Austin Metro Real Estate Blog

Speaking not only as a long time REALTOR in Austin, Texas, but a homeowner, business owner, and concerned citizen, the $700 billion bailout plan intended to shore up the nation's lenders was a "necessary evil." I was politically opposed to the plan initially, but like a lot of others couldn't see any other option given the alternatives. The overall economy, and the housing market specifically, are in dire straights.

Without going into all the details of the $700 billion stimulus package because it covers a broad spectrum of ways to implement the hoped-for recovery, I would like to concentrate on one specific area - the "Housing Stimulus" section. I know it's still early, but suffice it to say the plan has unfortunately not been as effective as was hoped in improving the nation's housing market. 

A few ideas have come out of the National Association of REALTORS® (NAR) Convention in Orlando, Florida, that just ended last week, that we as, not just REALTORS, but concerned citizens, should support. Congress may consider a second economic stimulus bill this month. If they do, there are a number of changes that could help to provide more stability to the nation's real estate markets which most agree is a necessary step towards recovery. If we ALL, not just REALTORS, contacted everyone in our database to contact their congressman for a positive vote, we could see a lot fewer foreclosures in the near future!

NAR has proposed a Four-Point Housing Stimulus Plan and has urged Congress to include the following provisions in any future legislation:

1)Make the $7,500 first-time homebuyer tax credit available to all buyers and eliminate repayment requirements. The credit's limited availability and repayment requirement severely inhibit its use and effectiveness.

 2) Make the 2008 Federal Housing Administration (FHA), Fannie Mae and Freddie Mac loan limits permanent. New rules for 2009 will reduce the loan limits, but now is not the time to tighten mortgage affordability.

 3) Get the Emergency Treasury bank relief program back on track and allocate more funds to mortgage relief. Create a federal mortgage interest buy-down program to make below-market rates available and stabilize home prices. The proposed rate buy-down is close to two points below the current rate.

 4)Permanently bar banks from engaging in real estate brokerage and management. The banks have proven they have enough to do simply managing the loan process. They should not handle home sales and purchases as well.

To contact your congressman, click here.

If you like it, and want it , and can afford it, it has never been more affordably priced!

The "it" I am referring to is not a new diamond ring or a new car, it's a luxury custom home with a price tag at or exceeding $1,000,000 in Austin, Texas. There are a lot of them for sale, and not too many selling. As of today, 11/06/2008, there are 526 of them on the market in the metro area, and sales are down from last year almost 40% - 216 have sold so far this year, compared with 354 total last year.

If you factor in the custom homes in the next bracket down, the $750,000 - $999,999 price range, the picture gets even bleaker. There are 413 of these homes on the market, some of them just moving into this category after being reduced by the listing Realtors. Another indicator that times are not good for luxury home sellers - since January 1, 568 of these homes, including both price brackets, have been listed for sale, and subsequently withdrawn from the MLS because they had not sold. Granted, some of these may have been withdrawn and later put back on the market, but this is still a staggering number!

There are several reasons for this scenario. Most obvious is the "economic epidemic" that is gripping the nation and certainly impacting real estate prices. Although Austin hasn't experienced the "flu-like" home symptoms most metro areas have, we do seem to have "caught a bad cold", especially in the upper price tier. Savings accounts and stock portfolios are being hammered, and a lot of these buyers were paying cash for these homes as little as last summer - cash that has suddenly vanished.

Second, with $1,000,000+ home sales going from 125 in 2003 to 354 in 2007, it was only natural that custom home builders from across the planet flocked to Austin to cash in! There are over 150 (this number is being reduced almost daily) custom builders in the Austin area, compared to about 40 production builders ($100,000 - $600,000). With a large custom home taking from 8-14 months to build, a number of these homes were started before the market starting going south earlier this year, and are now gathering dust. 

Third, from a resale perspective, a number of sellers are simply looking to downsize their house payment, and/or moving out of state. This is , of course, natural attrition in a normal market, but this isn't a normal market, and the "downsizers" are abundant this year, and the "upsizers" aren't to be found! 

