Market Update for August 2019
Predictions, Predictions, Predictions
If you like real estate statistics and charts as much as I do July is a fun month. We attended both the Home Builders Association of Austin Mid Year Update as well as the Austin Board of Realtors Market Update with Dr Jim Gaines from the Real Estate Center at Texas A&M University. Inside we share some of the more interesting slides. If you would like a copy of the entire slide deck text us your name and email to 512-791-7473.
The home builder’s presentation focused on supply and demand as the builders are struggling to keep up with the number of people wanting to buy in our area. To keep homes affordable builders are having go further out to find land cheap enough to build on, build on smaller lots (one builder in Leander is building single family homes on 19’ lots). The ratio of land to home price is typically 5 or 6 to 1. What that means is if the lot is $50,000 the price of the home needs to be $250,000-$300,000. We are seeing smaller homes on smaller lots and it was said “$300,000 doesn’t buy what it used to” when talking about changes in the market.
Williamson County Judge Bill Gravell talked about a proposed bond package and said “You can’t be successful if you can’t move people.” Although there are not any specifics at this time one of the projects would expand Ronald Reagan Blvd. With the projected population estimates for the Austin MSA being between 4.5-5.2 million by 2050 long term infrastructure plans will be important.
Dr Gaines talked about how affordable housing will be a problem in Texas over the next 25 years. Millennials by and large are still renters due in part to high levels of student loan debt.
Around our area we see many other affordability issues that rarely are talked about. Here are a few…
Many seniors would like to downsize their home. Property taxes become a challenge because our property taxes are not portable to a new home. What happens is someone who has lower taxes with an Over 65 Exemption looks into moving up to a home with a better floor plan for them and discover the property taxes on the newer home have higher taxes. Not only does that keep the senior from downsizing but also keeps their home from being available for a family looking for a larger home.
We see many families who have been renting for years and are now priced out of being able to buy in the neighborhood. They would have been able to buy 2 or 3 years ago but today the prices are higher and they no longer can qualify for a mortgage payment for a home. The only good news is rental rates have not increased as much as home prices in many areas.
Many families we talk with already own a home and would like to move up to a larger home in a couple years when their kids are older. What they don’t realize is many of the type of homes that would be worth them making a move are being sold too quickly for them to have a chance. As prices are going up, they will likely regret not moving up to a larger home today with low interest rates rather than pushing a move off into the future.
We have friends with family living in other parts of the country who contact us every year about possibly moving to the area. They want to be closer to their kids but they want to wait until their current home in Albuquerque or Cleveland appreciates more. Of course, home prices in those cities aren’t keeping up with prices around here. That means when they do finally decide to make a move, they likely will have to find a home farther away from their kids.
Where Are Our Clients Moving?
We know many people are moving to our area from Houston, Dallas and California but where are people going when they sell their home? It’s a small sample size but here are where our
clients from July moved to:
Florida -3, Georgetown, TX -2, California –1, Oregon -1, Washington -1. Our 3 clients who moved to Florida all are retired. That sounds good to me!
Attending A Conference And Better Customer Service
In mid July we were fortunate enough to get out of the heat and attend a real estate conference in Traverse City, Michigan. It’s always interesting to meet other high level real estate professionals from around the country to see how things are done in other markets.
This year we have been focusing on systems to provide better customer service for our clients. At the conference we learned from some of the best in the business and are have already put many systems into place to make the home buying and selling process easier for our clients.
Traverse City is a great place to visit. The weather was about 75 and the town is full of restaurants with great food (and ice cream). Other highlights were climbing to the top of Sleeping Bear Dunes and stumbling into a concert performed by a band playing 70’s and 80’s pop cover songs.