In the course of my day to day to activities, I oftentimes get asked about the appreciation rate in the Austin market, and my thoughts on the future of the Austin housing market. When responding to these inquiries, it’s important that I explain the different methodologies in calculating the appreciation rate. When you analyze the appreciation rate of anything you are simply comparing the current value to a previous value and reporting the percentage in change. However, the observations derived from these figures can vary drastically by what metrics you are using.
If you look at the appreciation rate based on the average sales price, your results will be skewed by high and low outliers. For this reason, I prefer to use the median sales price when assessing the appreciation rate for Austin area homes. However, simply utilizing the median sales price has its own flaws. What if the homes sold in 2020 were all much larger than the homes sold in 2019? Your results would be skewed. Thus, when looking at the appreciation rate, I prefer to compare the median price per square foot. Even using this metric, results can still be unreliable. If there were far fewer sales in one year than the other, the appreciation rate derived may not reflect the true nature of the market.
That being said, everyone wants to know what the appreciation rate is for homes in the greater Austin area. I myself was curious after looking over the year over year growth for Austin homes from July 2019 to July 2020. I knew that by only comparing these two months of data, the statistics were not illustrating the true picture for certain neighborhoods. Thus, I got to work and combed through the data to try to form a more clear picture.
Before I illustrate my findings, I would like to point out a few factors in regards to the data utilized. All of the information I pulled was from the Austin Board of Realtors MLS. I limited my search to the most central Austin area zip codes, and I analyzed sales data for all single family homes. This included new and existing condo, townhome, and traditional home sales. I compared the sales thus far in 2020 with all sales in 2019. Inherently, there are some flaws to this approach as there is a complete year of data for 2019 and only partial data for 2020. That being said, here is what I found.
If you look at the median sales price per square foot, the 78701 zip code had the highest appreciation rate among central Austin zip codes. 78701 had an appreciation rate of 13.84% with the median sales price per square foot in 2020 at $658. This data was pulled from approximately 160 sales in 2020 compared to around 300 sales in 2019. It will be interesting to review these stats once a full year of data for 2020 is available. However, this downtown zip code has a strong track record of appreciation with an increase of about 10% for the median sales price per square foot between 2018 to 2019.
The 78742 zip code showed the lowest level of appreciation in the Austin area. In fact, it was the only zip code I analyzed that actually depreciated between 2019 to 2020. In 2020, the median sales price per square foot was $228 compared to $248 in 2019. However, there were only two sales in 2020 and five in 2019, and thus this data set is too small to draw meaningful conclusions.
Although, I think the results are less significant, I also analyzed the appreciation rate among the same Austin area zip codes based on the median sales price. Based on this methodology, the zip code in Austin with the highest appreciation rate between 2019 to 2020 is 78746. Homes in 78746 appreciated 19.76% between 2019 to 2020. This data was pulled from 426 sales in 2019 and 232 sales in 2020. The 78742 zip code similarly showed the lowest level of depreciation when analyzing the change based on the median sales price; however, as previously mentioned, the limited number of total sales in this zip code obscures the validity of this figure.
All in all, it is important to assess appreciation rates in the Austin real estate market. When you own a home and its value appreciates over time, you make money when you sell! And, when you leverage your home purchase with a mortgage, that appreciation benefit is compounded based on the fact that you’re profiting off the appreciation value of the entire home, when only paying a portion of the home’s value in your down payment. For example, if you bought a home for $300,000 and put 20% down ($60,000) and that home appreciated 10% you would make a $30,000 gain on a $60,000 investment. It’s a bit more complicated when you throw mortgage payments into the mix, but you can easily see why understanding a given area’s appreciation rate is important. That being said, make sure to take a comprehensive look at the data and recognize its potential limitations when evaluating a market based on the appreciation rate.
If you have questions about the appreciation rate in your Austin neighborhood, contact me today. I’d be happy to do the research and provide you with the data you need to make an informed decision.
After a lull in real estate sales during the typically peak spring selling season, the Austin real estate market is showing a rebound in full force this summer.
