Homeowners & Renters See The World Through Different Lenses

Renters have a different view of real estate economy than homeowners.


Source: PEW Research Center

It seems that renters are much more pessimistic about rising home prices. I’m not sure of the participants in this study were planning on buying a home in the near future, but this study does show something interesting about how you see the market when you own property versus when your at the mercy of a landlord.

More renters believe home prices are rising.

Are they pessimistic about their buying power? They may be feeling left out of the prosperity homeowners found during the boom years leading up to our current conditions.

Renters aren’t worried about the housing economy.

Renters expect prices to climb more than homeowners do. So why aren’t they buying? First-time home-buyers are seeing harder times with mortgage woes. It takes some patience and hard work to get a home loan, and perhaps renters aren’t willing to go through with it.

Americans are not optimistic about the economy.


Source: PEW Research Center

Yet this study is extremely interesting. We saw some of the greatest appreciations in Austin real estate in 2006. Many people sold out to collect their equity while late-comers created a building and flipping surge, especially in central Austin real estate. 2007 was much slower than 2006, especially in the last two quarters. Yet, the number of those who believe the economy is in poor shape has not increased as dramatically as I would expect. I think this shows how pessimistic people are about the economy anyway. We live in a fairly prosperous country and Austin has a steady growth rate which leads to steady real estate prices, yet I would expect similar numbers on a local study based on the fears and questions I receive.

Is this thing on?

I still wonder if anyone can actually hear me. Don’t be afraid to buy. We are currently in a RARE buyer’s market here in the Austin real estate market and at the same time, interest rates are at HISTORIC lows. I’m shopping for real estate in Austin now so don’t blame me if you don’t get in on this buyer’s market! Get your head out of that national news paper, turn off CNN, and get real. We’ve seen studies showing that people think the bottom is falling out of the American economy for years and it hasn’t. In fact, the primary reason for the housing slowdown and the buyer’s market here in Austin is the attitudes of people, not actual economic fact. Now that sellers are getting real, take a chance and think about investing in Austin’s real estate market. I’ll show you how!

Fact or Fiction: Global Warming

I’m going to deviate from my norm of Austin real estate topics to hit on another environmental topic that I’ve been pondering lately. It’s HOT here in Austin. Not just warm but seriously HOT. Is it global warming? If so, what is the cause and how can we deal with it?

The findings of a recent survey surprised me. It seems that fewer Americans believe that global warming is an actual phenomenon now than several years ago.


Source: PEW Research Center

For me, it was the opposite. I was skeptical from the beginning talks of global warming but it now makes a great deal of sense to me. I just needed time to gather facts and make my own educated judgment. What I have yet to pass judgment on is whether it is caused by human or environmental factors. For now, I suspect it is a mix of both. With a history of cycles of ice ages and hot ages, it seems that we are entering a hot age. Yet it seems that this change has actually been noticeable in the past 5-10 years which leads me to believe than human factors are interfering with the natural cycle by speeding things up


Source: PEW Research Center

Do you accept global warming as a problem?
What steps do you believe in to fix it?


Source: PEW Research Center

I’m sure that there is no quick fix, however, making sustainable decisions to reduce landfills and emissions is an obvious start. Planting trees still sounds like a great idea to me. After all of the forests around the world that have been seized in order to create our great civilization, it certainly seems like replanting trees to clean the air and produce oxygen is an obvious and relatively easy decision. There’s talk, and then there’s action…

So what do you do to save the world?
How can we save the world in Austin?

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.

Are you living on an abandoned landfil?

I was surprised when I found this resource showing where all of the know abandoned landfills are in Austin. The City of Austin has a map showing the locations of known landfills. Is there one close to you?

The complete map is available here.

Is over-building causing our slow real estate market?

Top 30 Residential New Construction Cities (click to enlarge):

Austin/Round Rock hold the #12 spot for New Construction based on single and multi-family building permits.

4 of the top 30 markets show negative job growth and they all happen to sit on the southwest and southeast coasts (Los Angeles, Riverside/San Bernardino, Miami and Tampa) where the media began picking up news of economic trouble.  They saw a great deal of new construction but a -12% job growth.  Again, these are the areas that saw appreciation at 200-2000% per year compared to Austin’s steady and slow appreciation and strong, positive job growth..  That’s a volatile market compared to a steady market.  Of course, we are hurting on a minor scale because of the media attention to the housing sector, but this is another great example of how Austin isn’t suffering like the cities the media keeps covering.