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These $1,000,000+ homes are found throughout some of the most sought after areas - from central Austin to the lakes. A breakdown of these areas follows:

Area 1B: 50 homes for sale- (zip code 78703) includes Tarrytown, Hyde Park, and Pemberton Heights

Areas 8E & 8W: 118 homes for sale- (zip codes 78746, 78733, 78738) includes Westlake, Seven Oaks, Davenport, Lake Pointe, and Rob Roy

Area LN & LS: (Lake Travis) - 127 homes for sale- (zip codes 78732, 78734, 78738, 78669, 78641) includes Lakeway, Hughes Park, Spanish Oaks, Bella Montagna, Belvedre, Bella Strada, Flintrock, and Falconhead

Area RN: 53 homes for sale- (zip codes 78730, 78732) includes Steiner Ranch, Greenshores, Riverplace, Long Canyon, and Westminster

Area W: 48 homes for sale - (zip code78735) includes Barton Creek and Gaines Ranch

So, back to my original theme - IF YOU CAN AFFORD IT, COME AND GET IT - CHEAP (or at least, cheaper)! I have seen some of these homes discounted as much as $300,000. For the best prices, locations, complete market analysis and more on these homes, contact Phil Hutson toll free @ (888) 410-5858. 

Accolades continue from a variety of sources for the Austin, Texas metro area, as to the potential for job-seekers, opportunists, and those simply seeking a better way of life/standard of living.

* Forbes magazine named Austin the 3rd city on a list of "recession-proof" cities due to its strong housing market, low unemployment rates, and growth in agriculture, energy and manufacturing, May '08

* Austin ranks 3rd Best City for Jobs in 2008 by forbes.com, Jan. '08

* Popular Science names Austin as one of the top 10 green cities in the US, Feb. '08

* Austin ranks 1st in Fastest Growing Metros in 2008 by Forbes.com, March '08

* Round Rock ranked the 7th Best Places to Live in America by Money Magazine, July '08

* Orbitz.com lists Austin as one of the Country's top 6 movie landmark destinations, March '08

* Austin ranks as the 4th Best City in Overall Standard of Living by Expansion Management

* Austin ranks 2nd among the 50 Best Places to Live comparing the combinations of adventure, attractiveness, and affordability by Men's Journal 

 Contact me for a free 350-page Relocation Guide - a comprehensive resource for everything in Austin! Table of contents include: Business and Economy (cost of living, top 25 employers, etc.), Education (schools), Healthcare Resources (hospitals/healthcare facilities), Housing (area map, communities), Leisure (museums, theatres, wine tasting, etc.), Lake Living (all about the lakes), Shopping and Dining, and Getting Settled (moving resources, religion, etc.)

Eldon Rude of Austin MetroStudy gave his third quarter report, "Housing Update and Economic Outlook," last week, and I thought I would share some notes. In general, we have some ongoing challenges in our local market, but there are a number of factors that set us apart from more troubled parts of the country. We're not entirely out of the woods because of several possible national economic threats looming ahead, including - scarce availability of financing, selective corporate bailouts, scarce down-payment assistance, slowing job growth, and increase in foreclosures - but there are a number of positive signs, and as I've said in numerous articles, if you are looking for a place to relocate, Austin, Texas, should be high on your list!

Reasons include: 

