The below stats courtesy of the Real Estate Council of Austin:
Do You Know How Important the Real Estate Industry is to the Central Texas Economy?
- It generates more than $17.4 billion in total economic activity each year.
- It employs more than 121,000 people in Central Texas for a total labor income of $5.4 billion.
- It generates $204 million in local tax revenue annually.
Wednesday, September 28, 2011
It is hard to price
It is hard to price a personal home. Double the difficulty when the market changes. When the market changes like it has in the last 3 years we tend to remember a higher price. This applies to trading cards, antiques, cars and on and on. Take for example the price point we might have thought our home was worth BEFORE November 2008 (when the mid west, Texas and Austin fell into the real estate recession once the stock market crashed).
Even though we did not want to sell our home around this time in 2007 & pre November 2008, we still had a vague idea on price. Fast forward to today and the need to sell. It is hard to change the number from the peak of that 2007 & summer '08 pricing to current 2011 pricing. We naturally want to hold onto the higher price. This is one reason a home sits on the market and inventory builds compounding the need to price right.
Second most difficult aspect to pricing is a price correction, or reducing a price after "x" number of days on the open market. If for example a home needs to decrease its asking price by $10,000 it could be argued that $10k is lost. Another way to discuss a price reduction is the fact the $10k was just never there to begin with in the current environment. Gold is an example of a current market condition that currently rewards a person for holding the longest. In other markets like housing there is a volume of sellers that under cut the rest. This brings back the number one most important question in selling in residential real estate, your "why"? Your "why" will aid in setting your price.
Even though we did not want to sell our home around this time in 2007 & pre November 2008, we still had a vague idea on price. Fast forward to today and the need to sell. It is hard to change the number from the peak of that 2007 & summer '08 pricing to current 2011 pricing. We naturally want to hold onto the higher price. This is one reason a home sits on the market and inventory builds compounding the need to price right.
Second most difficult aspect to pricing is a price correction, or reducing a price after "x" number of days on the open market. If for example a home needs to decrease its asking price by $10,000 it could be argued that $10k is lost. Another way to discuss a price reduction is the fact the $10k was just never there to begin with in the current environment. Gold is an example of a current market condition that currently rewards a person for holding the longest. In other markets like housing there is a volume of sellers that under cut the rest. This brings back the number one most important question in selling in residential real estate, your "why"? Your "why" will aid in setting your price.
Now is not the time to settle
If your a buyer in the Austin area market it is not the time to settle on a home that does not have the majority of your realistic expectations. There is inventory to chose from and 'realistic sellers' plus the low fixed 30 year mortgages. Have a wish list of 1-5 that you must have to make the offer (i.e. price, size, location, commute, finish out). Finalize your wish list with another round of 6-10 (garage, pool, wood floors, storage, landscaping) that would be nice to have but not mandatory on your purchase. Having realistic expectations is critical here, it is a great time to be buying a home in Austin. If your having trouble locating a home than you could be in your own way. Double check your wish list and make sure it is realistic.
Wednesday, September 14, 2011
One key reason is the freedom to choose
I was catching up with friends who bought their first home last year. They have to replace the flooring since a hot water heater broke and flooded, damaging the current floor. This was an insurable upgrade. They were not selling, but I was asked what is the best choice for flooring? Their question about what to choose for flooring got me thinking.
5 years ago we all looked at residential real estate appreciation in terms of 12 month periods. 20 years ago it was assumed appreciation would take years. I think we should return to that mindset of "20 years ago". This is a benefit to the 'situation' the country is in regarding residential r.e.. I told them to choose what they wanted. Do anything that you desired. Don't worry about the best choice for someone else or the others outside of the front door. Being able to choose what we want inside our home without a landlord/management company input is a major piece to the American Dream. A remaining question could still be, "what if my choice hurts me selling the home later?". My answer to this one would be how quickly would you be selling? and then I would return to the encouragement of enjoying a home and the freedom to choose that comes with ownership.
In order to protect the money spent on an upgrade like flooring in this case simply keep the house for a long period of time. When you are ready to move don't sell but lease it out, turn the home into an investment. The initial down payment was for owner occupancy which was achieved by living in the property a long period of time/many years. Let appreciation have years to develop while you live in the house. Tweak the house to your interests because you can. Stay in the house for the long term. Go ahead and wait to stage the house for the public when you sell the property many years from the purchase.
