-year ARM averaged 5.33 percent.
"Mortgage rates eased further over the week, helping to promote an affordable home-purchase market and stimulate refinance," said Frank Nothaft, Freddie Mac vice president and chief economist. "This comes at a time when house price declines are moderating and consumer demand for prime mortgages at commercial banks has picked up."
"The National Association of Realtors® reported that national median sales price of existing homes fell 11.2 percent in the third quarter relative to the same period last year. Moreover, almost 20 percent of the top metropolitan areas experienced positive annual growth, compared to only about 12 percent in the first quarter of this year."
Monday, November 9, 2009
Austin Stats and Some GOOD NEWS!
Good news: Fewer Underwater Mortgages
Fewer people are underwater on their mortgages -- further evidence that the real estate free-fall may be slowing.
Just 21% of all single-family homeowners owe more on their mortgage balances than their homes are worth, according to a third quarter residential real estate report from Zillow.com. That is down from 23% at the end of the second quarter. Why is this great news? Read HERE for further information!
Austin Market Stats: (courtesy of Alamo Title)
The number of active listings are down 11.91% from last year. The number of new listings are down this week by 4.02% (compared to 11/2/08 - 11/8/08).
Pendings are up this week 3.96%.
Sold residential units are up 26.82% compared to the same week last year.
Units for Sale:
Nov. 1 - Nov. 7, 2009
(compared to the same week in 2008)
New listings down this week 4.02%
Pendings are up 3.96%
Solds are up 26.82%
As for Average Prices:
Nov. 1 - Nov. 7, 2009
Sold average sales prices decreased 17.31% to $253,568. In 2008 it was $306,643 for the same week.
Fewer people are underwater on their mortgages -- further evidence that the real estate free-fall may be slowing.
Just 21% of all single-family homeowners owe more on their mortgage balances than their homes are worth, according to a third quarter residential real estate report from Zillow.com. That is down from 23% at the end of the second quarter. Why is this great news? Read HERE for further information!
Austin Market Stats: (courtesy of Alamo Title)
The number of active listings are down 11.91% from last year. The number of new listings are down this week by 4.02% (compared to 11/2/08 - 11/8/08).
Pendings are up this week 3.96%.
Sold residential units are up 26.82% compared to the same week last year.
Units for Sale:
Nov. 1 - Nov. 7, 2009
(compared to the same week in 2008)
New listings down this week 4.02%
Pendings are up 3.96%
Solds are up 26.82%
As for Average Prices:
Nov. 1 - Nov. 7, 2009
Sold average sales prices decreased 17.31% to $253,568. In 2008 it was $306,643 for the same week.
Friday, November 6, 2009
It's Official - Tax Credit Is Extended
It’s official. President Obama has signed a bill that extends the tax credit for first-time home buyers into the first half of 2010. In addition, the extension also opens up opportunities for others who are not buying a home for the first time.
Tax Credit For Home Buyers
First-time home buyers (people who have not owned a home with the past three years) may be eligible for the tax credit. The credit for first-timers is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing joint return may qualify for the full tax credit amount.
What Are The New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010
Tax Credit Versus Tax Deduction
It's important to remember that the tax credit is just that...a credit. The benefits of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time buyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, they would owe nothing.
Better still, the tax credit is refundable, which means the buyer can receive a check for the credit if they have little income tax liability. For example, if a first-time buyer is eligible for the $8,000 but is liable for $4,000 in income tax, a check for the remaining $4,000 would still be received.
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of credit has been increased. Single tax filers who earn up to $125,00 are eligible for the total credit amount. Those who earn more than this gap can receive partial credit. However, if the taxpayer earns $145,000 or more, they are ineligible for any tax credit. Joint filers can earn up to $225,000 combined for the total tax credit. If the joint filer is up to $245,000 in combine salary they can receive partial credit. Any more earnings than $245,000 and they are not eligible for any tax credit.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
Tax Credit For Home Buyers
First-time home buyers (people who have not owned a home with the past three years) may be eligible for the tax credit. The credit for first-timers is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing joint return may qualify for the full tax credit amount.
What Are The New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010
Tax Credit Versus Tax Deduction
It's important to remember that the tax credit is just that...a credit. The benefits of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time buyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, they would owe nothing.
Better still, the tax credit is refundable, which means the buyer can receive a check for the credit if they have little income tax liability. For example, if a first-time buyer is eligible for the $8,000 but is liable for $4,000 in income tax, a check for the remaining $4,000 would still be received.
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of credit has been increased. Single tax filers who earn up to $125,00 are eligible for the total credit amount. Those who earn more than this gap can receive partial credit. However, if the taxpayer earns $145,000 or more, they are ineligible for any tax credit. Joint filers can earn up to $225,000 combined for the total tax credit. If the joint filer is up to $245,000 in combine salary they can receive partial credit. Any more earnings than $245,000 and they are not eligible for any tax credit.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
Thursday, November 5, 2009
Lake Travis Schools - Denies Property Tax Increase
Voters on Tuesday rejected a 2-cent property tax increase in the Lake Travis school district, with 59 percent voting agtainst the measure and 41 voting for it.
When the school board approved its $79.5 million budget in August, board members also adopted the tax rate: $1.06 per $100 of assessed property value for maintenance and operations and 27.59 cents per $100 of value for debt payments.
But because that exceeded the state-imposed cap of $1.04 for maintenance and operations, a rollback vote wsas automatically triggered, making the higher amount subject to voters' approval.
The rejection means the maintenance and operations rate rolls back to $1.04.
When the school board approved its $79.5 million budget in August, board members also adopted the tax rate: $1.06 per $100 of assessed property value for maintenance and operations and 27.59 cents per $100 of value for debt payments.
But because that exceeded the state-imposed cap of $1.04 for maintenance and operations, a rollback vote wsas automatically triggered, making the higher amount subject to voters' approval.
The rejection means the maintenance and operations rate rolls back to $1.04.
Friday, October 30, 2009
$8000 First-Time Home Buyer Tax Credit Agreed To Be Extended!
Great news came across the newswire today about the First-Time home buyers tax credit. It looks like Senators have agreed in principle to extend the credit although it still has to be inserted into a bill & voted on by the house. Headlines across the nation are slightly confusing on whether or not this will go through, but many feel that it will surely pass.
Here is what USA Today had to say about today’s announcements:
“Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.”
Based on today’s compromise it looks like the income limit would also be raised to $125,000 a year for individuals and $225,000 for married couples, up from the current income limits of $75,000 and $150,000, respectively. This means that more people will be in a position to capitalize on this incentive, which hopefully will fuel more home sales.
Many sophisticated real estate investors are excited about this potential extension because they are able to work with people facing foreclosure to create a win-win-win scenario where they can help purchase their home without them getting a foreclosure attached to their credit. Investors can then fix up the home and sell it at a discount to first time home buyers who can leverage this extended tax credit. Everybody wins and neighborhoods are being improved at the same time.
Question:
Are you glad that Senate leaders compromised to extend this tax-credit or do you think that it will hurt new and existing home sales? I would love to hear your feedback in the comments below!
Here is what USA Today had to say about today’s announcements:
“Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.”
Based on today’s compromise it looks like the income limit would also be raised to $125,000 a year for individuals and $225,000 for married couples, up from the current income limits of $75,000 and $150,000, respectively. This means that more people will be in a position to capitalize on this incentive, which hopefully will fuel more home sales.
Many sophisticated real estate investors are excited about this potential extension because they are able to work with people facing foreclosure to create a win-win-win scenario where they can help purchase their home without them getting a foreclosure attached to their credit. Investors can then fix up the home and sell it at a discount to first time home buyers who can leverage this extended tax credit. Everybody wins and neighborhoods are being improved at the same time.
Question:
Are you glad that Senate leaders compromised to extend this tax-credit or do you think that it will hurt new and existing home sales? I would love to hear your feedback in the comments below!
Thursday, October 29, 2009
Homebuyer Tax Credit Could Be Extended
The first-time homebuyer tax credit has been such a popular program that lawmakers are considering extending it past the November 30 deadline.
Under the credit, new homebuyers can qualify for an $8,000 tax credit. As of now there are two options on the table: one, House proposal would extend the credit through the end of March, then lower and phase it out through the end of 2010; or two, a more generous option in the Senate would extend the credit through June 30, 2010 and open it to all buyers, rather than just first-timers.
The Senate is reportedly close to a deal and could vote on the extension as early as this week.
Under the credit, new homebuyers can qualify for an $8,000 tax credit. As of now there are two options on the table: one, House proposal would extend the credit through the end of March, then lower and phase it out through the end of 2010; or two, a more generous option in the Senate would extend the credit through June 30, 2010 and open it to all buyers, rather than just first-timers.
The Senate is reportedly close to a deal and could vote on the extension as early as this week.
Tuesday, October 27, 2009
Austin Real Estate - 3rd Quarter Report
The Austin real estate market tightened slightly during the 3rd quarter of 2009. Inventory for Austin as a whole is balanced – with a level of 5.7 months of supply. This is down from 6.3 months of supply at the end of the 2nd Quarter. However, throughout the Austin area, there are local variations in the market.
Sellers Markets: 1 – 3 months of supply
There are 9 local areas with less than 4 months of inventory. These are all located in the close-in suburban part of Austin. Median home prices range from $100,000 to $400,000. Homes in these neighborhoods are mostly limited to re-sales. Builders have generally moved further out to find lots for new construction. There is strong demand for these close-in areas. Mortgages are readily available. And, the first time homebuyer tax credit has drawn buyers into the market. Strong demand has kept inventory at low levels.
Balanced Markets: 4 – 6 months of supply
There are 17 local areas with balanced markets. The balanced markets are distributed throughout central core areas; close-in suburban areas; and some outer-suburban areas. Median prices in these neighborhoods range from $100,000 to $400,000, with a couple of areas up to $600,000. There is some new construction in these areas – which increases inventory. Readily available conforming mortgages; first time homebuyer tax credit; and low interest rates have improved the demand side, and kept these areas balanced.
Buyers Markets: 7 + months of supply
There are 20 local areas with over 7 months of inventory. Median home prices in these areas vary from $100,000 to over $1 million. Generally, these neighborhoods have more new home construction available – which increases supply. Upper end homes continue to have higher inventory than the lower and mid level part of the market.
Upper End Market:
Areas with many homes over $800,000 include Central and Northwest Austin, Westlake, Barton Creek, and Lake Travis. These neighborhoods have been popular locations for speculative building or remodeling.
Although most builders have slowed or stopped speculative building in the high end, this level of inventory has been slow to contract. This is because mortgage money is not as readily available for buyers of high end homes. Jumbo mortgages (over $417,000) require 20% down payment; excellent credit and income; and a higher interest rate. Many buyers in this market have been unable to sell their previous home in another state, and this has slowed the demand for high end homes here.