• Texas continues to be number one in job growth, with Austin high on all national lists for jobs, property appreciation and low inventory of homes for sale.
• Locally, Texas leads the nation in job growth, with 4 Texas metro markets in the top 10 for job creation, including Austin at #6.
• Single Family new home starts are down 42% nationally.  SF starts are down 41% in Texas, although Texas is still #1 on the list for new starts.
• In the apartment market, occupancy is beginning to decline (at 91.4% city-wide), with rates flattening at $.98 per square foot on average.
• In the resale market, inventory is holding at 6 months, although we should anticipate an increase in the spring when more homes come on the market.
• Among sub-markets in the Austin area, Southern Travis County is still the most active in new home starts.
• The highest months of supply of finished vacant homes is in Lake South, where sales have slowed around high price points. Other areas with over a 7 months supply are Hays West, Central South Austin, Central North Austin, and Round Rock/183.
• Austin has the second lowest months of supply of new homes in all Metro Study markets nationally, second only to San Antonio. Austin is 4^th lowest in resale inventory of all Metro Study markets nationally, after Houston, Denver and Sacramento. This makes our market well positioned to experience an early recovery.
• Economic boosters include: Austin has never experienced a "bubble" in home prices and prices are holding; inventories are manageable; foreclosures in Austin have remained moderate; Central Texas is poised for significant growth in population over the next 5-10 years; tight financing has created pent-up demand for homes that will give our market a boost when more financing options become available; businesses continue to locate in Austin
• Forbes magazine calls Austin "Recession Proof" back in May - a bold statement that has a lot of merit, even in these tough "recession-like" times

Phil Hutson has over 20 years real estate experience selling Austin real estate, and is the Broker/Owner of Showcase of Homes.

Hey Mr./Ms. Custom Home Buyer - think you're smart/sophisticated enough to find that super deal on that million dollar home you've always wanted? Don't be so sure.............

Although sometimes more sophisticated than your average home buyer, since typically the upper-end luxury home buyer is older (not necessarily true in the Austin area), has done this many times before, and has more time TO look, the standards of finding the "best" deal still prevail. The "best" deal is not always so obvious if data obtained solely from web-based sources (numerous "find-the-best-home" Internet sites) is the main, if not only, source of information. Having access/knowledge to data not found on the Internet is sometimes crucial to not only saving thousands of dollars on the price, but in finding a Custom Builder that is reputable and financially sound to service warranty issues after closing. 

I say this because it ceases to amaze me the number of high-end custom homes sold every year in the Austin area without a Realtor. True, a number of these homes are contracted directly with the Builder on a to-be-built basis, but even that process could have been enhanced if the Buyer had first obtained the services of a reputable Realtor with experience in and with custom home sales - before the bid process, during architectural planning, through construction, and to final closing. The mere price of that million dollar+ mansion should NOT be the only consideration in a buyer's thought process, as so much more goes into probably one of the most expensive investments one will make!

Here are a few items to consider that are VERY important, and that most if not all custom buyers either have expertise in, knowledge of, or access to:

• Inventory of available or soon-to-be-completed homes; access to all "appointment only" homes

• Synopsis of selected Builder, community history (appreciation/depreciation), school analysis 

• Builder sites/lots available for construction

• Market/cost analysis including site procurement (lot cost), price/sf, sold comparables, etc.

• Architectural/structural/feature recommendations

• Construction walk-through inspections through completion, and final inspection w/builder

• Mortgage companies/interest rates (when applicable), and title and closing documentation review

 Realtors that represent Custom/Luxury buyers are not usually the "rookies" in the office, but generally the more seasoned veterans that have done this before. In a previous post, Austin Real Estate Agent - Choose a Specialist, I mentioned qualities to look for when making a Realtor decision.

I built my own Custom home - I'd be glad to assist in helping build yours! With over 24 years experience, put my vast knowledge of the Austin Custom Home market to work for you! Contact Phil Hutson @ phil@showcaseofhomes.com, or call toll free (888) 410-5858. 

Area Market Statistics

Home Sales Stabilize in Austin Area

October 20, 2008 - Central Texas home sales remain steady, according to the latest Multiple Listing Service (MLS) report from the Austin Board of REALTORS®. The median price for single family homes in September remained unchanged from one year ago, while the number of homes sold inched closer to 2007 sales totals.

The 1,670 homes sold in September reflect an eight percent decline from one year ago. These sales contributed $406,955,620 to the local economy, down 11 percent from 2007. Meanwhile, the median price for single family homes showed no change from last September, remaining at $182,600.