The E-P ratio is the number of jobs divided by the number of permits.  A number less than 1.0 is generally a sign of an unhealthy market, Austin’s E-P ration is 1.2.

Here’s another look at Austin’s economic health.  I’ve been hearing and reading the media attacking builders nationwide for causing our economic downturn.  Although builders should seriously take a break on cities like Los Angeles and Miami, Austin’s builders seem to be properly managing inventory and new starts.  Los Angeles (and other east and west coast markets) saw a boom in the housing market much earlier than we did here in Austin.  To fill the gap, new builders sprang up and moved into the areas.  Now they need to find work in other sectors or cities.  Austin saw a boom in new builders and new construction only a year or two ago when we had our largest seller’s market this decade in 2006.  The job sector saw much less boom as well so it is much easier to stabilize as our market stabilizes as well.

Expect to see new construction continuing as Austin continues to see job and population growth, as well as the wealth of the population growing.

Why I Love Real Estate Investors

Real Estate Investors are:

  • Smart
  • Creative
  • Ambitious
  • Goal-Oriented
  • Practical
  • Efficient
  • Networked
  • Logical

I love investors because like me, they make decisions based on logic and numbers, not emotion.  They are creative wealth-builders who won’t retire poor.  They are business-minded, practical people with a forward-thinking mentality.  Investors love other investors, and I love connecting them.  Some of the greatest projects I’ve worked on were Joint Venture investment projects.

Austin is a great place to invest in real estate.  Investing in Austin is easy; a no-brainer.  Where else can you find such consistent growth?  Where else can you find such a beautiful and unique city that can’t help but attract more and more businesses and people?

I tried the stock market in 1999 and today my stocks are worth the same as they were then.  I make my first real estate investment in Austin in 2002 and let’s just say it worked out well for me.  Real estate is something I grew up with, know, and understand.  I love investing in it myself and sharing opportunities I find with other smart people.

Walmart planned for Central Austin

April 1, 2008

Just announced this morning, Walmart has their sights set on yet another central Austin location. In addition to the Northcross location at Anderson Lane and Burnet Road, a new store at 42nd and Guadeloupe is set to open in the summer of 2009. Plans are currently underway to purchase 32 homes in the vicinity which will be demolished in order to make way for Hyde Park superstore. In order to keep neighbors happy, this Walmart will include a roof-top park and swimming pool as well as an in-store Starbucks.

Neighbors have mixed emotions about welcoming the mega-retailer into their quaint Hyde Park neighborhood. Chelsie Howard, a resident of the neighborhood, welcomes the store saying “Traffic is so horrible in Austin, having a Walmart in Hyde Park will enable residents to get out of their cars and walk, run, or bike to a store stocked with all of their needs.” The store is expected to boost Austin’s economy by 3.4% by 2012.

Walmart chose this location after other retailers, like the Walgreens at 45th and Guadelupe, reported booming business and even nation-wide sales records. This store will be the 5,784th in the nation and will stout the title of “Greenest Walmart in the U.S.” with energy saving features such as roof-topsolar panels powering fluorescent lighting. The store’s plans include selling excess solar power back to the city at 7.8 cents per kw hour as a way of “giving back” to Austin’s community.

Walmart 2004

 

(image from PRNewser)

To read the complete press release, click here.

——————

April 10th, 2008 – Update

This post is receiving so much traffic, I thought I’d make sure everyone notices the date of April 1st on the post.  There’s no need to email me in a panic, this is an APRIL FOOLS post!  It’s been fun, but don’t worry because there are no plans to put a Walmart in Hyde Park.  There are, however, plans for a Walmart at Burnet Road and Anderson land in the Northcross Mall shopping area.

For information on the Northcross Wallmart, check out the developer’s site and (of course) an Austinist post on the outrage caused by the plans.

Austin Tops Forbe’s Fastest Growing Metro’s List

austin real estate, forbes, where to buy, top citiesAustin has been making national headlines lately, and good ones at that. While we hear that the real estate market nation-wide is in a slump, we also keep hearing that Austin’s economy is still strong (even if it is no longer booming). It should be no surprise, then that Austin topped Forbe’s list for big metros.

Check it out!

 

Of course, if one looks at economic growth in the country’s largest 100 metros, the usual suspects jump to the top of the list. With an estimated 32% GMP growth from 2007-2012, Austin, Texas, is the winner for big metros. Atlanta, Seattle, Orlando, Houston and San Jose, Calif., also appear high on the list. What do they all have in common? They’re tech hubs with proximity to universities and a healthy increase in population. Austin’s population, for example, is expected to increase by nearly 15% by 2012, according to Moody’s Economy.com forecasts.

