4113 Avenue F Update

For those of you interested in the project at 4113 Avenue G in Hyde Park, Austin, Texas, the plans are available publicly:

http://www.ci.austin.tx.us/agenda/2008/downloads/d3nrd20080088.pdf

It is my opinion that objecting to this project based only on the fact that an old house that is being removed (probably torn down, possibly moved) and being replaced by a new house is against the plans for growth that keep our local economy in Austin healthy. While there are many projects in Hyde Park that don’t conform with many people’s ideas of what is appropriate in Hyde Park, we must also remember that it is a high-density, urban neighborhood now. That comes with thousands and thousands of opinionated people. One may hate a particular house and another may think that it’s the most beautiful in the neighborhood. Many love all the old bungalows complete with all their aging, others find them small and in need of a fresh coat of paint and a update to accommodate the modern family.

I am one of the few outspoken Hyde Park residents for progress. A 700 square foot bungalow that has been recovered in asbestos and needs new electrical, plumbing, and many other repairs is not an asset to the neighborhood in my opinion. When these properties are going for $300,000+, who wants to spend that kind of hard-earned money to live in a cramped home with no closet space? If you want to protect your investment in Hyde Park, I believe in supporting managed progress. Well-kept historic homes should stay, but many, especially in northern Hyde Park, are essentially crumbling track-homes. I think the neighborhood deserves to be taken care of, and that includes removing houses that have not been maintained.

We have great systems in place through the design guidelines and the Historic Preservation committees and groups. We cannot object every time someone wants to add on some much-needed space to a cramped home. And hasn’t anyone noticed that new builds have slowed dramatically? That’s because land values have gotten so high that it doesn’t make any sense to build at today’s prices. New homes can easily get up to $1,000,000. And although I think that some blocks of Hyde Park support these prices, they are few, far between, and lined with historic mansions.

When you object to any and all change, it creates a great deal of conflict. I see that conflict every day in the Hyde Park N. A. Yahoo! group and in neighbors who know that I am a resource to ask on where to go and what to do next. I’ve seen neighbors attach 50-year-residents of Hyde Park for adding on to their homes while the aggressors went home to crumbling eyesores. It’s all a matter of opinions, and like my Kindergarten teacher once told me, you have to learn respect other people’s opinions and feelings. And anyone with a Psych 101 education can tell you that aggressively approaching someone will put them on the defensive and will not get the results you are looking for.

Also, I wanted to remind everyone that the Hyde Park Neighborhood Association is a ‘Neighborhood Association’ and not a ‘Home Owner’s Association’. The difference is, a Neighborhood Association is not mandatory and can not pass and mandatory rules. The HPNA has drafted and sucessfully pushed legislation in the interest of the neighborhood, but you need only the City’s approval for any plans on your Hyde Park property. The City will approve or deny based on all local laws and codes, including some which affect Hyde Park alone.

I encourage comments and I’m sure I’ve struck a few buttons.

Sales Tax Holiday This Weekend for Energy Efficient Products

This Memorial Day will be a sales tax Holiday for energy efficient products. Think of the back-to-school tax free weekend only for your home.

Austin real estate is going to keep getting better with green choices.  “Going Green” means making environmentally conscious purchases when you need to purchase something.  Buying something because it’s green is counter-productive.

“If you’ve been thinking about finally buying those energy efficient light
bulbs, purchasing a programmable thermostat, or actually replacing the
refrigerator, dishwasher or air conditioner with a cleaner more efficient
one, memorial day weekend is the time to do it. You’ll save money, while helping to reduce energy demand and greenhouse gas emissions,” noted Lone Star Chapter Conservation Director Cyrus Reed.

But are there any downfalls? For instance, what happens to all of the old appliances when they are replaced? This ECO-Consumerism drives me nuts sometimes. While I appreciate what this piece of legislation is trying to do, I can’t see throwing out so many appliances that work for shiny new ones. How is this in the spirit of “going green”?

