Real estate auctions have become a popular method for developers to liquidate their inventory on completed condo projects in Austin.   Since May, there have been three major auctions at Brazos Place, Bel Air and the Sage Condos.  All three auctions have been highly attended with the winning bids coming in around 25% to 40% below the previously listed prices.  I recently attended the Bel Air auction with some clients who purchased a great unit at a great price.  There are rumors of more to come, so before you run off to the next auction here are few things to know. 

• Preview/Prequalify - Generally these auctions will be advertised for at least three to four weeks prior to the auction date with the auction company setting up an office on site. Go to the auction information office and preview the units for sale. Pick out your top three to five units, as you may not get your favorite at the auction. While most people are in favor of a good deal, you also need to determine if this is a place you would enjoy living. If you are planning on financing the purchase, be sure to prequalify with the seller’s preferred lender to make sure that you can obtain the type of financing you desire.
• Due Diligence - The auction office should have copies of all the relevant info regarding the purchase and ownership of the units. Review the purchase agreement, title commitment, condominium information sheet and any other property owner’s association documents. Some good questions to ask are: What are the HOA dues? What do the HOA dues cover? Are the units being sold “as-is”, or will the seller make minor repairs prior to closing and provide a builder’s warranty? Does the seller have an unpublished reserve price?
• Attending the Auction - Show up early and bring the required deposit checks. Review your list of favorite units and write down you top price for each. A buyer’s premium will be added to the winning bid amount. This can range from four to ten percent, so be sure to include this figure in setting your limits. Prior to the auction, the auction company will announce the order in which the units will be auctioned off. Once the bidding begins, watch for the first few units (unless these are one of your favorites) and get a feel the number of actual bidders and the winning bid amounts. Start bidding and stick to your limits, and remember if you are the winning bidder you will be signing a purchase contract. 

Interested in bidding on a condo? Call or email me for more information! 512-497-9252 and joe@jhresidential.com.

I have buyer’s remorse often enough that I am convinced some stores are secretly tracking my returns only to one day say, “You are no longer allowed to shop here.” Embarrassing but true. Shoes are easy to return. A home, however, is not. With the deadline for the tax credit to new homebuyers around the corner, we want to encourage our first time homebuying clients to take advantage of it, but not at the expense of buying a home they won’t love.

HOWEVER, if you are buying a house to take advantage of the first time homebuyer tax credit, TIME IS RUNNING OUT! Please read our HOME BUYING GUIDE for a step by step run down of home ownership. As you will see, the process from contract to close takes AT LEAST 3-4 weeks and this is only when there are no glitches. So, to be safe, we recommend that first time home buyers have an accepted contract on a house by October 15th.

If you can’t find that perfect house for you by then, ask yourself these questions: 

• Will I be priced out of what I would like without the tax credit?
• Will the $8,000 save me enough on my payment so I can use my cash to update a home I like into a home I love?
• Are my expectations realistic?
• Will I have buyer’s remorse if I DON”T buy now or will I be relieved that I waited?

While there are several bills in the house trying to extend the tax bill, all have been sitting in committee and since government isn’t known for speed, I wouldn’t put my hope in an extension. If you ARE planning on using the tax credit, it is time to get serious about your homesearch. If we have not already set your personal website up for you, call us at 512-497-9252.

Joe just compiled April’s data (May’s won’t be out until next week). There is a lot of talk about the “Austin” market, but every neighborhood differs. Let us know any comments or questions you may have regarding the numbers.

Recently, I read an article in Forbes that implies how Texas could benefit from California’s bust. The Golden State’s top income tax rate is 9.3% and kicks in at a $47,056 income level a year. Compare that to Texas’ no state income tax. California now leads the US in number of people exiting the state. How does this help Austin? Austin has been a long time desired place to live for former Californians both for its sunny weather and laid back attitude (and possibly its political attitude). With no state income tax, a competitive job market, and affordable homes (from a Californian’s perspective especially), Austin is well positioned to benefit from the bankruptcy of other states. Not that we are happy to profit from a loss, but we do extend a hearty Texas welcome to those who are discovering our sunshine. We love to help people moving to Austin. This is one of our specialities and greatest joys as realtors!

