Bill Morris Realtor

RE/MAX supports military families

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Wed, 16 Nov 2011 14:00:18 -0800

RE/MAX has been recognized in this area for five consecutive years:

RE/MAX Recognized for Dedication to Military

This is just one of many reasons I'm proud to be part of this organization, along with being the real estate industry sponsor of Children's Miracle Network and Happy Hill Farm Academy, and a strong supporter of Komen Foundation. (Oh, and yes, the most experienced, educated, and productive real estate professionals in the industry.)

Bill F. Morris, ABR, CRS, CDPE, e-PRO, MBA
RE/MAX Capital City
Call or Text:       512-785-3345
Toll-Free:           1-800-692-8784, x 162
Email:                 bmorris@remax.net
Web:                   www.eHomesByMorris.com

Your personal referrals are the best measure of my success!

Austin CowParade for the kids!

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Tue, 15 Nov 2011 21:48:42 -0800

Austin isn't the first for this kind of fundraising, and this isn't even the first of its kind here. It is fun, though:

Proceeds went to Dell Children's Medical Center and The Superhero Kids Endowment. I didn't participate in the auction, but I donate part of my fee from every real estate transaction to the Dell hospital, so I am thrilled to see this huge benefit for them. Here's a little more about this event from local station KXAN, linked by the Austin Business Journal:

'CowParade' art auction raises $1.5M: kxan.com

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Can a website tell you your home's value?

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Tue, 15 Nov 2011 11:27:09 -0800

It used to be that when I arrived to discuss pricing with a prospective seller-client many were just waiting for me to share my market analysis, and hoping my opinion of their home's value was as high as theirs (or at least what they "needed to get"). They may have talked to other real estate agents, or heard a neighbor talking about what he heard about another neighbor's sale price, or they might have collected flyers from overpriced houses around the neighborhood to support their own opinion.

Now, most people have checked one or more of many websites that purport to offer "estimates" of market value. SmartMoney.com offers an interesting discussion on that subject:

The Fuzzy Math of Home Values

That article is a good summary of what consumers should expect from those online estimates. In short, they may be fairly accurate, but the odds are high that they will be misleading -- through no fault of the purveyors of those websites. It is simply not possible so far for an affordable programmed algorithm to take into account all the variables that influence the market value of a specific home.

That fact is complicated further in "non-disclosure" states like Texas, where sale prices are not public information. This leaves those algorithms to work with appraised tax values (which may be questionable themselves since the appraisal districts don't have access to sales data either), extrapolations from recorded mortgage data, etc.

I have seen online home value estimates that were half of actual value, and I have seen them twice as high as homes ultimately sold for. I have seen a duplex valued based on "comps" that were very nice single family homes in entirely different parts of the city. Two different websites can provide very different estimates of value for the same home.

Even with all of our technology, there are still only two reasonably reliable ways for a homeowner to get good estimates of market value: (i) a fee appraisal or (ii) a market analysis from an experienced real estate professional. Even at that, this is a combination of art and science: Every share of Dell stock is exactly like every other share, and they all sell for "market value" at any point in time. On the other hand, five copies of the same house floorplan in the same neighborhood may well have five very different values, based on location, condition, owners' choices of colors, flooring, countertops, appliances, pre-listing staging, etc.

The take-away: Consult a professional, and consult more than one if needed. If properly prepared and presented, the market data will tell a pretty unambiguous picture of the range of market values in which a home can compete effectively. Get comfortable with the quality of the analysis. Maybe more importantly, get comfortable with the professional you choose to represent you in this very important process. A lot depends on that decision.

Your personal referrals are the best measure of my success!

Who owns your mortgage? You might be surprised

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Sun, 13 Nov 2011 11:11:33 -0800

Property rights in the United States depend on routine and reliable recording of all related documents -- deeds and liens -- and easy public access to those records. County recording offices have traditionally been where such "public notices" are readily available.

A company that has been tracking ownership of mortgage loans for almost twenty years is an important reason for questions about whether the current system of keeping up with many mortgage loans properly meets that standard and tradtion:

County clerks warn that private home loan registry may cloud titles to thousands of Central Texas homes

This relates directly to much of the turmoil in the mortgage foreclosure crisis over the past year or more -- lawsuits in which it was found that lenders taking properties through foreclosure could not produce properly recorded evidence that they actually owned the liens involved. Without that evidence, it has been found in some cases that those lenders did not have the right to foreclose at all.

This is more than just interesting, and it is by no means unique to Central Texas. This "public notice" requirement is vital to confidence in private property rights, a foundational principal and a huge part of what makes the United States the United States.

I always welcome comments on my blog, but I especially invite them on this post. In particular, if you work in the mortgage industry or the title insurance industry, please share your thoughts here.

Your personal referrals are the best measure of my success!

Sales dollar volume - another look at Austin home sales

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Fri, 11 Nov 2011 14:23:27 -0800

A few days ago I updated my Austin Market Dashboard, and earlier today I commented on the status of median home prices in the Austin Metro area. This post offers a view of sales history here that combines unit sales and average sale prices -- total sales volume in dollars:

There has been a lot said and written over the past couple of years about the trouble in the housing industry -- and there certainly has been some. More in some places than in others, but we have all felt it.