I say if you have an appliance that you were thinking of replacing anyway, use this tax holiday to save yourself some money while supporting the environment by making an eco-conscious choice on something you were going to purchase anyway. Don’t throw that 4-year-old dishwasher in the landfill for the upgraded model, but do replace that 30-year-old A/C unit that’s on the fritz.

Stock up on light bulbs for when your current ones burn out. If you’re going to replace working bulbs, do it only in rooms you have lit very often, perhaps your family room or study. Why toss out all of those perfectly good bulbs from the bathroom that you zip in and out of?

If you don’t have a programmable thermostat, I say go for one. I’ll make an exception here because they save so much energy!

Take advantage of this city incentive if you have been waiting to stock up on bulbs or replace a dying appliance, but remember to recycle your old appliances whenever possible and don’t bother with upgrades that don’t make sense!

And check out this link on eco-consumerism. Monbiot has expressed my concerns beautifully!

Sellers DETACH!

Although Austin isn’t seeing the horror of many other markets (like southern California), the nervousness and hesitation of Austin’s buyers still has us in a buyer’s market.  So in a buyer’s market, what should you do differently, as a seller?

One of the best things a seller can do in any market is detach from your house completely.  This is your most important strategy in a buyer’s market as well.  We know you have more than money invested in your house.  It’s been home to you in the best and worst of times, and you’ve worked hard to improve it and make it the best that it can be.  But in these times, you need to be objective and detach from the house to make it not your home, but a place someone else wants to live.

Don’t take it personally.  Any offer is good.  If you get an offer, it means you beat out your neighbors no matter how low or complicated it may be.  You may not be able to accept the offer, especially if it has a ton of strings attached, but don’t take it personally if you get a low offer.  The buyers chose your house over all the others — keep that in mind.  It could be low for a number of reasons, but it’s not because they don’t think the house is great.  Sure, they will likely make a great deal of changes, but not until it’s their home.  Many buyers who have previously been priced out of the home of their dreams are fishing for a great deal from someone who needs to move on.  You may be in this situation or you may not be, but always remember, any offer is a good offer.  Even low offers open a dialog of negotiations that can result in a sale.  You can always have your agent draft a counteroffer.

Don’t over-price thinking that it leaves you room to negotiate.  Over-pricing puts your house in a pool with other houses that are likely larger with more features so which house in the price range would you pick?  Always put yourself in the buyer’s shoes.  Sellers who over-price end up in a cycle of reductions to actually get their homes sold several headaches later.  Save yourself the stress, it’s worth it.  Price reasonably and competitively to get your house sold more quickly than the competition.  You will be making fewer payments which saves you money even if you don’t actually see the savings.

Be patient with your buyers.  Loans are tough right now and under-writers are struggling to approve many who could have received a loan for almost nothing down not too long ago.  Even pre-approved buyers can be sent through seemingly endless waits for final approval.  Your buyers want to buy a house; it’s an emotional time for them as well.  Don’t panic over financing.  Wait it out.  The deal may not work out, but financing is really out of your control as a seller.

Sellers in Austin may have had it easy a few years ago, but times have changed.  You can still sell your home if you get your house completely ready for sale, price it competitively, detach emotionally, and don’t take it all personally.

Optimism in Commercial Real Estate

Is Commercial Real Estate Investing in Austin Safe?

Headlines read “Commercial Real Estate Markets Hold Steady“, “Commercial Real Estate Loans to Weaken as Economy Slows“.  But the first quarter of 2008 showed that 6 of the 7 sectors of Commercial Real Estate are holding strong.  Returns on commercial investments are still stronger than many other options, even if they have slowed.  The cost of financing remains a concern, but long-time investors are still optimistic.  Their greatest fear is the unforeseen, but good investors don’t let that deter them.  Risk is all part of the game.

Will the HOLLYWOOD be demolished?

Hollywood isn’t all fairy tales and happy endings, in fact, the famous HOLLYWOOD sign, originally erected in 1923, is now in serious danger. The Associated Press is reporting that the land surrounding the sign is now for sale, and fears are that the land will be sold for housing.

An investment group has just put some of the surrounding hand up for sale as Los Angeles residents fear the worst. 138 acres above and to the left of the famous and historic sign that was once owned by Howard Hughes is currently for sale for $22 million. The property was purchased from Hughes’s estate in 2002 for a reported $1.7 million.

