Austin Real Estate Guy Blog

This will be my last post on this blog. I have another blog from my Austin real estate website that I will use exclusively from now on. I have kept two blogs for a while and that has proven to take too much effort. I also feel that I have diluted each by not posting identical content on each. So anyone who has a feed from this blog, please use this one for RSS http://www.austinrealestateguy.com/blogs/sam_chapman/rss.aspx
and this one for ATOM
http://www.austinrealestateguy.com/blogs/sam_chapman/atom.aspx.

Click to visit my current Austin Real Estate Blog.

Austin Home Sales Slow

The statistics for March, 2008 show that home sales in Austin dropped for the 9th month in a row. Home sales dropped 21% from a year ago. The average price of a home sold also dropped for the first time in a very long time. Is this a correction? Not in my opinion. Austin has been adversely affected because of buyers being cut out of our market. Many can't get loans because of tighter credit standards. Many can't buy because they are waiting for a house to sell in another area.

What does the future hold? Dell announced a 900 person layoff here recently. AMD just announced that it will cut 215 jobs in Austin. As the global demand for chips and related items drops, the Austin high-tech sector may see more layoffs.

But wait, there is good news as well. The Austin annual job growth figure came out the other day, as did our area's unemployment rate. Jobs grew at an annualized rate of 2.9% and unemploument was at 3.6%. Those are very strong numbers, especially considering what is happening in other parts of the country.

Within about 60 days, the University of Texas at Austin is expected to announce the creation of a medical school here. Think of the jobs that would bring both during construction and when in it is service. The new Cedar Park Regional Medical Center opened in December of last year. Lakeway is getting a large, regional medical facility with a Level II Trauma Center, medical offices and retail space. That too will bring jobs.

So Austin might balance the bad with the good. However, as the national economy goes flatter, Austin will continue to see the effects. 2006 and the first half of 2007 were on fire in terms of record home sales. The current market doesn't stand a chance of keeping pace. The only direction is backwards until around October.

October is the month last year that the credit crisis really slammed our market. What I want to see is the stats from October and beyone compared to 2007.

OK, it is now April, 2009 and sales are still slow. We're down around 30% in terms of homes sold compared to last year. Prices in some parts of town are holding fairly steady and they are dropping in others. The south Lake Travis area, for example, is seeing extremely slow sales and prices are off almost 10% compared to the same last year.

Austin Home Values Still Rising

Home values still rising was a huge headline in the Austin American Statesman this morning. What a crock! This irresponsible article was talking about the tax appraisal districts in the area increasing the appraised value of houses. The very last part of the article said that the values they were talking about were for spring and summer of 2007. Well guess what, folks? That was before the sub-prime mess hit and before Austin started slowing.

The latest stats I just got from Alamo Title Co. showed home prices across the 5-county area having dropped just over 2% in March compared to March, 2007. Certain parts of Austin are healthier than others, but the truth is that our market has weakened and prices have started to come down.

The biggest problem with this article is that sellers will read it. If they don't read it carefully, they may not price their homes properly. Overpriced listings will not sell. People who really need to sell will start dropping prices. As they drop month after month it may look like they are desperate. The reality will simply be that they are adjusting to where the original price should have been.

Lake Travis Fire Rescue

The Hudson Bend Fire Department is now Lake Travis Fire Rescue (LTFR). The name change isn't the big news, the drop in the ISO rating is.

The Insurance Services Offices (ISO) Public Protection Classification (PPC) is dropping from a 5 to a 2. What this means to people who own homes and businesses in the LTFR coverage area is a decrease in insurance premiums. There are other factors besides the ISO rating that will have an effect. Things like distance from a fire hydrant and distance to a fire station also play a role.

How can you find out if your premiums will drop? Call your insurance agent. I called mine yesterday and he had not heard this news. Not knowing means not checking policies to see if rates will drop. Now he will not only verify the information, but he will mail all of his clients within the LTFR service area notifying them of the change.

Pearson Ranch Austin

As the "national" housing market has cooled, so has Austin, but... I put the word national in quotes because there is no such thing as a national housing market - it is all local. Regarding Austin cooling, I am specifically referring to the number of new homes starts and that number has plummeted. The reason? A lot of it has to do with the fact that large nationwide builders are having trouble in many markets. In order to to conserve capital, these builders have cut back in Austin.



OK, that brings me to my point - the Pearson Ranch community is back on track. This area of 195 acres in north Austin had been a Centex Homes pulled out of. Now, developer Bob Wunsch is planning over 400 new homes and also apartments there. This is the developer of the huge Austin subdivision of Anery Ranch. The development is between Texas 45 and Brushy Creek Road, east of 183 around 5-10 minutes. I have a feeling that one of the reasons that Wunsch is taking the project on is because of Texas 45.



