SellAustinTexas

Night Skyline

Austin’s excellent quality of life, strong economy and high employment rates made it a top choice among American cities in several recent studies and best of lists for 2011.  Here’s a quick re-cap of some of the bigger accolades as compiled by the Austin Business Journal:

•In July, Forbes and the Praxis Strategy Group named Austin America’s No. 1 “boom town.”

•Earlier this month, Austin was ranked by the Milken Institute as the fourth best-performing city in the U.S.

•Austin was ranked this month as the top city for the highest job levels in a decade but Forbes magazine cited a 19 percent drop in high-tech jobs over the past decade when it ranked Austin No. 32 on a list of best cities for tech jobs.

•In September, Austin snagged fifth on a list of U.S. cities with the most healthy employment outlooks.

•The Brookings Institution named Austin among the best green job generators in its “Sizing the Clean Economy: A National and Regional Green Jobs Assessment” report.

•Ajilon Professional Staffing said Austin has the second best jobs market in the U.S. but Forbes ranked the Capital City No. 3 for best jobs market in its January report.

•Austin leads the nation for having the most favorable conditions for small businesses, an April report said.

•Businessweek listed Austin among the best places to live, Business Review USA chose Austin as one of the eight best places to live and work in the U.S., and RelocateAmerica named the Capital City as one of the 100 finalists in its 14th annual best places to live contest.

For a more expanded list, read the full article here.

Parenting magazine recently named Austin the #2 city for families right behind Washington, D.C.  The magazine compiled data based on quality of schools, affordability of homes, strong job market, parkland space and cultural activities.  The article noted our city’s 27,000 acres of parkland(!), abundance of pools to keep us cool, Town Lake, great schools and many pediatricians.  It also mentions the many year round festivals in Austin and, most importantly, the many innovative companies who make Austin a progressive city.  Other cities include Honolulu, Omaha, Seattle and Boston.

It’s March in Austin Texas, we have sprung forward, seen the last of winter’s chill and we prepare for over 200,000 internet enthusiasts, film buffs and music enthusiasts to visit our fair city for the SXSW Music Film and Interactive Festival.  We welcome not only the fans, but major film and television personalities, politicians and world renown musicians such as Jake Gyllenhaal, Al Franken, Kanye West, The Foo Fighters and many, many more.

There are even events for those of us who would prefer to avoid the crowds downtown, but still want to see amazing performances. This week SXSW is featuring a stellar lineup at Auditorium Shores…kid friendly and completely free!

Thursday, March 17th,  Luke Rahtborne starts the evening off at 6:00pm, followed by Twin Shadow at 7:00 and ending with The Strokes at 8:00.

Friday, March 18th,  Suzanna Choffel kicks it off at 6, followed by Bowling for Soup then Blue October finishes it up at 8pm

Saturday, March 19th is tailor made for the whole family starting at 11am with The Groundwork Music Orchestra, Ozokidz and MarchFourth Marching Band.  The evening ends with Bright Eyes taking the stage at 7:30 (see the full schedule here)

With all the energy, amazing March weather and, let’s face it, the incredible people who live in Central Texas, it’s no wonder that after SXSW there  is a renewed interest in all things Austin, including making it a new home or even 2nd home.  You can find your Central Texas home away from home on the DMTX Realty Group website…whether it be land in Hill Country, a lakeside retreat or your Central Austin dream house.

The past year has brought a lot of adjustments to the Austin market.  Here’s a year-end rundown on stats (compiled as of 11-30-2010):

Total dollar volume of single family properties sold: $4,180,259,992 – down 1% from 2009

Average price for single family homes: $194,000 – up 3% from 2009

Single family homes sold: 16,477 – down 6% from 2009

Average days on market: 76 – down 4% from 2009

Looking at the numbers, we saw the average price rise and the average days on market go down – both signs of improvement in the market.  However, the total volume went down in both number of dollars and number of homes.   These up and down stats point to a 2010 Austin real estate market going through a period of adjustment.  It will be interesting to see how 2011 turns out.

Here’s some recent good news in terms of the economy.  According to the Brookings Institution, Austin was one of only 15 major metropolitan areas to experience job growth in all 4 quarters of 2010. Forbes ranked Austin as the 10th most affordable city in the US. It notes our strong high tech job economy.

Some first-time buyers risk losing an $8,000 tax credit if the sale and purchase of a  home is not completed by June 30, 2010.

With the June 30 deadline looming for first-time homebuyer tax credits, many homeowners struggle to close the deal, while many buyers drag their feet at the risk of losing it all.

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On Saturday, the Austin Statesman wrote about first time homebuyers taking advantage of the tax credit. The group includes many young professionals who may not have made a home purchase without the incentive, like 25 year old Helen Rodriguez, who says, “it’s the cushion that made me comfortable making this purchase at this point in my life. Without it, I don’t think I would have been comfortable buying.”