Active listings for September rose two percent from one year ago to 10,217, while pending sales dropped ten percent to 1,520 and new listings fell 11 percent to 2,617. The average amount of time these properties sat on the market rose 18 percent from 2007 to 71 days.

"National economic troubles and limited access to credit continue to impact the local housing industry," says ABoR Chairman Socar Chatmon-Thomas. "However, Austin's economy has avoided many of the ups and downs experienced by other parts of the U.S., and our city is poised to remain on the forefront of the country's economic turnaround."

September 2008 - Single Family Homes

• 1,670 was the number of homes sold, down 8 percent from one year ago
  
• $182,600 was the median price, unchanged from September 2007
  
• $406,955,620 was the total dollar volume of properties sold, down 11 percent from last year

For a comprehensive home analysis for the Austin metro area contact Phil Hutson @ phil@showcaseofhomes.com or call toll free (888) 410-5858.

For the 2008-09 fiscal year, Austin, Texas, property tax rate remains lower than other major cities across the state at $0.4012 per $100 property valuation. For the average homeowner, this means a tax bill of approximately $988 a year. 

The 2008-09 fiscal year tax rate of $0.4012 per $100 of property valuation is lower than last year's rate of $0.4034, but since home values are still climbing, the average homeowner will pay around $80 more a year to the city at tax time.

Tax rate decrease

With city-owned utilities making transfers to the general fund and substantial sales tax revenue, Austin is able to keep the property tax rate lower than other major cities in Texas. Ransom-Nelson said the average home price in Austin is up approximately $21,000 from last year to $246,352. Based on that valuation, a homeowner would pay $988.36 in property tax.

While the escalating property valuations will equal more tax revenue for the city this year, expenditures are increasing as the city tries to keep up with the growth. In a statement released during the budgeting process, Austin City Manager Marc Ott said the city will have to continue to keep a close eye on revenue in the coming years.

Growth is Slow But Steady

While the U.S. economy is experiencing turbulent times, the City of Austin projects that the local economy will continue to grow during the current fiscal year, but at a more moderate rate.

City economist John Ransom-Nelson said economic trends at the local level do not necessarily mimic those at the national level. "Because Austin is in a growth mode and expanding regionally, the city is less likely to experience the slowdown that is plaguing other areas," he said.

"It depends on where [a city is] situated when the economy does better or it does worse. Austin is building a bunch of apartment complexes, and the real estate market is still fairly strong at the time. It's eventually going to affect us, but not as much," he explained. New Home Builders are feeling a little pinch, as they continue discounting some inventory homes to attract buyers.

Austin Has a Slight Cushion

Austin is also made up of sectors less susceptible to economic slowdown. "You've got a state government here and a university that are, to some extent, recession proof," Ransom-Nelson said. "It doesn't mean that it's totally recession proof, but it's a large component of the makeup of Austin."

This "cushion" also helps the real estate markets in the surrounding communities like Round Rock, Pflugerville, Westlake, and the Lakeway/Lake Travis areas.

The Location: 20 miles west of Austin.

The Numbers:

• Established: 1963
• Population: 8,002 from the 2000 census
• Average age: 41 years
• Current Median Home Price: $273,100
• Who lives there: Families (non-single residences) represent 79.9% of the population, giving Lakeway a higher than average concentration of families. There is a healthy mixture of working Austin families, retirees and second home weekenders.

Snapshot:
Lakeway is a planned development consisting of approximately 5,500 acres of Texas Hill Country that stretches across meadows, hills and limestone cliffs to the shores of Lake Travis approximately 20 miles west of the Texas Capital - Austin. It is one of the most respected recreation oriented, planned communities in America. Lakeway blends extraordinary scenic beauty with controlled growth and quality recreational resources. The land rises and falls in a panorama of the Texas Hill Country, secluded valleys and wooded acres - from the average Lake Travis level of 681 feet mean sea level to a maximum land elevation of 1,174 feet.

Eat, Shop & Play:
The City of Lakeway, boasts a wide variety of shops and eateries. A visit to the Oasis, the "sunset Capital of Texas" Located 450 feet above Lake Travis, is a must!