Getting around in Austin has become more and more difficult over the last 5+ years. This area isn't known for being good about developing the infrastructure to get people from place to place quickly. Well known for being anti-growth in ways, the Austin area has been terrible about improving highways to move traffic more quickly. Love or hate them, toll roads have become part of the Austin scene. Texas 45 is just that. What used to be a pretty long commute to the downtown area is now much faster.

Rollingwood Building Boom

Rollingwood, a small city tucked into the Austin area just minutes west of downtown, is booming in a way. The city has generally been built out for a very long time, but the addition of city sewer has changed the area dramatically. What used to be a community of relatively modest homes has seen many of these homes torn down to be replaced by new and much larger homes. Gary Keller, the Keller of Keller Williams, is a perfect example. He tore down homes on two neighboring lots and replaced them with an almost 8,000 square foot home.

The Rollingwood boom isn't new to Austin, but the reason for it is different than what has been seen in other areas. Until the city installed sewer, any home owner who wanted to expand a house in Rollingwood would have had to replace the existing septic system. Having a septic system in the yard also prevented people from adding pools in many cases. Rollingwood remains a very nice, quiet neighborhood. It just has newer and larger homes now than it did 10 years ago.

Pedernales Falls State Park

If you live in Central Texas and like the outdoors at all, you need to know about Pedernales Falls State Park. This is a park that is around 90 minutes north of San Antonio, just a bit east of Johnson City and around 45 minutes west of Austin.

The park is named for the series of short waterfalls that the Pedernales River formed as it carved its way through the limestone hills. The rock that the falls goes over and through shows signs of the many years of erosion. You can also see bent trees and debris high on the hill beside the river and in trees from past floods.

This is a great area in which to hike, take photos and jump into a cool river in the middle of the hot Texas summer. Take a look at my Pedernales Falls photos now.

Selling a House? Look Up

I was just reading Nickie Rothwell's Home Staging Blog and the title of her post caught my eye and made me think. The title was When Staging a Home for Sale, Remember to Check the Roof. Nickie was talking about wind damage, but here in central Texas we have more than wind to consider.

If you are selling an Austin home right now, look at the roof. As an owner, you should know the age of the roof and whether or not you have had hail or wind damage. If the roof is older than 10 years or if you have had hail you may want to consult with a roofer. Any buyer will probably have an inspection done. Although they may not be licensed roofers, inspectors will look at the roof. These folks can see signs of hail damage or wind damage and they will make note of it. Another thing inspectors will look for is tree limbs close enough to run on the roof during wind storms or limps actually resting on the roof. Such limbs are a problem and need to be trimmed back.

Is it better to replace shingles before putting the home on the market? Right now I would say yes. Sales of homes in Austin are slow compared to a year and prices are beginning to trend down. Knowing this, your house needs to be in better condition than your competitors, especially if prices are similar for similar homes.

SXSW - Austin Music Festival

SXSW stands for South by Southwest, Austin's premier music festival. Started in 1987, SXSW has turned into one of the largest music festivals in the country, with bands coming from all over the world. The financial impact on Austin is huge. According to a study commissioned by the festival, SXSW brought around $95 million to Austin's economy in 2007. Economist Anglos Angelou estimates that the festival also brought around $12.8 million in media attention.

OK, SXSW is huge - so what? In addition to giving people in the central Texas a lot of really great entertainment, this showcases Austin to thousands of people from outside the area. Face it, when people who have not been to Austin think of Austin, they think that is like Dallas or Houston because that is all they have seen on TV. Once you get someone west of Mopac Expressway into the hills, they are pretty stunned by what they see.

I have a client in Hawaii who is really excited about moving to Austin. He was here to record a song with Willie Nelson and loved what he saw. He and his wife will visit in April and I can't wait to show them around.

I can't claim that a lot of people get out of the downtown area to check out the lakes and Hill Country while here for SXSW, but I'm sure many do.

If you want to check out the SXSW website, click here. The festival is only a week away.

Pick of the Month

I started something for people I have helped purchase who are from outside the Austin area. This has been especially great for people from outside of Texas. Austin is very different than what most people think of when they think of Texas. Some of my picks of the month really hope show that. Check it out by clicking the title of this post.

Or take a look at a few below.

Westcave Preserve
Hamilton Pool
Pedernales Falls State Park

Google Comes To Austin

The Austin American Statesman confirmed rumors I have been hearing for months this morning. Google has leased 25,000 feet of space in downtown Austin. Google follows another California tech firm in bringing people to Austin. According to Data Knowledge Center, PayPal has leased 37,000 square feet in Austin in which they will place 300 developers to build PayPal's global payment platform.

