Austin home sales may be gaining strength

Friday, June 20, 2008 - 10:35 AM CDT

Austin Business Journal

It’s showing signs of a possible rebound, but the Austin home market remains sluggish.

Single-family home sales in the metro area totaled 2,154 in May, down 20 percent com-pared with May 2007, according to data from the Austin Board of Realtors. However, the May figure is the highest number of total sales the area has experienced in eight months.

Austin is not seeing the drastic price drops that many other markets around the country have experienced. The average price for a single-family home stood at $263,151 in May, up 5 percent from a year ago.

“Despite economic conditions across the nation, Austin continues to have a relatively low unemployment rate and cost-of-living index,” says ABoR Chairman Socar Chatmon-Thomas. “While we’re not enjoying the booming real estate markets of 2006 and 2007, we have seen steady increases in sales volume since January 2008.”

Pending single-family home sales totaled 1,418 in May, down 55 percent from May 2007. New listings for the month were down 7 percent from a year ago.

Townhome and condo sales are also on the downswing. A total of 239 units were sold in May, a 24 percent decline from a year ago.

Texas

Further slowdowns in home sales, consumer worries over the mortgage mess and a shaky economic outlook have led the majority of Texas real estate markets to new forecasts that show most markets heading south in 2008.

Propelled by a growing economy, Texas had been doing much better than most of the rest of the country, but market conditions are changing as the brakes hit Lone Star State real estate.

Houston has seen its booming market slow to the slowest level in more than a decade, and prices are beginning to fall in most areas. The national mortgage meltdown has hit the oil capital and the inventory of homes and condos are increasing nearly every month.

As the state’s largest urban center, Houston has had a history of modest appreciation with few pockets of deflation. Houston has experienced big booms in the oil business, but real estate has been a whole different story. The market is weakening and is forecast by Housing Predictor to weaken further through the remainder of 2008, as homes devalue an average of 3.2% across the board.

In Dallas the impact of increasing foreclosures are taking a toll on the market place. A glut of foreclosures will further damage the Dallas housing market. The boom wasn’t particularly strong compared to many other urban areas of the country in Dallas, where sales were stalled in mid-2006 as a result of higher foreclosures due to subprime borrowers. Then a summer spike produced more home sales and appreciation flourished.

City Forecast
Houston ? 3.2%
Dallas ? 3.8%
Austin 4.8%
San Antonio ? 3.9%
Lubbock 2.3%
Amarillo 2.4%
El Paso ? 3.8%

Dallas real estate has had a history of erratic battles, but nothing as dramatic price-wise as major east and west coast markets. Dallas is forecast to see its fortunes fade all together through the remainder of the year, accounting for 3.8% average deflation.

In Austin, where the high-tech business has drawn a youth culture of working class professionals, the market still shows many signs of strength and should sustain that growth through the year. The state’s capital will see relatively healthy home sales carry it through what will be an otherwise tough year in many housing markets.

Austin will witness appreciation of 4.8%, mainly because of first time home buyers who want to get into their first home. This highly white-collar town will carry itself strongly through the credit crisis storm.

San Antonio has grown into being one of the top 25 metropolitan centers in the nation. New homes were built to fill the demand, but an over abundance of risky subprime loans and new creative financing have fed an onslaught of foreclosures on to the market.

San Antonio is still seeing an influx of new businesses moving into the area, but growth has begun to slow as a result of the mortgage crisis nationally. The crisis is beginning to have a severe economic impact on San Antonio, where the inventory of homes on the market is growing. The slowdown hit San Antonio earlier than many expected and will force home values southward, forecast an average loss in values of 3.9% in 2008.

Over in the Texas panhandle, in less populated Lubbock and Amarillo prices are lower and fewer foreclosures are affecting the markets. Both areas will see fewer home sales in 2008 and will experience modest appreciation. Lubbock is forecast by Housing Predictor to finish the year with average home prices at 2.3% higher. While Amarillo looks forward to appreciation of 2.4% in 2008.