What the chart above points out is that the total dollar value of home sales activity in the Austin metro area over the past 3 or 4 years hasn't really been unusual, except that it hasn't been growing. It's not really down from an historical perspective, though. What was unusual was the bubble that we enjoyed in 2006 and 2007, as did most of the U.S. Our bubble wasn't as large as some so our fall wasn't as long, but there is no doubt that a correction took place.

The other notable feature in that chart is the distance between the annual highs and lows in 2008 through 2011. There is an obvious upward trend overall during those years, and the shape of this curve in 2011 looks very much like pre-bubble 2005. Year-to-date dollar volume in 2011 (January through September) is just 2% lower than the same period in 2005.

Does this mean "happy days are here again?" If that means going back to the boom time of 2006-2007 (or 1998-2000), probably not. We are on the mend, though, and, given continuing uncertainties elsewhere in the world and elsewhere in the U.S. housing market, virtually all forecasts are for continuing growth for Austin and Central Texas.

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Disclose, disclose, disclose! Just ask the Quaids ...

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Fri, 11 Nov 2011 12:23:12 -0800

I don't usually pay much attention to our celebrity culture, but this article in the business section of yesterday's Austin American-Statesman caught my eye:

Quaid, wife sue to void purchase of Austin home

Anyone who has been in the real estate business is well aware of the requirement to "disclose, disclose, disclose" everything you know or think you know about the condition of your home when selling. Not only is it the right thing to do, but it is the best protection against this kind of horrible surprise.

Dennis and Kimberly Quaid purchased their home on the shore of Lake Austin in February of this year. Apparently, they have encountered many things about the house that they wish they had known sooner. Since I have no knowledge of the facts of the case I won't comment on whether the case has merit, but picture yourself -- 9 months after you sold your home and moved on with your life -- being faced with this kind of lawsuit.

Will they have to return the proceeds of the sale? Possibly. Will they spend a lot of money on legal fees to get through this? Almost certainly.

Sure, home buyers should do their own due diligence -- property inspections, etc. -- but as a seller, there is no substitute for being absolutely meticulous in preparing your disclosure notice prior to putting your home on the market.

Your personal referrals are the best measure of my success!

NAR: Median Home Prices Down - How About Austin?

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Fri, 11 Nov 2011 12:05:58 -0800

According to a report from the National Association of Realtors® this week, the median price of resale homes in almost 3/4 of 150 U.S. metros in 3rd Quarter 2011 compared to the same period in 2010. Click here for details. NAR's data shows a 4.8% decline for single family homes in Austin, and a 2.1% increase for condominiums. I have not tracked prices by product category in my Austin Market Dashboard, but the combined data that I do have, as reported by the Real Estate Center at Texas A&M University shows about a 1% decline overall from 3Q'10 to 3Q'11, so we're in the right ballpark.

Reviewing monthly Austin Metro median prices reveals a clear trend from pre-recession times to now, noticeably interrupted in July 2010 by the end of our last homebuyer tax incentives:

Isolating just the 3rd quarter numbers from those years shows that this year's quarterly decline is not especially a concern. Note price levels in 2011 compared to 2007 and 2008, when we should have been feeling the effects of the housing downturn:

The weakest time for home prices in the Austin/Central Texas market was 2009, and this year's 3rd quarter median is up 3.5% from that time. Reviewing the details of NAR's data shows that most of the cities reporting large increases in home prices this year are among those that have the farthest to go to regain their pre-recession levels. It is great to see large increases in those cities, and we must all hope this change represents a trend.

On the other hand, Austin's "slow and steady" performance during the recession means that a dip compared to last year's very unusual July price spike should not be surprising. The longer-term view remains encouraging.

Your personal referrals are the best measure of my success!

Austin Market Dashboard - updated

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Sat, 05 Nov 2011 12:41:14 -0700

Followers of my blog know that I have not been keeping up with this space over the past several weeks -- a testament to the busy-ness of the Austin/Central Texas real estate market. Amidst continuing discouragement from national news reports, our local economy is growing and creating jobs, and the real estate market is moving well as a result. I have posted a complete discussion at www.AustinMarketDashboard.com, but I'll offer a couple of highlights here. First, for three consecutive months -- July, August, and September -- 2011 home sales were up more than 30% compared to the same months in 2010:

That is good news, especially considering that this is the first year in three years in which seasonal sales patterns were not distorted by temporary tax incentives aimed at encouraging home purchases. Second, although sales and average prices have dipped recently those changes represent very typical seasonal market behavior. The market indicator that I find more meaningful is the absorption rate, or "odds of selling":

That absorption rate has dipped over the past couple of months too, but this is the fiirst time since 2005 that we have seen this metric bouncing around the long-term average of 21% rather than a much lower level. With continuing uncertainties in the U.S. political and economic scene, and in the world economy, these Winter months may remain a little soft, but if history is an indication then we are poised to enter a new growth phase in the local real estate market. Feel free to visit www.AustinMarketDashboard.com for more detail and discussion, or just call or text or email me if you have any questions.

Your personal referrals are the best measure of my success!

Happy Halloween! Haunted houses for sale ...

