Real Estate Information

Austin is fast becoming a strong second home market. According to the National Association of REALTORS® (NAR), a record 2.82 million second homes were sold in 2011. Given attractive interest rates, a strong housing market, and the increasingly mobile lifestyle of North Americans, it comes as no surprise that the resort and second home market is enjoying steady growth.

For some, purchasing a second home is a financial strategy to help them grow and protect their wealth -- and certainly vacation getaways may provide rental income opportunities to help savvy boomers offset the expenses of second home ownership. Others may be motivated to buy a second home because it can be used as a "family retreat," to be later transformed into a residence after retirement, and then handed down as a family legacy.

Here are some interesting statistics from the NAR 2011 Profile of Second-Home Buyers: The typical vacation-home buyer is 55 years old with a total household income of $71,000. Investment-property homebuyers have a median age of 47 years with a typical household income of $85,700. 33 percent of vacation homebuyers wanted a second home close to their job or school; while 24 percent wanted the home close to their primary residence. Nearly one out of five second homes will become primary residences after retirement. Because technology affords the freedom of telecommuting and "working where you play," the decision to own a second home or resort property has been made easier than ever before.

If purchasing a second-home is in your future, whether as an investment or for personal use, now is the time to get the information you need to make an informed decision. Our team of qualified real estate professionals can help guide you through financial considerations, assist you in finding the right Austin area community and even refer you to a resort property specialist for the destination of your dreams. It is possible to consider using the equity in your current home to finance the down payment on a second home if that fits within your financial budget and goals.

If you are planning to use your second-home as a vacation retreat, make sure you consider your needs. Are you looking for a secluded location in the woods or somewhere with an active community? Natural beauty is great, but don't forget about cultural and social resources, as well as first-rate golf, tennis and other popular sports facilities when scouting locations.

And what about location? For example, buyers from the Northeast are the biggest feeder market for second homes in the South. Many San Franciscans retreat to Lake Tahoe, while Bostonians gravitate to Cape Cod. However, there may be many great locations not more than two to three hours away from your home. You will likely get more enjoyment out of a property you can get to quickly and frequently. Since you know the area, chances are you'll make a better real estate investment closer to home.

If your second home is mostly for investment purposes, ask your real estate professional about property
management options, which can be a crucial financial factor, as well as important to peace-of-mind. Location is also a factor for those buying a second home as investment property, especially if appreciation or rental value is your goal. According to the NAR survey, the median distance between the primary residence and the investment property is 18 miles; and 44 percent are in the suburbs.

There are also tax implications to consider with your investment. If you rent your home for 15 days or more in a
year, you may have to declare the rental income. However, your expenses may be deductible. You'll want to confer with your tax advisor to learn how your purchase will affect you financially. How you use a second home is up to you, but make sure you look at each property with an eye toward tomorrow, because the vacation homes likely to appreciate the most are the ones that Baby Boomers can play in today and
retire in tomorrow. 

FHA is rolling out major changes for borrowers, starting April 1, 2013.

Monthly mortgage insurance payment (MIP) rates are going up .10 basis points, and borrowers putting down less than 10% will pay the MIP for the life of their loan.

Also, down payment requirements are going up from 3.5 to 5% on FHA jumbo loans.  As a result, these increases, more stringent requirements, and marketing strategies will now likely make Conventional loans a better option for borrowers. Essentially, FHA loans will be marketed as more of a sub-prime type of loan.

The bottom line for borrowers looking to use an FHA loan is they will need to close before April 1, 2013, in order to be grandfathered in with current guidelines. 

For more on the specifics reference the HUD guidelines @ HUD New FHA Guidelines 

We are regularly asked what is so special about Austin.  Buyers from all over the states and aboard quiz us regularly.  Our answers generally include factors such as quality of life, higher education, economic growth, jobs, startups and of course real estate. We can always reference a story here or there with Austin ranked high on a "list".

Colin Pope and The Austin Business Journal recently put together a nice story with an updated list of numerous Austin rankings.

In addition thanks to Kenneth Osborn from Gracy Title here is a link to a story from the Chamber showing Austin as the NUMBER ONE job market in the US with 4.4% growth rate and 35,300 new jobs in the last 12 months.

Colin Pope  Editor- Austin Business Journal    Link to ABJ Article

Magazines, think tanks and list makers have ranked Austin high on some high-profile lists and reports during the past few months.

Here they are — most of them calculated upon hard economic data so we put stock in them.

·         Austin took the top spot for the third year in a row on Forbes’ list of “America’s 20 Fastest Growing Cities.”

·         The number crunchers at personal finance website NerdWallet.com populated its list of the "Best Cities for Job Seekers" with many Lone Star locations, but guess who topped them all.

·         Austin ranked second behind San Jose, Calif., on the Milken Institute’s annual index of best-performing large cities.

·         When it comes to job gains as a percentage during the past five years, Austin is tops.

·         This is a good thing, but Austin was named one of the “most surprising” real estate markets recently.

·         That backs up Trulia’s prediction that Austin will be one of the healthiest housing markets in 2013.