In the City of Austin, the median sales price rose to $423,000; this figure is up 11% compared to last July. The total number of home sales within the city limits also increased 21% from July 2019. There were 1,470 closed residential home sales in the City of Austin last month. Inventory remains critically low, and we are seeing homes spend less time on the market too. Within the city limits, homes spent an average of 29 days on the market in July.
Within the greater Austin area, we saw similar trends. The median sales price for single family homes in the Austin-Round Rock MSA increased 10% from July of 2019, and the number of total homes sales for July increased at the same year over year rate as within the city limits, 21%. Homes in the greater Austin area spent a little more time on the market last month compared to homes within the city limits. The average days on market within the Austin-Round Rock MSA was 44 days last month - still 3 days less than July of 2019.
Unprecedentedly low interest rates are fueling buyer demand, and despite Covid-19 concerns the Austin economy is still managing to create new jobs that spur an influx of new residents. Combined these factors resulted in the second strong month of consecutive home sales within the greater Austin area. Now, the real question is do we have enough housing supply to keep up with buyer demand?
Want to know what’s happening in your hyper-local Austin market? Contact me today and I’ll give you the run down!
Your monthly housing payment consists of more than just your mortgage payment. When you are looking at purchasing a new home, it’s important to consider everything that goes into your total payment so that you can identify homes that fit in your budget. Although looking at a home’s price is a good starting point, two homes that are the same price can have very different monthly payment amounts.
Principal and InteresT
The majority of your monthly housing payment will likely consist of principal and interest payments for your home loan. This will vary based on the amount you put down on the purchase of the home, and the terms of the loan. However; if you putting 20% down or less on a 30 year conventional loan, the principal and interest portion will be the bulk of your payment. Initially, you will pay more in interest than you are paying down on principal. Over time, you will gradually see more of this total payment going towards principal than interest.
If you put less than 20% down on the purchase of your home you will also have some form of mortgage insurance in your total monthly housing payment. Private Mortgage Insurance (PMI) is required for conventional loans with less than 20% down and Mortgage Insurance Premium (MIP) is an insurance policy required on Federal Housing Authority (FHA) loans. Both PMI and MIP are protection for the lender in the event of default. A borrower may request that PMI be removed when the loan to value ratio reaches 80% either through payments to the principal, appreciation of the home, or a combination of both. MIP also may be able to be removed, but it will vary based on the loan terms and could even require a re-finance.
If you’re purchasing a home, you are going to want to insure it, and a lender will require that the property is insured. Insurance rates can vary by company, policy details, and the property. An older home will likely have a higher insurance rate. If there were many claims on the property over the years, the rate may be higher. The rate will also vary based on the location. The safety of a neighborhood and the likelihood of natural disasters is also going to influence your monthly home insurance rate.
Here in Texas, it’s especially important to pay attention to property tax rates. After your principal and interest payment, this will likely be the second largest portion of your total monthly housing payment. Property tax rates in Central Texas can vary from under two percent to over four percent. On a $400,000 home with a two percent property tax rate, you will pay around $667 per month towards property taxes. For another $400,000 home with a four percent tax rate that amount doubles to $1,334 per month. It’s easy to see how even a small change in the property tax rate can have a significant impact in your monthly housing payment. Make sure to pay attention to property tax rates when looking for a new home that’s in your budget!
Although they are not traditionally included in your monthly mortgage payment, Home Owner’s Association (HOA) fees are something that should be included when thinking about your monthly housing expenses. HOA fees for some Austin area homes exceed $1,000 per month! Even though these figures are not paid in conjunction with your monthly mortgage payment, they are factored in when determining loan eligibility. Other factors to consider include utility costs. An older home may have higher utility bills compared to a newer home that has more energy efficient upgrades. A home located in a Municipal Utility District (MUD) may have a higher tax rate because of that MUD payment. Homeowners in a Public Improvement District (PID) will have to pay a fee, usually annually, to cover the costs of the infrastructure.
As you can see, your monthly hosing payment is made up of many different factors. It’s important to consider all of these items when looking for a home you can afford. Make sure to look into all of the details before you fall in love with your next home. If you have questions about the home buying process, or want a dedicated broker to help you navigate the Austin real estate market, contact me today.