The City of Los Angeles has interest in purchasing the land, but has a legal limit of $6 million, the most recent tax appraisal.

Although the land is supposedly not that close to the HOLLYWOOD sign, a development filled with homes could seriously put the glamor of the sign in serious jeopardy. The 45-foot high letters would seriously over-shadow the average home, even in Hollywood, but rows and rows of little boxes in the letters’ shadows would certainly detract from the famous site, but one or two mansions may only look like small specs in the distance.

The fate of the Hollywood Hills is truly in the balance! Do you want to own this piece of history?

America’s Least Overpriced / Most Underpriced Cities

Forbe’s list from 2007 covers the least over-priced US cities and Austin ranks 2nd!

1. Charlotte, N.C.

Median home price: $190,600
P/E: 15th lowest
Affordability rank: 8th most affordable
Housing price trend: 8%

2. Austin

Median home price: $173,700
P/E: 12th lowest
Affordability rank: 13th most affordable
Housing price trend: 4.9

3. Raleigh, N.C.

Median home price: $213,700
P/E: 17th lowest
Affordability rank: 14th most affordable
Housing price trend: 14.5%

4. Detroit

Median home price: $151,700
P/E: 8th lowest
Affordability rank: 2nd most affordable
Housing price trend: -1%

5. St. Louis

Median home price: 147,900
P/E: 11th lowest
Affordability rank: 3rd most affordable
Housing price trend: 0.5

6. Pittsburgh

Median home price: $116,100
P/E: 3rd lowest
Affordability rank: 5th most affordable
Housing price trend: -1.8%

7. Orlando

Median home price: $272,100
P/E: Lowest
Affordability rank: 15th least affordable
Housing price trend: 3.9%

8. Philadelphia

Median home price: $230,200
P/E: 16th lowest
Affordability rank: 11th most affordable
Housing price trend: 3.3%

9. Indianapolis

Median home price: $119,300
P/E: 2nd lowest
Affordability rank: Most affordable
Housing price trend: -4%

10. El Paso

Median home price: $127,600
P/E: 12th lowest
Affordability rank: 13th most affordable
Housing price trend: 4.9%

Top 10: Most Expensive Homes in the World

Forbe’s always provides us with great rankings, this posts features the Top Ten Most Expensive Homes in the World for 2007.


#1: $165 million, Beverly Hills, Calif.
Once owned by newspaper magnate William Randolph Hearst, this expansive villa sits on six and a half acres in Beverly Hills.  A massive 75,000 square feet of living space is spread across three stories. The home boasts 29 bedrooms and 40 bathrooms.


#2: Bran Castle, $140 million, Brasov, Romania
Once inhabited by Romanian prince Vlad the Impaler, the inspiration for Count Dracula, this castle, built in 1212, sits on 20 acres.  The 17-bedroom castle rests on the top of a cliff and offers views across the countryside and surrounding mountains.


#3: $138 million, Updown Court , Windlesham, Surre
Larger than either Buckingham or Hampton Court palace, this 103-room home has 58 acres of gardens and woodlands, making it the idyllic English country home for those flush with cash.  Several ballrooms and grand entrance ways punctuate this house, which has a panic room, an indoor squash court, bowling alley, 50-seat cinema, helipads, space for eight limousines and a heated marble driveway.


#4: $135 million, Hala Ranch, Aspen, Colo.
The Starwood Ranch estate boasts a 56,000-square-foot mansion with 15 bedrooms and 16 baths.  The estate features several smaller buildings, stables, a tennis court and an indoor swimming pool.


#5: $125 million, Maison de L’Amitie, Palm Beach, Fla.
With the refurbished version–complete with ballroom, conservatory and 475 feet of oceanfront–Trump is confident the property will move (although the land this property sits on is worth more than the improvements!).  If the water is too rough on the beach, the property has a 100-foot swimming pool surrounded by gardens.