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Mon, 31 Oct 2011 10:51:41 -0700

From RISMedia:

Top 10 Haunted Homes For Sale

Trick or Treat! Have a great day

Your personal referrals are the best measure of my success!

Austin ranks highly in economic growth

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Wed, 14 Sep 2011 12:53:05 -0700

Austin Business Journal posted an article this morning about the growth in Austin's Gross Metropolitan Product in 2010 -- just under 7%, compared to 2.5% average GMP nationally. Here is their source, from Business First of Buffalo:

Gross metropolitan products for 366 metro areas

Among all 366 metro areas analyzed, the Austin-Round Rock-San Marcos area was the 35th largest local economy. It ranked 13th on GMP growth rate:

Notice that most of the other cities on that list are much smaller economies. Among the 50 largest metropolitan economies, the Austin/Central Texas area enjoyed the 2nd fastest GMP growth last year, only led by California's Silicon Valley:

Obviously, Northern California experienced the housing downturn very differently than we did here: According to the Case-Shiller Home Price Index through June 2011, the average home value was down 38% from the peak in May 2006. Austin home values gained 16% over the same period. That's a difference that may last a long time given the size of the housing bubble that burst in California.

On the other hand, Northern California and Austin have been compared many times, and they have a lot in common in terms of technology-driven economies and entrepreneurial spirit. It is great to see both growing. These cities should be pacesetters for the national economy in the coming months and years.

Your personal referrals are the best measure of my success!

Austin vs. Clear Capital Market Report

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Wed, 14 Sep 2011 09:54:54 -0700

On Monday I tweeted a link regarding the most recent Clear Capital Market Report:

Summer’s Last Stand: Clear Capital® Reports U.S. Home Prices Increase 4.0%

As always, this kind of report makes me curious about how the Austin/Central Texas real estate market compares. That's the reason for this post.

First, here are a couple of tables I lifted from the Clear Capital report (click to enlarge):

Interestingly, you will recognize that many of the cities on both lists -- highest and lowest performing -- have also appeared on lists of the cities that suffered most from the recession and housing downturn. It is encouraging to see real gains in home values using Clear Capital's unique approach to quarter-to-quarter price comparisons, but many of these cities still have a long way to go before saying that home values have recovered. It is also very discouraging to see so many troubled cities still struggling, and posting losses in home values year-to-year. Clear Capital's report notes that "The gains of summer are not recouping the longer-term declines, and national yearly home prices are down -6.2% compared to last year’s levels."

Clear Capital used data through August 2011. Final August data for Austin isn't in yet, so I can't make direct comparisons, but I can say that average home sale prices in May-June-July were 4.24% higher than in the previous three-month period (and unit sales were up more than 37%!). I can also say that the average sale price in July 2011 was 10% lower than one year earlier. As I have pointed out in the past, the average price in July 2010 was dramatically, and artificially, inflated because the tax credit program that ended the month before had shifted lower priced sales forward, leaving upper-end properties to dominate in July. I cannot comment knowledgeably about how much that distortion affects the year-to-year figures in the lists above, but I am confident that it is a factor. We did not have that kind of artificial influence this year, so the strength in sales and sale prices in Austin this spring and summer have been impressive:

A key influence on home values during this difficult period has been the proportion of distressed sales (short sales and foreclosures) in a local market area. Looking at the lists above, you will see that most of those metropolitan areas are still seeing huge numbers of foreclosed homes (REO Saturation) -- 30% to 50% of all home sales! In contrast, 13.7% of homes sold in the Austin metropolitan area in May through July were foreclosures, and they tended to be concentrated in identifiable subdivisions and hyperlocal market areas. Distressed sales have not exerted the kind of generalized price pressure here that many other cities have experienced.

Summary: According to Clear Capital the healthiest quarterly gains in home values were in the Midwest (7.3%) and the Northeast (4.9%). Texas is in the South in their study, where quarterly improvement was 3.5%. The Austin area is above that average -- using data only through July. Based on "raw" MLS data, I expect to see final August prices higher than July, so our "apples to apples" comparison with these other cities should look even better. Moreover, Austin's slow-but-steady growth is very refreshing given the upheaval still going on in so many other places.

Your personal referrals are the best measure of my success!

Wells Branch Beauty!

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Tue, 13 Sep 2011 10:39:39 -0700

Wonderful Wells Branch home!

Beautiful 3-2 in Wells Branch. Master bedroom opens to private patio. Wonderful sunroom off of living area. Great master bath with jetted tub. Large corner lot. Renowned Round Rock ISD schools.

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Bill Morris , Realtor®, ABR, CRS, CDPE, e-PRO, MBA
www.ehomesbymorris.com | 512-785-3345 | Contact Me

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Remembering ... and moving forward

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Sun, 11 Sep 2011 09:12:29 -0700

The world changed ten years ago and the war with those who attacked the U.S. still goes on. It's important to take time to remember, and to be thankful for what we have, and for the strength and resilience of the United States of America!

We have domestic challenges, too, but if we have learned anything in the past ten years it must be that we will go on, and succeed, and thrive.

Today is an occasion to pray for those who were lost on 9/11/11, to thank those here and abroad who have sacrificed so much since then, and to look forward calmly and resolutely to the many bright days ahead.

Your personal referrals are the best measure of my success!

