July 2012 Update: Austin Market Heats Up

 

Austin was named #2 in “Top 10 Cities People Are Moving To” by Fiscal Times.  Buyers are flooding the market.  Confidence is high.   Mortgage rates are low.  2012 is proving to be a great year for Austin real estate.  Austin’s inventory level at mid-year is just 4.1 months – an overall seller’s market.

Inventory levels in Austin, area by area:

See how neighborhoods compare:  Inventory levels by local areas

There are many neighborhoods where inventory has dropped below 3 months.  For example, Area 7 (Barton Hills) would deplete all inventory in 1.35 months if no new listings came on the market.  Central south Austin is down to 1.62 months, and southwest Austin is at 1.89 months of supply.  Basically, all mid priced homes in central and close-in suburban areas are in tight supply.  We are seeing multiple offers for homes that are priced and presented well.

Upper priced homes generally take longer to sell.  In the “over $800K” range, supply varies from 9 months to several years of inventory, depending on the area.

Foreclosures: 

These have not been a large part of our market, and appear to have peaked in 2010.

2012 (mid year) – 3.06%

2011 – 4.25%

2010 – 5.00%

2009 – 3.75%

Some comparisons with the month of June, 2011:

Single-family homes sold:  23% more than June 2011.

Median price for single-family homes:  8% more than June 2011.

Average number of days on the market:  17 days less than June 2011.

New homes on market:  8% percent more than June 2011.

Active listings on market:  20%  less than June 2011.

Pending sales:  15% more than June 2011.

Mortgage Rates:

The federal government continues to hold down rates in order to stimulate the economy.  If you are a homebuyer or investor, loan rates have simply never been better.  There was a time when 10% was considered a very low rate (after a period of up to 19%).

Compare payments on a $300,000 (30 year) loan:

10% interest –  $2,633 monthly

5% interest – $1,610 monthly

3.8% interest – 1,397 monthly

Another way of putting it is to say that, today $2,633 will cover the payment on a $565,000 loan, versus the $300,000 loan you could get at 10%.  The low cost of money makes this a great time to get into a home.

“A little tail wind is a lot better than a headwind,” says economist Chip Case, of Case-Shiller.  In Austin we have a lot of tail wind!

 

Roselind Hejl, CRS

Matthew Hejl, Realtor

Coldwell Banker United Realtors

512-327-0385 – Direct

512-789-4563 – Cell

www.weloveaustin.com

Austin Market January, 2012: Inventory is the Story

Our end-of-year look at the at the Austin real estate market tells a simple story – demand is exceeding supply. The overall months of inventory for the Austin area is at 3.61. By comparison, 2010 ended the year with 5.1 months of inventory; 2009 ended with 4.6 months. We have moved from a balanced market into seller’s market range for most areas.

Newcomers moving in and investors attracted by low interest rates have put steady pressure on inventories in all parts of Austin. Jed Kolko, Trulia’s chief economist recently offered this prediction: “The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. “
Austin was Kolko’s top pick for growth cities to watch. And, a look at the inventory levels throughout Austin shows that he is right on the money.

Inventory Levels

Inner Core Neighborhoods: 75% seller’s market; 25% balanced markets.

Close in Suburban Neighborhoods: 94% seller’s markets; 6% balanced markets.

Outer Suburban Neighborhoods: 42% seller’s markets; 37% balanced markets; 21% buyer’s markets

See more detail by areas here: Months of Inventory by Area

Demographics

Demographics are on our side. There are 1.763 million people in the Austin area. By 2020 this is expected to increase by 31% to 2.3 million. To supply an additional 198,000 households, assuming that 50% buy homes, we need 99,444 new homes. This means we need 11,000 new homes per year over the next 9 years. In actuality, builders supplied 5,900 new homes in 2010 and 6,100 in 2011, and production is estimated at 6,500 for 2012.

So, we expect that job and population growth, plus investors who prefer real estate over the more volatile stock market, will continue to fuel the demand side.

