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Market Quick Hits = Opportunity

Market Quick Hits

“We often miss opportunity because it’s dressed in overalls and looks like work” ― Thomas Edison

  • Units closed in April 2017 decreased 3.8% compared to April 2016. Year to date we’re up 1%.
  • The Austin MSA inventory is up 16.9%, 15.1% in Travis County and 14.6% in Austin City Limits.
  • Year to date condo sales are up 13%. Condos currently represent 10% of the total sales in the Austin MSA and 20% of the total sales in Austin city limits.
  • Current interest rates for a 30-year fixed are 4%; down 0.125% from the beginning of May.
  • Builder incentives and seller concessions are on the rise once again. Percentage of sold price to original list price dropped 0.7% compared to prior year.

We’re still very clearly in a sellers’ market, but a dip in sales and interest rates plus increases in inventory and seller concessions clearly spells opportunity for home buyers in Central Texas. As interest rates are expected to rise throughout the next year, now very well could be the best time to discuss taking advantage of the market by purchasing your first home, moving-up, or purchasing income-producing property.

 

For Buyers: What’s It Worth

 

 

FOR BUYERS: WHAT’S IT WORTH?

Many people view homeownership as a primary goal, even when the initial benefits aren’t financial. I’m an Accredited Buyer’s Representative (ABR®) and I’d love to discuss your homeownership goals!

Report: Homeownership Is More Than Just the Facts by Suzanne De Vita. © 2017 RISMedia.

Property Tax Protest, 2017

Taxes, Taxes & More Taxes

“The thing generally raised on city land is taxes.” -Charles Dudley Warner

2017 is the year we should all be protesting our property tax assessments. While 2016 was a record breaking year for home sales in the metro area, annual home sales growth slid from 5% to 1%  and price growth from 8% to 6%. Yet, it’s almost a certainty that your notice of appraised value shows increases of 10%+. That tells me it’s time to review your tax assessment carefully with your favorite Realtor.

You have probably received advertisements from companies offering to help you protest the value. While some of these services can be of value to those with little time, I’ve found the DIY approach to this process is just as easy as using a third party, without a 40% fee.

As always, I’m here to help. Grab your 2017 Notice Of Appraised Value and connect with me. Together, we’ll make sure you are armed with with the steps to take, things to consider and of course I’ll supply you with comparable properties that support your case.

You must file your protest by May 31st, so connect with me soon!

-scott

1Q17 Market Watch

How’s that real estate market, you ask?

1Q17 single family units sold were 0.5% higher compared to 1Q16.  This is a clear continuation of the market slowdown we noted previously, but make no mistake, we are still on pace to beat last year’s numbers. Even if it’s just by 0.5%What continues to raise my eyebrow is the interest rate increases over the last 9 months. Consider the graph above that shows the interest rate fluctuation for a 30-year fixed rate mortgage over the last 5 years. If you are considering a home  purchase, think about this:

A July 2016 homebuyer had an average interest rate of 3.41%, an average price of $353K, and a monthly principal and interest (PI) payment of $1,560. Today, the rate is 4.25% and the average price is $370K which means a PI payment of $1,820 per month. Did you catch that? A buyer who waited out the last 9 months is paying an extra $260 per month for the same house today. 

Today’s interest rate of 4.25% is actually a low for the week but most believe the trend upwards will continue.  If you are considering buying, we should build a plan now before the rates move even higher. 

I’m confident in the health of our local market, though the slowdown is real and frankly much needed. Still, there is plenty of opportunity for everyone out there. Whether for a move-up seller, first time buyer, or investor, there is opportunity throughout the Austin metro area. You simply need to look for it with your favorite Realtor at your side. That’s me! 

Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States© [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, April 12, 2017.
 

May 4th-7th: An Other-Worldly Weekend

What A Weekend! 

What do  Luke Skywalker, The Guardians Of The Galaxy, free comic books & the Eta Aquarid Meteor Shower all have in common?  They are coming together the first weekend of May for what promises to be one of the most adventurous weekends of the year!

