Homes and Real Estate in Austin, Texas

The Latest News on the Texas Economy

A recent report on the Central Texas Economy from Jon Hockenyos of Texas Perspectives reveals some very positive new data related to the strength of our local economy. Much attention has been focused strictly on home prices and and fluctuations in the number of homes for sale, etc., but this report focuses on the wider economic picture beyond simply home prices. Read on to learn more about the data in the report and check out the HUGE difference between the last 12 months of jobs figures in Austin compared to the national data.

The big picture:

Jobs Figures:
While the national employment growth has been in the negative column for each quarter since Q2 of 2008 (including a 4.3% drop in Q3 of 2009 and another 3.5% in Q4), the Austin employment growth shows a different story.

Every single year since 2004 Austin has added jobs, and then after (in 2009) losing the 2.3% gain made in 2008, Austin has actually added jobs again so far in 2010.

It’s a remarkable figure when considering the fact that the national economy is hardly back on track (with Goldman executives being taken to task, lenders finally acquiescing about mortgage compromises to keep people in their homes, etc.). Check out the two charts below for a snapshot:

Want to check out the full text of the extensive economic report comparing the Texas (and specifically Austin) economy to the national figures? Download the PDF here.

About Red Home Realty

Red Home Realty is a forward-thinking group of ambitious real estate professionals that look at real estate differently because the old way is broken. Traditional real estate brokers have had their fun, and now it’s our turn – We’re changing the game in Austin real estate.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

20% Cash Back Rebate – We make it easy for savvy consumers to find their new home online so when you buy with us, you get 20% cash back. It’s like one of those big bailouts you’ve heard about, except the money goes in your pocket, not to Wall Street.

It’s all about YOU – You’re not just a lead, you’re a guest in our home where you can expect Ritz-Carlton level service. We are ladies and gentleman empowering ladies and gentleman with new tools on new platforms backed by market data and facts – good, bad, or ugly.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Sales Estimates: Projects Under Construction in Downtown Austin, TX

Depending on who you ask, the Downtown Austin condo market is either a perfect exemplar of what a sustainable, timely downtown boom looks like, or it’s the beginning of a huge glut of properties that will have to be sold at fire-sale prices.

Here at Red Home Realty, we think they’re both wrong: Austin’s downtown condo market – with properties such as the Austonian, The 360 Condos, the Plaza Lofts, and the Four Seasons Hotel and Residences – is indeed an example of timely growth that can be absorbed by the market, but isn’t completely perfect either.

There have certainly been examples in which condos have undersold, have to be sold at Auction (the most recent example being The Sabine), or have been sold off-MLS for much lower than the original asking prices. The most recent data from Capital Market Research (via Austin Towers) shows that the truth is indeed somewhere in the middle: while affordable downtown units (such as the 360 Condos) sell quickly and easily, those over $1M tend to be far more difficult to unload. 

Check out the Austin Sales Estimates for Projects Under Construction chart below for the full scoop on what’s happening with the four most high-profile (and luxurious) projects currently under construction and in the pre-sales phase in Downtown Austin, 78701:

So what does all of this mean? Well first off, it’s important to note that of the 1500 units delivered to the Downtown Austin condo market since 2001, about 98% of them have been sold and have closed.

To add another number to put that figure in perspective, only 18 out of 1,554 units in downtown over the past 7 years have NOT sold. But the data above illustrates the challenges of selling numerous units for $1M+, and a number of the remaining units remain unsold. We believe that this may lead to some changes (price drops) for a number of these availabilities, perhaps putting some downward pressure on the sky-high price-per-square-foot of these recent projects.

Want to get the scoop on exactly what’s out there above $1M? Looking for a luxury condo downtown and want to work an off-market deal with the developers? Redhomerealty.com has your back – just give us a call today for more information.

About Red Home Realty

Red Home Realty is a forward-thinking group of ambitious real estate professionals that look at real estate differently because the old way is broken. Traditional real estate brokers have had their fun, and now it’s our turn – We’re changing the game in Austin real estate.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

20% Cash Back Rebate – We make it easy for savvy consumers to find their new home online so when you buy with us, you get 20% cash back. It’s like one of those big bailouts you’ve heard about, except the money goes in your pocket, not to Wall Street.