Tempering Factors

On the other hand, there are certain forces that have moderated and slowed down the demand side.
First, there is the backlog of foreclosures held back by legal issues and botched paperwork. There is also shadow inventory – loans in default that will be foreclosures or short sales. These will continue to add to inventory and hold down prices. But, not to great extent. The evidence is clear that distressed properties have not defined our market. The foreclosures that do come on the market are quickly absorbed – often with multiple offers.

Foreclosures in Austin:

2009 – 3.75% of market
2010 – 5.0% of market
2011 –4.25 % of market

Second, many newcomers have chosen to rent a home while they get settled or sell their home in another city. This has resulted in the highest occupancy rate for apartments in 25 years – about 96% occupancy. In many areas, single family rental homes are in very short supply. Of course, the short supply has raised rental rates. Eventually, these renters be ready to buy homes, and will add to the demand side of the market.

Third, there are still hurdles for buyers in getting financing, especially in the upper end. The cumulative effect of new regulations and conservative approach by appraisers have dampened mortgage momentum. If the appraiser cannot support the sales price, under tough comp requirements, the deal is likely to fall through. Even if the buyers are able to add more down payment, they are usually reluctant to proceed without confirmation by the appraiser.

And, fourth, anxiety concerning national and international financial conditions affects the real estate market, and we are not immune to that in Austin.

Yet, these dampening effects have not stymied demand for homes. They have slowed the pace of the market and kept demand from getting so strong that prices escalate quickly.

Conclusion

Overall, we are starting 2012 in the best of both worlds. Reduced supply is always good news for sellers. And buyers still have best-in-a-lifetime interest rates that can be locked in for 30 years.
Austin is simply a great place to live. We know it, and the word is out. That is the real story. And, for those who invest for the long term, the story has a happy ending.

If you have a real estate question, please feel free to call or email – and join me on a social media site.

A big thank-you to all of you who have sent us friends and associates who need to buy or sell houses! Keep sending! 

Roselind Hejl, CRS

Coldwell Banker United Realtors

512-327-0385 – Direct

512-789-4563 – Cell

www.weloveaustin.com

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Time to File Your Homestead Exemption for 2012

 

If you bought a home in 2011, it is time to file for your Homestead Exemption.  This will lower your property tax bill for as long as you own the home and occupy it as your principal residence.

After buying a home, you become eligible for a Homestead Exemption on Jan 1 of the following year.   So, for homes purchased in 2011, the time to file is between Jan. 1 and April 30, 2012.

The county appraisal district will send you a form to mail in to them.  If you don’t receive the form,  I have included some links to get the form online.  There is no charge, and you only need to do it once.

When you send in your form, you will need to include the following two items as proof that you live in the house where the exemption is claimed.  The address on both of these forms must match the address of your home.

1.     Copy of Texas driver’s license (or ID card)
2.     Copy of vehicle’s registration receipt

(If you do not own a vehicle, you may send a utility bill and sign an affidavit for non ownership of a vehicle.)

There are additional exemptions that you may qualify for, such as the Over 65, the Disabled Homestead, or the Disabled Veteran’s exemption.  Here is a link to general info about property tax exemptions.

Feel free to call if you have a question about this or anything else we can help with.

Travis County Application 

Williamson County Application

Hays County Application 
Roselind Hejl, CRS
Coldwell Banker United
512-327-0385 office
512-789-4563 cell

www.weloveaustin.com

 

P. S.  Don’t respond to this scam:  An official looking letter is usually sent to new homeowners with a bill for filing your house as a homestead in the deed records.  This is not necessary, and will not lower your taxes.

Modern Master Bath Remodel

My clients, Dawn and Ray, chose a classic 1990’s vintage home for its quiet neighborhood and easy walk to school and library.  This was a three bears kind of house – not too big, not too small – just right.  Dawn is a children’s book writer and artist.  And, you could say that she began to re-write the story of this home from the moment she moved in.  It has been fun to watch her sort it out and find the way, relying on her own artistic sense.

Her latest project has been the master bath…

Here is the entrance to the Master Bath – typical 1990’s style, with panel doors, beige carpet, white tile, and big 6″ cans in the ceiling.  Mostly, the space was kept as is, but that wall on the right with the thermostat had to go!