“May The Force be with you” on May 4th. Start your weekend early celebrating Star Wars Day at one of several local Star Wars themed events. Join Other Worlds Austin at 4th Tap Brewing for special screenings of award winning Star Wars Fan Films, a costume contest and a special taproom limited release of “The Fist Of The Empire”, an imperial stout representing dark side of The Force.

Look skyward the nights of May 5th & 6th as the Eta Aquarid Meteor shower peaks. Though visibility in the US isn’t optimal, Texans can still see upwards of 20 meteors per hour just before dawn.

May 6th, is Free Comic Day! What? Free Comic Book Day! Comic book and graphic novel stores across town will be participating in family friendly events in the 16th year of this annual celebration. While we will always be partial to our friends at Austin Book & Comics, this year we are all in with Austin Toy Museum and Hops & Heroes Comics for their first ever Free Comic Book Day Event.

Nerded out enough just yet? Did you forget that Guardians Of The Galaxy II comes out this weekend, too? It’s amazing when weekends like this shape up so nicely so grab your kids, your friends, or call me if you are shy and let’s nerd out this weekend together!

Board of Realtor Stats vs MLS Data – Jan 2017

The Austin Board of Realtors (ABOR) just released their report on January home sales. As we wait for all the media to report the data, I think it’s a fun exercise to check that data.

The graphic below illustrates the difference in ABOR’s data and that which you can find in Matrix (the software Realtors use to list properties and to find opportunities for prospective home buyers). The top of the graphic is ABOR’s data. The bottom shows screenshots of the MLS data found in Matrix.

Of note, demand, represented in the ABOR graphic is up 7% while Matrix shows a 4.4% increase. Supply represented in the graphic by months of inventory, is shown to be at  2 months of supply in ABOR’s graphic compared to 6 months of supply in Matrix.

Let’s pose the obvious question, which is correct? Is it the Board of Realtors tasked with managing the data and running Matrix or Matrix itself?

Stay tuned my friends and let me know if you want to take advantage of the market!

ABOR vs MLS Jan 2017

(click to expand graphic)

It’s Time For Your Annual Home Review!

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Are you ready for 2017?

This is that time of year to chat with your favorite Realtor for your annual home review. As your home is likely your biggest investment,  it’s critical to consider these 5 questions every year:

  1. What changes have occurred in your life that alter your goals for the next 5 years?
  2. What properties near you have sold, and how does this impact you today?
  3. What’s happening in your neighborhood that will impact the value of your home?
  4. What’s occurring with your current mortgage and what changes could benefit you?
  5. What new tax laws give you deductions or credits on home improvements?

Message me now and let’s answer these together to make sure you get the absolute most out of 2017!

<Check out our preview of2017 and the stories we’ll be following>

Looking Ahead To The 2017 Housing Market

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Looking ahead to the 2017 Housing Market

Blame it on the election cycle, the climbing interest rates or affordability, and I’ve heard it all, the central Texas housing rate of growth very clearly slowed in 2016 compared to previous years. The good news is that the Austin metro area had another record breaking year with home values and sales.

Though the housing market traditionally slows every presidential election year, I wouldn’t blame the second half of last year being slower than the previous three years solely on the election. The normalization of our market in 2016, meaning a less aggressive rate of growth, will likely continue – though check out the ‘stories to follow’ below. Let me be clear, less aggressive rates of growth in our housing market will ensure the Austin Metro Area is strong for quite some time. In fact, we’re projecting a healthy market with record breaking home sales and home values in 2017!

This year we are primed to see:

  • Interest rates continue their climb upward and will flirt with 5% for a 30-year fixed
  • Adjusted rate mortgages and second liens will come back to the marketplace
  • Creative financing causes further competition in the sub $400k market
  • Most stats will continue to climb but normalize signaling a healthier market

Stories to follow that could impact our housing market :