The Academy of Golf in the Hills is the most advanced golf instruction center in the country. Its three holes, a par 3, 4 and 5, provide a range of challenges and learning opportunities with multiple pin placements, fairway bunkers, uneven lie mounds and varying cuts of rough. The Hills of Lakeway golf course is one of three golf facilities in Lakeway.

Located adjacent to the Lakeway Resort and Conference Center is the Lakeway Marina, the largest full-service marina on Lake Travis. There are more than 350 covered boat slips, as well as a parts department and fuel service. Daily boat rental (skiing, fishing, pontoon, pedal and runabouts) are available.

 The Hill Country Galleria Mall is expected to become the new shopping mecca of southwest Austin. The project which includes many high-end retailers offers a shopping experience much like that of "The Domain" in North Austin, with its village type atmosphere.

Outside of the retail shops, the Galleria will also feature a 1.3-million-square-foot lifestyle center, which includes a 30,000-square-foot City Hall, as well as an amphitheater and multifamily housing.

For additional information contact Phil Hutson @ (888) 410-5858, or email phil@showcaseofhomes.com.  

For years, Pflugerville has had one of the highest property tax rates in the Austin area, but with five consecutive years of decreasing rates, Mayor Jeff Coleman said those days might soon come to an end.

"I firmly believe that in the next four to seven years, this city is going to have to make a dramatic decrease in the tax rate," he said. "By then, Stone Hill [Town Center] will be full, Verde [commercial development] will be full. It's just going to take some time."

City officials anticipate that commercial growth in Pflugerville will continue to push the property tax rate down, as it has done in other cities experiencing similar growth. But Coleman said it will take time for retailers to generate the substantial sales tax revenue needed to change the city's funding mix.

Growing pains, property values

On Sept. 23, the city council approved the 2009 fiscal year budget, including a half-cent decrease in the property tax rate. Homeowners will pay more next year in property taxes despite decreased rate.

The current city tax rate of $0.614 per $100 of property valuation will be lower than last year's rate of $0.619, but rising property values mean homeowners are likely to pay more at tax time. The value of an average home in Pflugerville is $169,791, and with the new rate a homeowner will pay $1,042.52 next year in city property tax - an increase of $25.20.

"In the 2000 [U.S.] Census, we had 16,000 people. Today, we have over 41,800," Coleman said. "In less than eight years we have grown drastically."

Rooftop market

Although the new rate is lower than last year's, it will still remain significantly higher than nearby cities such as Round Rock and Austin, with respective rates of $0.3652 and $0.4012 per $100. Coleman attributes this to those cities' more established commercial sectors and the amount of sales tax revenue they generate.

Pflugerville relies more on property taxes than neighboring Round Rock, which depends on sales tax revenue from Dell, Inc. for a large percentage of its general fund revenue. For 2009, only 14 percent of Pflugerville's general fund revenue will come from sales tax, and nearly half will come from property taxes.

City Manager David Buesing said cities like Pflugerville traditionally have higher tax rates to compensate for the lack of retail.

"We've got a rooftop market here and when that's mainly what you have, you have higher taxes," he said.

Coleman said even with higher property tax rates than nearby cities, Pflugerville homes are among the best values in the region.

"We feel like we have the most reasonably priced housing market in the northern Austin market," Coleman said. "You can buy more house [for the price] in Pflugerville than virtually any place in Central Texas."

Mixed messages

As the commercial sector develops in Pflugerville, the council wants to make the city a place where residents can also work.

"What we're really focusing on now is recruiting businesses that are going to bring employment bases into Pflugerville," Coleman said.

But as the city moves forward, Coleman said the council will do all it can to preserve Pflugerville's rural charm.

"Our goal is to maintain as much of that small-town, community feel as possible while implementing those aspects of a larger suburb, which are retail growth and commercial tax base growth."

The dilemma facing the council, Coleman said, is finding a compromise that satisfies citizens wanting lower taxes but not willing to see nearby green fields transformed into retail space.

