Housing starts may rebound slowly, although they have begun to increase lately, according to a forecast from housing market research firm Metrostudy.

“We believe that some of the recent gains in housing starts could be given back during the third and fourth quarters of this year if the current tax credits are not extended,” said Brad Hunter, Metrostudy’s chief economist and national director of consulting. “That said, the forecast for 2010 is for steady increases in starts.”

The U.S. Department of Commerce is set to release national housing starts figures tomorrow.

Hunter said starts have increased in recent months partly because of the $8,000 tax credit for home buyers, but also because speculative inventories are down sharply among many builders.

He said home builders need to start a home every time they sell one to keep speculative inventory “at a normal level,” but that starts are nevertheless likely to rebound only slowly from this point for several reasons:

• Some builders in the bubble markets still are working off inventory.

• Some builders’ banks are cutting their credit even if they are current on their loans.

• Some builders are finding prices too low to sell homes profitably.

Nationwide, Metrostudy forecasts 562,000 housing starts for 2009, a 38 percent drop compared with the same period in 2008.

Single-family starts are forecast at 438,000, a 30 percent drop from 622,000 in 2008.

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The number 1 road block to home sales that we are seeing right now is fear that leads to the conviction that you can only buy something half price.  Here’s the trouble with this mind-set:  If you are buying in Austin, there are no half price homes!   If there were, trust me, they would be sold in a matter of hours to those of us watching like hawks for new listings.

There are half price homes available, just not in Austin.  Here’s why:  where there’s a boom, there’s a bust to follow.  Where was the boom?  Los Angeles, Palm Beach, Phoenix, Las Vegas… not Austin.  So where is the bust?  Los Angeles, Palm Beach, Phoenix, Las Vegas… not Austin.  The exception to this rule is places like Detroit where, just like in the old days, a town dependent on a factory goes bust when that factory goes bust.  Unlike Detroit, Austin is dependent not only on one industry, but several.  Our market no longer busts when Dell has major layoffs because there are other growing industries that can pick up the slack.

This is why our growth rate remains strong and why Austin consistently ranks strongest among all of the Nation’s cities in top ten lists and other rankings for financial, economic, and market strength.

So does Austin compare, really?  Let’s take a major indicator for the health of Austin’s real estate market, months of inventory – the amount of time that it will take to sell off our current inventory of homes.  With our strong, consistent job and growth rates, Austin usually has an average months of inventory figure around 3-4, representing a seller’s market.  In Austin, we are used to the security of this seller’s market.  When our inventory dips lower, homes are harder to find, you are likely to need to put an offer in on a home the day it is listed and for top dollar (like we saw in 2006).  Over 2007, 2007, and 2009, our months of inventory figure has been climbing.  This means that, compared to our local average, it is more of a buyer’s market as homes sit and some sellers are under pressure to negotiate low.  But…

To see an updated, interactive version of this chart, visit http://AustinHome.Pro/Statistics

Let me explain why things aren’t really as bad as they seem.  “Housing researchers consider a 6 to 6.5 months supply of homes for sale to represent a balanced housing market”*, or a neutral market — neither a buyer’s or seller’s market.  Last month, March of 2009, Austin just reached 6.5 months of housing inventory, up from 6.1 in Feburary 2009 and 5.7 in January 2009.  In March of 2008, we had 6.1 months of inventory and in March of 2007 we had 3.4.

So the real story is that we are still FAR below the national figures for months of inventory that can be as high as 10 (a real Buyer’s market!) and most importantly, they are steady even during this time of uncertianty — because of Austin’s (still) very strong economic and job growth rates.

As far as pricing goes, see the chart above.  The orange lines represent the median home sales price in the Austin-Round Rock mentro area and the blue line reprsents teh Average home sales price.  Both figures are still holding very steady.  In fact, take a look at how our median home salse price is stacking up next to the national and state figures over the past year:

To see an updated, interactive version of this chart, visit http://AustinHome.Pro/Statistics

The moral of the story is, as Douglas Adams put it best, “DON’T PANIC!”.  Go about your lives, buy or sell a home if you need or want to, and don’t over-think or out-smart yourself based on the pessimism and drama the news is selling you.  Be informed, I highly recommend my charts and figures over those you may find on other sites like Zillow because my data comes from a far greater and more accurate pool of information compiled by experts in our area, not in a far away state.  We are in a neutral market, not a buyer’s or seller’s market.  The only trouble is, we in Austin have grown very accustomed to living in an agressive seller’s market.