It’s all about YOU – You’re not just a lead, you’re a guest in our home where you can expect Ritz-Carlton level service. We are ladies and gentleman empowering ladies and gentleman with new tools on new platforms backed by market data and facts – good, bad, or ugly.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

How to Appeal Your Travis County Tax Appraisal
This is the time of year for taxes. Filing taxes, worrying about taxes, and perhaps most importantly to Austin residents – receiving your property valuation by the Travis County Appraisal District (most should be received on May 1st).

It shouldn’t come as a surprise that many will find their valuation to have increased over last year – the average rose from about $282K to around $295K from 2008 to 2009, and this year promises more than the same.

According to a recent article, Travis County has experienced another 5% increase in the value of Austin homes and Austin condos over the 2009 levels. Translation?  The county will be asking for more tax money from homeowners yet again. Good news is, you don’t have to take this bad news lying down: you have until May 31st to protest your new tax appraisal!  Want the magic formula? The steps are…..

(download the PDF using the link below)
Protest Form Travis County Taxes TCAD Austin, TX

The Process
First off, a clarification: the tax-assessed value of your home is what the tax appraisal office believes your Austin home or Austin condo is worth, NOT the actual market value of your home. In almost all cases in the city of Austin, owner’s tax appraisal amount is lower (sometimes significantly lower) than the actual market value of their property.

Since Travis County Appraisal District (TCAD) doesn’t perform actual market comparable or evaluations on all properties, their number is based on more general data such as it’s location and general characteristics. If you’re one of the lucky ones who’s appraisal comes back below the actual value of your home, then good news – less taxes to pay! But if comes back higher than you feel the condition, features, size, and location of your property warrants, then you can protest (unless of course, you like paying higher taxes?).

The process consists of a few simple steps:

1. File your protest form (PDF link above) – you can either hand write or type up this document and fax or mail it to the address on the form. Make sure you include the property address, clearly identify yourself as the homeowner, and indicate that you’re not willing to accept the decision made by the appraisal district for your home or condo.
2. Wait to be contact by TCAD, and then they’ll schedule a informal hearing in which you can present your case for why you feel that the property was over-valued. Don’t hold your breathe, it can take a couple months for this.
3. Get prepared. You’ll want to have the following evidence to make a strong case:CMA (comparable market analysis), documentation of your home’s condition (foundation or plumbing issues, etc. – bring photos or bids if you have them), and anything else that you feel will affect the value of your home. Some homeowners have even brought in maps (such as a printout from Google Maps) to prove that their property is in a bad location, such as on a very busy intersection. And lastly, bring a copy of your HUD statement if you recently bought your house or condo, and the purchase price of your home was lower than your appraised value.
4. Go to the meeting, and every so kindly state your case. Remember: you’re only protesting your tax appraisal, not the tax rate or how your tax dollars are being used. Be polite and courteous, bring copies of all your supporting documents so that you can just leave them with the county, and make sure you’re clear and concise about why you feel your home was overvalued. You don’t need to hire an attorney, you just need to think like one.  Go for it, this is your Law and Order moment!

You can contact TCAD directly using their website or call them up at 512.834.9138.  If you’re looking for a CMA (comparable market analysis), just give me a call or shoot me an email.

About Red Home Realty

Red Home Realty is a forward-thinking group of ambitious real estate professionals that look at real estate differently because the old way is broken. Traditional real estate brokers have had their fun, and now it’s our turn – We’re changing the game in Austin real estate.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

20% Cash Back Rebate – We make it easy for savvy consumers to find their new home online so when you buy with us, you get 20% cash back. It’s like one of those big bailouts you’ve heard about, except the money goes in your pocket, not to Wall Street.

It’s all about YOU – You’re not just a lead, you’re a guest in our home where you can expect Ritz-Carlton level service. We are ladies and gentleman empowering ladies and gentleman with new tools on new platforms backed by market data and facts – good, bad, or ugly.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Not buying a house before April 30, 2010? You’re either stupid or broke!

It’s not exactly a secret that there are lots of great reasons to purchase a home or condo in Austin, Texas in ANY market conditions (well not any, but you know what I mean). Austin offers steady appreciation, a solid local job market, a growing economy, and home prices that are affordable in comparison to other desirable American cities. But an article in Business Week perfectly articulates the increasingly hard-to-ignore fact that at this point NOT buying a house should only be an option for the broke or the foolish.

The Reasons

Interest rates are at a historic low and it won’t be too long before that trend may move in the opposite direction. Been stalling because you think you’ve got plenty of time to take advantage of that $8K tax credit everyone’s been talking about? Been waiting because you think rates may drop lower or that it’s not a buyer’s market? Well read on and discover some of the top reasons why the time is now to buy that Austin home or Austin condo you’ve been dreaming of.