Foreclosures:
On average, foreclosures are 3.1% of listings on the market – not a significant part of our market. (1st Quarter was 3.7%; 2nd Quarter was 3.6%) However, some sections of Austin have more foreclosures than this. These include the Manor, Elgin, Bastrop and some Southeast areas. Here you may see foreclosures at 8% to 12% of listings. These areas were popular with first time homebuyers, and were also targeted by investors during the boom market. The good news is that these neighborhoods do not have very high inventory levels. This indicates that their foreclosures are being absorbed quickly and inventory is not building up.
Conclusion:
In Austin we are not faced with serious depreciation, as a result of prices that were pushed to unsustainable levels. We are not faced with a serious foreclosure problem, generating its own downward spiral. And, we are not faced with widespread job loss.
Joel Kotkin, whose research appears on Forbes, ranks Austin as the best big city for jobs. He writes, “Few places have received more accolades in recent years than Austin, the city that ranked first on our list of the best big cities for jobs.
Builder Magazine placed Austin second on their list of the “healthiest housing market for 2009.” Their study says: “While other markets lost employment, Austin added 17,400 jobs last year – a 2.3% growth rate. It helps that Austin is home to both a major university and the state capital. Existing homes cost a little bit more in Austin than other Texas markets, roughly $188,600, but that’s still below the national average. Also, Austin is one of the few metro areas in the country where median prices actually rose in 2008 — 2.7%. Amazingly, Austin now generates more home building activity than Chicago, which has six times more people.”
For buyers in all price ranges it is a great time to come into the market. Interest rates below 5% are the best in a lifetime, and they certainly will not remain this low. This is not the time to be waiting around for a better deal. It is the time to start shopping for a great place to live in Austin!
Sellers Markets: 1 – 3 months of supply
There are 9 local areas with less than 4 months of inventory. These are all located in the close-in suburban part of Austin. Median home prices range from $100,000 to $400,000. Homes in these neighborhoods are mostly limited to re-sales. Builders have generally moved further out to find lots for new construction. There is strong demand for these close-in areas. Mortgages are readily available. And, the first time homebuyer tax credit has drawn buyers into the market. Strong demand has kept inventory at low levels.
Balanced Markets: 4 – 6 months of supply
There are 17 local areas with balanced markets. The balanced markets are distributed throughout central core areas; close-in suburban areas; and some outer-suburban areas. Median prices in these neighborhoods range from $100,000 to $400,000, with a couple of areas up to $600,000. There is some new construction in these areas – which increases inventory. Readily available conforming mortgages; first time homebuyer tax credit; and low interest rates have improved the demand side, and kept these areas balanced.
Buyers Markets: 7 + months of supply
There are 20 local areas with over 7 months of inventory. Median home prices in these areas vary from $100,000 to over $1 million. Generally, these neighborhoods have more new home construction available – which increases supply. Upper end homes continue to have higher inventory than the lower and mid level part of the market.
Upper End Market:
Areas with many homes over $800,000 include Central and Northwest Austin, Westlake, Barton Creek, and Lake Travis. These neighborhoods have been popular locations for speculative building or remodeling.
Although most builders have slowed or stopped speculative building in the high end, this level of inventory has been slow to contract. This is because mortgage money is not as readily available for buyers of high end homes. Jumbo mortgages (over $417,000) require 20% down payment; excellent credit and income; and a higher interest rate. Many buyers in this market have been unable to sell their previous home in another state, and this has slowed the demand for high end homes here.
Foreclosures:
On average, foreclosures are 3.1% of listings on the market – not a significant part of our market. (1st Quarter was 3.7%; 2nd Quarter was 3.6%) However, some sections of Austin have more foreclosures than this. These include the Manor, Elgin, Bastrop and some Southeast areas. Here you may see foreclosures at 8% to 12% of listings. These areas were popular with first time homebuyers, and were also targeted by investors during the boom market. The good news is that these neighborhoods do not have very high inventory levels. This indicates that their foreclosures are being absorbed quickly and inventory is not building up.
Conclusion:
In Austin we are not faced with serious depreciation, as a result of prices that were pushed to unsustainable levels. We are not faced with a serious foreclosure problem, generating its own downward spiral. And, we are not faced with widespread job loss.
Joel Kotkin, whose research appears on Forbes, ranks Austin as the best big city for jobs. He writes, “Few places have received more accolades in recent years than Austin, the city that ranked first on our list of the best big cities for jobs.
Builder Magazine placed Austin second on their list of the “healthiest housing market for 2009.” Their study says: “While other markets lost employment, Austin added 17,400 jobs last year – a 2.3% growth rate. It helps that Austin is home to both a major university and the state capital. Existing homes cost a little bit more in Austin than other Texas markets, roughly $188,600, but that’s still below the national average. Also, Austin is one of the few metro areas in the country where median prices actually rose in 2008 — 2.7%. Amazingly, Austin now generates more home building activity than Chicago, which has six times more people.”
For buyers in all price ranges it is a great time to come into the market. Interest rates below 5% are the best in a lifetime, and they certainly will not remain this low. This is not the time to be waiting around for a better deal. It is the time to start shopping for a great place to live in Austin!
Wednesday, October 14, 2009
Let's Run For The Water
Whether you’re a novice runner or hit the path along Lady Bird Lake as much as possible, I wanted to see if you would join me for the Gazelle Foundation’s 2009 Run for the Water presented by Keller Williams Realty!
Every runner who enters helps one person in the country of Burundi gain access to fresh drinking water for the rest of their life. You can choose to run the 5k, 10-mile or bring your kids along for the Kids 1K races! The race is coming up on Nov. 8.
I’d love for us to meet up and do the race together – are you interested? Just send me a note and we’ll come up with a plan! Visit www.runforthewater.com to sign up in the meantime!
Make it a great day!
Every runner who enters helps one person in the country of Burundi gain access to fresh drinking water for the rest of their life. You can choose to run the 5k, 10-mile or bring your kids along for the Kids 1K races! The race is coming up on Nov. 8.
I’d love for us to meet up and do the race together – are you interested? Just send me a note and we’ll come up with a plan! Visit www.runforthewater.com to sign up in the meantime!
Make it a great day!
Monday, October 12, 2009
Tuesday, September 22, 2009
August 2009 Market Stats Are Here
Curious to know the median price change by area for Austin Real Estate? Wondering if your neighborhood is selling? Here you go....
August 2009 Stats
August 2009 Number Sold Change by Area
August 2009 Median Price Change by Area
August 2009 Stats
August 2009 Number Sold Change by Area
August 2009 Median Price Change by Area
Monday, September 21, 2009
Week In Review - September 13th-19th
The number of active listings are down 8.80% from last year.
The number of new listings are down this week 14.92% (compared to 9/14/08 - 9/20/08).
Pendings are up this week 31.47%.
Sold residential units are up 16.61% compared to the same week last year.
The Week in Review
Units for Sale:
Sept. 13 - Sept. 19, 2009
(compared to the same week in 2008)
New listings down this week 14.92%
Pendings are up 31.47%
Solds are up 16.61%
As for Average Prices:
Sept. 13 - Sept. 19, 2009
Sold average sales prices decreased 6.45% to $248,498. In 2008 it was $265,644 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
The number of new listings are down this week 14.92% (compared to 9/14/08 - 9/20/08).
Pendings are up this week 31.47%.
Sold residential units are up 16.61% compared to the same week last year.
The Week in Review
Units for Sale:
Sept. 13 - Sept. 19, 2009
(compared to the same week in 2008)
New listings down this week 14.92%
Pendings are up 31.47%
Solds are up 16.61%
As for Average Prices:
Sept. 13 - Sept. 19, 2009
Sold average sales prices decreased 6.45% to $248,498. In 2008 it was $265,644 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
Homebuyer Protection Alert!
Recent Federal legislation can impact your closing date. When completing your Purchase Agreement, even if you are prepared to move forward and close quickly, a more conservative timeframe of at least 30-45 days from the time of the contract acceptance would be a more realistic expectation at this time.
Listed below is information on two pieces of legislation that stand to impact your closing date, and a few bullet points that explain the reasoning behind and effects of each measure.
HVCC: Home Valuation Code of Conduct
HVCC was designed to ensure that appraisals are conducted objectively and without pressure from parties with an interest in the transaction. Under HVCC:
• The appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company.
• A copy of the appraisal must be provided to the homebuyer/borrower no less than three days before closing.
• The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter timeframes, conservative expectations are warranted.)
• Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted.
HERA: Housing and Economic Recovery Act
HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance. Under HERA:
• No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.
• Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
• Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
• In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.
Listed below is information on two pieces of legislation that stand to impact your closing date, and a few bullet points that explain the reasoning behind and effects of each measure.
HVCC: Home Valuation Code of Conduct
HVCC was designed to ensure that appraisals are conducted objectively and without pressure from parties with an interest in the transaction. Under HVCC:
• The appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company.
• A copy of the appraisal must be provided to the homebuyer/borrower no less than three days before closing.
• The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter timeframes, conservative expectations are warranted.)
• Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted.
HERA: Housing and Economic Recovery Act
HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance. Under HERA:
• No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.
• Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
• Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
• In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.
Sunday, August 30, 2009
Why Rent: Advantages of Home Ownership
It's staggering when you think about the cost of living, especially if you're a renter and not a home owner. If you are currently paying $1,000 a month for rented housing, over the next three years your property management company will effectively have reaped $36,000 of your hard earned cash. In most cases, you know your rent will go up every year, even if you live in an area that has rent control regulations. You're paying the mortgage for the property owner, when you could be building equity in your own real estate investment.
The tax deductions available to homeowners vary, but there are solid rules the IRS lines out for us. Real estate taxes, mortgage interest, pre-paid interest, and interest on construction loans are all things to take into consideration as tax benefits.
The tax deductions available to homeowners vary, but there are solid rules the IRS lines out for us. Real estate taxes, mortgage interest, pre-paid interest, and interest on construction loans are all things to take into consideration as tax benefits.
Monday, August 24, 2009
Why Austin Remains Strong and Will Recover Early as the Economy Improves
Commentary by:
David Tandy
President, Gracy Title Company
As the Austin Chamber of Commerce recently noted, even though Austin showed a slight job loss in June, compared to other cities, we continue to be the number one city in year-over-year job growth of the Top 50 Metro Areas. Even with Austin’s substantial increase to a 7.1% unemployment rate, we still ranked number three for the lowest unemployment in the Top 50. Austin has several factors which provide a strong foundation for job creation and long-term economic strength:
Highly educated workforce. Not only does Austin and the surrounding area have an amazing 122,000 students enrolled in colleges and universities, but graduates want to stay in the Austin area. The Chamber lists another 300,000 college students within 200 miles of Austin, most of whom also would love to live in Austin when they graduate. In the world of “knowledge workers,” businesses increasingly relocate where they can find a highly educated workforce, or at least companies will create satellite divisions in those markets.
