Tuesday, June 24, 2008

According to Forbes, Austin is "Recession Proof"

"3. Austin, Texas
Median home price: +6.4%
Unemployment: 3.6% (from 3.8%)
Key growth: Natural resources and construction, +5.1%; leisure and hospitality, +5.3%
One of the hippest cities in the country has one of the lowest unemployment rates. The Austin region is home to Dell, and many tech companies from Apple to Sun Microsystems also maintain a significant presence. One difference between "Silicon Hills," as some call Austin's tech sector, and Silicon Valley? In Austin, the median home price is still under $200,000."

Click here to see which other cities made the list.
Forbes announced that Austin is among a list of cities that they consider "Recession Proof". They factor in things like the stats above- Unemployment Rate, Median Home Price and different industries that make up the local work force. This is nothing but good press and Austin gets this kind of advertising on pretty much a daily basis. As I have said in previous posts, the more people that would like to live hear is what drives businesses to base their operations here and directly influences current and future home prices to increase. What a great way to build your investment. What do you think?

Friday, June 20, 2008

NORTHWEST AUSTIN HOMES: Austin named #6 in top ten cities to live and work


"Our approach this year to picking the ten best cities in which to live and work was simple: Look for places with strong economies and abundant jobs, then demand reasonable living costs and plenty of fun things to do."

Click here for complete story

Kiplinger Magazine recognized Austin as one of the top ten cities to live and work. Austin has been on plenty of "top ten" lists over the last five years or so. This absolutely helps our economy and housing market by bringing the city of Austin to the forefront of the minds of people looking to relocate as well as businesses looking to start a new division. With more businesses and people moving to Austin daily it will bring house prices up and with so many people relocating here, it is not hard to realize why our housing market is going strong. It was interesting to see other cities on the list like Provo UT, Sacramento, CA (where I grew up) and Houston. Check out the article when you get a chance.

Monday, June 16, 2008

Beware of buying a home with "no money down"

"It's still possible to buy homes with no money down. In fact, it's possible to borrow as much as 105 percent of the purchase price, leaving the buyer with more debt than the house is worth.
It might sound like a pitch from a late-night infomercial, but the offer comes from Freddie Mac and Fannie Mae, two government-chartered companies with potentially conflicting mandates to uphold prudent lending standards and make home-ownership more attainable.
Freddie Mac says its "HomePossible" mortgages can help buyers with limited credit or savings such as teachers, firefighters and members of the military."

Click here for complete article.

This is a news story from the Austin American Statesman that was published yesterday in the paper and online. Since lending issues became big news back in September of last year with the sub-prime lending fall out, I have been answering all kinds of questions about lending practices and what types of programs are still available. The lenders that I work with most often, have some really great plans available and rates have been low lately although they are rumored to rise in the somewhat near future.

This article is about how Freddie Mac and Fannie Mae have mortgage programs that allow home buyers with limited credit or savings to borrow up to 105%!!! I really don't think this is a good move for most people in this situation. Home ownership is a big responsibility. I think a homeowner should be able to save at least 3-5% for a down payment on a home. Any less than that and the buyer is putting themself at a huge risk. Lets say Buyer "a" buys a $250,000 home with 10% down. They pay $25,000 at closing and owe $225,000 on the home. Buyer "b" purchases a $250,000 with no money down. Buyer a will not only have lower monthly payments because they owe less but also because they will probably qualify for a lower interest rate. If both of these buyers needed to sell their home in 6 months to a year because of an emergency or if they are being relocated for work, Buyer "b" would be in a pickle. They will be hard pressed to sell their home for an amount that will cover their mortgage, REALTOR commissions, and closing costs. Since they didn't have savings in the first place they may not have any at that time and they would be unable to close without a loan from another source. If Buyer "a' was in that situation, they could try to sell the home for at least what they bought it for and while they would see a loss, the sale is possible because they have equity in the home.
Some lenders have programs where the lender pays the buyers closing costs to help homebuyers with limited savings. These programs usually require at least 5% down but it does end up saving the buyer some of the money they need upfront.
Definitly plan ahead when thinking about buying a home. Please contact me if you think that now is the right time for you to buy.

Friday, June 6, 2008

Round Rock man scams people looking to lease a house by posing as a Real Estate Agent

"Timothy Alonzo Nero did everything he could to convince customers he was a legitimate real estate agent, Round Rock police say.
The 25-year-old had business cards, a convincing company name — BGN Management— and two office addresses. In at least one case, he had a key to the home he was trying to rent out.
But after Nero collected $25 for an application fee and $499 for a discounted first month's rent, his potential renters found that the key he'd given them to 1008 Howell Terrace Place home didn't work, police say."

Click here for complete story

He found these people through advertising on craigslist.org. There is a lesson to be learned here. If you are working with a Real Estate agent, you can verify their identity with the Texas Real Estate Commission as well as the Austin Board of Realtors.

Tuesday, June 3, 2008

Gas prices drive up bus, rail ridership in Austin. How will it affect Real Estate?

"For the first four months of this year, Central Texans took 677,914 more trips system wide than during the same period in 2007--a 6.1 percent increase in ridership, according to data from the Capital Metropolitan Transportation Authority.
Capital Metro's Park and Ride usage is also up this year, 13.3 percent over 2007. "

Click here for complete story

It is going to be ineresting if these gas trends continue (economic indicators say they will) to see how people change the way they use public transportation here in Austin. I imagine the resale price of my Prius is probably going up not down. It will be really interesting to look back in a year or two to see how home prices are going to be effected for properties that are closer to the new commuter rail, park and ride lots, or bus stops. I think the price will rise based on making that a more desireable location (similar to living closer to downtown) This is also a time that we will see a rise in home values in areas like Northwest Austin, Cedar Park and Leander as we get closer to the opening of the NW Commuter rail. What do you think?

Monday, June 2, 2008

Austin named #2 Metro area to offer the best job opportunities for young adults.

Group No. 1 consists of the 11 major markets where more than 25 percent of all residents are 18 to 34 years old. Group No. 2 contains 14 metros where fewer than 22 percent are young adults. Here's how they match up:
-- The young markets have been experiencing population growth of 2.1 percent per year since 2000. That's seven times the growth rate of 0.3 percent for the old markets.
-- The annual rate of job growth is 1.9 percent in the young metros compared to 0.4 percent in their older counterparts.
-- Personal income is climbing at a median pace of 3.4 percent per year in the young markets. The corresponding figure is 2.8 percent on the old side.

Click here for complete article

On bizjournals.com they have writen some articles and and published charts recently based on a study of the 67 largest metro areas in the USA and Austin is ranked as the #2 city to currently offer the best job opportunities for young adults. It is based on crieria that they have set forth and you can read more of that in the article.
The meat is basically that 29% of Austinites are between the ages of 18 and 34. That is the heaviest concentration of young adults of all metro areas. Who cares? You should... especially if you are a homeowner. Some of these people own homes. Some do not. Austin has a lot of college students that lease properties while they are in school. If there are job opporunities for those students here in Austin, those students will purchase homes and continue to live in the area.
Students from the other larger metro areas will also consider Austin for its job opportunities, culure, lifestyle, and cost of living. This will have a positive affect on any homeowner or investor in the area because it creates a constan flow of young people wanting to move to the area usually from areas that are more expensive to live. What do you think?