·         Austin is one of only five metropolitan areas in all of North America to rank in the top 70 of the 300 fastest-growing metropolitan economies worldwide, according to this report.

·         We are indeed growing fast, so Austin ranked No. 5 on a list of cities with the youngest housing stock.

·         Forbes has ranked Austin No. 8 on a list of cities where a paycheck stretches the furthest.

·         Austin has been named the No. 1 destination on the rise in the United States by TripAdvisor Inc.

·         This is a top U.S. city for clean technology, says Clean Edge Inc.’s Clean Tech Index.

·         Austin is one of only seven markets to experience a more than 5 percent growth in employees’ paychecks during the past 12 months.

·         It wasn’t on the football field, but we beat those Oklahoma City folks at something last year — this recent economic ranking.

·         Austin ranks fifth in the nation for the number of technology startups per capita, according to an analysis by San Francisco-based SizeUp.com.

·         And Austin’s economic might has done wonders for our neighbors to the north. Williamson County is among the three most prosperously expanding counties in the nation.

·         Oh, and Austin is home to some of the best events for entrepreneurs, it hosts some of the best bars in America for beer seekers, has one of the best schools for entrepreneurs, is hitched to some of the best food trucks, is home to one of the coolest co-working joints, and the University of Texas stood strong on a list of the nation’s best colleges for the dollar.

In the interest of balanced journalism and to prove these list makers aren’t on the take, Colin provided a couple of list where there are the rare occasions where Austin did not fare so well.

Austin ranked near the bottom on Forbes magazine's "Best Cities for Working Mothers" list.

And Austin comes in at No. 21 on a ranking of 25 major U.S. cities' public transit systems.

Really? Near the bottom for working moms?  We can't see. 

We are hoping to never the words "Fiscal Cliff" again! But the reality is there were changes in the laws that affect property owners. Below is a summary of information compiled by the National Association of Realtors........

Capital gains rate: This stays at 15% for those making under $400k/$450k.  After that tax rate is now 20%.  The $250k/$500k exclusion for the sale of a single family residence stays in place.

Mortgage cancelation relief is extended until January 1st, 2014.  This is for people doing short sales and not wanting to be taxed on the amount shorted to the bank.

Deductions for mortgage insurance premiums for filers making under $110,000 is extended through 2013 and is retroactive for 2012.

This one affects ALL homeowners, the energy efficiency tax credit of 10% (up to $500) was extended through 2013 for improvements to EXISTING homes.

Estate Tax:  The first $5m in individual estates and $10m in family estates are now exempt from estate taxes.  After that the rate is 40%.

The market in Austin and the Central Texas area is strong, and thanks to our amazing team we had an outstanding year helping many clients buy and sell homes.

If you are looking to buy or sell a home in the Austin, Texas area please contact us at 512.306.1001 or email me directly at Kent@CallKent.com

Have a great January!  

Step #1: Clean the Gutters

Once the leaves begin to fall, you will need clear gutters to allow rain and melting snow to properly drain. Clean out gutters by scooping out loose debris, washing out the gutter with a hose, and flushing out the downspouts. Another option you might consider is installing gutter covers which allow water to flow through, but keep leaves and other debris out.

Step #2: Insulate Pipes

Cold weather can spell disaster for exposed pipes. And as anyone who has experienced it already knows, a burst pipe can be a nightmare. To protect your pipes, wrap and insulate them with heating tape. Check for leaks and cracks so that minor repairs can be made before Jack Frost causes major damage.

Step #3: Trim Tree Branches

Winter storms can pack quite a punch, sometimes powerful enough to knock down tree branches and other debris. Falling limbs can damage homes, cars, or even innocent bystanders. Autumn is a great time to check your trees and other landscaping for weak branches. Trim branches that hang over your home or that look as though they may snap.

Step #4: Insulate Your Home

Cut heating costs this winter by checking the insulation in attics and basements. Proper insulation keeps heat from escaping and keeps your home warmer. The Insurance Information Institute recommends that attics be kept 5 to 10 degrees warmer than the outside air to prevent snow from melting and re-freezing, which can cause significant damage to your roof.

Step #5: Clean Out Chimneys, Furnaces, Boilers and Heaters

Before winter arrives, have your chimney or furnace checked. Servicing them once a year can prevent smoke and other damage to your home, helping to ensure your home stays warm. Make sure to keep your home's temperature at 65 degrees or higher to prevent pipes from freezing.

Step #6: Seal Windows and Doors

Make sure that your windows and doors are properly sealed by double-checking the weather stripping. Use weather stripping and caulking around windows and doors to prevent heat from escaping in cold months, saving you money on your energy bill.

Step #7: Prepare your lawn and landscaping

Cold temperatures cause grass and other plants in your landscape to go dormant. Spend a few hours preparing your lawn for beautiful greenery next year. Start by aerating. Renting an aerator is a cost-effective and efficient way to reduce thatch and provide extra space in the soil for water and oxygen to reach the roots. After aerating, spread a quality winter fertilizer to give your grass the nutrients it needs to grow strong.

