News

Home sales in Central Texas rise in January

Central Texas home sales rose 5 percent in January from a year ago, the Austin Board of Realtors reported Thursday.

January’s median sales price rose 1 percent to $179,250.

Real estate agents sold 884 previously owned homes in January, compared with 840 the same month last year. There were 1,417 sales pending, a 7 percent increase from a year earlier.

John Horton, chairman of the Board of Realtors, said January 2009 marked the low point of the current cycle.

“With steady improvement throughout 2009 that, continued in January 2010, we can see that we’re one year into the recovery in Austin,” Horton said. “What’ most important about this is that it’s the kind of recovery we want: one that is steady, stable and consistent.”

Throughout 2009, the volume of single-family home sales in Austin improved steadily, Horton said. In the first half of 2009, the gap in year-over-year sales narrowed consistently, reaching levels similar to those in 2008 during the summer peak, with the exception of a dip in August, Horton said.

By fall, sales began outperforming 2008. They surged in October and November, spurred by the original deadline for the first-time home-buyer tax credit. In December, sales returned to a modest increase, rising 5 percent from December 2008, a growth rate that held last month.

“We’re already seeing positive signs in sales volume and price appreciation,” Horton said.  “Those factors, combined with the population growth and additional jobs economists expect for our area in 2010, bode well for the long-term value of Austin real estate.”

Foreclosures increase despite recent signs of improvment

Austin-area residential foreclosures have jumped, dimming prospects for a drop after months of year-over-year increases.

Last month, the wave of foreclosures ap peared to be subsiding, as postings for the February auction were up just 2 percent from a year earlier. It was the smallest increase in months.

But 1,038 properties have been posted for the March 2 auction, up 26 percent from March 2009, according to Foreclosure Listing Service Inc. The Addison company collects foreclosure information for 25 counties in Texas, including Travis, Williamson, Hays and Bastrop.

For the first three months of the year, the 3,958 postings are 36 percent higher than for the same quarter of 2009, although down 2 percent from the year’s final quarter.

Early signs of a recovery in Austin’s economy could help ease foreclosures. Austin’s job losses have been slight compared with other large Texas cities, and job growth in the region — which several economists have forecast his year — could help people keep their homes.

Local foreclosure postings
The local breakdown for the March 2 auction:

Travis County: 667 postings, up 23 percent from March 2009

Williamson: 403 postings, up 23 percent

Hays: 151 postings, up 51 percent

Bastrop: 78 postings, up 30 percent

Austin City Council Approves Heritage Tree Ordinance

The Austin City Council unanimously approved the staff recommendation of the heritage tree ordinance on all three readings on Thursday, February 4, 2010, making it more difficult to remove certain trees 24″ or greater in diameter. Trees larger than 24″ but smaller than 30″ will require an administrative variance prior to removal, and trees larger than 30″ will require a land-use commission public hearing before a variance is granted.

RECA came out in opposition to the public hearing component of the ordinance. Despite RECA’s testimony and strong showing at City Hall, Council kept the public hearing process in the ordinance. Council Members amended the ordinance with the following changes:

• Include a tree list in the ordinance that will be subject to future modifications by rule, if necessary. RECA advocated for the inclusion of a tree list in the ordinance.
• Grant flexibility in the heritage tree variance language by allowing for exceptions if the removal of that tree will result in “a design that will allow for the maximum provision of ecological service, historic, and cultural value from the tree.” RECA advocated for more flexible removal criteria.
• Require monthly reporting from the City Arborist to the Urban Forestry Board on tree removals between 24″ and 30″ instead of public hearings for those trees. RECA advocated against public hearings for those trees.
• Allow for multi-stem measurements. However, a public hearing would only be required for trees with at least one stem greater than 30″. RECA opposed multi-stem measurements, but this amendment will not increase the number of public hearings.
• Remove certain exemptions for electric utilities. RECA was neutral on this aspect of the ordinance.

The final point of contention was the standard of removal for protected trees. City staff and RECA encouraged Council to keep that standard as denying “a reasonable use” of one’s property to allow for removal. Tree advocates asked for the denial of “all reasonable uses” before a tree could be removed. Council agreed with the RECA position.

It is also important to note that Council moved forward with the staff recommended version of the ordinance as opposed to Planning Commission’s version. Tree advocates testified in favor of the Planning Commission’s version, which would have been more onerous towards property owners.

The heritage tree ordinance will now be subject to a rules process to determine mitigation rates for heritage trees, potential stiffer penalties for illegal removal of trees, and how to interpret the following removal criteria: ”a design that will allow for the maximum provision of ecological service, historic, and cultural value from the tree.” RECA will be engaged in this rules process.

RECA has been involved in this issue for several years now, and special thanks goes out to Jeff Howard, Peter Cesaro, Paul Linehan, Aan Coleman, Keith Donahoe, and Jim Schissler for all of their hard work in advocating on behalf of RECA during this process. Without them, this ordinance would have been worse. Special thanks also to Board Members and the entire LDC class for showing up at City Hall to support the RECA members who testified at Thursday’s public hearing.