Why you should buy….NOW!
It’s obvious to anyone that follows the interest rate that it’s been dropping like a stone, and it doesn’t take an economist to realize that the current 5% rate is remarkable considering we’ve spent the last nine years (until very recently) hovering between 6% and 7%.

But what lessons can be learned from the historic trends and the change in the numbers in recent years?

1. For one, rates have a lot more room to move upward than downward: in the past 30 years the range is enormous (7% to about 18%). The norm was 9% as recently as the late 1970s, it was 10% in the 80s through the early 90s, and it was between 7% and 8% during much of the 1990s.
2. Second, the last time that long-term trends saw such a reversal from low to high it took about 20 years (from about 1970 to the early 90s) for the rate to come back to where it was before.
3. Lastly, the real financial impact that the rate has on the cost of purchasing a paying off a home cannot be understated: every quarter point change in the rate saves about $6,000 for every $100,000 borrowed over the course of the loan. With average assumptions for the typical first time home buyer, that means a savings of about $12,000 over the life of the loan for EACH 1/4 POINT! or, to put it another way, about $50,000 for each point in interest rate change

To sum it all up, the top three reasons to stop stalling and purchase a new home or condo in Austin, TX are:

• Historically low interest rates (around 5% and sometimes even lower)
• Reasonable home prices even in a strong local market such as Austin, TX
• The quickly expiring $8,000 (or $6,500) tax credit for new buyers – April 30, 2010.

So what are you waiting for? Start searching EVERY listing on Austin MLS here.  Want me to do the searching for you? No problem, just give me a ring.

Red Home Realty is a forward-thinking group of ambitious real estate professionals that look at real estate differently because the old way is broken. Traditional real estate brokers have had their fun, and now it’s our turn – We’re changing the game in Austin real estate.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Where’s the recession in Austin, Texas?
We came across another interesting story about Austin, TX that we just had to share – in addition to our strong job and real estate markets, it looks like Austinites are leading the pack in another way: we spent more than any other city in the country in 2009!

And not just during major tourist events such as our recent SXSW festival, but all year round. That’s right – we LOVE to spend in Austin. We even have a Ferarri dealership in Austin now! Read on to learn more about this (not so) surprising trend in the capital of the American south.

We’re still spending like it’s 1995

You’d think that, even amid general economic uncertainty, that the biggest spenders would be in the glamour cities such as New York City of Los Angeles that are known for high-culture, shopping, celebrities, and more. But in 2009, when the average American household spend about $37K, the average household in Austin spent a little more than $67K.This excludes mortgage payments or rent, and is more than 77% higher than the national average!Not only is this the highest yearly average in the United States, but when you break it down it gets even more surprising: for example we spent 83% more (about $15K) on shopping than the average household did in New York City!

Cities like Austin – and also like Raleigh, NC and Scottsdale, AZ – are weathering the storm far better than many others because they have strong and vibrant local economies and attract the so-called “creative class” that’s interested in cultural diversity, technological innovation, and overall quality of life. Cities like Toledo and Detroit were the lowest in the country (with Detroit residents spending just $16K per year for the average household), largely as a function of their weak local housing markets and poor job markets.

Even with the national economy in distress, Austin is constantly breaking ground on new projects and offering more ways for its residents to consume, including developments such as The Domain (where designer boutiques and high-end retail abounds) and the revitalized 2nd Street District, where downtown residents and visitors can stroll the huge sidewalks and browse high-end boutiques and enjoy some fine dining or wine.

What does all of this mean for buyers and sellers in Austin? It echoes what most people who watch our local market closely will tell you: the current recession offers even more evidence for the long-term viability of investing in a city as vibrant, popular, and economically resilient as Austin, TX.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Texas Lending Increases
Recently we’ve written a lot about the ways in which Texas – Austin specifically – has been bucking the national trends and showing remarkable resilience during this economic recession. In terms of recovering from the economic downtown, Austin has fared better than anybody, and Austinities also spent more amid recession than any other city in the United States in 2009. And now thanks to a recent report from the Austin Business Journal, we can add another interesting distinction to our list: lending by Texas banks actually increased in 2009 by more than $15B over the 2008 totals.