  • Jobs Jobs Jobs: Unemployment for our MSA continues to be the lowest in the state. Though the labor department reported a loss of 2000 jobs from November to December here locally. Texas currently ranks 10th in the nation in percentage of population growth from 2015-16 and 14th in the Tax Foundation State Business Climate Index. Competition nationwide is clear as local affordability and tax climate relative to other cities is still a concern.
  • What happens with the mortgage interest tax deduction? Though it’s not clear what will happen with the tax deduction as President Trump and House Republicans are not on the same page, what is clear is that change is coming. The National Association of Realtors is strongly opposed to any changes to the mortgage interest deduction.
  • Long-term impact of the return of creative financing (see above).
  • Other hot topics include: Water retention and distribution, the Texas Legislative Session and any changes to NAFTA.

canstockphoto3743460

To me, in light of all the pending change, I see opportunity across the board. If you’d like to get together and discuss the market and how you can take advantage of it, please let me know and let’s make that happen!

<read our 2016 housing market review here>

Reviewing the 2016 Housing Market

“Change in the Air”Reviewing the Housing Market

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2016 proved to be another solid year for Texas home owners, sellers and buyers. Here in Central Texas, home values continued to climb to record numbers as did the total units and dollar volume sold. But with change hanging over heads all year long, it’s little surprise to see some rates of change slow to a more “normal” market, as yours truly projected last January.

This time last year the Austin Board of Realtors reported that during 2015 the metro area saw 5% growth in terms of units closed and an appreciation rate of 8%, and citing it was “primarily due to our region’s job and ongoing population growth”, Aaron Farmer -ABOR president 2015.

The Austin metro area has been fortunate for quite some time in terms of the real estate numbers we’ve seen. Year after year has been record breaking with home owners seeing aggressive appreciation and home buyers finding themselves competing to win offers on existing housing.

But now, after a crazy election cycle and a few interest rate hikes, 2017 is starting with a bit of a different feel.

“The Central Texas housing market is slowly beginning to align with long-term historical trends. Homes are spending more time on the market and the pace of both home sales and price growth is slowing,” said Brandy Guthrie, 2017 President of the Austin Board of REALTORS­®. “This normalization does not necessarily mean a weakening housing market, but a return to less aggressive market conditions.”   – ABOR Press Release, January 18th 2017

About that slowing pace. The Real Estate Center at Texas A&M (the mecca for all things Texas Real Estate) published a report saying that Austin Metro area saw home sale growth slide from 5% to 1%  and price growth from 8% to 5.9%.

However, that’s the area as whole. Digging in a bit more may surprise you.

According to data I pulled directly from the MLS, Travis County saw the year-over-year increase in number of homes sold go from 5% in 2015 to 1.1% in 2016 and the growth in average price per home slowed from a rate 8% to 5.5%.  Austin City Limits took an even more interesting turn moving from 2.1% growth in units sold in 2015 to a 1% reduction in 2016; and the growth in average price per home dropped from 8% in 2015 to 4.2% in 2016.

Austin MSA area Market comparisons

(click graphic to expand)

To be fair, our market has been outpacing itself for quite sometime. I’ve often compared the market to car speeding at 80mph in a 55mph zone and to continue that metaphor, the metro area is still pacing at about 65mph.

Further, for the past few years most economists have agreed that the 8-10% appreciation rate we’ve seen the past few years was not sustainable and in fact, most argued that we’d like to see that drop to around 4.5. Well in 2016, it did and for the most part, that’s GREAT!

Let me be clear, the housing market in Central Texas, the local metro area and Austin looks quite healthy moving forward. If you are considering buying or selling, there is opportunity abound and I want to help you find it. Let me know if our team can be of assistance and let us help you take advantage of what is sure to be another stellar year in 2017!

<check out our 2017 preview and the stories we’ll be following>

For Buyers: Saved By The Bell

FOR BUYERS: SAVED BY THE BELL 

You may have heard the rumors that spring is the best time to buy a home. But if everyone is abiding by that advice, what does that mean for you? Sometimes it helps to go against the current and do things on your own timeline. Here are some compelling reasons why you may want to wait until after the school bell rings to start shopping around for a new home. Winter spring, summer, or fall, all you have to do is call and I will make sure that I find you your dream home. I look forward to working with you!

4 Reasons to Buy a Home After School Starts by Deborah Kearns. © 2016 NerdWallet, Inc. All Rights Reserved.