Population growth. The Perryman Group’s latest forecast indicates that the Austin-Round Rock MSA will gain about 75,400 new wage and salary jobs from 2008 to 2013. In June, Bizjournals published their analysis of county-by-county growth patterns within each state, and used that information to predict metropolitan growth at five-year intervals between 2005 and 2025. During this 20-year span, Austin is projected to climb 13 notches from 38th to become the 25th largest metro area in the U.S.
Stable home prices. Despite the drop in the number of MLS transactions, home prices remain strong. While most large markets in the U.S. experienced a substantial increase in home prices from 2001 to 2006, and therefore a substantial decline from 2006 to present (some by as much as 50%), Austin’s single-family median home price has remained amazingly stable.
Austin ranks high as a place to relocate and expand a business. Kiplinger, a D.C.-based publisher of business forecasts and personal finance advice, ranked Austin 8th in its recently released 2009 “Best Places to Live” report. This year’s report emphasized the best cities for work—looking for cities that have stable employment rates in key job areas as well as providing new career opportunities. The report placed a premium on places that will lead the country in employment growth when the recovery takes off. Entrepreneur magazine’s August issue ranks Austin the tenth-best start-up city in America and Forbes ranked Austin number one for economic recovery! The Forbes analysis highlighted the diverse base of business in Austin and projected that the Austin economy will grow by $5 billion by the end of 2010. The Austin Chamber of Commerce has seen a spike in inquiries and company visits. According to the chamber’s data from January 1 through May 31, the Austin region has seen 76 site visits in that time frame from companies looking to relocate. During the same period last year, there were 54 site visits, and in 2007, there were 43.
Austin also benefits from the favorable business climate of Texas. No large state compares when it comes to being business-friendly. Texas was recently named the country's Number One state for business by Directorship, a publication that caters to corporate boardroom leaders. Additionally, the U.S. Department of Commerce named Texas the top exporting state in the nation for the seventh year in a row based on 2008 export data.
Fiscal responsibility. The Economist recently ran a series of articles comparing Texas and California, noting among other things the favorable business climate and low tax rates in Texas. Even more critical was the difference in the budgets of the two states. Of course, California is not the only state running out of money and slashing education and other budgets. The National Conference of State Legislatures recently reported that 11 states raised taxes this year, eight tapped into “Rainy Day” funds and two states relied solely on spending cuts to balance their budgets. Texas was not included in any of these categories. While many large population states were unable to balance their budget this year, Texas remains economically healthy with a balanced budget—an amazing accomplishment in this economic recession. For these reasons and many more, Austin and Texas are in an excellent position to do well when the overall economy begins to recover.
David Tandy
President, Gracy Title Company
As the Austin Chamber of Commerce recently noted, even though Austin showed a slight job loss in June, compared to other cities, we continue to be the number one city in year-over-year job growth of the Top 50 Metro Areas. Even with Austin’s substantial increase to a 7.1% unemployment rate, we still ranked number three for the lowest unemployment in the Top 50. Austin has several factors which provide a strong foundation for job creation and long-term economic strength:
Highly educated workforce. Not only does Austin and the surrounding area have an amazing 122,000 students enrolled in colleges and universities, but graduates want to stay in the Austin area. The Chamber lists another 300,000 college students within 200 miles of Austin, most of whom also would love to live in Austin when they graduate. In the world of “knowledge workers,” businesses increasingly relocate where they can find a highly educated workforce, or at least companies will create satellite divisions in those markets.
Population growth. The Perryman Group’s latest forecast indicates that the Austin-Round Rock MSA will gain about 75,400 new wage and salary jobs from 2008 to 2013. In June, Bizjournals published their analysis of county-by-county growth patterns within each state, and used that information to predict metropolitan growth at five-year intervals between 2005 and 2025. During this 20-year span, Austin is projected to climb 13 notches from 38th to become the 25th largest metro area in the U.S.
Stable home prices. Despite the drop in the number of MLS transactions, home prices remain strong. While most large markets in the U.S. experienced a substantial increase in home prices from 2001 to 2006, and therefore a substantial decline from 2006 to present (some by as much as 50%), Austin’s single-family median home price has remained amazingly stable.
Austin ranks high as a place to relocate and expand a business. Kiplinger, a D.C.-based publisher of business forecasts and personal finance advice, ranked Austin 8th in its recently released 2009 “Best Places to Live” report. This year’s report emphasized the best cities for work—looking for cities that have stable employment rates in key job areas as well as providing new career opportunities. The report placed a premium on places that will lead the country in employment growth when the recovery takes off. Entrepreneur magazine’s August issue ranks Austin the tenth-best start-up city in America and Forbes ranked Austin number one for economic recovery! The Forbes analysis highlighted the diverse base of business in Austin and projected that the Austin economy will grow by $5 billion by the end of 2010. The Austin Chamber of Commerce has seen a spike in inquiries and company visits. According to the chamber’s data from January 1 through May 31, the Austin region has seen 76 site visits in that time frame from companies looking to relocate. During the same period last year, there were 54 site visits, and in 2007, there were 43.
Austin also benefits from the favorable business climate of Texas. No large state compares when it comes to being business-friendly. Texas was recently named the country's Number One state for business by Directorship, a publication that caters to corporate boardroom leaders. Additionally, the U.S. Department of Commerce named Texas the top exporting state in the nation for the seventh year in a row based on 2008 export data.
Fiscal responsibility. The Economist recently ran a series of articles comparing Texas and California, noting among other things the favorable business climate and low tax rates in Texas. Even more critical was the difference in the budgets of the two states. Of course, California is not the only state running out of money and slashing education and other budgets. The National Conference of State Legislatures recently reported that 11 states raised taxes this year, eight tapped into “Rainy Day” funds and two states relied solely on spending cuts to balance their budgets. Texas was not included in any of these categories. While many large population states were unable to balance their budget this year, Texas remains economically healthy with a balanced budget—an amazing accomplishment in this economic recession. For these reasons and many more, Austin and Texas are in an excellent position to do well when the overall economy begins to recover.
Thursday, August 6, 2009
Austin Market Misc.
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.”
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.”
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!)
Thursday, May 14, 2009
Austin Real Estate Gaining Momentum
According to the March 2009 Multiple Listing Service report by the Austin Board of REALTORS®, the volume of single-family home sales in March 2009 was 1,421, down 22 percent from March 2008, and the median price was $180,160, down 4 percent over the same time period. Jay Gohil, Chairman of the Austin Board of REALTORS®, provided some insight, “Sales volumes in March are still down compared to a year ago, but we’re beginning to see the gap in volume close.”
For example, in January 2009, sales volume was down 36 percent compared to January 2008. In February 2009, sales volume was down 28 percent compared to February 2008. In March 2009, the 22 percent decrease in volume compared to March 2008 shows the Austin real estate market is gaining momentum. Chairman Gohil continued, “Looking at the first quarter of 2009, we’re seeing sales volumes improve and home values remain steady – that’s good news for Austin homeowners. Those factors, combined with Austin’s strong economic fundamentals, bode well for our market heading toward the summer buying season.” One of the most important economic fundamentals driving the real estate market is job growth, for which Austin was fortunate in 2008. Looking ahead, a recent study based on data from the U.S. Bureau of Labor Statistics cited Austin among the top 10 metropolitan areas in the country with the highest potential for job growth in 2009.
March 2009 Statistics
• $328,098,953 was the total dollar volume of single-family properties sold
• $180,160 was the median price, a four percent decrease from one year ago
• 1,421 was the number of homes sold, a 22 percent decrease compared to March 2008
For example, in January 2009, sales volume was down 36 percent compared to January 2008. In February 2009, sales volume was down 28 percent compared to February 2008. In March 2009, the 22 percent decrease in volume compared to March 2008 shows the Austin real estate market is gaining momentum. Chairman Gohil continued, “Looking at the first quarter of 2009, we’re seeing sales volumes improve and home values remain steady – that’s good news for Austin homeowners. Those factors, combined with Austin’s strong economic fundamentals, bode well for our market heading toward the summer buying season.” One of the most important economic fundamentals driving the real estate market is job growth, for which Austin was fortunate in 2008. Looking ahead, a recent study based on data from the U.S. Bureau of Labor Statistics cited Austin among the top 10 metropolitan areas in the country with the highest potential for job growth in 2009.
March 2009 Statistics
• $328,098,953 was the total dollar volume of single-family properties sold
• $180,160 was the median price, a four percent decrease from one year ago
• 1,421 was the number of homes sold, a 22 percent decrease compared to March 2008
Monday, May 11, 2009
The Week in Review
Units for Sale:
May 3 - May 9, 2009
(compared to the same week in 2008)
New listings down this week 23.30%
Pendings are up 9.69%
Solds down 22.38%
As for Average Prices:
May 3 - May 9, 2009
The "New Listings" average list price is up 3.49% to 340,555.
Sold average sales prices decreased 31.61% to $231,097. In 2008 it was $337,917 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
May 3 - May 9, 2009
(compared to the same week in 2008)
New listings down this week 23.30%
Pendings are up 9.69%
Solds down 22.38%
As for Average Prices:
May 3 - May 9, 2009
The "New Listings" average list price is up 3.49% to 340,555.
Sold average sales prices decreased 31.61% to $231,097. In 2008 it was $337,917 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
How Adjustable Rate Mortgages Work
During the last decade, Adjustable Rate Mortgages (ARMs) have increased in popularity among consumers. These days, few homeowners (especially first-time buyers) remain in their homes for more than seven years. In this case, it often makes sense to get an adjustable rate mortgage with a lower rate, especially one with a 5-year or 7-year fixed portion, since they won't have the loan long enough to be concerned about rate fluctuation.
Adjustable Rate Mortgages have three main features: Margin, Index, and Caps. The Margin is the fixed portion of the adjustable rate. It remains the same for the duration of the loan. The Index is the variable portion. This is what makes an ARM adjustable. Margin + Index = Interest Rate.
It's important to understand that there are many different indices: The 11th District Cost of Funds (COFI), the Monthly Treasury Average (MTA), The One Year Treasury Bill, the Six Month Libor, etc. Each index has its own strengths and weaknesses; some are slow moving, others are more aggressive.
The third and final component of Adjustable Rate Mortgages is Caps. Caps limit how much the rate can fluctuate over time. Annual Caps limit changes to the annual rate, whereas Life Caps provide a worst case scenario over the life of the loan.