Austin-area fires somewhat contained, but devastating!

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Wed, 07 Sep 2011 13:17:25 -0700

I was out of town for the past several days, catching glimpses of the news about fires burning all around the Austin/Central Texas area. I contacted clients and colleagues that were the most likely to be directly affected, and I am very happy to find most still okay.

One family that I helped buy their first home a few years ago still hasn't been able to get back to find out if it is still there, but they got themselves and their pets out safely. Another friend and client who lives on acreage south of the Austin airport is packed up and waiting to leave if necessary. There was a fire near her last night, apparently started by a neighbor who thought burning trash in his back yard would be just fine in these conditions!

Other friends and clients and colleagues were evacuated but have been able to return home ... for now. It has been a full year since we had any significant rain here, and although it's a few degrees cooler today, by the end of August we had 76 triple digit days this summer, with more in the forecast next week!

Two lives are known to have been lost so far, and hundreds of Central Texas families are without homes and there is no end of the drought in sight. I love this area, and I really haven't minded the hot summer, but please take a minute to send out some prayers for those that have been so devastingly affected over the past several days.

For more, here's the latest on the fires at this moment:

Central Texas Fires Update

With Hurricane Irene and Tropical Storm Lee along with Texas fires, there are plenty of prayers to spread around, but it is SO VERY important!

Your personal referrals are the best measure of my success!

Texas homestead changes ...

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Sat, 03 Sep 2011 10:40:59 -0700

In case you missed it, the Texas Legislature enacted new rules in this year's session aimed at making sure that property owners claiming the Homestead Exemption from a portion of their property taxes are legitimately using the home as their primary residence. That law took effect on September 1, 2011. If you already own your home and have your exemption in place, this does NOT affect you, but ...

If you buy a new home and need to file a new Homestead Exemption Application, or if you want to add additional homestead-related exemptions ("Over 65," for example) you will need to provide more info than in the past. Specifically, you'll need to provide a copy of your Texas driver's license (or State-issued ID) and a copy of your vehicle registration receipt. The addresses on both must match the address you are claiming as your homestead.

If you bought a home this year, don't rush out to file for your homestead exemption. You're not eligible to claim it until January 1, 2012 anyway. (And don't fall for a scam by paying somebody to file it for you!) When the time comes though, be aware of these new requirements.

Your personal referrals are the best measure of my success!

Confidence in Austin

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Thu, 01 Sep 2011 13:15:16 -0700

I have written about the surge in multifamily building permits earlier this year in the 5-plus family category. With population and job growth continuing, and home values still in the doldrums where many of those new Austinites came from, the need for rental property here is clear, and builders and developers recognize it. Here's another sign of the confidence developers have in Austin's future:

Projects in progress promise revenue, attraction for city

That article discusses several projects that are either underway or in progress in Downtown Austin. The hotel projects and Bowie Street redevelopment, all serving the Austin Convention Center area, demonstrate the expectation that Austin will continue, and grow, as a "destination" for visitors.

Just more reasons to stay bullish on Austin ....

Your personal referrals are the best measure of my success!

A great example: Commitment to Helping Others

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Thu, 01 Sep 2011 10:48:32 -0700

I have known and worked with John Pfannkuche over the past couple of years, and I know that he has had some very real challenges of his own in the economic downturn. I have watched him keep his chin up and continue moving forward.

His own issues have not dimmed John's willingness to do for others. This article from last Sunday's Austin America-Statesman is a real testament to John's character:

Texas community work to rebuild after wildfires

Donating his personal time and talent to rebuild a neighbor's house for free, John demonstrates the best of what we should all aspire to. I'm proud to know John Pfannkuche and proud to share this bit of his story.

Your personal referrals are the best measure of my success!

Austin maintains in a faltering Case-Shiller world

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Tue, 30 Aug 2011 12:54:29 -0700

S&P's Case-Shiller home price index reports are out and numerous press reports are highlighting the fact that in June 2011 average home values were down compared to June 2010 in all twenty of the cities used in the C-S study. There really is no way to sugar-coat that for homeowners in those cities except to point out that on a month-to-month basis things don't look nearly so bleak this year. If you own a home in one of those cities, though, and you have been waiting to sell your home so you could move for a better job (or for any job), or just to move to a more affordable rental or a smaller mortgage, losing ground over the past year is bad news.

Ultimately, the problem still is the overvalued housing stock that was purchased during the "bubble" in the middle of the last decade. Since the downturn, foreclosures have dominated private sellers' ability to set their sale prices, and significant "shadow inventory" of foreclosures still to come allows little hope of this improving over the next year or so. I disagree with policy solutions that cause this process to take longer than it otherwise would, but whether we drag this out for two or three more years or let the market "settle" more quickly, allowing these properties to flow through the market will be extremely disruptive and painful.

Still, the vast majority of these problems continue to be concentrated in a handful of states, and even more concentrated in a relatively small number of municipalities around the country. Much of the middle of the country is relatively unaffected by the housing downturn except as simply part of the national recession that we're all experiencing. In Texas, the foreclosure rate is much lower than California, Arizona, Nevada, and Florida have seen, and outside the major cities foreclosures are very rare statewide.