Are you looking for more in your next home than four walls and a roof? Do you want a sense of community and resort style amenities too? If you value the experience as much as you do the home, you’ll want to consider one of these great Austin area communities with the most enviable amenities available to residents. While you will have to travel a bit out of the city to find these great neighborhoods, once you get there you may never want to leave.
Located on the south shore of Lake Travis in the community of Lakeway, Rough Hollow offers residents direct lake access, sweeping hill country views and top notch amenities. Rough Hollow has it’s own yacht club and marina where residents can store their boats, enjoy concierge service, and dine at the on-site restaurant. They even offer complimentary stand up paddle board and kayak rentals to guests (I mean residents). The community also features a resort style pool complete with swim up bars and a lazy river. If you feel like enjoying yourself outside without getting wet there are tennis courts, soccer fields, a playscape, volleyball courts, a dog park and an amphitheater. There’s also a state of the art fitness center and a splash pad for the little ones. Speaking of kiddos, Rough Hollow feeds into one of the best school districts in the Austin area, Lake Travis ISD.
Head west of Austin to Dripping Springs to find Headwaters, another master-planned community with ample amenities. Headwaters embraces healthy living and accomplishes this by providing residents with a vast trail system, a fitness center with on-site work-out classes, an expansive sports field and multiple parks. The developers of Headwaters also wanted to create a strong sense of community among residents and created multiple spaces to assist with this task. There’s a large outdoor pavilion with seating and televisions as well as the HUB wi-fi cafe where residents can enjoy a cup of coffee or a meal with other residents.
Just east of Austin is the appropriately named Easton Park community. Located on 1,500 acres, there’s plenty of room for tons of lifestyle enhancing amenities. The Union is Easton’s Park 14,000 square foot amenity center featuring a club-style fitness facility, event space, and gaming room. Outside you will find bocce ball courts, outdoor fireplaces, jam stations and a huge pool. The Adventure West section of the community will feature an integrated trail system connecting residents to a community garden, amphitheater, playground, pavilion, a pond and a green space perfect for yoga, picnics and outdoor games. There will also be future commercial space in this section of Easton Park. Overall residents at Easton Park enjoy amazing amenities at an affordable price.
In Manor you can find Whisper Valley- Austin’s newest master-planned green community. Residents enjoy access to a huge 600 acre park, community gardens where you can grow and eat delicious produce, ample trails and pocket parks, and an on-site fitness center. There’s also a Google-powered discovery and amenity center, a geothermal heated pool, an activity room and electric car charging stations. It’s not just the amenities that are eco-friendly in Whisper Valley, homes in this community are zero-energy capable.
The Orchard Ridge community is located about 35 minutes north of Austin in Liberty Hill. This master-planned community also offers resort style amenities to its residents. The Activity Center is home to the community clubhouse, the courtyard, an outdoor pavilion with a fireplace and BBQ grills as well as the pool and splash pad. One of the visions for Orchard Ridge was to create garden spaces that residents can participate in and explore. Thus, Orchard Ridge offers community garden plots, and orchards throughout featuring fruit and nut trees. There is also an expansive fitness center available for resident use complete with strength training and cardio equipment. There are ample outdoor amenities at Orchard Ridge too. In this community you will find two neighborhood parks, two tot lots, an expansive play field, and soon there will be a dog park. Additionally, a trail network provides nearly two miles of paths for walking, hiking or biking.
Also located north of Austin, Rancho Sienna is a community full of amenities located in Georgetown. The Sienna House is the heart of the community; here you will find the fitness center which is open 24 hours a day and has tons of workout equipment plus classes for residents to enjoy. There’s also a basketball court if you feel like shooting some hoops. A large covered pavilion allows residents to gather year round. There’s a cozy wood-burning fireplace for keeping warm in the winter and a large fan for a cool breeze in the summer. The Sienna House also has a large grassy lawn for casual picnics, movie-nights, and summer concerts. The Sienna House pool offers something for everyone: dedicated lap lanes, water volleyball, a beach, and Ol’ Dumper who keeps the little ones entertained. Of course a master planned community in Austin wouldn’t be complete without a splash pad, and Rancho Sienna has not one but two splash pads for the kiddos. Don’t think Rancho Sienna forgot about the fur babies; they have dedicated dog parks for small and large breeds, and if your pup need more activity consider taking him for a hike along Big View Trail.