Adjustable Rate Mortgages have three main features: Margin, Index, and Caps. The Margin is the fixed portion of the adjustable rate. It remains the same for the duration of the loan. The Index is the variable portion. This is what makes an ARM adjustable. Margin + Index = Interest Rate.
It's important to understand that there are many different indices: The 11th District Cost of Funds (COFI), the Monthly Treasury Average (MTA), The One Year Treasury Bill, the Six Month Libor, etc. Each index has its own strengths and weaknesses; some are slow moving, others are more aggressive.
The third and final component of Adjustable Rate Mortgages is Caps. Caps limit how much the rate can fluctuate over time. Annual Caps limit changes to the annual rate, whereas Life Caps provide a worst case scenario over the life of the loan.
Wednesday, April 29, 2009
Dos and Don'ts Of Home Selling
An energetic real estate agent can have your home on the market in a day. However, to provide the kind of marketing exposure you need to sell in today's market takes a little longer, unless your home is photo-ready when you list.
Ideally, you should start planning for your home sale months before you want your home to be on the market. First find an agent to represent you. Then, create a game plan together for the premarketing phase of the process.
Use your agent as a resource. Walk through your home with your agent to get feedback on work, decluttering and rearranging that needs to be done before the house is photographed for advertising and shown to prospective buyers. If your agent doesn't have a good eye for design, ask for a recommendation of a staging decorator.
HOUSE HUNTING TIP: Preferably, your home should not be submitted to the multiple listing service (MLS) or home-sale Internet sites without photos. Studies have shown that many buyers don't consider a listing that doesn't have photos.
Some sellers have presale inspections done to find out if repairs should be made before the property goes on the market. This wasn't as important several years ago when buyers were enthusiastic about the prospect of making money in the residential real estate market. Now buyers are much more cautious, and property condition is a critical variable.
One seller did a beautiful job fixing up her house for sale. She ordered a termite report and had some of the work done. But she didn't hire a home inspector to inspect the house. The interior was top-notch. In fact, more money was spent on this than was necessary. The listing agent was hired after the work had been done so the seller didn't benefit from the agent's advice about how much to spend and on what.
The house sold with multiple offers. However, the buyer's home inspection report revealed that the house needed a new foundation. Fortunately, there was a backup buyer. But, the price was negotiated down significantly. In hindsight, it would have been better to have fixed the foundation and done a less expensive redo of the interior.
A couple sold a similar home. They worked with their agent for months before the house was marketed. They did presale inspections and got estimates for painting, staging, furnace replacement, making necessary structural modifications and fixing miscellaneous defects referenced in the termite report.
Then, they prioritized, with input from their agent, and had the most critical repairs and enhancements done before the listing hit the MLS. There was no renegotiation necessary with the buyers after they completed their inspections.
Make sure buyers receive copies of proposals and paid invoices for work you did to your home so they know which items in your presale inspection reports have been repaired.
Another couple, who plan to move in a few years, decided to get their home ready to sell now. They put in a new master bathroom, refinished floors and plan to replace a dry-rotted deck. They will enjoy the improvements for the remaining years they stay in the house.
Most sellers wait until the last minute to get their house ready for sale. It can be very stressful trying to get all the work done in a short time frame. Doing work gradually over time is a saner approach. Sadly, most homes never look as good as they do when they're sold.
THE CLOSING: Now is a good time to have work done. A lot of contractors are looking for work. You might receive more competitive bids and be able to have the work done when you want.
Ideally, you should start planning for your home sale months before you want your home to be on the market. First find an agent to represent you. Then, create a game plan together for the premarketing phase of the process.
Use your agent as a resource. Walk through your home with your agent to get feedback on work, decluttering and rearranging that needs to be done before the house is photographed for advertising and shown to prospective buyers. If your agent doesn't have a good eye for design, ask for a recommendation of a staging decorator.
HOUSE HUNTING TIP: Preferably, your home should not be submitted to the multiple listing service (MLS) or home-sale Internet sites without photos. Studies have shown that many buyers don't consider a listing that doesn't have photos.
Some sellers have presale inspections done to find out if repairs should be made before the property goes on the market. This wasn't as important several years ago when buyers were enthusiastic about the prospect of making money in the residential real estate market. Now buyers are much more cautious, and property condition is a critical variable.
One seller did a beautiful job fixing up her house for sale. She ordered a termite report and had some of the work done. But she didn't hire a home inspector to inspect the house. The interior was top-notch. In fact, more money was spent on this than was necessary. The listing agent was hired after the work had been done so the seller didn't benefit from the agent's advice about how much to spend and on what.
The house sold with multiple offers. However, the buyer's home inspection report revealed that the house needed a new foundation. Fortunately, there was a backup buyer. But, the price was negotiated down significantly. In hindsight, it would have been better to have fixed the foundation and done a less expensive redo of the interior.
A couple sold a similar home. They worked with their agent for months before the house was marketed. They did presale inspections and got estimates for painting, staging, furnace replacement, making necessary structural modifications and fixing miscellaneous defects referenced in the termite report.
Then, they prioritized, with input from their agent, and had the most critical repairs and enhancements done before the listing hit the MLS. There was no renegotiation necessary with the buyers after they completed their inspections.
Make sure buyers receive copies of proposals and paid invoices for work you did to your home so they know which items in your presale inspection reports have been repaired.
Another couple, who plan to move in a few years, decided to get their home ready to sell now. They put in a new master bathroom, refinished floors and plan to replace a dry-rotted deck. They will enjoy the improvements for the remaining years they stay in the house.
Most sellers wait until the last minute to get their house ready for sale. It can be very stressful trying to get all the work done in a short time frame. Doing work gradually over time is a saner approach. Sadly, most homes never look as good as they do when they're sold.
THE CLOSING: Now is a good time to have work done. A lot of contractors are looking for work. You might receive more competitive bids and be able to have the work done when you want.
Friday, April 24, 2009
8 Things To Do Before Refinancing
With 30-year interest rates well below 5 percent, and 15-year interest rates between 4 percent and 4.5 percent, it's time to start seriously thinking about refinancing your mortgage.
But before you high-tail it to the nearest mortgage lender and fill out a mortgage application, there are eight things you should do:
1. Check out the interest rate you have on your current loan. When interest rates dip, the natural inclination is to start filling out loan applications left and right. But too many times, homeowners are focused solely on the new interest rate instead of how much they'll save by refinancing. While you may get water cooler-bragging rights, you should refinance only if it's going to save you money.
2. Find out how much your home is really worth. There's no way to sugarcoat it: Home values have sunk around the country an average of about 20 percent in the past year. In some places, such as Las Vegas, Miami, Phoenix and the San Francisco Bay Area, the decline has been twice as steep. It's vital to assess whether your home still has any equity (the difference between what you owe and what the home is worth) or if you are "underwater" with your mortgage (meaning that you owe more to your lender than the property is worth. Whether you have equity will determine what kind of refinance is open to you.
3. If you're underwater with your mortgage, assess how far underwater you are. While federal requirements have changed with regard to refinancing loans owned or serviced by Fannie Mae, Freddie Mac or FHA, if your loan is more than 105 percent of the value of the property, you may not be able to refinance without bringing cash to the table. (You may still be eligible for a loan modification, however.)
4. Get a copy of your credit history and credit score. Since the credit crisis began, lenders have raised the credit scores required to get approved for the best loan programs and best interest rates. The best place to go for a copy of your credit history and credit score is AnnualCreditReport.com. It's the only place where the three credit reporting bureaus provide a free copy of your credit history each year, plus you can pay $7.95 for a copy of your credit score. Choose the Equifax credit score, since it's the one closest to the score used by most lenders. (You can also go to MyFico.com, and purchase your credit history and FICO score for $15.95. You may also find their online community to be helpful in terms of suggestions on how to raise your credit score.)
5. Start identifying potential lenders. Shopping around for a loan takes a little more planning and effort than it used to, as lenders have jacked up the fees they charge to underwrite and process the loan. Your best bet is to talk to a national lender, a credit union (if you belong to one or can join one), a local mortgage broker (call your real estate agent if you don't know one and ask for several recommendations), and perhaps an online lender.
6. Find out if your second lender will subordinate to your first lender. If you have a first and a second mortgage (also known as a home equity loan), find out whether the second lender will subordinate to the new first lender. That will allow you to refinance your first mortgage, while leaving your second loan in place. Many second lenders will not agree to this, and if yours doesn't, you may not be able to refinance at all unless you pay off the second loan. One possibility is to refinance your first mortgage with the lender who owns your second loan.
7. Focus on the big picture, not just the interest rate. While the interest rate you'd get is important, it's also important to calculate how much you'd pay in fees, and how long it will take to pay yourself back the cost of the refinance with your monthly savings. For example, if you're going to save only $50 per month, and it costs you $5,000 to refinance, it'll take you 100 months -- or more than eight years -- to pay back the cost of doing the loan. You won't start saving until well into the eighth year of paying down the mortgage. So, unless you're cutting the term of the mortgage significantly (going from a 30-year to a 15-year), or you're able to pay off the costs in a relatively short period of time (say, less than a year or 18 months), it may not pay to refinance.
8. Get your paperwork together ahead of time. Before the housing crisis, you could almost do a refinance over the phone. In fact, you could call the loan officer you worked with regularly and put in your order for a refinance. You could do a no-cost refinance without providing much in the way of proof of earnings, or account statements or copies of tax returns. The forms would be delivered to your home, and then you'd sign them and send them in. Today, you've got to have your paperwork in order before you can refinance. Gather your W-2, a current paycheck, copies of your last two federal and state tax returns, copies of your bank accounts, retirement accounts, and other assets. Then call the lender.
But before you high-tail it to the nearest mortgage lender and fill out a mortgage application, there are eight things you should do:
1. Check out the interest rate you have on your current loan. When interest rates dip, the natural inclination is to start filling out loan applications left and right. But too many times, homeowners are focused solely on the new interest rate instead of how much they'll save by refinancing. While you may get water cooler-bragging rights, you should refinance only if it's going to save you money.
2. Find out how much your home is really worth. There's no way to sugarcoat it: Home values have sunk around the country an average of about 20 percent in the past year. In some places, such as Las Vegas, Miami, Phoenix and the San Francisco Bay Area, the decline has been twice as steep. It's vital to assess whether your home still has any equity (the difference between what you owe and what the home is worth) or if you are "underwater" with your mortgage (meaning that you owe more to your lender than the property is worth. Whether you have equity will determine what kind of refinance is open to you.
