Austin Real Estate Scene

Entries from December 2005

Top Mistakes of Home Buyers and Sellers in 2005

December 30, 2005 · No Comments

by Mark Nash

The 2005 residential real estate market was filled with anticipation of the sometimes overhyped real estate bubble. Though we’ll only see a correction, home buyers and sellers made some mistakes that those looking to buy or sell in 2006 can put to good use in their transactions.

Buyers:

     

  • Bought properties to flip at top-of-market prices. Thinking the bubble headlines were wrong or didn’t apply to them, newbie real estate investors wanted to become weekend millionaires. What they didn’t know is they were buying the experienced investors portfolios as they exited markets at the top. 
  • Utilized interest-only mortgages. Many home-hungry buyers discovered the only way you can pay top-of-market prices is to get an interest-only mortgage. With declining prices and no monthly principal payments, these homebuyers could fuel a foreclosure market in 2006. Fixed-rate mortgages will become the majority in 2006 as mortgage underwriters and educated consumers are reunited. 
  • Overlooked resale characteristics. New construction was the rage in 2005, everyone wanted to select finishes, floor coverings and kitchen cabinets. 2005 buyers should beware when this year’s homebuyers become sellers, buyers could bypass their resale that was new in 2005 for the chance to design their own new home. Look to future before signing on the line. 
  • Skipped performing a home inspection. Before some markets shifted away from sellers markets, many homebuyers waived their right to a property inspection. Never, skip or waive the right to a inspection, the benefits far outweigh the costs and could save you numerous headaches and expenses later. Hire a professional, not Uncle Bert. 
  • Misinterpreted developers incentives. Two years free condominium assessments, stainless appliances and plasma tv’s were thrown in to induce buyers to write contracts to purchase. What many buyers thought were a freebie were actually a signal that markets were softening and that projects were slow to sell from increased competition and a lack of buyers. Incentives are a band-aid for a languishing development. 
  • Were represented by the same agent representing the sellers. Thinking they might get a better deal, or out of ignorance, some buyers used the listing agent to represent them as well as the seller. Most states require written acceptance of this situation known as dual-agency by both parties under agent license laws. All buyers should be represented by an agent who has a fiduciary responsibility to them. Hire an exclusive buyers agent. 
  • Didn’t read homeowners association documents. Getting rid of Fido because you didn’t know you were moving into a no-dog building is an example why every buyer should request and read home owner association declarations, rules and regulations, association meeting minutes and budgets. Ask if there are any special assessments (typically for capital improvements; new roofs, windows, elevators) or planned ones. Special assessments can run into the thousands. 
  • Neglected to request rates of state, county or local transfer taxes paid by buyers at closing. Some buyers learn too late that they might need large amounts of extra money to pay transfer taxes in the state, county and city where they are purchasing property. Transfer taxes which typically can’t be financed can kill a transaction. Inquire when you start your search how much transfer taxes are and who pays them.

Sellers:

     

  • Over-priced home. Thinking back to bragging sellers at the water cooler or at the neighborhood cocktail party as little as a year ago, home sellers in 2005 overpriced properties in record numbers. After chewing up market time, the realization set in that it wasn’t the same market as year past. Realistic pricing based on sold comparable’s in the last six months illustrates to buyers that you understand today’s market. 
  • No Internet property marketing. According to The National Association of Realtors® over 70 percent of all home buyers start their search on the Internet before contacting a real estate agent. Require any agent you list your home with to post a virtual (360 digital) tour and a minimum of eight indoor and outdoor photos on the Internet. CD’s of your home are a great take-away for open houses. 
  • Stop showings too early after contract. With a shift towards buyers for the first time in years, buyers remorse was on the upside in 2005. Many sellers lost valuable market time when taking their home off market too early after signing a purchase contract. Continue to show your home until you feel very comfortable that your buyers intend to go to the closing table with you. 
  • Refused to pay buyer’s closing costs. For the first time in many years, buyers based on their strength in the market, asked for and received give-backs from sellers. Closing costs and points on mortgages were the most popular. Decide before offers come in what your strategy is for dealing with give-back requests. In 2006 expect owner-financing to be the next buyer perk. 
  • Exclusion confusion. As prices dropped, sellers began to strip fixtures and amenities in contract negotiations. Forget “if the price is right” and take down and replace Grandma’s chandelier and remove the mid-century refrigerator for sodas before you place your home on the market. Some simple ratios of home list price versus chandelier cost will convince you to not get distracted by personal property or must-keep fixtures. 
  • Knowing your market and competition. Buyers in 2005 were very savvy with market times and available inventory. Home sellers who were out-of-touch failed to spend the time to visit competing properties at public open houses, study the competitions marketing and “listening” to the market. No or few showings, no second showings or purchase offers and unfavorable feedback indicate market issues with your home. Don’t be the obstacle to selling your home. 
  • Paid document fees on top of full-service commissions. American business is in love with extra fees that they charge if you don’t ask to have them waived. In 2005 documentation fees became standard in listing agreements. No matter what you’re told, they are just another revenue source for brokerages. It’s excessive for brokerages to ask for another $300.00 on top of 5-7 percent commissions from home sellers. Either ask to have them waived or have the listing agent pay them.