Wow!  See the difference?  The door was made from a large mirror that Dawn had intended to hang.  Kai Mueller, her carpenter, added hardware to create a barn door that glides along the wall.

Here is the original vanity, with mirrored wall, accent tiles, and chunky cabinet doors.

Ahh!  Now there is a sophisticated new vanity!  Home Depot installed the white Silestone counter.  Faucets are California Faucets from Ferguson Plumbing.  Candle sconce lights, by Sonneman, were ordered from All Modern.

Kai Mueller made the floating vanity cabinet and mirror frame from walnut hardwood.  Hardware was selected to go with the faucet style.  Find the pulls at Lowes or Ikea.  Binswanger Glass installed the mirror glass and shower door.

Here’s a glimpse of the old linen cabinet and main closet.

A set of deep drawers and upper cabinet replaced the old linen/clothes hamper.  So pretty and functional!

The white walls and floor contribute greatly to the simplicity and expansiveness of the space.  Walls are Simply White by Benjamin Moore.

Crown molding was removed, and ornate door and base trim was replaced by a contemporary 1″ x 6″ style.

Floors are 12” x 24” porcelain tile from Floor & Décor.  They have a light ribbed look, which adds to the organic feel.   The mirror in the closet opens to reveal the shelves behind.

A look back at the original space – very pretty, but not in the modern style that Dawn loves.

The tile adds some texture and natural color to the walls – a subtle, stone-like color.  Tiles are honed marble, 2” x 4″ subway style, from Floor & Decor.  The shower floor is done in flat river rock.

By working with the existing plumbing and space layout, Dawn avoided unnecessary cost and difficulty.  She kept the focus on modern styling, and used readily available materials.  The result is clean, modern, serene – and very doable.

BTW, Dawn tells me that the glass block window is on the hit list.  This story’s not over!

Chelsea Moor Makeover: Rediscovering White

We used to love white on interior walls.  In fact, our paint of choice was “mixing base white with white pigment added.”  However, over the last 10 years, we moved toward color.   Warm colors like taupe, beige, and whole wheat seemed necessary for warmth and style.  White was considered stark or unfinished – like primer on the wall.

So when it came time to choose a color for Chelsea Moor, we put up some color samples.  Balance Beige (Sherwin Williams) was a contender – think  beige-taupe on whole wheat.  When we put it up, the strong light in the room washed it out, and an underlying pinkish tone showed up.  (Not good.)

I know this is counter-intuitive, but I think that low light rooms need color – even dark colors – to add richness to the space.   In strong light, paint colors  tend to lose their richness and depth.

Color on walls with white on the ceiling tended to highlight the shortness of the 8′ walls, and evoke the popcorn ceiling look.  And because the living room ceiling was vaulted, color against a white ceiling would create a distracting angled line.

Actually, these walls were screaming for white.   But which white would be right?  Picking the right white is no small matter.   I turned to Remodelista – a design source that I read daily.  Their post on whites most used by architects was a great help.   The top choice for an all purpose white was White Dove by Benjamin Moore.  They called it “clean, calm and a great backdrop for art.”  Since we use Sherwin Williams, I chose a close match – Greek Villa.  This is a slightly warm white with no hint of any specific color.

We painted the walls, ceilings and trim all the same – flat paint on the walls and satin on the trim.   The white color expanded and simplified the space, making the walls a backdrop for a more important element – light.

Dining room in process:  Sunlight streams in and bounces off walls creating an active, changing environment.

Dining room before:  The dining room was made from this old sun room.

Dining Room in process:  An underlying design goal was to connect the interior to the outdoors.  Landscaping will help the “outdoor room” rise to the occasion.  There will be no window coverings.  No window coverings at all.

Kitchen taking shape:  Architectural features are highlighted by soft shadows.  The island and base cabinet were painted a dark grey (Porpoise by SW) to ground them and connect to the concrete floor.

Kitchen before:  We incorporated the old breakfast area  into the new kitchen.  The kitchen opens to the new dining area, which was the old sun room – behind the window on the left.