Once again, Austinites, you live in one of the top cities in the nation. Austin is a great place to live, work, make movies, listen to music, and buy real estate!

2007 In Real Estate – Austin Market Update

Month

# Sales

Dollar Volume

Avg. Price

# Listings

Months of Inventory

Dec-07

1,782

446,231,177

250,300

9,866

4.2

Nov-07

1,758

431,231,177

245,300

9,599

4.1

Oct-07

1,878

450,802,898

240,000

11,028

4.6

Sep-07

1,974

492,426,244

249,500

11,379

4.7

Aug-07

2,793

713,676,456

255,500

11,172

4.5

Jul-07

2,954

742,533,546

251,400

10,757

4.3

Jun-07

3,080

781,567,622

253,800

10,351

4.1

May-07

3,002

737,963,982

245,800

9,987

3.9

Apr-07

2,562

626,175,374

244,400

9,385

3.7

Mar-07

2,589

625,191,435

241,500

8,696

3.5

Feb-07

1,902

443,541,954

233,200

7,991

3.2

Jan-07

1,635

389,728,467

238,400

7,784

3.1

 So what was the real story with Austin’s Real Estate Market?  Is the bottom really going to fall out?  And why hasn’t it yet?  I feel like a broken record sometimes, but the falling prices we keep hearing about on the news are in totally different markets in the east and west coasts.  In these areas, prices flew up by 200, 400, and even 600%.  So it’s really no surprise that home prices have fallen in these markets.  Here in Austin, we’ve stayed smart as always.  Prices consistently rise, on average, 4-6% each year.  What we’re seeing in Austin right now is a slow-down, and after the huge boom we saw that peaked in 2006, it really shouldn’t be a surprise.  Prices were still climbing steadily in this period, but there were many, many more new homes built to meet a rising demand, and do-it-yourself HDTV fans flocked to invest in their own “flip” projects.  At some point in early 2007, supply met demand, but some were still creating supply.  And projects begun late in 2006 still had to be finished before being placed on the market.  Some areas of Austin saw this more than others, and in particular, Central Austin, East Austin, and South Austin saw the biggest booms.  Suburbs saw more production, but not on the scale of these urban areas of Austin.  Now, we’re waiting for demand to catch up with supply.  We are currently in a buyer’s market, but not on the gloom and doom scale of other parts of the country (or even Austin in previous recessions).  If I was thinking of buying a home, I would buy now while deals are good, sellers are willing to negotiate, and the market has some catching up to do.  If I were a seller in this market, I would be ready to be patient, and prep my house to it’s absolute peak, hiring professionals to make sure that everything is at it’s absolute best — the best way to ensure that when a house does sell in your neighborhood, it’s yours.

 I am still confident that there is no reason to panic.  Austin has grown to the point that it can withstand most anything you can throw at it.  We have many, many different industries to sustain us.  There are advantages to out-growing the medium-city way of life and I believe we are seeing it now.  New construction has slowed but is still strong.  The best builders out there will survive and others will move to a different industry.  This is a strong city now!

Keeping you up-to-date,

Aria Schoenfelt McIntosh
http://liveaustinrealestate.com
(512) 771-1776

Will Four Seasons Residential Break Ground?

Hot off the press, the Austin-American Statesman is reporting today that the “Four Seasons condos break ground this week.” I’ve heard that before (for the past seven years, in fact!), and I know that many bets could be lost if the Four Seasons Residential does become a reality. The 32-floor, 166 unit luxury residential high-rise with views of the newly renamed Lady Bird Lake is now expected to open on 2010.

Many have been worrying that Austin’s downtown can’t support the prices of $400,000 to $4 million, but with nearly half of the units already sold with nonrefundable deposits, it seems that this project is very healthy.

Still, with sales slow in neighboring buildings such as Milago, which also has beautiful views of Lady Bird Lake and luxurious amenities, can Austin take all of the planned urban residential development?

For now, it seems that people are still willing to spend the money to live in Austin’s booming downtown. With sales still holding slow across the board (even in sub prime developments), it seems our quickly growing number of Austinites can afford the luxury of an urban downtown, but are taking their time like they are all over the city.

If you would like more information on this development or any other condos/flats in downtown Austin, call 512-771-1776 or email ariakristen@gmail.com.

Aria Schoenfelt McIntosh
BridgeOne Properties & Corias Homes, Inc.
http://www.liveaustinrealestate.com