The Austin Chamber of Commerce quotes a PayPal director and general manager of PayPal Data Services about how Williamson County will benefit from PayPal's presence there. Williamson County is home to Dell, which has its headquarters in Round Rock.

Google and PayPal are two more examples of tech companies coming to Austin for the right reasons. One reason is the University of Texas, which cranks out many engineers who want to remain in Austin because of the great quality of life. Another is the relative affordability of Austin compared to California markets. Austin is more affordable in commercial space and housing for new engineers and other employees.

Austin Slow, Lake Travis Hot?

I posted some stats yesterday showing the slow-down of the Austin area real estate market. Funny thing, but the area covered by the Lake Travis Independent School District (LTISD) got hot again. That area had followed the trend of the Austin Board area for October and November, but December saw almost as many homes closed in December of 2007 as in December, 2006.

What that tells me is the area started seeing more home buyer interest in October and November. Most closings in December probably saw offers and negotiations in October and November. The next question is why was the LTISD area so much more popular.

Perhaps one big factor was the opening of the Hill Country Galleria Mall in Bee Cave. Dillard's opened September and the first phase of the rest of the mall opened shortly thereafter. It may sound silly that a mall could attract more home buyers, but think about it. The Lakeway, Hudson Bend and Bee Cave area, which has the bulk of the population that the LTISD serves, was 30 minutes from the nearest mall until the Galleria opened. The only significant services not in the area besides major shopping until the mall opened was a hospital (and one is on the way in Lakeway). By the way, another factor was the opening of the 500,000 feet of retail space across from the mall

The draw to the area the LTISD serves is a lot of things - hills, golf, Lake Travis, great schools. However, mom s (and dads) having to travel 30 minutes to major shopping was a bit of a headache. Want to see more growth? Just wait for the hospital. If it built, and every indication so far is that it will be, I think we will see a lot more growth, especially in older residents who want and need to be closer to health care.

One of the developments going in is very high end. The Reserve at Lake Travis is expected to have home sites ranging in price from around $300,000 to over $2 million for waterfront sites. As Lake Travis waterfront home sites have become more scarce, prices have shot way up. Will the growing services in the area support a development like this? Time will tell.

New Market Stats Update

From Alamo Title Co.:

December 2007

Units for Sale:
(compared to the same month in 2006)
New listings are up by 35.91%.
Pendings are down 43.09%.
Solds decreased by 27..28%.

As for Average Prices:
The "New Listings" average list price is up 8.61% to 294,316.
Sold average sales prices increased 7.90% to $252,417 compared to $233,939 in 2006.

That doesn't look good, does it? October and November were also slower than last year. I went to the Austin Board of REALTORS, but they don't have stats later than October yet. It is frustrating to wait for the Board to post stats. How does Alamo Title get theirs so quickly? They're good!

OK, so what is really going on here? My thought is the same as I have had since the mortgage meltdown. Austin isn't a market that suffered from a bubble, but things were bound to affect our market. Sub-prime buyers out of the market, people who used creative financing not getting loans, overbuilding in some areas, people wanting to relocate here not being to sell in other areas and buyer psychology thanks to the national media is negative.

Austin Homes are Undervalued

Many real estate markets in Texas, including Austin, are undervalued according to a study by Global Insight. Studying information about 330 markets in the country, it was found that despite declining housing values in 171 of the 330 markets, Austin is actually undervalued by more than 9%. In order to determine whether values were above or below where they should be, taken into consideration were prices, interest rates, household income, population density and other historical statistics for real estate markets around the country.

One reason that Texas markets, like Austin, are not overvalued is that this area never saw a rapid run-up of home prices like we saw in markets in California, Arizona and Florida. Bearish, you probably will disagree with this report, but these are stats by people who don't appear to have an interest in any of these markets, besides reporting about them.

If you read the methodology behind the report, you will see a remark cautioning people about their perception of overvalued markets. Just because a market like Bend, Oregon, which according to the study is overvalued by 70%, this doesn't mean that prices will drop by 70%. The reverse is also true. Just because Austin is undervalued by 9% doesn't mean that prices will shoot up. Real estate markets generally see prices adjust gradually.

Moving to Texas?

If you are relocating to Texas, there are some things you will need know. You will need to know about getting your car(s) inspected and registered, where to get a Texas driver's license, registering to vote, etc. Click here for that information and more.

Home Buyers - Don't Try to Time the Market

A lot of buyers out there right now seem to be wanting to wait for real estate prices to bottom out before making an offer. I personally don't believe you can time the housing market any better than you can time a stock. How can you know when any market has hit bottom? It starts going back up and keeps going back up. If this happens, you've already missed the bottom.