Thanks for sharing our Chelsea Moor remodel!

Roselind Hejl

www.weloveaustin.com

Chelsea Moor Makeover: DIY Concrete Waxing

We love the cool, hard surface and relaxed lifestyle of a concrete floor.  The photo above is from our own house.  John and Marie wanted to have a similar floor in their Chelsea Moor remodel.  They like the mottled, imperfect look of unstained concrete.

We have waxed concrete floors several times in the past on new construction, so have some experience in this.  However, the Chelsea Moor project involved re-finishing old abused concrete.  So, before waxing, we had to work through two levels of preparation:

Chelsea Moor Makeover: DIY Concrete Refinishing

Chelsea Moor Makeover:  DIY Concrete Patching

Now it is time for the waxing.  We have an Edco Floor Maintainer, bought from Lowe’s rental department for $270.  This is a heavy machine.  It takes two people to lift it out of the truck.  A stiff brush attachment fits on the bottom.   The brush builds up heat as it turns and burnishes the wax into the concrete.

The wax we use was Stone Tone Wax by Kimiko, purchased at The Stain Store in North Austin.  It may be bought in oil or water base.  The oil base wax tends to darken the concrete a little more than the water base.

How-To:

First, pour some wax into a small plastic container to work from.

Then pour about 1/2 cup wax on the floor.  If you pour  too much wax at once it will not burnish into the concrete fully, and will leave a sticky residue.

Plan to cover about a 4 x 4 foot area with 1/2 cup wax.

Run the heavy buffer over the wax slowly to spread it and rub it into the concrete.

Continue buffing for about 5 minutes to built up heat and burnish the wax into the concrete.  The wax fills the pores and seals the concrete.

The color of the concrete will darken slightly when the wax is put down.  Here you can see the color enhancement in the waxed area.

The waxed floor will be slightly glossy and smooth to the touch, similar to a smooth stone.

The re-use of old concrete is a green choice.  Concrete lives well – it does not hold dust and is very easy to clean with just a damp mop.  And, the clean hard surface goes well with modern simplicity.

Concrete Experiences – Round One

Concrete Experiences – Round Two

Concrete Experiences – Keeping Cracks in Line

Thanks for sharing our Chelsea Moor makeover!

Roselind Hejl

www.weloveaustin.com

Chelsea Moor Makeover: DYI Concrete Patching

A concrete floor is central to the design of Chelsea Moor.  We all love the cool hard surface and easy living of a concrete floor.  And, we are OK with the mottled, imperfect look of natural, unstained, concrete. 

 

Concrete Grinding

We learned a lot about re-finishing old, abused concrete.  About 1/16 inch of the concrete had to be ground off in order to get down to a clean surface.  It was nice to have this job behind us.  Read that gritty story in DIY Concrete Re-finishing.

 

Concrete Patching

When carpet is pulled up from a concrete floor, the nails leave ugly gouges.  It would be unacceptable to leave these, so they had to be patched.  We experimented with some patch solutions:

Glue & Concrete Dust -  When we ground the concrete, it created a powder.   We saved a bucket of concrete powder and tried mixing this with Tight Bond construction glue, for a homemade hole filler.  However, the glue shrunk back, and left a dip.  And it did not give a hard concrete surface.  So, overall this idea did not work. 

Rockite Cement:  This was purchased from True Value Hardware.  We mixed this stuff with concrete dust to get a better color match. 

Jim’s Concrete Patch Recipe:

6 spoons of  Rockite

3 spoons of concrete power (saved from the grinding process)

Water to make a thick paste (about 1-2 spoons)

Mix thoroughly in a plastic bucket.  Make up about 2 cups at a time.  It sets very quickly, so don’t make a lot.  In 15 minutes it will be hard.  Fill the holes using a small spatula.  It tends to get on the floor around it.

Let it dry overnight.  Then sand the excess that is on the floor around the patch. 

Thanks for sharing our Chelsea Moor Makeover!

Roselind Hejl

www.weloveaustin.com