Even in Austin -- not one of the Case-Shiller cities -- home values have fared well over the past few years. Among the cities used in the Case-Shiller indices, Washington, D.C. has been the best performer since its local market bottom in early 2009. That does not mean, however, that homeowners to bought in 2006 in the Washington area are happy with their property values today. In Austin, on the other hand, average values have held their ground and even gained some through this difficult time:

If you purchased a home in the C-S cities before 2004 the odds are good that your home value is still at or above what you paid, but if you made your purchase in 2005-2006-2007 (or refinanced at those inflated values), then there really is no silver lining in small monthly improvements. Austin home values are up, on average, about 50% since January 2000 -- roughly the same as the 10-city and 20-city indices, but obviously the probability is much higher here that you can sell when you choose to and at least breakeven, if not realize some gain.

The recession-driven low-point for unit sales and average sale price in the Austin metropolitan area was January 2009, just a few months before the bottom for the Case-Shiller cities. This chart compares year-to-year price performance since then:

Average prices in the Austin area have been up year-over-year in 15 of the last 19 months. We definitely saw a dip in June, but the magnitude was smaller than the C-S indices, and it followed a long string of gains. The last annualized good news in the Case-Shiller cities was in September 2010. Note also that Washington, D.C. gained year-to-year in 18 of those 19 months, but January 2009 was more than 40% below its year-before level, compared to just a 10% dip in Austin.

Again, there's no way to put lipstick on this and improve the national picture. The housing industry is troubled and is likely to remain so for some time to come. But I encourage folks who already own homes in Austin, or plan to, to keep the faith. Our fair city's performance remains much stronger than national news stories will lead you to believe, and as I have pointed out a number of times, sales and value growth over the past twelve months have been "natural" -- i.e., without the distortion of tax incentives for home buyers. This growth is truly a tribute to the underlying strength of our local and regional economy, which remains robust and resilient.

Your personal referrals are the best measure of my success!

Mortgage problems? You have options!

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Fri, 26 Aug 2011 23:10:29 -0700

Austin's foreclosure rate is much lower than the national average, and really dramatically lower than the hardest-hit cities in the country. Nonetheless, one related trend is as true here as elsewhere: When homeowners have problems making mortgage payments, most just hunker down and wait for the hammer to fall. If you're in financial straits, please don't be one of those.

Nationally, about 1 out of every 600 homes -- 0.16% -- received a notice of sale (foreclosure) last month. The Texas average was about 0.11% -- one of every 920 homes. The rate in Travis County was 0.12%, or one over every 859 homes. Compare that to Las Vegas, NV, where one of every 112 (0.89%) homes received a foreclosure notice last month. That's almost 7 1/2 times the foreclosure rate in Travis County! To be fair, Hays, Williamson, and Bastrop counties are doing worse than Travis -- 0.24%, 0.22%, and 0.18%, respectively. But the highest foreclosure rate in the Austin Metro area is 73% lower than in Las Vegas! Nationwide, foreclosed properties represented 31% of all home sales in the 2nd quarter of 2011. In the Austin Metro area, it was less than half of that -- about 15%.

But the point here isn't just to report on the recent foreclosure market, but to encourage homeowners who need help to try to help themselves. Indeed, the fact that we have fewer foreclosures here may make it harder for troubled homeowners to admit that they need help.

In a quick review of all the properties for which I have provided Broker Price Opinions over the past year, and the foreclosed properties that I have put on the market, I found that only 12/5% -- 1 of 8 -- were listed for sale during the previous 12 months. That means that 7 out of every 8 homeowners in this market sample never listed their homes for sale before they were taken in foreclosure.

If you're struggling with your house payment, or you have already missed a few payments, don't be one of those 7-of-8 folks! If you get in trouble financially:

Communicate with your mortgage lender or mortgage servicer (whoever you send your payments to);
Explain what has changed in your life that makes it hard to keep up with your mortgage -- job loss, medical issues, family growth, etc. -- a real hardship, not just "my house has lost value and I don't think I want to pay for it anymore";
Explore a forebearance agreement, which will allow you some time with no payments or with reduced payments while you get past the problems that caused you to default on your mortgage;
Try to work out a payment plan to get caught up;
Ask for a mortgage modification;
Hire a real estate professional to represent you in a short sale. (Short sales must be listed in the local MLS.);
Propose to sign a deed in lieu of foreclosure. (Deed the home back to the mortgage lender with minimal damage to your credit.)

There are many alternatives. There are no guarantees. But when you're dealing with your family's home, and your largest financial asset, it's important enough to try!

The most important of those steps is to COMMUNICATE with your lender! If you stop making payments and refuse to talk to your lender, you will definitely be on your way to foreclosure. Instead, pick up the phone. Call your lender's customer service line. Ask about your alternatives. Ask who else you can talk to. Keep notes and write letters! Document the reasons for your financial hardship. Document your efforts to work things out. Don't delay! Take action as soon as you realize you're in trouble!

If you're not sure what to do, call a professional! Many of us who work with distressed property situations will be happy to talk with you and offer advice. And if it turns out that a short sale is your best option, give it a try! Find an agent or broker with the right experience, get the right consultation, sign a listing agreement, and see how the market responds! You have nothing to lose, and you just might save your financial future!