"The city council receives a very mixed message depending on the project," Coleman said. "On one hand they say drop our tax rate and on the other hand they say don't change to do that, and we can't accomplish both things. We try to find a balance."

 Source: Community Impact Newspaper

For additional information contact Phil Hutson @ www.showcaseofhomes.com.

An article by staff writer Lauri Zachry in the Round Rock Leader, the local newspaper serving Williamson County, caught my attention recently. Since I live in Round Rock, my kids attend school there, and about 40% of my home sales are in the area, I am very much attuned to what's going on in the community. But that being said, I was still amazed at the growth that this area continues to see, and hence ANOTHER bond proposal for MORE new schools!

The most recent bond election voters approved for the district was in November 2006. Voters approved four propositions totaling more than $267 million. Projects funded by the 2006 bond include the opening of three new elementary schools and one new middle school this fall. The district's fifth high school, Cedar Ridge High School, will open for the 2010-11 school year.

In spite of the last bond package passed only two years ago, and in spite of the Nov. 4 general election being dominated by the presidential race, Round Rock ISD wants to remind voters that a two-proposition bond package for $293.9 million will be there to vote on. Most of the first bond proposition is devoted to new facilities and schools. The first bond proposition totals approximately $156.6 million.

The district wants to construct three new elementary schools in the Stone Oak, Paloma Lake and Parmer Lane corridor areas. The Paloma Lakes subdivision is in the northeast quadrant of the district near U.S. Highway 79 while the Parmer Lane corridor is near the RRISD Athletic Complex.  These two schools would accommodate up to 900 students. The Stone Oak elementary location will be a smaller school (for 700 students) located north of FM 1431 near the Stone Oak subdivision to help relieve overcrowding at Cactus Ranch Elementary.

RRISD will have four public hearings throughout October to provide input on construction for the new facilities, upgrades, technology and land and bus purchases. These public hearings will also give residents a chance to ask questions regarding the election. The dates and times for the public hearings are as follows:

· Oct. 14 - Westwood High School, 12400 Mellow Meadow Drive, Austin, and Round Rock High School, 300 Lake Creek Drive 

· Oct. 21 - McNeil High School, 5720 McNeil Drive, Austin

· Oct. 28 - Stony Point High School, 1801 Bowman Road

The pro-bond Political Action Committee, Classrooms 4 Kids, also wants voters to be informed before making their decision regarding the school bonds, said Classrooms 4 Kids co-chair Raymond Hartfield.
"We want to get the awareness up of this bond election," Hartfield said. "Yes, you'll be voting for president, state representative and for county commissioners but we don't want people to forget about this important election too. Since people will be voting for school bonds, we want them to make an informed decision."

The second considered bond proposition is totaled approximately at $137.4 million for school additions and renovations, curriculum, more buses and technology infrastructure. The RRISD Citizen's Bond Study Committee presented bond package recommendations to the school board and the community June 5.

The citizens study committee presented its tentative list of new construction, upgrades and technology infrastructure projects May 19 during a public hearing in the lecture hall at Round Rock High School. The original list the group started with totaled almost $440 million, but the committee reduced the list to $350 million, even though the district bond finance committee suggested further reducing the list to $300 million, said Catherine Hanna, 2008 Citizens Bond Study Committee co-chair and Classrooms for Kids co-chair. "We had some hard decisions to make," Hanna said. "We really don't have any fluff on this list."

During earlier bond study committee meetings, the district considered creating a 500- to 700-seat auditorium in the eastern portion of the district, smaller, 600-seat auditoriums at Round Rock and Stony Point high schools and an alternative high school. The citizen's bond study committee was unable to justify displacing other needed priorities for the two auditoriums, said Dwayne Kostiha, citizens bond study committee co-chair, in June. The board had until Aug. 26 to call the bond election to be placed on the Nov. 4 general election ballot. Early voting for the November bond election begins Oct. 20.

For information about Round Rock, contact Phil Hutson for a free relocation guide, or call (888) 410-5858.