Step #8: Winterize your deck

The harsh winter elements can take a major toll on decking, so it’s important to protect it. With a little time and effort, your deck will make it through winter unscathed and ready for outdoor fun in spring. To keep the structure’s integrity intact and wood looking beautiful, clean and seal your deck before winter arrives.

source: Austin Title / Roxanne Ford

According to the Multiple Listing Service (MLS) report released October 18, 2012 by the Austin Board of REALTORS®, the volume of home sales and the price of Austin-area homes continue to rise, as September became the 16th straight month of sales volume increases and eighth straight month of median price increases in the Austin area.

According to the report, 1,806 single-family homes were sold in the Austin area in September 2012, which is 10 percent more than September 2011. During the same time period, the median price for Austin-area homes was $198,250, a five percent increase from the same month in 2011. In addition, the market featured 3.7 months of inventory in September 2012, which is 1.7 months less than September 2011 and the lowest inventory figure seen in Austin in the last decade.

via  https://www.abor.com/news_media/statistics.cfm

 

Most sellers already know that enhancing their property’s curb appeal, keeping the house sparking clean and uncluttered are essentials for the home showing. We advise our sellers if they are thinking of going the extra mile and enhancing their home’s amenities or appearance in an effort to garner a higher sales price or close on a quick sale to keep in mind that going overboard can be a waste of time or even worse, a costly mistake.

The general rule of thumb we suggest is if a home seller of the average sales price home in Austin (around $252K) sinks $10,000 or more into pre-sale home improvements, they likely won’t regain that full amount in the home’s sale. It’s best to keep the improvements simple and low cost.

Applying a fresh coat of neutral-colored paint to the property’s interior walls is the number one improvement that can make a home shine, often resulting in a faster sale and in most cases provide a decent return on investment. In addition if a seller can budget for it often a professional exterior paint job can return up to 75 percent on your initial investment. A home’s kitchen and bathrooms are the rooms homebuyers will scrutinize the most. Upgrading their appearance by refinishing dingy cabinetry and replacing the hardware, adding some new flooring and applying some fresh paint can work wonders. Most important is making sure prospective homebuyers are able to easily imagine themselves living in the home and this means keeping colors neutral and fixtures simple.

Other simple enhancements include brightening the home’s interior with some new light fixtures and new electrical cover plates; professionally cleaning the carpeting or if necessary, replacement. We suggest planting a few strategically placed shrubs or flowerbeds; and brightening up doors with shiny new hardware and doorknobs. Also we are happy to do a preliminary walk thru to advise on which upgrades sell and which amenities homebuyers in our market are looking for; and most importantly, where your home stacks up against the competition.

If most of the active competing homes in your specific neighborhood feature freshly swept chimneys and new HVAC units, you may want to consider offering the same. Keep in mind that not all home improvement projects are equal when it comes to enhancing a property’s salability.

Investing in clearing up deferred maintenance areas is crucial. Remember home repairs or maintenance; for example, shouldn’t be confused with home improvements. Today’s homebuyers expect the home’s plumbing and electrical systems to work properly and safely, and they won’t want to buy a house with a roof that leaks. It’s worth the effort and cost to get these systems in order but don’t expect to recover the cost associated with these repairs. However, making sure the property’s systems are in ship- shape will improve its overall marketability. Most homebuyers prefer homes that are in move-in condition and that means a working furnace and hot water heater.

We advise our sellers to definitely avoid costly luxury upgrades like a swimming pool or hot tub or an elaborately landscaped yard. While these types of amenities may make a home more appealing to homebuyers and ultimately could tip the scales in your favor, its unlikely costs can be recouped for such upgrades.

We encourage our buyers to take the time to identify and categorize what they are looking for in a home as an important first step in the home-buying process. Lists that rank their must-haves, wants and dislikes help them stay focused on the ultimate goal of finding the perfect house – and helps keep cool heads while touring open homes.

Our suggestion in the initial consolation is to sit down, relax, and spend some time thinking about and itemizing the features of what the dream home or the perfect first home need to include. The lists aren’t cast in stone and likely will change as the home search evolves and buyers get a better idea of what’s on the market. As we tour homes and open houses, buyers may identify additional must-haves, wants and dislikes.

The must-have list is essential. It should include and rank by importance the features the home absolutely must include. A good rule is to list features that can't easily change: type of home (craftsman, split-level, a home with sufficient storage space or a fireplace), location/neighborhood, school district, proximity to transportation and shopping, closet space, number of rooms or square footage and the home’s overall condition (move-in or fixer-upper).

The wish list can be flexible, and should include cosmetic features and of course, the dream amenities. Wall-to-wall carpeting, hardwood floors, granite counter tops or a meticulously landscaped yard are features you can implement yourself. We always suggest touring as many homes as possible and never forgo a house sight unseen simply because it doesn’t include all the features on the must-have list. Finding a home that includes every essential may not be realistic, but it’s entirely possible to find a home that includes enough must-haves and just enough wants to strike a perfect balance. The house that doesn’t include a fireplace may include a view that you simply must have.

We are happy to sit down, consult, counsel and share expectations with buyers in advance so the process is smooth, fun and ends with the reward of the perfect home.