Austin one of America’s Safest City

In a recent study by Forbes.com, Texas cities were ranked among the safest in America. After examining the 40 largest metropolitan statistical areas across four major categories, including violent crime rates, workplace death rates, traffic death rates and the risk for natural disaster, the list of safest cities was determined. Austin-Round Rock and Dallas-Fort Worth-Arlington tied for the 15th spot on the list.

Central Texas: A Great Place to Live

Recent reports from a variety of news outlets indicate that the Central Texas region is among the top performers when compared to other U.S. cities. From San Marcos being deemed the best place to raise children to Austin-Round Rock and other Texas cities ranking among the safest in the U.S., here is what others are saying about Central Texas:

Austin Ranks No. 1 in Milken Institute’s Best Performing Cities

In the 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index, the Austin-Round Rock area ranked number one. Cities were ranked based on their ability to create and sustain job growth. The index also looks at economic growth, wages and salaries. Numerous other Texas cities joined Austin on the list—including three more in the top five. See how the Texas cities fared below:
1. Austin-Round Rock
2. Killeen-Temple-Fort Hood
4. McAllen-Edinburg-Mission
5. Houston-Sugar Land-Baytown
11. San Antonio
12. Fort Worth-Arlington
13. Dallas-Plano-Irving
14. El Paso
16. Corpus Christi

On a side note, Corpus Christi was one of the year’s biggest improvers. The city ranked 88 overall in the 2008 index and 16 in 2009.

Click Here to view other cities made the list.

Austin area home sales surge 58% from last year

Austin-area home resales jumped 58 percent last month from November 2008 as buyers scrambled to take advantage of low mortgage interest rates and a tax credit for first-time buyers.

But don’t expect those big percentage gains to continue – sales could slow next year due to rising mortgage interest rates and the end of the tax credit, which Congress recently extended through April and expanded to additional buyers.

November’s percentage increase was the biggest in more than a decade and followed a 38 percent jump in October, according to the Austin Board of Realtors. However, the 997 sales in November 2008 were unusually low, reflecting the worsening economic downturn at the time.

Last month, 1,576 homes were sold, the board said. The median price was $179,900, down 2 percent from a year ago.

More challenges are ahead because of “minimal prospects for short term improvement in the local economy and our job market,” said Eldon Rude, local director for Metrostudy, a housing research firm.

He said he doesn’t expect the market to show strong growth “until the employment picture brightens and consumer confidence strengthens.”
Rude said the sharp increase in November resales “was definitely tied to the availability of the tax credit but was also related to the significant slowdown in sales activity late last year as the U.S. recession took hold.”

With the extension, first-time buyers may still qualify for up to $8,000, but other buyers can get up to $6,500. Buyers must have a house under contract by the end of April and close on the sale by the end of June.
Year-over-year sales were up 31 percent in the Dallas area, also one of the biggest increases on record; 32.8 percent in Houston; and 52 percent in San Antonio.

Reed said he thinks the tax credit alone wasn’t enough to spur the Austin area’s November surge.

He said that interest rates of less than 5 percent also were a factor, as was the specter of rising rates. Reed predicted that interest rates will move into the mid-to-high 5 percent range by the end of next year’s first quarter.

Central Texas home sales up 38%

Central Texas existing-home sales jumped nearly 38 percent in October as buyers took advantage of a federal tax credit for first-time homeowners and favorable mortgage interest rates.

It was the biggest year-over-year per centage gain in more than four years and encouraging news for a housing market that struggled for much of 2009.

The Austin Board of Realtors reported Wednesday that 1,823 single-family homes were sold last month, compared. with 1,322 in October 2008.

Pending sales — transactions expected to close in November — were up 47 percent, an indicator of another strong month.

Much like the Cash for Clunkers rebate program spurred car sales earlier this year, the tax credit has drawn hundreds of thousands of first-time buyers nationwide into the market.

The credit was set to expire November 30 but recently was extended through April 30, with a new provision that allows a smaller credit for some move-up buyers.

Last month, 64 percent of sales were for homes priced between $100,000 and $249,999 a typical range for first-time buyers.

The median price was $182,000, down 5 percent from a year earlier.

Experts say the tax credit, along with low mortgage rates, will continue to feed sales in the coming months.

Dallas-area home sales were up only 11 percent last month, for example, the first gain since September 2008. After being down sharply in the first half of the year, Austin-area home sales have been improving since July.

New tax credit details

Who qualifies: First-time buyers and people who have occupied their house for five of the past eight years.

Income limits: Single filers who make $125,000 or less, or $250,000 for couples. Amount 10 percent of the sales price, up to $8,000, for first-time buyers; up to $6,500 for repeat buyers.

Deadlines: The home must be under contract before April 30, and the closing must occur by June 30.