3. If you're underwater with your mortgage, assess how far underwater you are. While federal requirements have changed with regard to refinancing loans owned or serviced by Fannie Mae, Freddie Mac or FHA, if your loan is more than 105 percent of the value of the property, you may not be able to refinance without bringing cash to the table. (You may still be eligible for a loan modification, however.)
4. Get a copy of your credit history and credit score. Since the credit crisis began, lenders have raised the credit scores required to get approved for the best loan programs and best interest rates. The best place to go for a copy of your credit history and credit score is AnnualCreditReport.com. It's the only place where the three credit reporting bureaus provide a free copy of your credit history each year, plus you can pay $7.95 for a copy of your credit score. Choose the Equifax credit score, since it's the one closest to the score used by most lenders. (You can also go to MyFico.com, and purchase your credit history and FICO score for $15.95. You may also find their online community to be helpful in terms of suggestions on how to raise your credit score.)
5. Start identifying potential lenders. Shopping around for a loan takes a little more planning and effort than it used to, as lenders have jacked up the fees they charge to underwrite and process the loan. Your best bet is to talk to a national lender, a credit union (if you belong to one or can join one), a local mortgage broker (call your real estate agent if you don't know one and ask for several recommendations), and perhaps an online lender.
6. Find out if your second lender will subordinate to your first lender. If you have a first and a second mortgage (also known as a home equity loan), find out whether the second lender will subordinate to the new first lender. That will allow you to refinance your first mortgage, while leaving your second loan in place. Many second lenders will not agree to this, and if yours doesn't, you may not be able to refinance at all unless you pay off the second loan. One possibility is to refinance your first mortgage with the lender who owns your second loan.
7. Focus on the big picture, not just the interest rate. While the interest rate you'd get is important, it's also important to calculate how much you'd pay in fees, and how long it will take to pay yourself back the cost of the refinance with your monthly savings. For example, if you're going to save only $50 per month, and it costs you $5,000 to refinance, it'll take you 100 months -- or more than eight years -- to pay back the cost of doing the loan. You won't start saving until well into the eighth year of paying down the mortgage. So, unless you're cutting the term of the mortgage significantly (going from a 30-year to a 15-year), or you're able to pay off the costs in a relatively short period of time (say, less than a year or 18 months), it may not pay to refinance.
8. Get your paperwork together ahead of time. Before the housing crisis, you could almost do a refinance over the phone. In fact, you could call the loan officer you worked with regularly and put in your order for a refinance. You could do a no-cost refinance without providing much in the way of proof of earnings, or account statements or copies of tax returns. The forms would be delivered to your home, and then you'd sign them and send them in. Today, you've got to have your paperwork in order before you can refinance. Gather your W-2, a current paycheck, copies of your last two federal and state tax returns, copies of your bank accounts, retirement accounts, and other assets. Then call the lender.
Seller financing a risky proposition? What happens if buyer declares bankruptcy?
Question: I am thinking of providing owner financing to a potential buyer of one of my homes. This would be a second home for my buyer and he would use it as his vacation home. What would happen to that second home if he were to declare bankruptcy or if he loses his primary residence in a foreclosure?
Answer: We think you're asking the wrong question. The real question you should ask is this: What will happen to the property you sell this person should he stop making his payments to you?
If you provide financing to this buyer, will he put down a substantial down payment? If he does, a large down payment should give you some comfort. If he puts down little or no money, you might be better off renting the home to him, and perhaps arrange to sell it to him in the future when his finances are more stable. Evicting a tenant from a lease is easier in most states than going through a foreclosure.
If you sell the home to him and he has financial difficulties with his primary residence, his financial difficulties most likely would spill over onto the vacation home. Homeowners are likely to stop paying the mortgage on a second home before putting their primary residence in jeopardy.
In a bankruptcy, you might find that you still have to foreclose against this buyer if he stopped paying on the loan you gave him for the purchase of the property.
If you suspect that your buyer is in financial stress, why would you want to sell him your home? If he merely loses his primary residence in a foreclosure, that fact alone should not affect his ownership of the vacation home. The key is whether he pays you the money he owes and whether you have enough of a cushion in the transaction to weather the storm should he stop making his payments to you.
Before you proceed with the sale of the home to this buyer, make sure you have obtained a copy of his credit report and understand his financial situation. Once you do, make sure you hire an attorney to advise you on structuring the sale to this buyer.
One option might be to sell it to him and take back a mortgage. But another option might be to sell him the home by using an installment contract for deed, otherwise known as a sale of the property over time where you retain legal title to the home.
Another issue you might face is whether you currently have a loan on this property and whether you intend to pay off this loan.
If you're financing your buyer's purchase of the property but you still have an existing loan that you're not planning to pay off, this could cause a huge problem for you down the line.
Aside from running afoul of your current lender's requirements, you'll have lost control over the asset. If the buyer fails to make any payments that are due, you'll have to continue to make the payments to your lender. If you don't, you'll harm your credit and your lender could foreclose on the home you sold to this person.
For more details about how to protect yourself, please talk to a local real estate attorney.
Answer: We think you're asking the wrong question. The real question you should ask is this: What will happen to the property you sell this person should he stop making his payments to you?
If you provide financing to this buyer, will he put down a substantial down payment? If he does, a large down payment should give you some comfort. If he puts down little or no money, you might be better off renting the home to him, and perhaps arrange to sell it to him in the future when his finances are more stable. Evicting a tenant from a lease is easier in most states than going through a foreclosure.
If you sell the home to him and he has financial difficulties with his primary residence, his financial difficulties most likely would spill over onto the vacation home. Homeowners are likely to stop paying the mortgage on a second home before putting their primary residence in jeopardy.
In a bankruptcy, you might find that you still have to foreclose against this buyer if he stopped paying on the loan you gave him for the purchase of the property.
If you suspect that your buyer is in financial stress, why would you want to sell him your home? If he merely loses his primary residence in a foreclosure, that fact alone should not affect his ownership of the vacation home. The key is whether he pays you the money he owes and whether you have enough of a cushion in the transaction to weather the storm should he stop making his payments to you.
Before you proceed with the sale of the home to this buyer, make sure you have obtained a copy of his credit report and understand his financial situation. Once you do, make sure you hire an attorney to advise you on structuring the sale to this buyer.
One option might be to sell it to him and take back a mortgage. But another option might be to sell him the home by using an installment contract for deed, otherwise known as a sale of the property over time where you retain legal title to the home.
Another issue you might face is whether you currently have a loan on this property and whether you intend to pay off this loan.
If you're financing your buyer's purchase of the property but you still have an existing loan that you're not planning to pay off, this could cause a huge problem for you down the line.
Aside from running afoul of your current lender's requirements, you'll have lost control over the asset. If the buyer fails to make any payments that are due, you'll have to continue to make the payments to your lender. If you don't, you'll harm your credit and your lender could foreclose on the home you sold to this person.
For more details about how to protect yourself, please talk to a local real estate attorney.
Thursday, April 23, 2009
What's Your Score?
How is it that you can apply for a mortgage, credit card, or car loan over the phone and be approved or declined in a matter of seconds? For speedy access to credit - and the mountain of credit card "preapprovals" you get in the mail each month - you can thank an invention called the FICO score.
Your FICO score is the most common type of personal credit score, used in some form by most lending institutions. The FICO score tells lenders in a very simple way how likely you are to repay your debts on time. Ranging from 300 to 850, your FICO score is calculated according to a formula developed by the Fair Isaac Corporation (hence the acronym "FICO").
What everybody wants, of course, is a high score - the higher the better. With higher scores come lower interest rates. How do you get a higher FICO score? First, you need to know the factors that influence your score. In order, they are:
* How you pay your bills (35 percent of your score). How consistently have you made your payments on time? If you've paid bills late, how many times were you late? How late were you? How much money did you owe? Have you ever had a debt in collection? What was the size of the debt? Have you ever filed for bankruptcy?
* Your total outstanding debt (30 percent). Outstanding debt is debt of all kinds, including mortgages, car loans, credit cards, home-equity lines of credit, and any other loans that are reported to a credit agency. Another important factor here is how much unused but available credit you have on your credit cards. The absolute amount of available credit you have is less important than how close you are to maxing out the credit you've been granted. The highest scores go to people who use credit sparingly and keep their balances low.
* The length of your credit history (15 percent). The longer you've had and used credit, the higher your score. You get even more points if you have established long-term credit with the same lenders - a reason why you might not want to close long-term credit cards, even if you don't use them very much.
* Mix of credit types (10 percent). Your score is higher if you have a variety of fixed-payment loans and revolving credit.
* Recent applications for credit (10 percent). A number of applications for credit over a short period of time raises a red flag for lenders, as it is often a sign that a person is in a cash flow problem. The FICO formula takes points away for this. Multiple applications for a specific type of credit in a concentrated time frame - when you're rate shopping for a mortgage, for example - don't count against your credit score.
What doesn't have an effect on your credit score? Demographic data like your age, sex, race, education, marital status, and how long you've held your job or lived in your current home. Perhaps surprisingly, your income and whether you've ever been turned down for credit also have no bearing on your credit score.
How to Raise Your Score
Just as there are things you can do that will lower your credit score, there are also things you can do to raise it, including:
* Pay your bills on time.
* Make more than the minimum payments, especially toward credit card accounts with balances close to your credit limit.
* Transfer a portion of the balances you have on cards that are nearly maxed out to cards where you are well below the limit.
* Challenge any inaccuracies on your credit reports. You're entitled to a free credit report every year. Check it at least that often to guard against mistakes.
Your FICO score is the most common type of personal credit score, used in some form by most lending institutions. The FICO score tells lenders in a very simple way how likely you are to repay your debts on time. Ranging from 300 to 850, your FICO score is calculated according to a formula developed by the Fair Isaac Corporation (hence the acronym "FICO").
What everybody wants, of course, is a high score - the higher the better. With higher scores come lower interest rates. How do you get a higher FICO score? First, you need to know the factors that influence your score. In order, they are:
* How you pay your bills (35 percent of your score). How consistently have you made your payments on time? If you've paid bills late, how many times were you late? How late were you? How much money did you owe? Have you ever had a debt in collection? What was the size of the debt? Have you ever filed for bankruptcy?
* Your total outstanding debt (30 percent). Outstanding debt is debt of all kinds, including mortgages, car loans, credit cards, home-equity lines of credit, and any other loans that are reported to a credit agency. Another important factor here is how much unused but available credit you have on your credit cards. The absolute amount of available credit you have is less important than how close you are to maxing out the credit you've been granted. The highest scores go to people who use credit sparingly and keep their balances low.
* The length of your credit history (15 percent). The longer you've had and used credit, the higher your score. You get even more points if you have established long-term credit with the same lenders - a reason why you might not want to close long-term credit cards, even if you don't use them very much.