Your personal referrals are the best measure of my success!

Austin Market Dashboard - thru July

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Wed, 24 Aug 2011 19:27:47 -0700

Reports on the United States residential real estate sector continue to disappoint, with weak housing starts, falling home sales, and declining prices. Even the Austin/Central Texas market experienced similar shifts in July 2011, but not as part of a trend as in other parts of the country. The Austin metropolitan area continues to enjoy population and job growth, high rental occupancies and resulting rising rents, and general strength in the regional economy.

To begin this month's dashboard discussion, here is a snapshot of the Austin Metro market as of August 24, 2011:

Active Listings: 8,714
(down from 9,021 last month)

Sold Last 30 days: 1,753
(up from 1,644 last month)

Months' Supply At That Pace: 4.97
(down from 5.5 months last time, and solidly in "sellers' market" territory)

Pending Contracts: 2,550
(down from 2,698 last month)

Pendings at about 1 1/2 months' sales indicates stable demand during the last month before the school year began here. It is worth noting that the final July market numbers used in the remainder of this summary reflect a decline in sales volume from June 2011 to July 2011 -- not the increase seen in the most recent 30 days of MLS data. That is an indication of the volatility of the market over short periods of time, but supports the fact that underlying market strength remains. It is reasonable to expect some seasonal slowdown in the coming months, although homebuyer tax credits and general economic turmoil have so badly distorted seasonality over the past three years that predicting what "normal" will look like in 2011 is difficult.

The continuing balance of supply and demand in the Austin housing market has served us well during this market cycle compared to some previous cycles -- notably the last downturn that was driven directly by failures in the financial services industry, in 1989-1990:

The dotted green line shows the significant over-inventoried conditions in 1990, and the fact that even at the worst of the current cycle our listing inventory peaked at about 7 months. Focusing just on the 2005 to Present period shows how very well balanced this market has remained, especially since January 2009, our lowest month of unit sales in the cycle:

That balance has allowed preservation of property values, and a shift in the "mix" among home price ranges toward more expensive properties has raised average and median prices:

In July 2010, both average and median home sale prices spiked due to the end of the last homebuyer tax credit program -- with very few first-time buyers left in the market and more expensive move-ups dominating sales. July 2011 prices were well below that level, but still supporting the years-long upward trend.

Using the 12-month moving average sale price filters out month-to-month and seasonal volatility. This chart provides that view, coupled with monthly actual sales:

Unit sales volume is clearly far below the pre-recession levels of 2006 and 2007, but month over month sales growth this year has been impressive -- and without tax incentives to create temporary demand. Moreover, the price mix this year represents more normal market performance than 2009 or 2010.

Finally, another view of market absorption is encouraging. Since 2005, on average, 1 out of 5 active listings have sold each month. That ratio has been as high as 36% (June 2006) and as low as 9% (January 2009). Note the wild gyrations in this number from late 2008 to July 2011:

In all market cycles since 1990, one or two dips to about 10% "odds of selling" signaled the beginning of a new market growth cycle. This time, we have touched that bottom three times, but in June 2011 we exceeded the multi-year average for the first time since the housing downturn reached Austin. Even with a monthly decline in sales in July, sales still absorbed 21% of active listings.

There is every reason to expect some seasonal softness in unit sales and prices in the coming months, but as I mentioned at the outset the Austin/Central Texas economy remains resilient. Economic strength continues to attract employers and employees to move here, that trend is filling available rental space and pushing rents upward, and as those new Austinites either sell homes elsewhere or just gain confidence in their futures they become Austin-area homeowners. Economic forecasters predict Austin's strength to continue for many years.

The links below will display printable versions of the entire Austin Market Dashboard:

Austin Market Dashboard 1990 to Present

Austin Market Dashboard 2005 to Present

You'll also find frequent market news updates on my personal website (BuyOrSellAustin.com) and comments at BillMorrisRealtor.com. I invite you to check in with me there, follow me on at Twitter.com/BMorrisRealtor and "like" me on Facebook. Also feel free to contact me directly whenever I can be of service.

Your personal referrals are the best measure of my success!

Austin in the news ...

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Mon, 22 Aug 2011 13:46:08 -0700

All of these articles, and many others, are linked on the Austin Chamber Of Commerce website. There's a ranking here to please almost everybody:

Unfortunately, this year we're also among the "hottest." I think we're at 67 days at 100 degrees or higher this year. That's already several times the average number of triple-digit days here. The record is 69 days, and it's clear that we'll break that. Personally, I like summer, even this one, but a lot of folks here have just about had it.

Anyway, this post includes at least four reasons to love Austin. If you're like me in your climate preference, make that five.

Your personal referrals are the best measure of my success!

July numbers are in ... highlights

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Mon, 22 Aug 2011 13:43:00 -0700

Two articles this week focus on residential real estate sales in July:

Home Sales Down in July but Up Strongly from a Year Ago (RISMedia)

Austin-area existing home sales up 32 percent in July (Austin American-Statesman)

Sales volume in Austin was down almost 8% in July compared to June. Nationally, the month-to-month decline was 3.5%. It is unusual to see any indicator look worse in the Austin/Central Texas market than nationally. As I have pointed out repeatedly, though, Austin unit sales have been increasing steadily, and substantially, since January 2011 -- a trend that most other cities in the U.S. envy.