Down on the Mexico border, El Paso has experienced a booming market amidst the credit crisis, despite higher foreclosures. El Paso’s economy is expected to grow from almost $18 billion in 2006 to $21.6 billion by 2009 measured by personal income, which should have produced a healthy real estate market for the year. But massive mortgage fraud and higher foreclosures are beginning to show signs of impacting the market.

The growing El Paso economy is attracting many new employers, but prices are forecast to deflate nonetheless through the remainder of the year a forecast 3.8% in 2008 as more and more people find it harder to get a mortgage.

More Rate Cuts Unlikely This Year

Federal Reserve Chairman Ben Bernanke says it’s unlike the Fed will cut interest rates any further this year. Bernanke, who spoke Tuesday via satellite to an international monetary conference in Spain, said inflation is the bigger concern at the moment.

The Fed’s aggressive rate-cutting campaign has contributed to a lower value of the U.S. dollar. That, in turn, has contributed to increases in the price of imported goods and in consumer prices.

“Households continue to face significant headwinds, including falling house prices, a softer job market, tighter credit, and higher energy prices,” Bernanke said.

Source: The Associated Press, Jeannine Aversa (06/03/2008)

Please go to http://www.CrosslandTeam.com/blog/ to see an excellent post from Steve Crossland about Tenant evictions in Texas.

CPI, Retail Sales Contribute to Lower Long Term Rates

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Long term mortgage rates fell dramatically during the week ended March 20 according to the Primary Mortgage Market Survey released by Freddie Mac. Short term rates remained relatively unchanged although fees and points bumped up to the highest levels we have seen in the three years we have been tracking the Freddie Mac report.

The 30-year fixed-rate mortgage (FRM) had an average rate of 5.87 percent with 0.5 point for the week compared to the previous week when it averaged 6.13 percent with 0.5 point. Last year at this time the 30-year averaged 6.16 percent.

The 15-year FRM dropped 33 basis points to 5.27 percent. Fees and points were unchanged at 0.5. One year ago the average rate for the 15-year was 5.90 percent.

(Source:Mortgage News Daily)

Daily Real Estate News  |  March 27, 2008

10 Fastest Growing U.S. Cities
The fast-growing areas in the United States are in the Sunbelt, with Texas leading the way, according to data released today by the U.S. Census Bureau.

Dallas-Fort Worth added more than 162,000 residents between July 2006 and July 2007, more than any other metro area. Three other Texas cities — Houston, Austin, and San Antonio — also were in the top 10.

Experts credit much of the growth in the South to strong local economies and housing prices that are among the most affordable in the United States.

A report earlier this month by Global Insight found that housing prices in the Dallas area were undervalued by as much as 30 percent.

Other areas experiencing growth included the New Orleans area, which is recovering from Hurricane Katrina and grew by 4 percent or nearly 40,000 people. During the same survey last year, the population of New Orleans dropped by nearly 290,000 people.

Meanwhile, Detroit lost more than three times as many people as any other metro area — its population declined more than 27,300. Other areas losing more than 5,000 people were Pittsburgh, Cleveland, Columbus, Ga., Youngstown, Ohio, and Buffalo, N.Y.

The 10 biggest gainers:

1. Dallas-Fort Worth-Arlington, Texas: 162,250
2. Atlanta-Sandy Springs-Marietta, Ga.: 151,063
3. Phoenix-Mesa-Scottsdale, Ariz.: 132,513
4. Houston-Sugar Land-Baytown, Texas: 120,544
5. Riverside-San Bernardino-Ontario, Calif.: 86,660
6. Charlotte-Gastonia-Concord, N.C.-S.C.: 66,724
7. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.: 66,231
8. Austin-Round Rock, Texas: 65,880
9. Las Vegas-Paradise, Nev.: 59,165
10. San Antonio, Texas: 53,925