*This quote is from the April 2009 issue of Tierra Granda, Journal of the Real Estate Center at Texas A&M University

But to be honest, this week, it has all really gotten to me.  I’m just in a funk over both the attitudes toward our current times as well as the ripples we are feeling here in Austin.  I was thinking about how now is different from the good ole’ days of the middle of this decade and other strong markets.  What’s different?  I noticed how every time I found a home for someone, I could give them 10 reasons why it would be hard to resell.  And I mean every time.  It got me thinking, all of these homes would sell in under 100 days a few years ago, even the one with no back yard, even the one with 5 bedrooms and only 2 bathrooms.  In up markets, pretty much everything sells.  Now we are watching buyers as they sit and age on the fence.  In the meantime, the homes are aging, rates are going up, and opportunities are being passed by.

I don’t think that an aged buyer is the best buyer.  I don’t mean how old you are, I mean how old your search for your next home is.  Waiting and waiting serves no one, yet there are justifications for being cautious.  Will that home resell?  My new answer is yes!  Maybe not quickly in the current climate, but in a strong market, anything is possible.  Someone will love the same things about that home that you love.  Maybe you will sell in another slow market and it may take 6-9 months to sell your home instead of 60-90 days.  But it will sell.  And would you be this picky in an up market?  Of course not.  If you wait months to put in an offer in a sellers market in Austin, you’re very likely out of luck.

But buyers are faced with troubles as well, not just sellers.  Sure, the amazingly low interest rates mean a great deal and quite possibly more house and there are still plenty of loans out there.  Those with troubled credit can even find seller-financing.  But buyers often also have to make a great deal of decisions.  “Do we sell our house first?  Should we refinance instead?  Should we remodel?”  These are all legitimate questions.  And the answers may be easier than you think.

Don’t torture yourself! These decisions are emotional ones.  When I have an emotional decision, I like to bring in a third, non-emotional party who can objectively explain facts and information to me.  This is my job in these times.  Not to be bummed out, not to cry over slow sales, not to cry over the state of the economy… to use my knowledge and experience in this industry to help you decide if it is the right time for you to move, refinance, or remodel.

You may think I just want your listing or you as a buyer client.  But there are other ways I get paid, and if you need help with any of these questions over refinancing, remodeling, etc., ask me!  I’d be more than happy to help you with your decisions, weiging options, and letting you just generally pick my brain so you can benefit from the knowledge and experience I have gained from nearly 3 decades in construction, remodeling, sales, and financing it all.

I’m still allowed to get bummed out from time to time, but when we do, remember there is always someone out there with an objective view that can help.

Possibly the most well-thought-out home built in Hyde Park since simpler times…
2006 Elegant Custom Build in One of Austin’s Favorite Central Neighborhoods

http://www.4608AvenueG.com

Priced for the current economy at $779,000
Amazing value, this home cannot be recreated at this price!

• Area 4, Hyde Park, MLS# 4242406
• Exemplary Lee Elementary, Kealing Middle School, McCallum High School
• Built 100% New in 2006 with 1930′s Historic Charm & Elegance by Corias Homes, Inc.
• 4 Bedroom
• 3.5 Bathroom
• 2 Dining
• Study
• 1st Floor Award-Winning Master Suite
• Over-sized .22 acre lot, 60W x 155D ft with a HUGE backyard filled with mature trees
• Attached, over-sized 2-car garage
• 10 ft ceilings 1st floor,
  9 ft ceilings 2nd floor,
  + vaulted ceiling in living
• Historic-style trim

Amazing Floor Plan…

• McMansion FAR limit allows for up to 1000+/- square feet to be added, perfect for a future guest house
• Many Green Home features including low-e windows double-paned, zoned climate control, heavy insulation, long-lasting materials
• Spacious 2712+/- sq. ft. custom “open but separate” floor plan feels like much more but saves money on heating/cooling costs
• Custom, professional landscaping front and back with a fully-automatic, programmable in-ground sprinkler system
• Built-in, owned, monitored security system
• Large front porch perfect for taking in central Austin nights
  

Open, Spacious Living Room…

• Tons of light from wood windows
• Alder/Custom Tile framed gas/wood burning fireplace
• Beautiful wood floors
• Vaulted ceiling
• Wired for surround sound
• Stained wood trim
• Window treatments included!
  