#6: $100 million, Tranquility, Lake Tahoe, Nev.
Conveniently on the tax-free Nevada side of Lake Tahoe, this 210-acre property is owned by Joel Horowitz, the cofounder of Tommy Hilfiger, who built the property from scratch.  The main house has 20,000 square feet of living space, is modeled after a northern European mountain home and has a 3,500-bottle wine cellar.


#7: $100 million Waterfront Estate, Istanbul, Turkey
Located on three-quarters of an acre directly on the Bosphorus in Istanbul, Turkey.  This residence offers more than 30,000 square feet of opulent living space in 64 rooms, which feature large windows looking to the water.


#8: Eurasia $100 million Moscow
This sizable property consists of an 11,700-square-foot manor house, two 4,000-square-foot guest houses and a 91,000-square-foot recreation center that has a pool, Turkish and Russian baths; a gym; sauna; and lounges. The property is 15 miles from the Moscow city center.


#9: $99 million Bishops Avenue, Hampstead, London
Just under the $100 million mark–depending on today’s exchange rate–the Toprak Mansion was built by Turkish entrepreneur Halis Toprak.  The 28,000-square-foot house has a double staircase and glass elevator.


#10: $75 million, Three Ponds, Bridgehampton, N.Y.
Three Ponds, which encompasses more than 60 acres of Hamptons farmland, is named for its surrounding lakes, but also features its own USGA-rated Rees Jones golf course.  Surrounding the main house are 14 gardens, a 75-foot-long swimming pool, golf pro shop, grass tennis court and a guest house.

Useful Housing Info Links

For those of you researching real estate:

Useful Housing Info Websites 

Characteristics of New Housing
Employment Trends for Metro/State Markets

Historical Facts, Figures and Trends

Home Building’s Direct Impact on the Economy

Home Price Index

Housing Market Statistics from HousingEconomics.com

Housing Starts

Housing’s Contribution to Gross State Product

In-Depth Analysis from HousingEconomics.com

Latest Home Mortgage Interest Rates

Local Economic Impact of Housing

Metro Home Building Permits

NAHB’s Housing Forecast

New and Existing Home Sales

New and Existing Single-Family Median Home Prices

U.S. Census Bureau Construction Price Indexes

These links can also be found on the Austin Real Estate News page.

Austin & The National Recession


Image credit: USA Today via Transparent Real Estate

 

Real Estate is an industry with local markets, but as a follow-up to my last post, “Austin Real Estate & The Austin Economy,” I thought I’d share a few more bits of information illustrating how Austin compares to the rest of Texas as well as the rest of the nation in this changing market. This graphic by USA Today should (of course) be taken with a grain of salt. For example, I find it surprising the Oklahoma is listed as expanding after losing GM. I do, however, think that this graphic is a strong illustration of what I keep coming back to in my blog posts about the economy and Austin’s real estate market. You can see California is completely off the charts followed by Florida, Nevada, and Arizona (Michigan has other factors as play). These are the markets I keep referring to in post after post after post. A lot of people made a LOT of money in these markets in the past 10 years during the boom in the warm coastal areas and now a lot of people are LOSING a lot of money because the boom as busted.

Texas (and more specifically, Austin) has remained strong with a steady growth rate of 2-4% during this decade. While some areas are in danger locally, the state as a whole is strong and Austin makes the top 3-5 of healthy market lists.

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So what’s all the fuss about? When some markets are in trouble, the news is spread nation-wide. The media are big business — never forget that! They make money if they can get you glued to TV news channels, newspapers, and news websites. They’re feeding you what you need to hear to tune in daily. So please, when you would like to be an educated consumer about Austin’s real estate market, keep it local and keep with the facts. I’m not against media entirely, I do think they have their place. But a truly educated consumer will check data and statistics to supplement their daily regiment of news.

Now stay tuned because in 30 minutes, after sports, weather, and entertainment news, we’ll let you know why this cute puppy could be in mortal danger.

… Just kidding.

The puppy is as safe as your real estate investments in Austin.

Austin Real Estate & The Texas Economy.

How Austin’s Real Estate Market Fits in to the National Economic Equation.