The 2009 Tax Credit To Provide Extension & Additional Benefits

The President signed into law on November 6th, the 2009 1st Time Home Buyer Tax Credit Extension.  The extension will allow home owners to take advantage of the program before May 1st, 2010 with all closing on a primary residence to occur no later than June 30th 2010.

The 1st Time Buyer Changes:

1. Buyer must be 18 years of age as of closing date.
2. The credit can be claimed on 2008 tax returns if closing occurs before Dec. 31st, 2009 and on 2009 tax returns after Dec. 31st, 2009.
3. The income limits changed to $125,000 for an individual and $225,000 for couples.
4. House price no greater than $800,000.
5. Borrower will need to provide a copy of settlement statement to the IRS to claim

Move Up Buyer Component:

In the case of an individual (and, if married, such individual’s spouse) who has owned and used same residence as such individual’s primary residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purpose of claiming the tax credit.  Such individual or couple can claim an amount no greater than $6,500.  All other rules of the tax credit apply.

Tax credit helps push home sales up 9.4%

Racing to complete their purchases before a tax credit for first-time owners expires, homebuyers pushed sales up last month by the largest amount in more than 26 years.

After jumping 9.4 percent in September, home resales are up nearly 24 percent from the bottom in January, the National Association of Realtors said Friday. But the market’s momentum could be affected if Congress declines to extend the credit of up to $8,000 for first-time buyers beyond the Nov. 30 deadline.

Nationwide sales rose to a seasonally adjusted annual rate of 5.6 million last month, up from a downwardly revised pace of 5.1 million in August. It was the strongest month in two years and beat economists’ forecast of 5.4 million, according to Thomson Reuters business news service. Sales, however, are still down 23 percent from their peak in 2005.

In another positive sign, the inventory of unsold homes on the market fell almost 8 percent to 3.6 million. That’s less than an eight-month supply at the current sales pace and the lowest level since March 2007.

“The excess supply of unsold homes has declined a lot, and this reduces the downward pressure on home prices,” said Harm Bandholz, an economist at UniCredit Global Research in New York. “An improvement in house prices is an important condition for an increase in housing wealth and therefore higher willingness of households to start spending again.”

Although home sales and housing construction have risen steadily after bottoming out this year, most economists say that prices, which recently stabilized, will resume their descent. The median sales price last month was $174,900, down almost 9 percent from $191,200 a year earlier and slightly lower than August’s median of $177,300.

The main reasons prices are weak: Unemployment and foreclosures are still rising. With the current 9.8 percent jobless rate expected to rise as high as 10.5 per cent next year, foreclosures will continue to set records.

Nationwide, more than 3 million households are either three months behind on their payments or in foreclosure, according to research firm First American CoreLogic. Many delinquent borrowers are still being evaluated for help under the Obama administration’s mortgage assistance plan.

To entice more buyers, Sens. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend the tax credit through June 30 and to expand it to include all home buyers, at an estimated cost of $16.7 billion.

Realtors and homebuilders are in favor and say that the tax credit is crucial to get the housing market back on its feet. However, some analysts say the tax credit may not, be as crucial to the housing market as real estate agents suggest. The Realtors association has “an incentive to talk up the effects of the credit as it is urging Congress to extend it, and it therefore may be exaggerating the credit’s effects,” wrote Nomura Securities economist Zach Pandl.

One potential roadblock to an extension also emerged this week: concerns that some of the 1.5 million applications for the tax credit are fraudulent.
The Treasury Department’s inspector general for taxes questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18.

Fortunately, home prices in Austin are fairly stable as Austin enjoys relatively low unemployment and did not have over-inflated prices.

Austin homebuilding market doing well

The Austin new-home market is showing signs of stabilizing, according to Bohlke Consulting Group LLC, a Houston firm that tracks building permit activity for single-family residences.

Builders slowed down in September after a busy summer, with permits last month down 45.3 percent from the year’s peak in July.

But a total of 2,185 permits were issued during the third quarter, up 9.2 percent from the 2,001 issued in last year’s third quarter.

It was the strongest quarter in more than a year, said Gary Bohlke, the firm’s vice president of consulting services.

“The strength is very broad-based,” he said,with 17 of the 26 market areas that Bohlke tracks in Central Texas showing increases over the same quarter in 2008.

The firm expects builders to seek 6,700 to 7,000 permits this year, an increase from 2008.

More views on the market:
Rob Hutton is president of D.R. Horton’s Central Texas division, the area’s largest builder. Horton in recent months has built several hundred homes
in Central Texas, aiming primarily at first-time buyers who qualify for a federal tax credit that is set to expire next month.

“Over the past few months, we’ve seen traffic improve in virtually all of our communities across Central Texas,” Hutton said.

“We’ve seen brisk demand” for the speculative homes, driven mostly, by mortgage interest rates that have hovered around 5 percent “and the fact that confidence is slowly returning to the local economy,” Hutton said.

“Also, and perhaps most importantly, we continue to see a strong desire for homeownership. Even in the middle of a very challenging recession,
the American dream of owning a home appears to be alive and well,” he said.

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