Need help choosing which amenity-filled Austin community is right for you? Contact me today, I’d be happy to help you find your new home.
There are quite a few equestrian friendly neighborhoods in the greater Austin area, and there are other properties that may not be located in a horse community, but are well suited for horses. Obviously, the most important factor to consider when looking for an equestrian property is if the deed restrictions permit horses. Once you ensure the property can legally have horses on it, you will want to make sure the property is suitable for horses too.
When looking for an equestrian property in the greater Austin area make sure to consider these factors:
Austin Area Homes For Sale In Horse Friendly Communities
Horse Friendly Communities in Bee Cave:
Horse Friendly Communities in Spicewood:
Ranch at Windemere
Horse Friendly Communities in Driftwood:
Horse Friendly Communities in Dripping Springs:
Polo Club at Rooster Springs
Horse Friendly Communities in Southwest Austin:
Bear Creek Estates
Horse Friendly Communities in Hutto:
Heritage on San Gabriel
Horse Friendly Communities in Georgetown:
Ranches of Sontera
Horse Friendly Communities in Leander:
Lone Mountain Ranch
You may think that listing your home in the midst of a world wide pandemic is a bad idea. However, there are actually quite a few good reasons why now is a great time to sell your home. Although many home owners are weary about buyers entering their homes at this time, there are a variety of strategies that can be used to mitigate these concerns. Furthermore, if you do want to sell your home in the near future, you may benefit from these unique market conditions.
Less Looky Lous
Traditionally when you are selling your home, it’s not uncommon to have what we refer to as “looky lous” coming through your home. These buyers are not very motivated, and they may not even really be interested in buying at all. A looky lou could even be a nosy neighbor. In short, this type of buyer is really just looking at your home and is not seriously considering purchasing it. Right now, there are far fewer looky lous. The buyers that are actively looking at homes are incredibly motivated. They are going out of their way to view homes, and buyers and agents are taking time to make sure the home is a serious contender before physically viewing the home. When I am working with buyer clients these days, we begin by looking at the home online together. We look at all of the photos, read all of the disclosures, look at the home from google street view, and we make sure it has a good chance of working for his or her needs before we visit the home in person. If we get to the property and notice it won’t work for the buyer’s needs from the exterior, we don’t go inside. In short, the buyers that are sporting gloves and masks, and signing Covid-19 disclosures before seeing a home are qualified and motivated. These buyers are serious.
In Austin, Texas it has been a seller’s market for a long time. There are not enough homes to meet the demand of buyers. However, the pandemic has only exacerbated this issue. Many individuals who were planning to list their homes have decided to wait to list when it’s safer. Others feel they simply can’t market their home with everyone living in it 24/7. Some people who had their homes on the market took them off the market when the pandemic hit. All of these factors result in less housing supply. If you list your home today, you are competing with fewer homes, and when supply goes down, price goes up.
Less Time on Market
Real estate agents use the term ADOM to refer to the average days on market for a particular listing. Single family houses in the City of Austin had an average days on market of 23 last month. In comparison the ADOM for homes in the City of Austin in April of 2019 was 32. Homes are spending less time on the market. As a seller, this is good news for you. Less time on market means less time living in limbo. Less time on market means less time hiding all of your random stuff in closets and under the bed. Less time on market means less time paying utilities, a mortgage, and taxes on the property you are selling.
If you are on the fence about listing your home right now, consider these advantages. Although there may be a risk to selling your home under the current conditions, there are a variety of ways to mitigate these risks, and there are quite a few unintended benefits to selling during a pandemic. If you have questions about listing your Austin area home for sale, contact me today.
Which comes first, the sale or the buy? Navigating buying a new home when you need to sell your current home at the same time.
If you are fortunate enough to be able to purchase a new home without selling your current home first, this post is not for you. However, if your financial situation requires that you must sell your current residence in order to purchase another one, you may be wondering how this is logistically possible. First off, this type of transaction is known as a contingent offer in real estate language. The offer you make on a new home is contingent on the sale of your existing house, and there are a few different ways you can make this type of move.