Mark Nash’s fourth real estate book, “1001 Tips for Buying and Selling a Home” (2005), and working as a real estate broker in Chicago are the foundation for his consumer-centric real estate perspective, which has been featured on CBS The Early Show, Bloomberg TV, Fidelity Investor’s Weekly, Dow Jones Market Watch, MSNBC.com, The New York Times, Realty Times, Universal Press Syndicate and USA Today.

Copyright © 2005 Realty Times. All Rights Reserved.
With an award winning staff of writers providing up to the minute real estate news and advice, thousands of REALTORS® in North America reporting daily market conditions, and a nationally broadcast television news program, Realty Times is the one-stop shop for real estate information. That’s why over 10,000 real estate professionals have turned to us for their publicity needs.

Categories: Uncategorized

Accommodate Aging in Place

December 30, 2005 · No Comments

   by Al Heavens December 29, 2005
A few weeks ago, an enthusiastic publicist trying to promote a product e-mailed me with a novel idea about something called "universal design."  I tried to explain that I had been writing for at least eight years about the concept of making a house accommodate people as they aged and that I even have a chapter in my book talking about it.

The publicist apologized. Apparently, universal design was news to her.

What is the real news, I suppose, is that I've reached a point in my life in which universal design is becoming a handy thing to have around the house.

I've noticed the difference in the way I deal with opening and closing doors, mostly. Three of our doors, including the back one, have aging-friendly lever handles. The rest have door knobs, which I'm finding more difficult to grasp and turn.

I can better understand the need for first-floor living, which is a major concept in the universal-design scheme. The layout of my first floor could easily accommodate it, with minor modifications to the bathroom, and the addition of a ramp from that levered back door to the courtyard and adjustment to backyard gate that would allow it to open wider for a wheelchair.

The fact that the kitchen was added just a few years ago means that the center island accommodates wheelchair users. The dishwasher is front-loaded, the stove's controls are on the front and accessible from a seated position, and the refrigerator's top shelf is also accessible.

There are two first-floor bedrooms — three if you count the library, which was the third bedroom of the house before the attic was converted to a full master suite. One is my older son's room, and he lives full-time in Southern California. The other bedroom belongs to my younger son. The library has a foldout sofa for guest accommodations.

My last house was not accommodating, built when the life expectancy was 45 years. People who lived longer were hardier and didn't usually need such accommodations.

First floors were public areas, so there were no bedrooms. Bathrooms were kept on the second floor and thus out of the public eye. Doorways were narrow and had thresholds, and there were plenty of stairs on both ends of the house. Once you got upstairs and were infirm, you needed a full-time caregiver.

It would have cost a small fortune for me to have aged in that house, and whatever redesign of the first floor I could have come up with would have been odd-looking, to say the least. I don't think it would have been completely accessible anyway.

Sometimes, it is easier to move, which is why builders have come up with over-55 communities.

As baby boomers have started to sprint past age 55, builders have grown to accept universal design. After the 1998 Builders Show in Dallas that featured a universal design prototype house, I asked a local builder whether he would be adding these amenities to his homes.

His response was that grab bars in showers and stoves with front controls sent the wrong message to a generation that believed they would live forever and in good health, thanks to all that running they did every day.

Today, universal design is a standard feature of his houses. Those same runners have developed bad knees, and the idea of living forever frightens people who aren't sure whether they've put away enough money for such long lives.