According to the FDIC, the 629 banks in Texas reported about $247 billion in loans and leases versus the $233 billion during 2008. Nationally the story is far different: loan and lease balances declined from about $7.8 trillion in 2008 to about $7.2 trillion in 2009.

On a national level the decrease can be attributed not just to the general tightening of credit markets but specifically to the fact that new federal requirements mandate that banks keep more cash in reserves than was previously required.

In Texas the increase is most likely attributable to business expansion in the state, which has also experienced strong recovery in the job market, strong local real estate markets, and continued population growth despite the recession.

The article also points out that much of the increased lending activity is the result of businesses choosing to come to Texas after being turned away by the big national players. The state continues to offer business sector diversity, well-functioning banking regulations, and vibrant local economies.

What does this all mean for those looking to buy in Austin? In addition to the unparalleled lifestyle advantages, proven appreciation, and healthy resale market in Austin, TX, the positive employment picture and the fact that our economy is recovering faster than any other in the country means Austin’s not just the place to be right now, but the place to be for years to come.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Understanding AISD School Rankings
Imagine for a moment that you’re a family moving to Austin and trying to figure out where to buy your first Austin home. Or that you are a young couple relocating away from downtown Austin condo and trying to find a family-friendly area and purchase a larger home. In either case you’re almost certainly going to be considering a very important factor for many people in determining where they buy: the quality of the local schools.

When it comes to school rankings and understanding which Austin schools will be the best fit for your family, it can be difficult to figure out. The recently released schools ranking report below offers a letter ranking for each of the AISD school, ranging from E (excellent), to R (recognized), to A (acceptable), to L (unacceptable performance). The schools included are AISD (the Austin Independent School District) that have at least one TAKS test result to report for the years in question, and other factors such as the dropout rate or completion rates are NOT considered in the ranking: according to the report “TAKS results and only TAKS results are required” to receive one of the four rankings. In addition to the school’s individual rating, the district is also given a rating, and cannot receive an E or R ranking if it has any L (academically unacceptable) campuses. So what are the requirements for TAKS performance to get a particular rating? Check out the table below for the complete requirements. What does all this mean to you, a buyer in Austin, TX? At Red Home Realty, we give our clients two pieces of advice related to school ratings:

1. It’s about more than just the letter ranking, because the ranking is based on a specific, inflexible set of criteria. To really understand the school’s performance, check out the full report (which includes dropout rates, diversity, completion rate, and more), not just the letter grade.

2. When choosing a neighborhood in which to purchase an Austin home, remember that the quality of schools is a great factor to consider even if you don’t have children, because the most in-demand schools create lasting, stable demand on the resale market for their neighborhoods.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Breaking News: Effective today, the new home buyer tax credit that was previously $8,000 has been increased to $18,000 through the end of April!

You’ve been trying to figure out how best to purchase your dream Austin home or Austin condo before the April 31st deadline, but you’ve also been busy at work, or worried about your daughter’s piano recital, or freaking out about that new boy you met on business in Topeka last week. But the days of waiting around are over, because you wont’ want to wait any more after you hear this: effective today, the new home buyer tax credit that was previously $8,000 has been increased to $18,000 through the end of April!

This is incredible news for buyers who have been on the fence about whether or not to make their dream of purchasing a new home a reality this month. There’s NEVER been a better time to buy your first home or condo in Austin, TX, and you can even get an additional $10K up to $16,500 as a move-up buyer! That’s right – get paid $16,500 to move up to a nicer home!

Don’t believe it? Does it all seem too good to be true? Just Topkea it.   Shoot me an email or give me a ring to get started.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

Ready for another Downtown boom?
It seems like every week last year there was an announcement of a new high-profile downtown Austin condo development, and just as quickly as some were built others faded away. But some, such as the Austonian, the 360 Condos, and smaller projects such as the Plaza Lofts are proud reminders of the strength of the Austin real estate market.

Well now that downtown Austin seems to have filled up with condo projects, and now that our economy is making a remarkable recovery from the recession, it’s once again time for developers to start take the plunge. Thanks to Austin Towers for the detailed reports, you da man!

The Aquaterra Condos
These were originally supposed to be 163 units across 20 floors on Barton Springs Rd (210 Barton Springs), but were one of the first major cancellations announced a few years back. Not the architects have gone back to the drawing board to try and figure out a way to update the project to be more competitive in the current marketplace. Though no funding has been lined up as of yet it seems likely that this one will go through in the next few years.