Year-over-year comparisons are encouraging in both cases -- July 2011 up 21% from July 2010 nationally, and up 32% in Austin! In both cases, it is important to note that July 2010 was the first month after the last homebuyer tax incentives expired, so sales were down that month. Still, this is meaningful growth.

Nationally, about 29% of sales were all-cash. In the Austin market, it was 22% in July. Both figures reflect strong activity by investors. (As a pre-recession point of reference, cash sales accounted for about 12.5% of Austin-area sales in 2006.)

Amid a flood of discouraging economic news over the past few weeks, I find this information encouraging. We absolutely have challenges still ahead -- residential building permits are still down, housing starts are abysmal, and mortgage underwriting remains tough.

On the other hand, as I suggested in a post last month (So what about the debt ceiling?), investors continue to put money in U.S. Treasuries and other debt instruments, bidding bond prices up and driiving yields down. That is being reflected in very low mortgage interest rates. In most markets there is still plenty of inventory available, and buyers are finding real value. General economic uncertainty aside, I believe that buyers who stay on the sidelines over the next six to twelve months will find that they missed the best opportunity to become homeowners we have seen in many years.

I'll have more to say about the Austin Metro market specifically when I update my Austin Market Dashboard over the next few days, but feel free to comment here, or call or text or email me and I'll be happy to discuss specific questions or concerns.

Your personal referrals are the best measure of my success!

1st Half 2011 -- Investment Properties in Austin

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Mon, 08 Aug 2011 17:33:00 -0700

Six months ago I compared "typical" investments in 2010 in single family homes as rental properties in various parts of Austin. (See Where to invest in Austin real estate?) Then I ranked the "MLS Regions" by Gross Rent Multiplier.

Now, I want to offer an updated look at residential real estate investments in the first half of 2011 -- this time including single family homes, duplexes, and fourplexes. Those property types are shown in separate tables a little later in this post, but it is important to point out some deficiencies in these calculations:

First, note that in all cases I have assumed 100% occupancy. That is unlikely to be a valid assumption, but my objective is simply to provide a basis for geographic comparisons, so any common vacancy assumption is about as good as another.

Second, the presence of each property type varies widely from one MLS area to another. In the single family category, I used the same hypothetical property in all areas -- 1200 to 1500 SF with 3 bedrooms and 2 full baths. You will see that only 8 of those homes sold in West Austin/Westlake in the first six months of this year, compared to 113 in South Austin. Likewise, duplexes and fourplexes tend to be concentrated, so the sample size here changes significantly. [Note also that I did not include nearby suburban cities in this analysis. Those areas may be preferable depending on your objectives, but I just had to limit the scope of this summary.]

Third, this information is not intended to help you assess the comparative value of investing in a house vs. a duplex or a fourplex. It is only intended to provide a yardstick for comparing the same type of investment from one area to another. By definition, using GRM for these comparisons, I have ignored variations in operating expenses. Ultimately, all real market analysis needs to be neighborhood- and property-specific. Generally, you can expect to find that property management effort and expense may vary from area to area. In addition, it is probably safe to assume that maintenance and repairs will be higher for duplexes and fourplexes than for houses, if only because there are two or four kitchens instead of one, and two to four times as many bathrooms, HVAC systems, etc. Take into account that some utilities may not be metered separately for some multifamily properties and you see another "opportunity" for net income to change.

Finally, note that a vacancy in a house represents a loss of 100% of rental income, whereas a single unit vacancy in a fourplex is a loss of only 25% of income. On the other hand, the probability of vacancy and the likely length of a vacancy may be higher for some multifamily rentals.

With that background, here is how these three investment opportunities fared -- on average -- around Austin during the first half of this year:

Again, please don't assume that this data shows that fouplex investments all over town offer better returns than any investment in a single family home. This may help you to compare the possibility of investing in duplexes in different parts of the city, but not to compare different types of property. Even then, base your decision on analysis of specific properties, and on your tolerance for start-up renovation expenses, ongoing maintenance and repair costs, and your appetite for continuing property management time and effort and cost.

I hope this is a helpful "high level" view of the area. Feel free to contact me with questions or if you want to discuss your investment objectives.

Your personal referrals are the best measure of my success!

Austin Market Dashboard -- still encouraging

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Mon, 01 Aug 2011 20:09:53 -0700

Even as chaotic market conditions still dominate press reports about real estate nationally, the Austin/Central Texas residential market continues to demonstrate fundamental strength. Sales volume is up for five consecutive months, and average and median home values have appreciated all year. Local and regional economic results and expectations are promising. The real housing crisis remains concentrated in five states. Austin's ultimate market growth still depends on national recovery from the recession and the housing downturn, but there is plenty of reason for optimism based on our local market activity.

First, this month's snapshot, covering Single Family Homes, Condominiums, and Townhouses in the Austin Metropolitan area:

Active Listings: 9,021

Sold Last Month: 1,644

Months's Supply At That Sales Pace: 5.5

Pending Contracts: 2,698

With 6 1/2 months' inventory generally considered "normal," our current situation tends to favor sellers. Moreover, the number of pending contracts represents about 1.6 times sales, indicating stable or slightly increased demand. As has been true for a long time in the Austin market, however, the average "months' supply" is comprised of individual market segments with 3 to 4 months of inventory that strongly favor sellers while other segments languish with listing inventory that will last 12 to 18 months or longer -- classic buyers' markets.