Is the concept of aging in place a viable one? Yes. Does aging in place have to be ugly? The ramp issue in some older homes is indeed an ugly solution, but whatever works. In the last 10 years adding an elevator has become less expensive in many situations, and some high-end builders who have been offering elevators as options are now providing them as standard features.

Retrofitting many older houses to accommodate an elevator is no longer prohibitively expensive, perhaps — and this is an example — $10,000 instead of $25,000.

As I said in the chapter on universal design in my book, it is much easier to build universal design into a new house than having to retrofit an older house. I also suggest that if you are planning an addition to an older house, it doesn't add all that much to the renovation costs to be accommodating.

It is hard to accept the fact that we are getting older. Although I am no fan of vinyl siding, I can appreciate the lower maintenance that accompanies it after spending much of November on a ladder finishing the final coat of paint on my cedar-sided house.

Still, I'm not willing to get off the ladder, so universal design seems like a viable solution to the aches and pains that seem to be accompanying increasing age.
Copyright © 2005 Realty Times. All Rights Reserved.
With an award winning staff of writers providing up to the minute real estate news and advice, thousands of REALTORS® in North America reporting daily market conditions, and a nationally broadcast television news program, Realty Times is the one-stop shop for real estate information. That's why over 10,000 real estate professionals have turned to us for their publicity needs.  

Categories: Real Estate Trends

Austin Real Estate Market Contributes Over $500 Million to Economy During Holiday Season

December 28, 2005 · 1 Comment

The Austin-area real estate market generated $512,658,555 in total revenue last month, adding fuel to the holiday economy. Reaching new heights with some of the largest November growth percentages ever, the market saw single family home sales generate $420,078,670 in revenue, a record-setting 44 percent increase from November 2004, according to the latest Multiple Listing Service (MLS) report from the Austin Board of REALTORS.Single family home sales for November totaled 1,870, representing a 24 percent increase from last year. The median price of these homes was $170,000, up 15 percent from 2004, and at an average of 68 days, these homes sat on the market for 13 percent less time. The 7,173 active listings represented a 14 percent decrease from last year. 

Other property types also showed growth last month. Multifamily home sales were up 61 percent, totaling 127. These sales generated $25,802,209 in revenue, an increase of 95 percent over the previous year. Townhouse/condominium sales rose 53 percent to 178, boasting an 82 percent increase in dollar volume with $31,911,484 in revenue.

Published by Chamber Communications
Copyright © 2005 Greater Austin Chamber of Commerce. All rights reserved.

Categories: Uncategorized

November sales up 24 percent from a year ago.

December 21, 2005 · No Comments

AMERICAN STATESMAN STAFF

Monday, December 19, 2005The Central Texas resale home market surged in November, with a 24 percent increase in sales and a 15 percent jump in the median price, to an all-time high of $170,000.

Owners sold 1,870 homes last month, up from 1,570 in November 2004. While the home market tends to slow down at the end of the year, November was only 25 sales behind October.

 The jumps were good news for sellers, but buyers could be in for a tough time as the supply of homes for sale fell 6.2 percent, to 7,173, the lowest it has been in several years.

A year ago, there were more than 8,300 homes on the market.

Homes are selling especially fast in some areas, including the real estate zones that include Northwest Hills, with an average of 26 days; South Austin, 20 days; North Central Austin, 26 days, close-in East Austin, 26 days, and Southwest Austin, 22 days.

http://www.statesman.com/business/content/business/stories/12/19homesales.html
 
 
 
 
 

Categories: Market Update

Home market surges even as supply drops; November median price hits an all-time high

December 21, 2005 · No Comments

Austin home market surges;

November median is an all-time

high

By Kate Miller Morton
AMERICAN-STATESMAN STAFF
Tuesday, December 20, 2005

Central Texas home buyers shrugged off rising interest rates in November, sending sales up 24 percent and the median price to an all-time high of $170,000, up 15 percent. But the supply of homes fell sharply, to a four-year low, and homes in some areas are selling within days, sometimes with multiple offers.

The hot markets include Southwest Austin, close-in East Austin, and South and Northwest neighborhoods. In East Austin, the number of sales is up 146 percent so far this year, and the median price is up more than 40 percent, to $155,000.