The Texas A&M Real Estate Center is a great resource for studying trends and statistics, and I will try to put their January 2008 Texas Economic Review in perspective for you and how it relates to Austin’s Real Estate Market. The Texas economy is showing the effects of the national downturn that the media keeps shoving in our faces, but not nearly as badly as you’d expect. This is a perfect example of how popular perceptions can differ from reality. Figure 1 below is from the January 2008 Texas Economic Review by Ali Anari and Mark G. Dotzour with the RECON Center. This chart shows how Texas is keeping strong against the country as a whole. Although growth rates are down, we do still have positive growth that is strong in comparison to the national average. It is also interesting that while the national average continued to decline in September through December of 2007, Texas saw an increase of growth. Proof that Texas still has a strong economy despite busts in other markets. In addition, “the state’s seasonally adjusted unemployment rate fell from 4.7 percent in December 2006 to 4.5 percent in December 2007″ according to Anari and Dotzour.

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Now, to look more locally. Statewide, we are seeing an average growth rate of 2.2% according to RECON. Austin is keeping strong at #3 for the state of Texas, which as I mentioned above is doing well relative to the national average with an growth rate in 2007 of 3.1%. Growth is great for all business, but in particular, it’s great for the Real Estate industry here in Austin. In addition to seeing an urbanization in Austin, we are also seeing growth in general. So although both the sub prime and jumbo mortgage markets are suffering right now, Austinites still have options.

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I could show you chart after chart of the strength of the growth in Austin. Instead, I will refer you to the Austin Real Estate & Economy Statistics page of my website for more and show you a chart of general economic growth:

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I’m not saying that home sales are still booming. What I will tell you is that home sales are definitely down from 2005 & 2006. However, it is important to note that we saw exceptional growth in 2005 and 2006. Those of us who have bee in the industry for a long time generally agree that late 2007 was a leveling-off period of this boom — which is good! If our market had boomed like the markets on the California and Florida coasts, our market could be busting like theirs rather than leveling off. Basically, the market spent the latter half of 2007 catching up with the prices created when Austin boomed in 2005 and especially 2006. I expect 2008 to continue this trend of leveling off, but I am also seeing an increase in buyers brave enough to turn off CNN and get back with the reality with a lesson they learned in High School Economics: Buy low, Sell high. Those who investors who sold in 2006 are standing proud and are watching for new investments as a leveling market couples with an election year to create a perfect opportunity to buy low.

Austin Real Estate Market Statistics

However, for those of you moving to a new part of town or even to a larger home, you are buying and selling in the same market. So what does this all mean to you? It means that you may not get the same price for your home you would have in 2006. Buyers are more realistic now and sellers are catching on. But you are also buying. That means that you will have the same advantages that potential buyers looking at your home have when you are looking for your new home!

So let’s say you’re moving up from a $175,000 house to a $250,000 house in today’s market. Homes are sitting on the market longer, which means that by the time you get an offer, buyers know you’ve been waiting for it and you’re already frustrated. That offer for $150,000 seems down-right offensive. But consider this, taking that $150,000 offer means you are lowering your price by less than 15%. Put on your buyer’s shoes for a moment sellers because making an offer on that $250,000 move up minus 15% means you can offer $38,000 less.

This is a very basic example and doesn’t take everything into consideration, but I hope you catch my point. For the general public, this period in our market can be good for you! You need to be ready to give your Realtor a while to sell your home, but trust me, we’re hungry too and working hard and creatively to end up with the results you need.

I also think that these challenging times will be good for our industry. Those who earned their real estate license to make a quick buck will find in this climate that they can’t. They will likely move on to other ventures leaving only the committed and best Realtors for your choosing. That in turn means our competition is stiffer and we’ll have to get better and more creative to stay in business — which is something this industry needs anyway. We can no longer get by on expertise alone (and I’ll admit, I’ve met many agents who lack even that), and technology along with amazing service that saves you time, money, and hassle is what top agents will need to have.


Digg!

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If you have any questions or would like any statistics not found in this post or my Austin statistics page, email or call (512) 771-1776.
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Aria Schoenfelt
BridgeOne Properties
Austin, Texas