One way to purchase a new home and sell your current home is to simply schedule both closings for the same day. You could sell your home in the morning, and then close on your new home the same afternoon. However, there are a few challenges with this particular method. First of all, you’re going to need to move all of your belongings out of your home and you should have it cleaned for the new occupants. Any savvy buyer is also going to want to do a final walkthrough before the closing. So, you would need to ensure all of your belongings are in the moving truck and the home looks presentable before the buyer does the final walkthrough. Is this doable? Yes, but it may not be pretty. Afterwords, you would need to sign all of the paperwork for the closing of your new home and wait for the lender to fund the purchase. Only, then could the moving truck deliver your possessions to your new home. Lastly, it’s not unheard of to have unexpected delays on either the buy or the sell side. Say the couple purchasing your home runs into unexpected financing issues that delay the sale of your current home a few days, you would need to amend the contract for your new home purchase by a few days too. In this scenario, you would hope that the seller of your new home agrees to the delay, but they don’t have to sign an amendment extending the closing date. You could be left in a very tricky situation.
Another option is to negotiate a seller lease back in the terms of the contract for the sale of your current home. A seller lease back allows you (the seller) to close on the sale of your home, and then lease back your home from the buyers for up to 90 days. You can negotiate the exact terms of the lease, but expect to pay something for this lease and potentially include a security deposit too. A seller lease back can be for as short as only a few days, too. If you have a short seller lease back, you would need to already have an offer in on another home that is contingent on the sale of your existing residence. A short lease back allows for a little more wiggle room with moving opposed to the same day double closing. A long seller lease back could be used when you haven’t even identified a new home yet. If you closed on your home with a 90 day lease back, you would have approximately 60 days to go under-contract on a new home, and you would be able to put in an offer that was not contingent on the sale of your current home since you would have already sold it. A contingent offer is often viewed as less strong than an offer that is not contingent. Thus, in a strong sellers market, closing on the sale of your home first with the temporary residential seller’s lease may be your best option to secure a new home.
A third option when trying to sell your current home and buy another one is to simply sell your current home, and then buy later. You could sell your home and then move all your possessions into storage and huff it out in a hotel while you look for your next home. You could go stay with family or friends. You could rent an apartment for a few months. All of these possibilities could work, but they would essentially involve moving twice.
Lastly, you could make an offer on a new home that is contingent on the sale of your existing home and involves a buyer’s temporary residential lease. This is similar to the seller’s temporary residential lease I outlined earlier, but it’s opposite. You would be leasing the home from the sellers before you purchase the home. This may be a good option if you can’t live in your home and allow showings at the same time. However, this method is also risky. What happens if you can’t sell your home or you suddenly lose your job and no longer can actually purchase the home you are now renting? Remember I said this lease was temporary. The buyer’s temporary residential lease is only to be used for a maximum of 90 days, and you are under-contract to ultimately purchase the home too. If something unexpected happened during those 90 days you could be forced to move back into your old home.
Ultimately, which method you decide to use to sell your existing home and buy a new one is up to you and will largely be based on your individual situation and the market conditions. If you have questions about the best strategy to use in your next move, feel free to contact me.
If you're anything like me, the idea of an entire month of staying home sounds like an incredibly daunting task. That's why I decided to come up with a list of 100 ways to avoid boredom while staying at home during the coronavirus pandemic. I've rounded up a whole lot of activities for individuals of all ages to have fun, be productive, and keep you occupied while social distancing.
Below is a great printer friendly version for you to put on your fridge!
In a previous post, I discussed how the effects of the coronavirus on the Austin housing market are still uncertain. Since, writing that post, many things have changed. A shelter in place order has been put into effect for the City of Austin, Travis County, Williamson County, and Hays County. Each of these ordinances varies slightly, and while real estate services are included as an essential professional service, the extent to which a REALTOR can perform his or her job duties is limited by these orders. The City of Austin ordinance as well as the Travis County order explicitly prohibit the showing of homes during the coronavirus shelter in place.
While other counties do not necessarily prohibit showing homes, the spirit of all orders is to allow real estate services that are truly essential. Assisting in the successful completion of closings for homes that are already under contract, providing critical property management services, and housing unhoused individuals is permitted while maintaining social distancing protocols. That being said, these orders severely limit the amount of real estate activity that can legally take place.