7Rio Condos
This project was originally slated for completion in 2009 but got stalled as the plans never materialized. The original plan was a 34-floor condo project with 160 units with a price tag of about $50 million, and though the previous plans feel through it’s not being actively rethought. The project would be located at 7th and Rio Grande at the current site of Ranch 616 restaurant, and the restaurant would be incorporated into the building. The neighborhood association seems to be on board at this point and the developer is already in good with the Austin scene having completed two previous projects in town.

21C Apartments
This is a big one. What the developers are trying to find funding for is a 31-story 350 unit apartment tower at the corner of Red River at Cesear Chavez. The rental rates would be extremely affordable (about $1.50 per square foot) meaning you could potential rent a 700 square foot 1/1 for about $1000 per month. The developers intend to have 70% of the building be 1/1 units and up to 10% of the units dedicated for affordable housing with controlled rent on the lower floors. There are also plans for a second and third tower containing a 200 story hotel, spa, and restaurant and condo units, respectively, but these plans are far more up-in-the-air given the current lending climate and real estate market.

Other Austin Texas Downtown Condo Projects
In addition to these major projects there are numerous other in the works included office buildings (more than 120,000 square foot Class A space at 800 W. 6th Street), office+condo combination (Block 51 which is in development and will have more details later this year), and more. To learn more about these or any other downtown Austin condo projects or anything else in the 78701, just shoot me an email by clicking here.

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.

2009 Market Summary: Austin is Ahead of the Pack
Now that the data is all in from 2009 we can look back and assess how Austin has performed in relation to the rest of the country. More important, we can look at Austin specifically and examine what really happened over the past year and what it might mean for buyers and sellers as 2010 continues.

Looking at the data summary for the Austin real estate market for last year, a few key trends emerge. First, it’s important to note that in a climate of national housing crisis and in which loans tend to be more difficult to get than at any time in recent memory, Austin has weathered the storm. The average and median list home prices and sold home prices are down by only a small margin (1.3-3%). Taken on its own this might seem like a troublesome figure, but considering that the number of sold listings dropped by about 7%, it’s actually a rather positive sign: even though fewer people are buying homes, the prices have remained surprisingly strong despite the drop in demand. Even in a time when many people are choosing to rent or can’t qualify for loans, Austin homes are desirable enough that the home prices saw now substantial decline. Second, the time on the market for homes in Austin offers two key lessons: inexpensive homes in the Austin area are in HUGE demand, and even more expensive homes are selling far faster in Austin (and for a higher percentage of their original listing price) than in most places in the country. What does this mean for those buying property in Austin? It means not having to worry about the long-term viability of Austin, TX and about sustained demand for property in Austin, because it’s obvious that even amid economic turmoil there is no shortage of interest in buying property here. Austin’s income has grown by about 35% in the past decade alone. beyond that, the jobs and local economic picture suggest nothing but additional growth in Austin’s future! Lastly, these numbers must be viewed in the context of a difficult loan climate. To see only minor drops in the listing and sales prices, and virtually no change whatsoever in the percent of the list price obtained at sale, is all the more impressive when considering the tight credit markets last year. But this year, with the $8K tax credit having been extended through April and many attractive FHA financing programs available, the market is set to rally: interest rates are currently in the 5% range, with many buyers obtaining 30-year fixed loans as low as 4.8% or 4.9%, even with less than 20% down! Learn more about the changes to the FHA guidelines and FHA programs here.

Another interesting point: It’s no secret that Austin has one of the most resilient local economies in the country and that Texas in general has experienced far less of the national economic downtown than other states such as California, Nevada, or Florida. But what may surprise even the biggest fans of Austin, TX is just how well the numbers bear out the notion that Austin is perhaps the best place to own property in the US. The most recent Brookings Institution report (discussed by RECON here) details the fact that austin has the TOP Gross Metropolitan Product (GMP) in the United States. The average US metro area saw a 2.4% decline in their GMP from the end of fiscal 2008 until now, but in Austin we expanded by 2%! And one of the coolest things about our market is that people tend to live within their means and the average home price matches up nicely to the average income – just check out the image below:

We’re Tech Nerds - While some Austin Realtors are struggling to sync their Blackberry, we live and breathe technology. From our powerful Austin Home Search tool for buyers to our online and social media marketing for sellers, we use technology and common sense to connect with the market.

Connect with us at rojorealestate.com, or learn about the Austin market on our company blog. You’ve got questions – now you have help.