* Mix of credit types (10 percent). Your score is higher if you have a variety of fixed-payment loans and revolving credit.
* Recent applications for credit (10 percent). A number of applications for credit over a short period of time raises a red flag for lenders, as it is often a sign that a person is in a cash flow problem. The FICO formula takes points away for this. Multiple applications for a specific type of credit in a concentrated time frame - when you're rate shopping for a mortgage, for example - don't count against your credit score.
What doesn't have an effect on your credit score? Demographic data like your age, sex, race, education, marital status, and how long you've held your job or lived in your current home. Perhaps surprisingly, your income and whether you've ever been turned down for credit also have no bearing on your credit score.
How to Raise Your Score
Just as there are things you can do that will lower your credit score, there are also things you can do to raise it, including:
* Pay your bills on time.
* Make more than the minimum payments, especially toward credit card accounts with balances close to your credit limit.
* Transfer a portion of the balances you have on cards that are nearly maxed out to cards where you are well below the limit.
* Challenge any inaccuracies on your credit reports. You're entitled to a free credit report every year. Check it at least that often to guard against mistakes.
Tuesday, April 7, 2009
Austin Business...Moving Up The Ladder
Another reason Austin Real Estate is a great investment! Growth in Austin continues...and Forbes has moved Austin UP in the rankings for the best place for business and careers.
Forbes.com ranks Austin the 8th best place for business and careers in its latest list.
Texas' Capital City rose significantly from 47th on last year's list. Austin was behind cities such as No. 1 Raleigh, N.C. and No. 4 Fayetteville, Ark. The list was ranked according to factors such as cost of doing business and projected employment growth.
Forbes.com cited Austin's projected annual job growth rate of 2.3 percent--the fifth fastest in the country, and its relatively low subprime mortgage exposure.
For its reporting on Austin, Forbes.com spoke with the Charles Schwab Corp., which expanded its Austin presence in 2007 when it purchased the 401(k) Co. "The city of Austin is extremely business-friendly. They have bent over backwards to accommodate us," Glenn Cooper, head of real estate at Schwab, told the news site.
The top 10 cities on the list were as follows:
1. Raleigh, N.C.
2. Fort Collins, Colo.
3. Durham, N.C.
4. Fayetteville, Ark.
5. Lincoln, Neb.
6. Asheville, N.C.
7. Des Moines, Iowa
8. Austin, Texas
9. Boise, Idaho
10. Colorado Springs, Colo.
Forbes.com ranks Austin the 8th best place for business and careers in its latest list.
Texas' Capital City rose significantly from 47th on last year's list. Austin was behind cities such as No. 1 Raleigh, N.C. and No. 4 Fayetteville, Ark. The list was ranked according to factors such as cost of doing business and projected employment growth.
Forbes.com cited Austin's projected annual job growth rate of 2.3 percent--the fifth fastest in the country, and its relatively low subprime mortgage exposure.
For its reporting on Austin, Forbes.com spoke with the Charles Schwab Corp., which expanded its Austin presence in 2007 when it purchased the 401(k) Co. "The city of Austin is extremely business-friendly. They have bent over backwards to accommodate us," Glenn Cooper, head of real estate at Schwab, told the news site.
The top 10 cities on the list were as follows:
1. Raleigh, N.C.
2. Fort Collins, Colo.
3. Durham, N.C.
4. Fayetteville, Ark.
5. Lincoln, Neb.
6. Asheville, N.C.
7. Des Moines, Iowa
8. Austin, Texas
9. Boise, Idaho
10. Colorado Springs, Colo.
The Week in Review
Units for Sale:
Mar. 29 - Apr. 4, 2009
(compared to the same week in 2008)
New listings down this week 19.86%
Pendings are down 8.75%
Solds down 17.63%
As for Average Prices:
Mar. 29 - Apr. 4, 2009
Sold average sales prices increased less than 6.31% to $266,905. In 2008 it was $251,063 for the same week
Mar. 29 - Apr. 4, 2009
(compared to the same week in 2008)
New listings down this week 19.86%
Pendings are down 8.75%
Solds down 17.63%
As for Average Prices:
Mar. 29 - Apr. 4, 2009
Sold average sales prices increased less than 6.31% to $266,905. In 2008 it was $251,063 for the same week
Tuesday, March 17, 2009
The Week In Review
Units for Sale:
Mar. 8 - Mar. 14, 2009
(compared to the same week in 2008)
New listings down this week 18.41%
Pendings are down 16.47%
Solds down 29.34%
As for Average Prices:
Mar. 8 - Mar. 14, 2009
Sold average sales prices increased less than 3.02% to $240,861. In 2008 it was $233,794 for the same week.
Mar. 8 - Mar. 14, 2009
(compared to the same week in 2008)
New listings down this week 18.41%
Pendings are down 16.47%
Solds down 29.34%
As for Average Prices:
Mar. 8 - Mar. 14, 2009
Sold average sales prices increased less than 3.02% to $240,861. In 2008 it was $233,794 for the same week.
Monday, March 16, 2009
Tips to Avoid Identity Theft
Obviously this title doesn't suggest anything having to do directly with Austin Real Estate...however, after reading the article below I did think it prudent to share the information. I had no idea that this kind of theft has become the crime 'winner'. I suppose though having your credit identity hacked and torn apart does directly effect your potential real estate transactions. Take a few tips from this article:
Identity theft is now passing drug trafficking as the number one crime in the nation–with more than 15 million victims every year. Rather than lie awake at night worrying and wondering if your identity has been stolen, you can actually take a simple step to protect yourself...it's called a credit freeze (or, sometimes, a security freeze).
According to the U.S. Department of Justice, about 1.6 million households have experienced some form of theft when it comes to their financial accounts. Here are some important tips for keeping your information safe and sound:
Just the Facts. Don't give unnecessary information like your date of birth and income level when you're filling out things like warranty cards or supermarket club cards. Share only what's really necessary in every situation.
Navigating the Net. Never post your address or your full date of birth on any social networking sites because both are pieces of information needed to steal your identity.
Searching for a Job? Never give a potential employer your Social Security number on an Internet job site. Also, thoroughly read the privacy policies of any online job boards to make sure they won't sell your information.
Safe Keeping. Never keep your Social Security number in your wallet, glove compartment, or any other easy-to-access place. Also, never have it printed on your checks or use it as your password.
Shred 'Em. Remember, when you're ready to get rid of old documents that contain important information, shred them with a cross cut shredder.
Protect Your Mail. If you have to mail something that contains sensitive information, use a secure mailbox (not the one at the end of your driveway).
The bottom line is this: When it comes to your personal information, share it on a need-to-know basis only!
Identity theft is now passing drug trafficking as the number one crime in the nation–with more than 15 million victims every year. Rather than lie awake at night worrying and wondering if your identity has been stolen, you can actually take a simple step to protect yourself...it's called a credit freeze (or, sometimes, a security freeze).
According to the U.S. Department of Justice, about 1.6 million households have experienced some form of theft when it comes to their financial accounts. Here are some important tips for keeping your information safe and sound:
Just the Facts. Don't give unnecessary information like your date of birth and income level when you're filling out things like warranty cards or supermarket club cards. Share only what's really necessary in every situation.
Navigating the Net. Never post your address or your full date of birth on any social networking sites because both are pieces of information needed to steal your identity.
Searching for a Job? Never give a potential employer your Social Security number on an Internet job site. Also, thoroughly read the privacy policies of any online job boards to make sure they won't sell your information.
Safe Keeping. Never keep your Social Security number in your wallet, glove compartment, or any other easy-to-access place. Also, never have it printed on your checks or use it as your password.
Shred 'Em. Remember, when you're ready to get rid of old documents that contain important information, shred them with a cross cut shredder.
Protect Your Mail. If you have to mail something that contains sensitive information, use a secure mailbox (not the one at the end of your driveway).
The bottom line is this: When it comes to your personal information, share it on a need-to-know basis only!
Tuesday, March 10, 2009
Choosing a Fixed Rate Loan
Fixed rate loans generally come with one of two options; the 30-Year Fixed and the 15-Year Fixed. If a borrower is planning on being in the same home for a long period of time, a 30-Year Fixed may be more attractive because it offers stability. The monthly payment will remain consistent over the life of the loan. If interest rates are at historic lows at the time the borrower is seeking to obtain financing, this is a good program to consider.
A 15-Year Fixed loan program offers the same stability, but the accelerated amortization schedule makes the monthly payment substantially higher. While the interest rate may be lower on this type of loan, the borrower must be willing to commit to a higher monthly payment. If the borrower wishes to retire in 15 years and be debt-free at that time, this loan program may be more suitable to the borrower's long-term needs.
It is also possible to make pre-payments on a 30-Year loan and reduce the life of the loan, as well as the overall interest payment, without committing to the higher monthly payment of a 15-Year program. As long as there is no pre-payment penalty associated with the 30-Year mortgage, pre-payment offers the borrower the latitude to make additional payments when it is affordable. If cash flow becomes difficult, this arrangement will not put the borrower in a compromising position.
A 15-Year Fixed loan program offers the same stability, but the accelerated amortization schedule makes the monthly payment substantially higher. While the interest rate may be lower on this type of loan, the borrower must be willing to commit to a higher monthly payment. If the borrower wishes to retire in 15 years and be debt-free at that time, this loan program may be more suitable to the borrower's long-term needs.
It is also possible to make pre-payments on a 30-Year loan and reduce the life of the loan, as well as the overall interest payment, without committing to the higher monthly payment of a 15-Year program. As long as there is no pre-payment penalty associated with the 30-Year mortgage, pre-payment offers the borrower the latitude to make additional payments when it is affordable. If cash flow becomes difficult, this arrangement will not put the borrower in a compromising position.
Market Stats - March 10th, 2009
The number of active listings are up less than 1% over last year.
The number of new listings are down this week 22% (compared to 3/2/08 - 3/8/08).
Pendings are down this week 17%.
Sold residential units are down 39% compared to the same week last year.
How are we doing on sales prices? To get the full picture, check out the our web site for latest sold data.
For additional information on the current market, please visit out web site.
The Week in Review
Units for Sale:
Mar. 1 - Mar. 7, 2009
(compared to the same week in 2008)
New listings down this week 22%
Pendings are down 17%
Solds down 39%
As for Average Prices:
Mar. 1 - Mar. 7, 2009
Sold average sales prices increased less than 1% to $226,272. In 2008 it was $227,558 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
The number of new listings are down this week 22% (compared to 3/2/08 - 3/8/08).
Pendings are down this week 17%.
Sold residential units are down 39% compared to the same week last year.
How are we doing on sales prices? To get the full picture, check out the our web site for latest sold data.
For additional information on the current market, please visit out web site.