On March 20th, I took note of the recent market activity for residential homes in the greater Austin area. All stats that follow are based on statistics for all single family homes in the Austin MLS. This includes homes, condos, and townhomes. From 3/19/2020 to 3/20/2020, there were 287 new home listings. One week later, the number of new listings dropped by 114. The number of pending home sales similarly decreased but not nearly as dramatically. On Friday, March 20th, there were 136 pending home sales. In comparison, we saw 18 pending home sales on Friday the 27th of March. Additionally, home sales decreased from 145 on the 20th to 108 on the 27th.
The number of homes leaving the MLS is also indicative of the effect of Covid-19 on the Austin real estate market. Between March 19th and March 20th, 16 homes were withdrawn from the Austin MLS. That number rose to 23 between 3/26/2020 and 3/27/2020. Real estate agents also have the availability to change the MLS status of homes to temporarily off market. On Friday the 20th, 35 homes were changed to this temporary status. Yesterday, March 27th, there were 47 homes that went to temporarily off market status. These numbers are more substantial when looked at from a greater duration of time. In the 3 days prior to 3/20/20, 91 homes went to temporarily off market status. In comparison, 196 homes were temporarily taken off the market between March 25th and March 27th.
In short, Covid-19 and the resulting shelter in place orders are affecting the Austin real estate market. If you can’t physically show homes, there will be far fewer home sales. In my personal business, I am seeing these effects first hand. Clients who planned to list their homes and buy new ones are holding off until after the coronavirus pandemic. My new construction deals are continuing; however, the implications of the shelter in place orders will very likely slow construction on many homes. As always, if you have specific questions feel free to contact me.
As the coronavirus provides a very real concern to most of the world, one of the most common concerns among many Americans is how to face the immediate concern of boredom. The vast majority of us are practicing social distancing, and staying at home as much as possible. However, you can only binge Netflix for so long, before the yearning to do anything else really kicks in. Now is a great time to think of ways to make this time as productive as possible. Consider tackling some home projects to ease your boredom as we face this global pandemic. If you need supplies, most hardware stores are still open, and many offer online ordering to minimize your interactions. Here are some of my personal suggestions for staying busy around the home.
1.Tackle Deferred Maintenance
Before you start thinking about watching youtube videos on how to re-tile your master bath, it’s best to start with the regular routine maintenance you may have been neglecting. Do you remember the last time you changed your air filters? If not, now’s a great time to change them. How about that towel rack that came loose 6 months ago? Why not get out your screw driver and finally fix it? Look around your home, and identify all of the little projects that you know need to be addressed. Then, get to work on fixing them one by one.
While you are identifying the deferred maintenance items on your list, you may have noticed areas where you need to do some touch up paint. Hopefully, you have some extra paint on hand, and can touch up those spots easily. If you don’t, you may want to hold off on that project until after the coronavirus season. However, if you’ve had aspirations to paint an accent wall, or like me have considered an elaborate paint stenciling project, now’s a great time to pick up the roller and get to work. If you’re looking for inspiration, I ordered my wall stencil from a great US company, Cutting Edge Stencils, they have plenty of ideas for using their stencils on their website. Don’t limit yourself to just walls, you can also paint tiles, furniture, and patios.
With everything happening in the world, the idea of spring cleaning is now more important than ever. In addition to disinfecting hard surfaces, light switches, and door knobs consider some more extensive cleaning projects too. Why not think about cleaning out your junk drawer, organizing your closet, and re-claiming your garage? Why not Marie Kondo your entire home? You know you have the time.
I don’t know about you, but just seeing a bright colorful flower brightens my day. That’s why I planted some blue delphiniums in my front porch planters early this week. If you can’t make it to a store to purchase plants right now, that doesn’t mean you can’t work on your garden. You can pull weeds, move rocks around to create beds, and prepare the soil. You may also have some seeds on hand. I found a bunch in my junk drawer earlier this week. Now, I have a nice little cropping of sunflower, tomatoes and basil seedlings that have started growing in my windowsill. Now, more than ever you may recognize the benefits of growing your own produce.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.