Category Archives: Home Buying

The Heat is On

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It’s hot out there and I’m not just talking about the weather.  Consistently low interest rates coupled with increases in rent payments have led more buyers to enter the Austin housing market. The main factor that limits a tenant from being a homeowner is the down payment.   There is not always a big difference between a monthly rent payment and a mortgage payment.   So, with some money in their pocket,  I am seeing more and more first time home buyers enter the Austin real estate market who were happy to be tenants 2 years ago.

Austin Real Estate Market

Low interest rates have given people buying power and motivation to be homeowners.  The influx of first time home buyers purchasing lower priced homes has led to very low inventory.   It is the low inventory that has driven Austin home sales into a seller’s market and as a result of that – prices have increased in all price points.

Austin Real Estate Home Seach
Buyers and Sellers need to tread very carefully over the next two months as market data catches up with the shift into a seller’s market.  Multiple offers are being driven by lack of inventory.  Lack of inventory is leading buyers to offer more than list price.  List price and even over list price is leading properties to not appraise because appraisals are based on sold comparables and sales history have not caught to today’s prices.  This will settle out in a couple of months, as the sales history starts to reflect today’s market.  If the house does not appraise though, a buyer is not going to get a loan.

Buying an Austin Home

Buyers are not looking at things with the same set of eyes they were years ago.  Buyers are now recessionistas.  They understand this may not be the market for a deal, but they do care.  That means seller’s still need to show pride of ownership.  The house should still be spotless, the yard should still be mowed and all systems should still be maintained.  Sellers who do not show their homes in the best possible light, will find their house needs to be priced at a deal or it may not sell at all, just like any market.  Buyers don’t mind paying what a house is worth to them, but it needs to be worth it.

Get Ready…Get Set…Then Buy

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I showed a house about a week ago that had 20 back-up offers on it.  Yes, it was a foreclosure, but still that was kind of crazy.  Other Austin homes I have showed this week have gone under contract the same day they hit the market.  My advice?  Just know what your limits are in terms of what you want to spend.  Make sure you know that the estimated monthly payment is in your comfort zone and have a pre-approval in your hand from a lender.  In addition, know who you are going to call for an inspection.  There is no need to wait until you find a house to know who you are going to call.  In this market, there is no time to get pre-approved when you find a house. 

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So, what do you do when you have lost out on a few houses because they are already under contract before you get of the gate?  Don’t panic.  You’ll find the house that’s right for you, so don’t settle on something because you start to feel a little desperate.  You have to listen to your gut and not talk yourself into something.  As long as you are realistic in terms of what your buying power will get you, there is no need to settle.  Buying a house is the most expensive thing you will buy, so if it takes you an extra 3 months to find the perfect fit – take it.

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Buying a house in this market is kind of like speed dating.  You have little time to decide if the house is a good fit for you. If the house doesn’t have any of the items on your must-have’s list…then move on.  There are more fish in the sea and there are more houses too.  You don’t get married unless you’re in love and I sort of want you to be in love with the house too or at least really like it.

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Supply and Demand

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We are officially in a Seller’s market.  Typical time on the market is less than 90 days (3 months).  Prices are inching up because the demand for housing is rising in the area and the available inventory is down considerably from last year.

Search for an Austin Home
Apartment hunters are even finding it harder to find a place to rent.  Leases are typically annual whether it is an apartment, duplex or house, so expect rent to increase when it is time to re-lease.  Tenants need to always consider this when they are thinking about transitioning into becoming ‘buyers’.  With a mortgage, your monthly payment is fixed for the life of the loan.  Sure taxes go up, but you generally have an idea what you are paying.  The one thing that inhibits a tenant from becoming a buyer…is the down payment and closing costs. Closing costs can be negotiated a bit with the seller, but you do need some money to put down.

Austin Luxury Home Search
Austin was recently names the top city in the U.S. for job creation and people are moving here (1,500 per day to Texas).  If you are thinking about putting your home on the market now is the time.

Moving to Austin

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Moving to Austin? I have selected randam subdivisions in the greater Austin area and listed some current real estate market data. Average Days on Market below 3 months are considered Seller’s markets, because homes are moving quickly. Neighborhoods with homes on the market between 3 and 6 months are considered neutral. As you can see, the Austin Real Estate market is very strong. Buyers are moving to Austin and with interest rates still low…buyers are moving within Austin.

Moving to Austin?
The data below is specific to single family homes. If there is an area you want me to spotlight -please let me know.

