Bigger is Better
We buck the national trends because we are self-sufficient.  Here in Texas, we have more resources, natural and economic, than most countries!  This is why our real estate market, like other markets, is holding strong despite the national recession and the crumbling prices the news shoves into our heads each day.

• If Texas was a country, it would be the 10th largest country in the world
• If Texas was a country, it would have the 12th strongest economy based on GDP
• If Texas was a country, it would be the 5th largest oil & gas producer
• 82.5% of the Texas population is in Metros… DFW, Houston, San Antonio, & Austin
• Texas has more Fortune 500 companies than any other state
• Austin was #1, San Antonio was #2, in Forbe’s recent national “Best Bank for Your Buck Cities” report while Houston made #4 and Dallas made #7!
• Builder Online Ranked Houston #1, Austin #2, Fort Worth #3, San Antonio #4, and Dallas #5 for “Healthiest Housing Markets in the Nation”!
• Many of the best universities in the nation are right here in Texas

I highly recommend watching this video, supported by many including Governor Rick Perry, to help demonstrate why Texas is so strong:

Latest Statistics (hover for detailed figures)

Source: Forbe’s

It’s not just Austin that’s getting national attention, Texas is making the news as a strong state as well.  Texas ranked #3 of the Forbe’s “America’s 10 Fastest-Growing States”.  This growth helps keep the local economies strong in our big cities, including Austin.

“THERE used to be a time — oh, let’s call it 2007 — when summer was considered a time of almost limitless possibilities, a time of languorous vacations, of trips filled with the promise of discovery.

“But the summer of 2008 is starting out like a cruel joke, with air travel increasingly a nightmare and with wildly escalating gas prices threatening to make the road trip all but obsolete. It’s almost enough to make you sit at home and catch up on episodes of “Gossip Girl.”

…

“1. TEXAS HILL COUNTRY

Who needs Europe? The Texas Hill Country, west of Austin and north of San Antonio, might be the next best thing to crossing the Atlantic. The region is lush, colorful and, unlike much of the pancake-flat state, dotted with beautiful green hills that are evocative of Tuscany or the south of France. Moreover, the region is speckled with 22 wineries (www.texaswinetrail.com) that buzz with food and music festivals year round. And towns like Fredericksburg offer a taste of the Old World, with German-style biergartens and schnitzelhäuser.”

You can read the whole article here.  And of course, I post links to all great news stories in the Austin Real Estate News section of this website.

• It is Texas law that when two trains meet each other at a railroad crossing, each shall come to a full stop, and neither shall proceed until the other has gone.
• Texas law forbids anyone to have a pair of pliers in his possession.
• It is illegal for children to have silly haircuts in Texas.
• Would you believe that it is illegal to spit on your laundry on Texas?
• A city ordinance states that a person cannot go barefoot without first obtaining a special five-dollar permit.
• A recently passed anticrime law requires criminals to give their victims 24 hours notice, either orally or in writing, and to explain the nature of the crime to be committed.
• In Austin, it is illegal to carry wire cutters in your pocket.
• In Galveston, it is illegal to drive a motor car down Broadway before noon on Sundays.
• If you went to church in Texas years back, you’d better be recognizable. An old law made it illegal to go to church in disguise.
• In Houston you cannot buy beer after midnight on Sunday, but you can buy it on Monday.
• In Texas it’s legal for a chicken to have sex with you, but it’s illegal to reciprocate.
  
• It is illegal for one to shoot a buffalo from the second story of a hotel.
  
• It is illegal to carry a pair of wire-cutters in your back pocket.
• It is illegal to drive without windshield wipers. You don’t need a windshield, but you must have the wipers.
• It is illegal for a person to shoot a buffalo from the second story of their hotel.
  
• It is illegal to have an open container in a car.
  
• It is illegal to have anything protruding from your bumper unless it is attached with a chain
• It is illegal to milk another person’s cow.
• It is illegal to spit on the sidewalk.
  
• It is illegal to take more than three sips of beer at a time while standing.
  
• It is illegal to urinate on the Alamo.
  
• It is legal for a husband to beat his wife as long as he uses something no bigger than his thumb.
  
• It is legal for the blind to go hunting as long as they have someone with them who isn’t blind.
  
• It is legal to commit a homicide as long as you tell the person when, and how you are going to kill them.
• In Texas any artificial constructed underwater barrier reefs must come with an instruction booklet.
• In Texas, sixteen-year old divorced girls are prohibited from talking about sex during high school extracurricular activities.
• Temple: No one may ride a horse and buggy through the town square. You can ride your horse in the saloon. Cattle thieves may be hanged on the spot.
• Texarkana: Owners of horses may not ride them at night without tail lights.
• The entire Encyclopedia Britannica is banned in Texas because it contains a formula for making beer at home.  Does that mean Google is banned too?
• There is an old law in Texas that states you are unable to tuck your pants into one boot unless you own ten or more cattle.
• You can be legally married by publicly introducing a person as your husband or wife 3 times.  Although that is in the process of being changed in favor of an anti-gay common law.
  

Texas isn’t alone… from the BBC:

The UK’s top 10 most ridiculous British laws were listed as:

1. It is illegal to die in the Houses of Parliament
2. It is an act of treason to place a postage stamp bearing the British king or queen’s image upside-down
3. It is illegal for a woman to be topless in Liverpool except as a clerk in a tropical fish store
4. Eating mince pies on Christmas Day is banned
5. If someone knocks on your door in Scotland and requires the use of your toilet, you are required to let them enter
6. In the UK a pregnant woman can legally relieve herself anywhere she wants, including in a policeman’s helmet
7. The head of any dead whale found on the British coast automatically becomes the property of the King, and the tail of the Queen
8. It is illegal not to tell the tax man anything you do not want him to know, but legal not to tell him information you do not mind him knowing
9. It is illegal to enter the Houses of Parliament wearing a suit of armour
10. It is legal to murder a Scotsman within the ancient city walls of York, but only if he is carrying a bow and arrow

The top 10 bizarre foreign laws as voted by those polled:

1. In Ohio, it is illegal to get a fish drunk
2. In Indonesia, the penalty for masturbation is decapitation
3. A male doctor in Bahrain can only examine the genitals of a woman in the reflection of a mirror
4. In Switzerland, a man may not relieve himself standing up after 10pm
5. It is illegal to be blindfolded while driving a vehicle in Alabama
6. In Florida, unmarried women who parachute on a Sunday could be jailed
7. Women in Vermont must obtain written permission from their husbands to wear false teeth
8. In Milan, it is a legal requirement to smile at all times, except during funerals or hospital visits
9. There is no age of consent in Japan
10. In France, it is illegal to name a pig Napoleon

Austin’s Rankings

• #1 Best Place for Dating
• #1 Place to Live in Texas – Money Magazine
• #1 Place to Live, Work, & Make Movies 2008
• #1 Top Growth City (U-Haul 2005)
• #10 Healthiest U.S. City
• #3 America’s Smartest City
• #3 Great Place to Live – Life 2.0
• #3 of Best Cities for Jobs (Forbes)
• #5 Large Metro to Relocate a Family for 2007
• #5 Least Stressful City by American City Buisiness Journals

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.

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.

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.

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.

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:

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.

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.

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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

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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!