 

Sandy Kerr, an agent with Keller Williams Realty, recently listed a house for $199,950 in the Shady Hollow subdivision of Southwest Austin. Two days later, she said, she had a contract and a backup contract, both for well above the asking price.

Houses that are priced well “seem to fly off the market,” she said, though fast sales don’t necessarily translate into big price jumps. Prices in the Southwest market rose just 1 percent last month, with a median of $223,000.

Sales have been strong all year. But until last month, prices had been rising at a more moderate pace. Through November, the median price is up 6 percent from the same 11 months of 2004.

Even in some areas where homes are selling fast, prices haven’t been shooting up. But sales are growing much faster at the upper price ranges, helping drive up the median price.

Sales of homes priced between $100,000 and $150,000 are up about 11 percent, while sales of homes priced at $1 million and up are 50 percent higher than a year ago, though only 20 homes fall into that category.

Bill Stanberry, Stanberry & Associates CEO, said he thinks demand is just one element fueling rising median prices.

“The median simply means a lot of the lower-priced homes weren’t sold or weren’t there to buy in November, and so the people bought higher-dollar homes,” he said.

“That may be a reflection of the interest rates ticking up,” he said, adding that rising mortgage interest rates have a bigger impact on buyers who may be stretching to afford houses than on more affluent people.

Mortgage rates have risen to an average of 6.3 percent, up from about 5.7 percent at the beginning of the year, according to Freddie Mac, the federal mortgage finance company.

Through November, area sales were up 19 percent, and the median was up 5 percent, to $163,000. But new listings have decreased all year, tightening the market for buyers.

“Austin is doing very well,” said Jim Gaines, research economist with the Real Estate Center at Texas A&M University. “I don’t know if you can say it’s the leading market in the state, but it’s definitely the leading market among the major four: Austin, San Antonio, Houston and Dallas.”

Austin’s momentum is bucking the national trend, according to Walter Molony, spokesman for the National Association of Realtors.

“We are seeing a slowing in home sales, but not in prices,” Molony said of the national market. “Prices are continuing to rise at historically high rates. We expect price appreciation to slow down in 2006, but still rise a little faster than historic norms.”

Home prices have been relatively flat in Central Texas for several years, keeping homeownership in reach for a larger share of the market than in many East and West coast areas.

Austin’s third quarter median price was $167,100, a 5.4 increase from the year before. The national median was $215,900, a 14.7 percent increase from the third quarter 2004.

Central Texas could see a much higher rate of appreciation next year if the new listings fail to keep up with demand. But many agents say they think the lack of new houses on the market is partly attributable to the traditional slowdown around the holidays, when owners are reluctant to show their houses.

“Buyers don’t seem to be seasonal, but the sellers do,” said Carol Strickland, president of Avenue One Properties.

http://www.statesman.com/business/content/business/stories/realestate/12/20homesales.html

Categories: Uncategorized

November home sales stay strong!

December 20, 2005 · 2 Comments

November saw another good month in Austin-area home sales, according to the Austin Board of Realtors.

Single family home sales brought in $420 million, a 44 percent increase over the same month last year. More than 1,800 single family homes sold, a 24 percent increase from 2004. The median prices of the homes was $170,000, a 15 percent increase.

Homes sat on the market for an average of 68 days, 13 percent less time than in November 2004. With 7,173 active listings, the area had 14 percent fewer listings than last year.

Townhouse and condominium sales jumped 53 percent to 178 sold in November. Bringing in almost $32 million, the sales represented an 82 percent increase in revenue over the same time last year.

The Austin Board of Realtors is a nonprofit organizations that operates the Multiple Listing Service and represents more than 7,000 licensed Realtors in Central Texas.
© 2005 American City Business Journals Inc.

What Does all this mean for you? Well if you are thinking about buying a home soon then you might want to move forward as you’ll continue to see price increases over the next year. And if you are a thinking about Selling then you are looking at selling in a rising market where you can get more money for your house. Again the key to selling is getting your ready to sell… Call me and I’ll send you a FREE Home Sellers Bookley on “10 Steps You Must Take Before You Sell Your Home” http://www.terrillspeakshomes.com/free_reports.shtml

Categories: Uncategorized

Hello world!

December 1, 2005 · 1 Comment

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!

Categories: Uncategorized