First time homebuyers have been calling lately to ask more about “Obama’s” tax credit. We are seeing anecdotal evidence that this incentive is getting buyers off the sidelines. I asked our preferred mortgage lender, Rich Krafve of Austin Mortgage Group, to break it down for us:

The 2009 Enhanced Tax Credit Provides a Fantastic Opportunity for First Time Home Buyers to Purchase the Home of Their Dreams

In their efforts to stimulate the economy and bring back the housing market, Congress has passed legislation that provides a tax credit up to $8,000 for first-time home buyers purchasing a primary residence.

HOWEVER……………………

The clock is ticking for buyers who want to take advantage of this opportunity as only homes purchased on or after January 1, 2009 thru November 30, 2009 are eligible.

This tax credit is different than the tax credit of 2008 in that the new tax credit does not have to be repaid.

Highlights of the 2009 Homebuyer Tax Credit:

· The tax credit is for first-time home buyers only. A first time home buyer is a buyer who has not owned a primary residence for the three year period leading up to the purchase.

· The tax credit is determined by taking 10 percent of the purchase price and it is capped at a maximum of $8,000.

· The tax credit does not have to be repaid if the homebuyer stays in the residence for at least three years.

· Eligible buyers include single tax payers with incomes up to $75,000 and married folks with incomes not to exceed $150,000

· The tax credit is eligible for homes purchased from January 1, 2009 thru November 31, 2009.

· Eligible properties that will qualify as a primary residence include single family residences, condos, townhomes, manufactured homes and even houseboats.

No pie for you if you already own your home. But everyone will benefit from more movement in the market.

Spring is my favorite time to hit outdoor happy hours. One of the things I love about being a realtor in Austin is that it is my job to know Austin better than anyone! Happy hours are seriously one of my favorite things. DO YOU HAVE A FAVORITE PLACE IN YOUR HOOD? LET ME KNOW! Why has no one told me about the Paggi House happy hour before? This is the PERFECT place for Spring drinks– the outdoor seating is cozy, the trees provide the perfect amount of shade and sun, and the view is awesome. But happy hours are all about the deals! This happy hour has at least 10-15 drinks that are HALF OFF (from cucumber martinis to pinot noirs) and many appetizers are HALF OFF! Let’s go!

One of my good friends recently lost his job and another had a significant salary cut. Austin, the great city that we live in, is not immune to our national economy. I am often reminded by the scripture, “Do not be anxious about anything… but with thanksgiving present your requests to God”. I may not know the future, but I know Who holds it! Along with current market data, I have also included a Statesman article below and the promised after picture of my junk drawer that Amy Hadley helped me to organize! 

There are a few conditions that econominists look at when projecting what the housing market will look like in Austin for 2009. Austin’s unique recent history has positioned it to weather the storm better than many other areas in the United States.  During the early 2000’s, when many parts of the country were experiencing an inflated boom, Austin suffered the dot com bust. Housing basically did not appreciate during that time period and when prices did begin to appreciate, it was at a far slower rate than other areas of the country. This, along with a steady population and employment growth, curbed the nose dive that many others states have experienced. 

How is your home affected by the current market? This depends on location, and price. The most recent housing numbers in Austin do reveal a significant slow down in certain local markets, while other areas have still seen a minor increase in average sales price.

Selling a home? The most impacted markets are the million  plus homes where inventory is at a whapping 30 plus months. Homes that are 350K and below, with close proximity to downtown, are being less impacted as first time home buyers, encouraged by interest rates below 5%, are getting off the sidelines. These buyers are also not impacted by having to wait for their current home to sell.