The Week in Review
Units for Sale:
Mar. 1 - Mar. 7, 2009
(compared to the same week in 2008)
New listings down this week 22%
Pendings are down 17%
Solds down 39%
As for Average Prices:
Mar. 1 - Mar. 7, 2009
Sold average sales prices increased less than 1% to $226,272. In 2008 it was $227,558 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
Wednesday, March 4, 2009
Enhanced Tax Credit Provides Outstanding Opportunity for Home Buyers
In its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for first-time home buyers.
But time is of the essence for buyers who want to take advantage of this opportunity. Only homes purchased on or after January 1, 2009 and before December 1, 2009 are eligible. Click HERE for more detailed information.
But time is of the essence for buyers who want to take advantage of this opportunity. Only homes purchased on or after January 1, 2009 and before December 1, 2009 are eligible. Click HERE for more detailed information.
Keller Williams now 3rd LARGEST Real Estate Franchise
Austin-based Keller Williams Realty is now the third-largest real estate franchise in the country, as measured by number of agents.
Keller Williams had 72,794 agents at the end of 2008, according to Real Trends, a trade publication. That pulled it ahead of Re/Max International, which had been third.
The company has 679 offices in the United States, and said it distributed $30 million in profits to agents last year under a profit-sharing program.
Keller Williams focuses on residential real estate but last year launched a commercial division, which now has 220 brokers in the U.S. and Canada.
Keller Williams had 72,794 agents at the end of 2008, according to Real Trends, a trade publication. That pulled it ahead of Re/Max International, which had been third.
The company has 679 offices in the United States, and said it distributed $30 million in profits to agents last year under a profit-sharing program.
Keller Williams focuses on residential real estate but last year launched a commercial division, which now has 220 brokers in the U.S. and Canada.
Austin Joins Top Ranks for Growth
Forbes magazine ranked Austin, Texas, #3 in its Best Cities for Jobs in 2008 and that makes Austin a great target area for real estate. The Texas state capital city came in #1 for income growth in the Forbes list and #2 for job growth. When you consider that houses are where the jobs go at night, then Austin homeowners are sure to rest well, knowing they're in a good spot for equity growth.
While the number of houses sold in December dropped 16 percent compared to a year earlier, the Austin American Statesman reports the average price buyers paid was up 8 percent at $191,000. While sales volume is expected to cool in the city, Austin's job market keeps growing, creating greater demand for homes in great condition and priced right.
Price growth hasn't stopped through the last three years. In 2004, the average single family home sold in Austin was at $154,700. The latest report from the National Association of Realtors shows the same house at $188,200 for the end of the third quarter 2007 -- a gain of more than 21 percent.
While the rest of the country's pricing leveled and dipped last year, homeowners' equity growth continued upward throughout the last 12 months. Meanwhile, while Economy.com forecasts prices to level and dip for the citizens of Austin by about 4 percent in the next several months, job growth will put pressure on the inventory, creating a high level of demand on the dwindling supply.
What's keeping the market insulated from a bubble-like implosion is job growth. The Texas Workforce Commission released job expansion figures indicating the Austin region added 29,500 new jobs during the 12 months ending September 2007 -- a 4 percent gain in employment during the past year.
While the number of houses sold in December dropped 16 percent compared to a year earlier, the Austin American Statesman reports the average price buyers paid was up 8 percent at $191,000. While sales volume is expected to cool in the city, Austin's job market keeps growing, creating greater demand for homes in great condition and priced right.
Price growth hasn't stopped through the last three years. In 2004, the average single family home sold in Austin was at $154,700. The latest report from the National Association of Realtors shows the same house at $188,200 for the end of the third quarter 2007 -- a gain of more than 21 percent.
While the rest of the country's pricing leveled and dipped last year, homeowners' equity growth continued upward throughout the last 12 months. Meanwhile, while Economy.com forecasts prices to level and dip for the citizens of Austin by about 4 percent in the next several months, job growth will put pressure on the inventory, creating a high level of demand on the dwindling supply.
What's keeping the market insulated from a bubble-like implosion is job growth. The Texas Workforce Commission released job expansion figures indicating the Austin region added 29,500 new jobs during the 12 months ending September 2007 -- a 4 percent gain in employment during the past year.
Friday, February 27, 2009
If I Sell My Home, Will I Have to Pay Capital Gains Tax?
The IRS permits a maximum exclusion on capital gain of $250,000 for individuals and $500,000 for married couples filing a joint return who sell their home, but of course some conditions apply.
For the five-year time-frame prior to the date of the sale of your primary residence, you must meet the Ownership and Use Tests the IRS provides in Publication 523, Selling Your Home. These rules ensure you have owned the home for at least two years, and lived in the home for at least 24 months out of the last five years. Additionally, you may not have excluded a gain on your taxes from the sale of a different home within the last two years. Note that if you sell your property for less than your original purchase price, you cannot claim a capital loss.
A 'reduced maximum exclusion' can apply to those who must sell their home due to a change in their place of employment, health issues, or unforeseen circumstances that affect qualified individuals. In all cases, it is best to consult your tax professional or IRS guidelines if you have any questions about the taxes you may be responsible for if you sell your home.
For the five-year time-frame prior to the date of the sale of your primary residence, you must meet the Ownership and Use Tests the IRS provides in Publication 523, Selling Your Home. These rules ensure you have owned the home for at least two years, and lived in the home for at least 24 months out of the last five years. Additionally, you may not have excluded a gain on your taxes from the sale of a different home within the last two years. Note that if you sell your property for less than your original purchase price, you cannot claim a capital loss.
A 'reduced maximum exclusion' can apply to those who must sell their home due to a change in their place of employment, health issues, or unforeseen circumstances that affect qualified individuals. In all cases, it is best to consult your tax professional or IRS guidelines if you have any questions about the taxes you may be responsible for if you sell your home.
Saturday, February 21, 2009
What Is Title Insurance?
Title insurance is a policy that is usually issued by a title company to protect the lender against something that might have happened in the past, rather than something that might occur in the future. In essence, an extensive search of public records is conducted by the title company to validate who has held title to the property in the past. The lender wants to know if there are any liens, judgments or easements on the property that they should be aware of.
But title insurance also guards against hidden risks or unknown factors that might cause an encumbrance at some point in the future, such as unknown heirs, forged deeds or wills, misinterpreted wills, false impersonation of the true owner of the property, deeds signed over by persons of unsound mind, or defects in the recording of past titles. Title insurance covers the cost of the title search, and any legal fees that may result from any dispute over past property ownership. It is required by the lender and paid for by the buyer.
The smart home buyer will also purchase title insurance to protect their own interests. This is a one-time premium that protects the buyer or their heirs, as long as they retain an interest in the property.
But title insurance also guards against hidden risks or unknown factors that might cause an encumbrance at some point in the future, such as unknown heirs, forged deeds or wills, misinterpreted wills, false impersonation of the true owner of the property, deeds signed over by persons of unsound mind, or defects in the recording of past titles. Title insurance covers the cost of the title search, and any legal fees that may result from any dispute over past property ownership. It is required by the lender and paid for by the buyer.
The smart home buyer will also purchase title insurance to protect their own interests. This is a one-time premium that protects the buyer or their heirs, as long as they retain an interest in the property.
Saturday, February 14, 2009
First-Time Home Buyers FAQs
Buying a home is one the biggest financial decisions most people will make in their entire lives, so it's only natural to have questions about the process, especially for first-time home buyers.
What are the benefits of owning versus renting a home?
When you add up the tax benefits of owning a home versus renting a home, it costs no more to be a homeowner than it does to rent, in many cases. With this in mind, why help finance your landlord's financial goals when you can own your own home and, as your equity grows, increase your savings for the future as well?
Does my credit score affect my ability to secure a home loan?
When it comes to qualifying for a mortgage, the answer is never simply a matter of yes or no; it's a matter of when: When will you be ready to qualify? While your credit score does affect this process, with credit repair services, government loans, and other programs and strategies, home-ownership can be a reality for anyone willing to put in the necessary time and effort.
What's the difference between being pre-qualified and being pre-approved?
There's a world of difference. A pre-qualification is a statement based often on unverified financial data. A pre-approval, however, is a decision to loan, and carries a lot of weight with sellers. With a pre-approval, you are essentially a cash buyer, and not only do you know exactly how much you can afford, sellers will take your offer much more seriously knowing you are pre-approved.
What are the benefits of owning versus renting a home?
When you add up the tax benefits of owning a home versus renting a home, it costs no more to be a homeowner than it does to rent, in many cases. With this in mind, why help finance your landlord's financial goals when you can own your own home and, as your equity grows, increase your savings for the future as well?
Does my credit score affect my ability to secure a home loan?
When it comes to qualifying for a mortgage, the answer is never simply a matter of yes or no; it's a matter of when: When will you be ready to qualify? While your credit score does affect this process, with credit repair services, government loans, and other programs and strategies, home-ownership can be a reality for anyone willing to put in the necessary time and effort.
What's the difference between being pre-qualified and being pre-approved?
There's a world of difference. A pre-qualification is a statement based often on unverified financial data. A pre-approval, however, is a decision to loan, and carries a lot of weight with sellers. With a pre-approval, you are essentially a cash buyer, and not only do you know exactly how much you can afford, sellers will take your offer much more seriously knowing you are pre-approved.
Monday, February 9, 2009
New Stimulus Package Proposes Tax Credit For Home Buyers
Last week, the Senate verbally approved the Fix Housing First Act, an important amendment to their version of the Economic Stimulus Bill. The piece of legislation and the Stimulus Bill are still awaiting Senate and House negotiations, but could provide all home buyers of primary residences over the next year with a tax credit of $15,000 or 10 percent of the cost of the home, whichever is less. The credit will not need to be repaid unless the home is sold within two years of purchase. This Senate's version of the tax credit, if implemented, will replace, or “sunset” the current $7,500 credit.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
New Stimulus Package Proposes Tax Credit For Home Buyers
Last week, the Senate verbally approved the Fix Housing First Act, an important amendment to their version of the Economic Stimulus Bill. The piece of legislation and the Stimulus Bill are still awaiting Senate and House negotiations, but could provide all home buyers of primary residences over the next year with a tax credit of $15,000 or 10 percent of the cost of the home, whichever is less. The credit will not need to be repaid unless the home is sold within two years of purchase. This Senate's version of the tax credit, if implemented, will replace, or “sunset” the current $7,500 credit.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
Interests Rates Change Daily
Interest rates change constantly, but it is important to know that rates are cyclical. If rates are currently at historical lows then we know there is a strong probability rates will go up again, and vice-versa. Certain economic indicators such as unemployment data, consumer price index, retail sales data, and consumer confidence all have an effect on mortgage interest rates. But the key factor to watch is the relationship between stocks and bonds.