Others also include some artists and other creative entrepreneurs, like Tim and Carli Price. They had been house hunting for two years but “could never find anything in our price range that wasn’t ready for a bulldozer,” he says. But after the tax credit, they were able to find an affordable home that met or exceeded all their expectations.

Mortgage companies in Austin are reporting on how many first time buyers the credit is bringing in – about 45% of Sente Mortgage’s loans were to this group, according to Vice President Kenton Brown. “That’s a majority of the purchase activity we’re seeing now.” He says the credit is “creating a trickle-up effect,” that is, allowing home owners to sell their starter homes and move into larger ones.

“Not only does it get first-timers in the market as homebuyers,” says Don Reed, senior loan officer at Integrity Home Mortgage in Austin, “but the tax credit acts as a boost to consumer spending when they get their refund check from the IRS.”

For all the benefits of the tax credit, buyers need to be aware that the deadline is coming and action needs to happen now to take advantage of it. “Don’t dawdle — it takes at least four to five weeks to process a mortgage application and hold the closing,” the Statesman writes. Also, a bump in interest rates is looming: some experts say to expect it next summer, some say sooner. Ed Solter, president of Presidential Mortgage Co. in Austin, is expecting a 1% bump in the first quarter of 2010. Even if legislators were to pass an extension or even expansion of the tax credit, it’ll come paired with higher rates. Now is the time to start your home hunting if you also want to take advantage of these great deals.

Still thinking that house prices are going to decline further? Are you still anticipating the “deal of a lifetime” just around the corner? You’re about to be out of luck. It’s natural to look at the national economic news and think that we are going to see a further erosion in home prices but it looks like things are pointing up for Austin’s economy. We have seen a decline in high-end home prices but the average home price in Austin has remained relatively stable. The $8,000 first time home buyer tax credit is also about to run out (see the previous post). But by far the biggest reason: Interest rates are anticipated to go up and that is going to price a lot of people out of the market. Compared to the week prior to August 24, 2009, the national 30-year mortgage rate is up 4 basis points from 5.14%. Compared to three months ago, the 30-year rate is up 20 basis points from its average rate of 4.98%. Why are interest rates going up? The massive government spending has the potential to lead to long term inflation, causing interest rates to rise. Ted Jones, Senior VP and Chief Economist at Stewart Title explains it best:

“…let’s assume a loan amount today of $100,000 with a 30-year fixed-rate residential loan at 5 percent. Nationwide at the time of this writing, the average 30-year rate was 4.85 percent per Freddie Mac. Fannie Mae forecasts an average rate in all of 2009 of 5.13 percent. So the 5 percent is a reasonable assumption.

So if rates go up just 1 percent to 6 percent per year, then prices must drop at least 10 percent for that same buyer to qualify for the same monthly payment. A 1.5 percent increase in rates to 6.5 percent requires a 15 percent price decline, and a 2 percent increase necessitates a 20 percent price decline to qualify. Note: This 1 percent interest rate change to a 10 percent price change is only true when interest rates are 5 percent as they are today.”

Interest rates vs. price changes

Admittedly, at the same loan-to-value ratio, as prices decline so does the down payment. Since, however, many buyers select the price range of homes they consider buying based on their monthly payment potential, rising rates may force future buyers into less expensive homes and hence properties they find less desirable.

So, if you are waiting to buy your first home or if you are waiting to make that second home investment – don’t wait much longer! Postponing that purchase is going to price you out of the market and you are going to have to settle for something less or just wait for the next recession. Don’t get burned. Thanks to Ted Jones for letting us reprint part of his blog which can be found here.

 Forbes has just announced what many Austinites already knew: Austin, Texas is the best city to live in for affordability and opportunities. Austin landed number one on their Top 10 list of Best Bargain cities.

The list was based on five points:

- Average salary of workers (Bachelor’s Degree or higher)

- Annual unemployment statistics

- Cost of living

- Housing Opportunity Index (amount of homes sold that are affordable to family with the local median income).

Austin did well in all categories, particularly the unemployment rate, which at 5.5%, is about half the national average.

Why Austin? Austin has three main contributing features: being the state capital, a university town, and a technology industry based city. Further, Texas as a state offers many incentives for entrepreneurs and business owners; Texas is now home to many California businesses that became too expensive to operate in that state. Four other Texas metropolises are on the top ten (Houston, San Antonio, Dallas and Fort Worth).  Although, even Forbes acknowledges that it’s the charm of the city and the people in it that makes Austin such a desirable place to work and live.

View from 555 Condo

If you have been waiting to put your home on the market, here is a new piece of information to consider. If your home is within Austin city limits and over 10 years old, you may be subject to the Austin Energy Efficiency Ordinance affective June 1, 2009. This new ordinance requires homeowners to have a specially certified inspector conduct an energy audit on their home. The findings will be required to be disclosed to a potential purchaser of the home.

These audits will be very helpful to buyers and sellers in finding and fixing sometimes costly inefficiencies. The audits may; however, add to the process and length of time that it will take to put a home on the market- at least while the program is first being implemented. This just might be the motivation that you need to list your home now.