The 10 fast-growing metro areas

1. Palm Coast, Fla.: 7.2 percent
2. St. George, Utah: 5.1 percent
3. Raleigh-Cary, N.C.: 4.7 percent
4. Gainesville, Ga.: 4.5 percent
5. Austin-Round Rock, Texas: 4.3 percent
6. Myrtle Beach-Conway-N.C.-Myrtle Beach, S.C.: 4.2 percent
7. Charlotte-Gastonia-Concord, N.C.-S.C.: 4.2 percent
8. New Orleans-Metairie-Kenner, La.: 4 percent
9. Grand Junction, Colo.: 3.7 percent
10. Clarksville, Tenn.-Ky.: 3.7 percent

Source: The Associated Press, Paul J. Weber (03/27/08)

Curently, there are 168 properties for sale in the zip code 78620 ranging in price from $74,900 to $5,200,000 offering great opportunities.

There are 8 homes pending.

There are 22 homes pending taking backups.

Finally, since January 1, 2008, 40 properties have sold ranging from $43,000 to $1,300,000.

The average of the 40 is 2150 square feet, $131 per square foot, and average sold price of $283,613.

 Tary Snyder,

Broker, Texas Lone Star Realty

Despite the negative talk about the housing and credit markets, nearly two-thirds of Americans believe now is an ideal time to buy a home, according to a recent study commissioned by Beazer Homes, one of the country’s top-10 home builders. And, some 24 percent said they plan to buy a new home in the next two years. Of those who said purchasing a new home was on the horizon, 24 percent called themselves first-time buyers, while 28 percent have owned three or more homes in their lifetime. According to Martin Hernandez, corporate vice president of sales for Beazer Homes, a rich supply of housing and low interest rates are contributing to the “smart time to buy” sentiment. “Savvy consumers realize housing is a cyclical industry. In the current market, buyers can take their pick of quality homes with a variety of options, upgrades and incentives,” said Hernandez. In fact, given the current supply of homes for sale and special incentives available in many parts of the country, 65 percent of survey respondents agree that this “truly a buyer’s market.” And, 39 percent believe that tentative buyers who are waiting for home prices to go lower risk “missing out on one of the greatest home-buying markets in recent history.” “If you find the right home at the right price, you should buy it because we don’t know when the trend will shift,” advised Hernandez. Too many choices can be daunting, not only for first time homebuyers, but for those who are downsizing or looking for a vacation or second home. Hernandez recommends doing a little homework first to be sure you get exactly what you want. Here are his tips on how to look for a home in today’s housing market.

Start online. The Internet is a great resource and 80 percent of buyers begin their real estate shopping online. One in four people found the home they wanted online in 2006, according to the National Association of Realtors latest research. Most online sites allow you to narrow down your search by state, targeted subdivision and price, as well as take virtual tours and get driving directions.

Make a list. You know how many bedrooms and baths are important, but what about other bells and whistles like a gourmet kitchen, walk-in closets or flex space? “The neighborhood, schools, shopping and parks also frequently appear at the top of the list,” said Hernandez. “It all comes back to location. Location is still top-of-mind in a buyer’s eyes and remains important when you consider resale.”

New vs. resale. Your list should include whether you plan to spend time on maintenance or improvements, an answer that will help you decide whether to buy a newly constructed home or a resale. In the current market, a newly constructed home is likely to be a much better value for homebuyers when compared with the purchase of a resale home. Benefits to purchasing a newly constructed home include updated floor plans, better warranties, energy-efficient systems, and, in many instances, the ability to personalize certain features like flooring, countertops and paint colors. Additionally, a new home does not require the costly remodeling updates that can accompany the purchase of a re-sale home, Hernandez said.