When the economy is slow and the stock market is "bearish," many investors move money out of stocks and into bonds and mortgage-backed securities. This causes mortgage interest rates to go down. When the economy is doing well, the stock market rallies and is considered "bullish." Investors then have a tendency to move their money out of that safe haven of bonds and mortgage-backed securities and back into stocks. As a result, mortgage interest rates go up.
When the economy is slow and the stock market is "bearish," many investors move money out of stocks and into bonds and mortgage-backed securities. This causes mortgage interest rates to go down. When the economy is doing well, the stock market rallies and is considered "bullish." Investors then have a tendency to move their money out of that safe haven of bonds and mortgage-backed securities and back into stocks. As a result, mortgage interest rates go up.
Monday, January 26, 2009
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.
At a quick glance, yes, it's easy to see why the mistake is made. For 11 out of the 13 months recorded, 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 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.
At a quick glance, yes, it's easy to see why the mistake is made. For 11 out of the 13 months recorded, 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 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.
Wednesday, January 14, 2009
Week In Review
Units for Sale:
Jan. 4 - Jan. 10, 2009
(compared to the same week in 2007)
New listings down this week 37.67%
Pendings up 1.11%
Solds down 33.90%
As for Average Prices:
Jan. 4 - Jan. 10, 2009
Sold average sales prices decreased 14.14% to $242,093. In 2008 it was $281,978 for the same week.
Jan. 4 - Jan. 10, 2009
(compared to the same week in 2007)
New listings down this week 37.67%
Pendings up 1.11%
Solds down 33.90%
As for Average Prices:
Jan. 4 - Jan. 10, 2009
Sold average sales prices decreased 14.14% to $242,093. In 2008 it was $281,978 for the same week.
Tuesday, January 6, 2009
Avalon Planning Residential Lots
An Orlando-based developer has purchased a 68-acre tract near the Dell headquarters with plans to develop up to 140 residential lots. Avalon Park Group bought the land near the I-35 and E. Yager Lane intersection from locally based Solo Star Realty Inc.
The site currently has multiple zonings, but Avalon is working to have it rezoned exclusively for single-family residential development.
The site currently has multiple zonings, but Avalon is working to have it rezoned exclusively for single-family residential development.
December 2008 Austin Real Estate (Short) Stats
Units for Sale: (compared to December 2007)
New listings were down 12.84%.
Pendings were up 34.86%.
Solds decreased by 16.01%.
As for Average Prices:
The "New Listings" average list price is up 2.36% to 300,316. In December 2007 the average list price was $293,392.
Sold average sales prices decreased 5.66% to $238,867. For December 2007 it was $253,205
New listings were down 12.84%.
Pendings were up 34.86%.
Solds decreased by 16.01%.
As for Average Prices:
The "New Listings" average list price is up 2.36% to 300,316. In December 2007 the average list price was $293,392.
Sold average sales prices decreased 5.66% to $238,867. For December 2007 it was $253,205
Monday, January 5, 2009
Don't Underestimate Inflation
Inflation has been tame for so long that it's easy to ignore when planning for retirement. However, even inflation of 2% or 3% per year, over a period of many years, can seriously erode the purchasing power of your funds. At 2.5% inflation, $1 today will be worth 78 cents in 10 years, 61 cents in 20 years, and 48 cents in 30 years. That can have a major impact on those entering retirement for several reasons:
- New retirees are less likely to have defined-benefit pensions. Thus, they must rely more on Social Security benefits and personal savings, including defined-contribution plans such as 401(k) plans.
- Cost of living adjustments for Social Security benefits are less generous. While Social Security benefits are still adjusted for inflation based on the consumer price index (CPI), the methodology for calculating the CPI changed dramatically in 1999, reducing increases in the CPI.
- Retirees are living longer. As life expectancies increase, retirees are spending more years in retirement, so their retirement savings are subject to the impact of inflation over a longer time period.
- Health-care costs are becoming more of a burden to retirees. More and more companies are reducing benefits or eliminating health care insurance for retirees, and health-care costs tend to increase faster than overall inflation. For instance, in 2006, the overall CPI increased 3.2%, while medical care costs increased 4.0% and hospital and related services increased 6.4% (Source: Bureau of Labor Statistics, 2007).
To combat the effects of inflation on your retirement income, consider these tips:
- Use a conservative inflation rate for planning purposes. Since your retirement is likely to span decades, consider inflation over long time periods. For instance, while inflation has averaged 2.54% over the past 10 years, it has averaged 4.31% over the past 30 years (Source: Bureau of Labor Statistics, 2007).
- Consider investment alternatives likely to stay ahead of inflation. Thus, a significant portion of your portfolio will probably be invested in stocks, which have typically earned returns in excess of inflation.
- Invest in tax-advantaged investment vehicles. Look into 401(k) plans, individual retirement accounts, and other retirement vehicles. While each has different rules for taxing contributions and earnings, all provide some tax-free or tax-deferred benefits. Since you aren't paying income taxes on earnings throughout the years, that typically means you'll have a larger balance at retirement than if you were paying taxes throughout the years. Thus, you'll start out with a larger retirement base to help combat inflation's effects.
- Keep fixed expenses as low as possible. Try to enter retirement with as few debts as possible. If you aren't using a significant portion of your income to pay a mortgage, car payment, or credit card debts, you'll have more flexibility to deal with higher prices.
- Decide how you will deal with health-care costs. While Medicare will help once you turn age 65, it still does not cover many health-care costs. Look into Medigap policies and prescription coverage to help with those noncovered expenditures, especially if your employer does not provide health insurance after retirement.
- Minimize withdrawals from your retirement assets, especially during the early years of retirement. To counter inflation, you need to withdraw larger and larger sums just to maintain the same purchasing power. To make sure you don't run out of funds late in life, keep withdrawals during the early years to a minimum.
- Be prepared for change. After retirement, keep a close eye on your investments. If inflation increases and you are concerned that increasing withdrawals may deplete your investments, you may want to look for ways to reduce your living expenses or go back to work at least part-time.
Should You Consider International Investing?
During the 1990s, the U.S. stock market significantly outperformed international stock markets. International investments drew little attention during that time. But now the situation has reversed, with international investments outperforming U.S. stock investments over the past few years. Is now the time to take another look at international investments? Before deciding, consider these points:
Do international investments really add diversification benefits to a portfolio? The primary objective of diversification is to reduce the volatility in your portfolio. For instance, when the U.S. stock market is declining, investments in other parts of the world may be increasing. Over the short term, especially during periods of crisis, stock markets throughout the world tend to move in the same direction. Many believe that the world economy has become more entwined, making world markets more correlated with each other, possibly reducing the benefits of global diversification. Yet, how closely a country's stock market is correlated to the U.S. stock market will depend on how heavily that country depends on exports to the U.S.
One way to determine the diversification benefits of adding an asset class to your portfolio is to review the correlation between the two assets. Correlation is a statistical measure of the extent to which one asset class moves in relation to another asset class, ranging from +1 to -1. A correlation of +1 means the two assets are highly correlated and move very closely together in the same direction. Combining assets with a high positive correlation will not provide much risk reduction. A correlation of -1 indicates the assets move in opposite directions, a rare event in the investment world. A correlation close to 0 means there is no relationship in the price movements of the two assets. Combining assets that aren't highly correlated can help reduce a portfolio's volatility.
A recent study comparing the correlation of returns between the U.S. stock market and major foreign stock markets for the period from 1988 to 2007 found the following correlations with the U.S. stock market:
| Japan | . 35 |
| Pacific region | .42 |
| Australia | .50 |
| Hong Kong | .51 |
| Switzerland | .54 |
| Singapore | .55 |
| Germany | .60 |
| France | .62 |
| United Kingdom | .65 |
| Netherlands | .67 |
| Europe | .71 |
| Canada | .73 |
(Sources: T. Rowe Price Associates, Inc., Standard & Poor's, 2008)
While some of the correlations are relatively high, others are fairly low. Since these correlations relate only to major foreign markets, there is potentially less correlation with developing countries' stock markets. In general, the correlations with foreign markets are still low enough to provide diversification benefits.
Do returns in foreign markets offer greater potential than U.S. stock market returns? No one can predict the future performance of any stock market. However, reviewing past performance can help develop realistic expectations. International investments outperformed the U.S. stock market for five-year rolling periods from 1974 to 1982 and from 1985 to 1990. From 1990 to 2003, international markets lagged the U.S. stock market. Since 2004, international markets have outperformed the U.S. stock market (Sources: The Case for Global Investing, 2005; Diversifying Overseas, 2007).
These returns, however, compare overall international returns to U.S. returns. From 1987 through 2006, the U.S. stock market never had the highest returns out of 10 major foreign markets. In 2002, the U.S. stock market ranked 9th out of 10 markets, 10th in 2003 and 2004, 8th in 2005, and 10th in 2006 (Source: Diversifying Overseas, 2007).
Even though international markets have had higher returns than the U.S. for the past few years, international investments lagged behind U.S. investments for such a long time that there may be opportunities to find investments in other parts of the world that are more attractively priced than those in the U.S.
Does international investing offer other advantages? The U.S. stock market now represents only 45% of total market capitalization in the world, down from 66% in 1970 (Source: Diversifying Overseas, 2007). Limiting yourself to U.S. investments means eliminating over half of the world's investments from consideration. In a number of industries, the world's leading companies are not U.S.-based. Of the top 10 industry leaders in terms of market capitalization, the following were located outside the U.S.:
- 9 in metals and mining companies
- 8 in electronic equipment and instruments companies
- 7 in automobile companies
- 7 in household durables companies
- 7 in telecommunications companies
(Source: Diversifying Overseas, 2007)
Also, since different countries are at different developmental stages or at different stages in the economic cycle, you may find opportunities to invest in trends in other parts of the world that you missed in the U.S.
What percentage of your portfolio should be invested in international investments? It is usually recommended that you allocate at least 10% of your portfolio to international investments, since less than that will typically have little effect on your portfolio's total return. It is common to see recommendations of a 20% to 30% allocation to international investments. Inflows to international mutual funds have increased 89.6% from 2004 to 2007, with investments in international mutual funds comprising 20% of all equity mutual funds in 2008 compared to 18% in 2006 (Source: Bank Investment Consultant, July 2008).
However, what percentage you allocate will depend on personal factors, such as your risk tolerance, time horizon for investing, and comfort level with foreign investments.
International investing may not be suitable for everyone. In addition to the risks associated with domestic investing, foreign investing has unique risks, such as currency fluctuations, political and social changes, and greater share price volatility. Diversification does not ensure against loss.
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