Tarry Town (Central Austin)
Number of Active Houses on the Market: 16
Average Days on Market: 80
Median List Price: $ 797,000

Legend Oaks (Southwest Austin)
Number of Active Houses on the Market: 8
Average Days on Market: 52
Median List Price: $ 291,725

Plum Creek (Kyle)
Number of Active Houses on the Market: 37
Average Days on Market: 41
Median List Price: $ 171,827

Great Hills (Northwest Austin)
Number of Active Houses on the Market: 25
Average Days on Market: 51
Median List Price: $ 495,126

Pemberton Heights (Central Austin)
Number of Active Houses on the Market: 6
Average Days on Market: 120
Median List Price: $ 1,687,500

Circle C Ranch (Southwest Austin)
Number of Active Houses on the Market: 22
Average Days on Market: 43
Median List Price: $ 352,400

Downtown Condos (Central Austin)
Number of Active Houses on the Market: 102
Average Days on Market: 82
Median List Price: $ 455,500

Travis Heights (Central Austin)
Number of Active Houses on the Market: 12
Average Days on Market: 64
Median List Price: $ 694,700

Like Homes attract Like Buyers

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Low rates, low inventory and plenty of buyers have made for a busy 2012 Austin Real Estate season.  The biggest mistake a buyer can make right now is to not have a plan and thorough understanding of the home buying process.  If a home comes on the market these days, that is better than most – whether it is because of features or price, rest assured there are plenty of buyers that are going to go see it – and they all have similar wants and needs in a house.  In fact, many buyers all view the same houses, because a new one pops up in a popular subdivision or school district they want.  Like houses attract Like Buyers.  My last 2 listings had multiple offers and the last offer I wrote did as well.   Multiple offers are the norm right now, so buyers need to be prepared to act quickly when viewing a house they have interest in.

Steps to Home Ownership in Austin

Get pre-qualified or pre-approved for a loan before you ever step foot in a home – it will alleviate disappointment and an offer will not be accepted without one.

Understand the contract up front…what is option money, earnest money, a MUD, how does a back-up contract
work?  Having an understanding of the contract and the home buying process will save time and maybe a bit of frustration before you actually purchase a home.

Who are you going to call?  I have yet to call in the Ghost Busters, but knowing who you are going to call these days for an inspection is helpful.  Knowing how much hazard insurance might cost, even how much common upgrades like having a room painted, replacing carpet or installing granite might be helpful to know upfront, so that you have an idea.

Preparing before looking at homes will give the buyer a leg up on the competition and the ability to act quickly when the ideal home becomes available.

 

The 7 Year Itch

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I often get asked by buyers first starting their Austin Home Search whether they should buy a home with a master upstairs with the rest of the bedrooms or on the main level.  The answer lies in the buyer based on where he is in his own individual timeline.  Sure, there comes a point when you may not want to be on the same floor as the kids – or maybe even in-laws.  On the flip side, buyers who are just starting to plan to have kids or have young children often prefer to be on the same floor.  The boogie man typically doesn’t make a presence until about 2am, so parents often want to be nearby to deal with late night trouble shooting without being a flight of stairs away. 

Search Listings for Homes for Sale in the Austin MLS

A Custom Home Search for Austin MLS listings can be created to search for homes with the master on the first floor or upstairs only.

Sure, a master on the main level can be helpful in the later years, when the kids are gone and the steps become cumbersome.  Understand, though, as much as we think this is going to be the last house we will ever buy – this little thing called life often gets in the way, which leads to a move. 

What my clients are often concerned about when purchasing a home with the master up is how that might affect re-sale.  What is important to remember is that buyers more often than not, reflect the seller at a given moment in time and that is when they are shopping for a home.  When you are selling the buyer is going to choose your home, for the same reasons you decided to buy it.  Also, there are many neighborhoods where is master is always up, just because that was the trend at the time.  So, in certain neighborhoods – that is the design you are going to be choosing from regardless.

 
My advise – choose a house that is going to work with your lifestyle for the next 7 years.  If you stay in it longer – great, but after 7 years you generally start getting the itch to move or need to move.  If we all had crystal balls the world would be a much different place.

Go with the Flow

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I have seen many Austin properties for sale.  Lots of  things about a house can be changed including the paint, flooring, fixtures, even the kitchen cabinetry.  The one thing that can become cumbersome, expensive or nearly impossible is the floor plan.  Floor plans play a key role in determining how fast a house will sell and may ultimately affect what it will sell for.  A house needs to have a certain flow to it, which reflects how people live within it.  People often prefer the master bedroom on the main level to provide some separation and privacy.  Others like having a living area on the upper level.  A backyard door from the kitchen often makes for a better transition with pets and small children then directly into the living room.  Make no mistake, there is no perfect floor plan, everyone has slightly different routines when they enter a home and live within it. 

Routines often change too once you move in to a new house.  People think building a house is the answer, but 9 times out of 10, it is still not perfect.

Austin Properties for Sale

Some floor plans have nothing to do with how you live – but how you feel.  Feng Shui principles can be applied to floor plans as well, affecting overall peace of mind.  A house needs to have good chi, which is the energy that flows throughout a home.  For example, you never want to front door of a house to be aligned directly opposite the back door of a house, because the chi can escape too quickly.  Entering with a house with a wall in front of you also blocks the energy path through a house.   Furniture placement and plants are helpful when floor plans do not apply optimal feng shui principles, because you can use them to redirect the flow of energy.
How do you know when you have found a home with a good floor plan?  It’s really easy.  Just think about how it makes you feel on the inside.  If it makes you happy, it’s a good floor plan.