Get pre-approved. Pre-approval means you receive a loan commitment for up to a certain amount from your lender, based upon their review of your credit and finances. Because pre-approval gives you a dollar amount to consider, it allows you to narrow your search to only the homes that you can afford. If you have been saving for a down payment on your mortgage, you’re not alone. The Beazer survey revealed that 24 percent of respondents are currently putting aside money for a down payment on a new home. Your options. When looking for a pre-construction home, depending upon your builder, you will have personalized choices to consider, including what type of flooring, countertops, appliance finish and organizational features will go into building your new home. Discuss these with your builder and be sure to stay within your budget. Beazer Homes surveyed 548 adults nationwide, Jan. 4-7, 2008, between the ages of 25 to 72 with a minimum annual household income of $40,000. The margin of error was ± 3 percent. Beazer Homes operates in 19 states.

Powder rooms wrapped in bold textured wallpapers. Foyers striped in light-reflecting metallic glazes. Crown molding and trim enveloped in dark rich chocolate. Dining rooms covered in wine-red and then washed in midnight-black.  Welcome to the list of best-dressed walls for spring 2008. Color follows fashion in home décor this season as winter’s doldrums make way for new beginnings and homeowners look for ways to freshen living spaces, according to Vicci Barrett, design director for Beazer Homes. In her position with one of the nation’s top 10 homebuilders, Barrett stays on top of industry trends, keeps tabs on what new home buyers want and personally helps them navigate through wall color selection.  Barrett is excited about the revival of wallpaper, which can be a striking welcome to guests in the powder room or as an accent wall in the dining room. Designed with great imagination with texture top-of-mind, today’s wallpaper ranges from super dressy to bold geometrics to fun and funky. “Color is an entirely personal choice and is not for everyone. For example, pink is huge this year and is everywhere, from walls, sofas and accessories, but not everyone can live with it,” said Barrett. “If a homeowner is squeamish about adding color, we tell them it’s always safe to choose neutrals like warm grays, soft off-whites and light browns for the walls and add pops of color and texture through window treatments, wallpaper, accessories or even furniture pieces.” She pointed to the breakfast nook, dining room or master bath as great places to “add pops of color on walls.” Referring to the “magic of the monochromatic palette,” Sheri Thompson, director of Color Marketing and Design for Sherwin-Williams, suggests using different shades of one color to bring harmony to an entire space. Monochromatic palette trends include neutral gray-greens or spa-inspired blues of water and sky, as well as buttery yellows and warm creams that evoke a sense of cheerfulness and optimism. Barrett offers the following tips to new home buyers or those who want to add a fresh look through wall color this spring: Powder rooms. Often void of windows, this small space is the perfect place to show off that beautiful wallpaper pattern that mimics fabric. Whether you want “over the top traditional or flat-out funky modern” wallpaper is the material and the powder room is the place to make your statement.  Great room/keeping room/breakfast nook. This is where monochromatic and neutral colors come into play. You generally want to carry through the same color scheme in rooms that adjoin unless there is a sharp delineation where one room clearly stops and another starts. If you have a separate breakfast nook, consider using a special color that will set it apart like aqua, spring green, squash or paprika. Dining room. Add ambiance or richness to the dining experience by using a red hue like pomegranate or a shade from the purple family like berry aubergine.  The brown family is still very hot in warm mocha or cocoa.   Depending on the color of the fixtures and accent pieces, you can use a metallic or gold sheen as an overlay or a black wash to give the painted walls an elegant and exciting look.  Molding magic. In homes with heavy trim and crown molding, Barrett is seeing a return to dark hues in chocolates and grays. “Colors with grayed undertones are very hot neutrals because they’re softer. A sage green that is muted with the undertones of gray can add warmth to the overall feel of the home when used on trim. A heather-gray tone casts a soft blue undertone and gives a homey feel to the architecture of a home when used on trim,” she said. Toned up ceilings. Trey or coffered ceilings are a great place to add another color dimension and move the eye upward to take in the space. A deep-chocolate ceiling and light blue-green-gray walls or soft gold in a two-story great room with a beautiful fixture can add a very dramatic affect. As a rule of thumb, the ceiling should be a shade or two darker than the walls if you’re using it as an accent. Faux Finishes. Once thought to be on its way out, faux finish use is returning through applications that use metallic glazes, plaster for added texture or dark washes to add depth to the foyer or dining room.