Buying a home? With increased inventories across the map, deals are out there, but you often don’t know what sort of deal until you submit an offer. Some sellers hold stubbornly to price while others are in more dire situations. Even with this current market, we have had multiple offer situations this past month on homes under 300K.

Here is a recent breakdown of market activity by  price range along with the months of inventory based on a three month lag of sales volume. Numbers are taken from Austin Multiple Listing Service: 

Recovery is not expected until mid to late 2009 or early 2010. I have included a recent article from the Statesman. If you have questions about how to make your home more marketable in the current market or how to find a deal, email us at joe@jhresidential.com

 Experts’ forecasts grim but not dire, Statesman, 1/16/09, Kirk Ladendorf

Economist Angelos Angelou on Thursday painted a picture of Austin in 2009 that doesn’t look pretty: anemic job growth, falling average wages and retail sales, and sharply rising vacancy rates for commercial real estate and apartments.It was one of the gloomiest Austin forecasts that Angelou has given in 25 years.

But, bad as it is, he said that Austin will look good this year compared with the rest of the country.  “2009 will be one of the toughest years that Austin has experienced,” Angelou said. But “we are going to weather the storm better than many places around the country.”

Other economists share his viewpoint that Austin and Texas will escape the worst of the recession. “We can’t really hide from the vicissitudes of a severe recession,” said Bud Weinstein, director of the Center for Economic Development at the University of North Texas.

But “I don’t think it is going to be as bad here as in other parts of the country,” Weinstein said. “We didn’t have the same excesses. We didn’t have the housing bubble. And, until recently, we were insulated by rising energy prices.” The U.S. as a whole lost 2.6 million jobs last year, a drop of about 2 percent. The Austin metro area, by contrast, added 19,000 jobs last year for a growth rate of 2.5 percent.

For 2009, it won’t take much to do better than the nation, which is in a deep downturn. Austin employers will create 2,100 jobs this year - paltry by historic standards - for a growth rate of less than 0.3 percent, Angelou forecast. But that prediction depends on the passage of a federal economic stimulus program. “If the stimulus package actually works, then we will see some job growth,” he said. “Otherwise, we will see negative growth.” Conditions will improve in 2010, when Austin adds 11,000 jobs, for a growth rate of 1.4 percent, he said.  

Retail sales will dip less than 1 percent this year to $23.8 billion before rebounding to $24.6 billion in 2010, Angelou estimates. The real estate market is weakening, Angelou said, forecasting sharp increases in vacancy rates for office, manufacturing and retail space. He expects 23 percent of office space to be empty at the end of the year, up from 19 percent now. Commercial and apartment rents are predicted to drop as well, and Angelou said he is pessimistic about downtown condominium sales. 

New housing starts will drop so sharply in the next two years, he said, that Austin could find itself with a single-family housing shortage in the next few years. “There are a lot of cushions for Austin’s economy” that shield it from the worst of the downturn, Angelou said. “Some of its strength is that continued population growth keeps injecting money into the economy.” 

Angelou said Austin needs to redouble its effort to recruit new employers in renewable energy, data centers, creative media including video games, software development, health care and biotechnology. Austin and Texas already are leaders in some areas of renewable energy, but the city and the state might have to bolster their incentives to compete effectively with other states that also want to lure new energy companies.

Waco economist Ray Perryman, who presented a five-year forecast in Austin this week, said Texas will add more than 1 million jobs by 2013, far surpassing the nation as a whole. The Austin area, he said, will add more than 80,000 jobs in the same period.

In past years, Angelou has drawn a paying crowd of several hundred people to the Austin Convention Center ballroom for his forecast. This year, the event was in a smaller room, with about 10 fewer tables. Some companies said they did not buy tables because of the weak economy. Chart adapted from crosslandteam.com

Brilliant Amy Hadley brought a muffin tin to help organize the drawer! I am proud to say I no longer have a junk drawer in my kitchen!

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Amy Hadley, home organizer, offered the following tips for junk drawer clean up. Email her if you want help at amy@amyhadley.com :