Gourmet Kitchen…

• Granite counters
• Ultra-durable granite composite double sink resists stains
• Upgraded 1hp disposal
• Center Island with storage, built-in wine storage, custom mesquite counter, hidden GE Profile Series microwave
• Custom, hand-built Alder cabinetry
• Stainless appliances
• Gas range & oven
• Breakfast bar
• Separate breakfast dining area
• Opens to covered back porch
• Full, walk-in pantry with electrical outlets for wine refrigerator, shredder, etc.
• Desk area with elegant, built-in pin board perfect for managing household items
• Amazing for entertaining
• Stained Wood trim

Award-Winning Master Suite…

• Large master suite, perfect for even a king-sized four-poster
• Private access to back porch
• His and Her separate walk-in closets
• Extra-large spa-bath with glass mosaic tiles carried throughout
• Bain Meridian air bathtub
• His and Hers separate vanities, Hers has knee space
• Granite Counters
• Well-thought out with plenty of storage and even plenty of in-shower-shelving
• Separate Water Closet
• Window treatments included!

Amazing 2nd Floor…

• Large Bedrooms
• Plenty of Light
• Separately Zoned for Energy Savings
• Spacious Landing
• Large, Walk-In Closets in all 3 Bedrooms

Separate Study…

• Set up for children or adults
• Spacious area
• Plenty of storage
• Wired for network
• Plenty of outlets
• Hide-away computer cabinetry

Huge Backyard…

• Filled with pecan trees
• Covered, open porch for amazing Hyde Park outdoor living
• Fully landscaped with programmable, in-ground sprinkler system
• Includes a garden!

This workshop will give you an overview of the green building process. You’ll come away with a framework for making better design and building decisions, including:

·Assessing what your family needs in a home
·Choosing a designer and builder
·Selecting a lot or making the most of the one you have
·Increasing comfort and reducing utility bills
·Making smart material and appliance choices
·Developing a beautiful landscape that saves water, time, and money
·Creating a home that benefits your family and the planet

Lady Bird Johnson Wildflower Center
4801 la Crosse Ave
Austin, Texas 78739
Click here for directions

To register for the workshop:
Print the Registration Form (pdf) and fax to (512) 482-5441; or e-mail to register.
Registration fee is $35 per person.

Deadline for registration: Wednesday, August 13, by 5:00 p.m. Sorry, there is no registration at the door.

Click here for more information about this event

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!

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!

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.

Forbe’s has just announced the top-10 most recession-proof cities and two central Texas cities made the top 3!  #2 was San Antonio and #3 was Austin.

1. Oklahoma City, OK – Falling unemployment rates, strong housing market, and growing agriculture make OKC a great buy.
2. San Antonio, TX – Growing industry, undervalued but climbing prices on homes, and new businesses keep San Antonio on the rise.
3. Austin, Texas – The median home price is up 6.4%, unemployment is down to 3.6% from 3.8%, and out economic growth continues.  We no longer depend on one or two main companies ( like Dell) to survive.  We have a bustling business sector.

I still don’t recommend playing the housing market like the stock market unless you are dedicated to being an investor, but I would like to show you yet another bit of proof that the housing bubble is absent in Austin.  Don’t stress over your home’s value!  You can make a great deal of wealth in real estate if you can learn to take everything you hear with a grain of salt.  Investing and moving every few years can build a great deal of wealth, but is not for everyone.

Just rest assured that Austin is an amazing city that is keeping your home’s value in a steady state of growth.  Think of it as a Blue-chip stock rather than a Tech Stock!