5 years ago we all looked at residential real estate appreciation in terms of 12 month periods. 20 years ago it was assumed appreciation would take years. I think we should return to that mindset of "20 years ago". This is a benefit to the 'situation' the country is in regarding residential r.e.. I told them to choose what they wanted. Do anything that you desired. Don't worry about the best choice for someone else or the others outside of the front door. Being able to choose what we want inside our home without a landlord/management company input is a major piece to the American Dream. A remaining question could still be, "what if my choice hurts me selling the home later?". My answer to this one would be how quickly would you be selling? and then I would return to the encouragement of enjoying a home and the freedom to choose that comes with ownership.
In order to protect the money spent on an upgrade like flooring in this case simply keep the house for a long period of time. When you are ready to move don't sell but lease it out, turn the home into an investment. The initial down payment was for owner occupancy which was achieved by living in the property a long period of time/many years. Let appreciation have years to develop while you live in the house. Tweak the house to your interests because you can. Stay in the house for the long term. Go ahead and wait to stage the house for the public when you sell the property many years from the purchase.
Paying attention when city is the remodeler
In the mid 90's I lived off of Crockett and S. Congress and the local paper Austin American Statesman reported the city was going to do what it could to improve this stretch of South Congress. Around '95 the neighborhood real estate was already in demand but the historic stretch of S. Congress was not the pedestrian friendly rich environment for shopping & restaurant/bar it has become. I just had dinner with my family there over the past weekend.
News just broke that the city is interested in another remodel of another street - Airport Blvd.. I would encourage homeowners who have thought of selling to hold on. Based on the success of South Congress this could be another story where one wished to have bought in before the work was started or completed.
Article I reference is from Austin Business Journal 9/9-9/15 Volume 31 #27 by Vicky Garza
News just broke that the city is interested in another remodel of another street - Airport Blvd.. I would encourage homeowners who have thought of selling to hold on. Based on the success of South Congress this could be another story where one wished to have bought in before the work was started or completed.
Article I reference is from Austin Business Journal 9/9-9/15 Volume 31 #27 by Vicky Garza
Wednesday, September 7, 2011
What is so important about ABOR (Austin Board of Realtors)
For years banks and private investment groups have wanted 'in' on real estate multiple listing services, the MLS. "They" consider it public records that "they" should have access to. And for years this has been prevented, you should hope this continues if your a home owner or interested in buying a home.
The multiple listing service (MLS) is run by a governing board in the area it serves. In Austin it is Austin Board of Realtors (ABOR). These boards are non profit. The only way a state licensed person can become a Realtor is by joining one or more of these boards then following board rules and guidelines, otherwise one is just licensed in the state of Texas and NOT a Realtor. Realtor's are directly associated with the details of the sales and it is these same Realtor's that follow board procedures on board software in specifics of a transaction. The data is imperative to the entire process; pricing a new home on the market, formulating an offer to a new listing, knowing trends, Appraising (Appraisers are Board members). When a home owner wants to learn more about pricing is not done through 'zones' or grids like on Zillow or how our Texas Counties value for tax purposes. This home owner calls their Realtor and they review data from The MLS sponsored by The Board of Realtors in their area. When a buyer seeks data to formulate how they will offer on a home the same procedure is applied. A board employee even calls us Realtor's when something is not filled out correctly. Since each Brokerage Office and every Realtor is basically independent the data IS NOT influenced by a conglomerate or investment group nor does the board have any interest serving share holders like a bank would. This way data has a better chance of remaining market driven. Data from a board of Realtor's has less chance of being influenced than if it were under an investment group with a number of other companies that could or could not have real estate holdings.
The multiple listing service (MLS) is run by a governing board in the area it serves. In Austin it is Austin Board of Realtors (ABOR). These boards are non profit. The only way a state licensed person can become a Realtor is by joining one or more of these boards then following board rules and guidelines, otherwise one is just licensed in the state of Texas and NOT a Realtor. Realtor's are directly associated with the details of the sales and it is these same Realtor's that follow board procedures on board software in specifics of a transaction. The data is imperative to the entire process; pricing a new home on the market, formulating an offer to a new listing, knowing trends, Appraising (Appraisers are Board members). When a home owner wants to learn more about pricing is not done through 'zones' or grids like on Zillow or how our Texas Counties value for tax purposes. This home owner calls their Realtor and they review data from The MLS sponsored by The Board of Realtors in their area. When a buyer seeks data to formulate how they will offer on a home the same procedure is applied. A board employee even calls us Realtor's when something is not filled out correctly. Since each Brokerage Office and every Realtor is basically independent the data IS NOT influenced by a conglomerate or investment group nor does the board have any interest serving share holders like a bank would. This way data has a better chance of remaining market driven. Data from a board of Realtor's has less chance of being influenced than if it were under an investment group with a number of other companies that could or could not have real estate holdings.
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