Those snapshot figures will change as listing agents catch up with MLS updates from late July, but they are close enough to use as a barometer for now. Compare that market status with this view of the market using final data from June 2011:

Notice that 5.5 months' supply now compares to a 7 month supply at the end of June. The market absorption rate is even more impressive:

On the surface, the trend since January 2011 looks like a seasonal rise similar to those we saw in 2009 and 2010, only to see the market dip again. This has been the most volatile market in many years and we could be disappointed again, but it is worth noting that this year's growth in absorption has happened without the help of any homebuyer tax incentives. For the first time since 2007, the "odds of selling" exceeded 20% in June. To put that in perspective, compare this year's performance with other market cycles since 1990:

I see reason for optimism in that recent data.

As you might expect, market strength tends to reinforce sale prices, and we have see that this year as well:

Clearly, both average and median prices are up, continuing a very long-term trend in the Austin/Central Texas market. It is a fact that sales volume in our metro area is down very significantly from pre-recession levels, but even with that influence, and filtering out seasonality by using 12-month moving averages, the price trend is very encouraging:

Returning to monthly data, that price vs. demand trend isn't as counterintuitive as it appears. Note these results since the bottom of the market cycle in Central Texas, and again consider the fact that this year's sales growth is undistorted by tax incentives:

There is almost no doubt that the moving average sale price will dip next month because the highest-ever monthly average in July 2010 will fall out of the 12-month average. That distortion last year occurred in the first month after the last homebuyer tax credit program, when sales of entry level homes nearly stopped, allowing sales of higher priced homes to dominate the month's activity.

If you have followed national and international economic news in recent weeks, you know that we still have at least several months of choppy market conditions ahead. Market behavior in the Austin area, however, remains encouraging. Population and employment continue to grow, apartment occupancy and market rents are up, and even new construction is showing a little new strength. More reasons that this is a great time to live in Austin, Texas!

The links below will display printable versions of both the long-term and short-term market dashboards:

Market Dashboard 1990 to Present

Market Dashboard 2005 to Present

Feel free to review this information at your leisure and let me know if you have any questions or just want to discuss the Austin real estate market. Of course, I'll also be happy to talk about specific homes and market conditions in particular neighborhoods or market segments. Just give me a call.

Your personal referrals are the best measure of my success!

Debt ceiling debate and interest rates

Bill Morris, ABR, CRS, CDPE, ePRO, MBA (RE/MAX Capital City) — Fri, 29 Jul 2011 12:06:50 -0700

Like most of us, I have been watching the endless debate about what to do about the United States' federal government debt, and the debt ceiling. The most visible pundits have constantly warned about a financial Armageddon if the debt ceiling isn't raised by next week -- that the U.S. will find it's debt instruments downgraded and will be forced to pay higher interest rates to continue to attract investors to buy U.S. Treasury bonds. Some others that haven't been taken as seriously by the popular press don't seem so concerned.

The truth, I believe, is that nobody knows so everybody is left to grind whatever political axe appeals to them. Leaving that aside, it seems to me that all investment decisions are a function of four factors: supply of the "thing" being considered, demand for it, the risk (i.e., uncertainty) related to the return on that possible investment, and alternative investments available. Given our government's continuing appetite for borrowing there is no reason to expect the supply of Treasury instruments for sale to decline. In addition, although all of the current political panic hides this fact, the risk that bondholders that are due payment 6 months or more in the future won't get paid really doesn't change next Tuesday night, so this uncertainty shouldn't drive investors away or cause them -- by itself -- to demand a higher return. That means that potential investors are left to consider their alternatives, and that will determine the ultimate remaining demand for U.S. bonds.

On that basis, my question is: If you have money to invest, where else are you going to put it? (Sure, real estate remains a great store of value and offers higher potential returns than most "hard" assets, but let's stay focused on financial instruments here.) Based on financial news, Italy and Greece don't look attractive, and they are potentially a huge drag on the entire Euro zone. China? Maybe, but how well protected is the average investor's money there? Japan? Russia? South America? I don't hear a rush to any of those investment markets. How about the U.S. stock markets? Certainly an alternative, and equities have seen a huge run-up over the past couple of years. Is that near the top? Isn't the outlook for corporate growth and profitability dependent on the larger economic picture? Does that mean that the risk associated with investing in stocks is at least as high as the risk of investing in U.S. bonds? Maybe even higher?

I am not a professional investor or an investment advisor, but as I work through that line of thought, I don't see anything that should drive demand for Treasuries down dramatically next week. If that's true, then there is no reason for interest rates to spike unnaturally except maybe for short-term bonds. It increasingly looks like we may all get a chance to find out who's right and who's wrong, but my prediction is that the sun will still come up next Wednesday.

As for interest rates, they will inevitably go up, with or without the influence of this debate in Washington. In a separate post, I'll comment on what they might mean for homebuyers.

Your personal referrals are the best measure of my success!