What may be more realistic is to get with a competent REALTOR® and get good comps for the house you want. Then make a realistic offer. What may be realistic in one place may not be realistic in another. In markets where houses are taking forever to sell, a seller may entertain a lower offer than in markets that are doing better. Just as things are different in San Diego than they are in Austin, they are different from neighborhood to neighborhood in Austin. So do your homework.

The worst thing to happen if you buy now is that prices could drop. But just like the stock market, what goes down usually goes back up. With stocks, you may do dollar cost averaging. Unless you're buying a lot of houses, you can't do that with real estate. So when you see something you really like, be informed and make an offer.

Questions? Go to my website to search Austin homes or call me at 512-293-2422.

New Super Walmart and Target

Where? According to a San Antonio Broker who I have known for over 20 years, these stores will go at the intersection of Hwy 281 and 311. But wait, that is half way between San Antonio and Blanco and Blanco is 45 minutes from Austin. What does that have to do with Austin real estate? Well, it has to do with Central Texas real estate, for which where Austin is a major hub.

Click here to see a map of this intersection and then zoom out a bit. What you will see is that the area these stores will serve include the town of Blanco and the Canyon Lake area. Canyon Lake isn't a Lake Travis (nothing is), but it is a lake near the major cities of Austin and San Antonio. Walmart and Target don't build where they don't expect growth. They are somewhat like McDonalds in that they do tons of demographic research to select real estate to build on.

The area west of Austin toward and beyond Dripping Springs and toward Marble Falls is growing like crazy. If you start at the Bee Cave area and go northwest to Marble Falls, then down 281 through Johnson City and Blanco to 311, then follow a line close to Canyon Lake and through Dripping Springs, you get almost right back to Bee Cave. This will be a high growth area for a long time.

What kind of developments are we likely to see? First, large ranches in the area that aren't right on a major road like 281 will sell and the price per acre won't be terribly expensive. By this I mean that the more rural ones will go for $15,000 to $25,000 per acre. These will probably be developed into areas that have lots between 5 and 25 acres or more. A good example of this is Waterstone. Waterstone isn't in the triangle I just drew, but it is representative of the kind of development that is likely. Waterstone is a community along the Guadalupe River between Bulverde (north of SA on 281) and Boerne (NW of SA on IH 10). I drive by it every time I visit my parents in the San Antonio area.

The other thing I drive by on 3351 between Kendalia and Bergheim are a bunch of gentleman's ranch properties. This is an area that 20 years ago was out in the sticks. I have made this drive quite a bit over the last 20 years and noticed significant changes just over the last 3 or so years. The first thing I saw was a lot of cell towers going in. That meant that the phone companies knew something I didn't know. I also saw cable laid along the road this year. Then I saw ranches slowly changing in character from large, open spaces to areas with new homes going up. My guess is that these are 25-100 acre size properties that developed as ranches were sold off and developed. Then it was places like Waterstone. That is exactly what I expect in the Bee Cave, Marble Falls, Blanco, 311, Dripping Springs, Bee Cave triangle and I think the momentum will pick up rather quickly.

Of all the counties in Texas, 9 of the fastest growing 25 between 2000 and 2003 are in Central Texas, where San Antonio and Austin are located. If we had data available today, I'll bet those numbers would continue to hold true.

Great Austin Area Schools

Texas Monthly Magazine has an article in the December issue about the best public schools in the state. A couple of local districts have most or all of their schools on the list. National Center for Educational Accountability (NCEA) looked at three years of data to compile the list. Using the NCEA's College and Career Readiness benchmark, schools that were in the top 5% were automatically included in the list. The other factor used was TAKS test results for elementary schools and higher than expected TAKS growth for middle and high schools. Read about the methodology here.

The Eanes and Lake Travis ISD schools were tops in the area. Eanes has 5 of 6 elementary schools, both middle schools and its only high school on the list. Lake Travis has 2 elementary schools, both middle schools and its only high school on the list. Click here to look for a school or district in Texas.

Out of approximately 8,000 public schools in Texas, just 859 made this list.

List Your House During the Holidays?

Sure, why not? The last month of the year is a great time to have your house on the market, as long as you are realistic about price. Your house will probably show really well. It will look great if you have decorated for Christmas. Visitors love the festive look. It will also be pretty neat and clean as you are probably doing some entertaining and have others over to the house during the holidays. And if you bake pies or cookies your house will smell good as well. Many people driving around during the holidays are listening to Christmas music, looking at decorations and this generally puts them in a good mood. These are the people you want looking at your house. Finally, people actually do shop for houses over the hilidays. People visit friends and relatives during this time of the year. While in your town they may very well want to look at houses. If yours is on the market, you may get some good showings.

Happy Holidays

Just a quick note to wish everyone a safe and happy Thanksgiving. I don't know about you, but I have a great deal to be thankful for. I'll bet you do to.