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Year Over Year Housing Inventory in Austin, TX Rises For First Time in Three Years

Austin-area home sales dip, year-over-year housing inventory rises for first time in three years



July14-page-001After a double-digit surge in home sales last month, Austin-area home sales dipped three percent to 2,944 single-family home sales in July 2014, according to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS® (ABoR). This is the first decrease in home sales since May 2011. At the same time, monthly housing inventory increased on a year-over-year basis for the first time in three years as more listings entered the market.


Bill Evans, 2014 President of the Austin Board of REALTORS­®, explained, “July 2013 had the highest monthly home sales volume in Austin’s history, so we knew it was going to be a tough month to beat. However, there’s no denying that the Austin-area housing market has been impacted by issues in inventory and affordability. With such high demand, the Austin-area housing market cannot grow without an increasing, continually replenished housing stock, but that housing stock must also be affordable and attainable for Austin homebuyers.”


Austin-area monthly housing inventory rose to 3.0 months in July 2014, an increase of 0.2 months from the year prior and the first annual increase in inventory levels since May 2011. This was driven by an increase in available listings, as active listings jumped 12 percent year-over-year to 6,859 listings and new listings rose eight percent during the same time frame to 3,788 listings. However, Austin-area housing inventory is still well below six months, which the Real Estate Center at Texas A&M University cites as a balanced market.


In addition, Austin-area home prices continued to climb with median price increasing nine percent year-over-year to $250,000 and average price rising seven percent to $318,854 in July 2014.


Evans continued, “Now, more than ever, managed growth and planned development are important for ongoing affordability and livability in Austin. As the City of Austin overhauls the Land Development Code that will dictate what development and housing is allowed as we continue to grow, we have to ask ourselves, ‘Is this the right kind of home for Austin’s housing market and do our regulations allow for it?’”


Despite higher home prices, Austin-area homes continued to sell at a faster pace. In July 2014, single-family homes spent an average 39 days on the market, two fewer days compared to July 2013. In addition, pending sales decreased four percent to 2,660 single-family home sales.


Evans concluded, “Amid questions about the direction of Austin’s market, we don’t believe this small decrease in home sales is indicative of a negative trend. The high demand for Austin real estate over the last few years continues to be fueled by strong job and economic growth in the Austin area. The issue we’re facing now is not whether Austin-area property values will fall, but whether future housing market growth in the Austin area will be stifled by a lack of affordable housing options for Austin-area homebuyers.”


July 2014 Statistics

    • 2,944 – Single-family homes sold, three percent less than July 2013.


    • $250,000 – Median price for single-family homes, nine percent more than July 2013.


    • $318,854 – Average price for single-family homes, seven percent more than July 2013.


    • 39 – Average number of days single-family homes spent on the market, two days fewer than July 2013.


    • 3,788 – New single-family home listings on the market, eight percent more than July 2013.


    • 6,859 – Active single-family home listings on the market, 12 percent more than July 2013.


    • 2,660 – Pending sales for single-family homes, four percent less than July 2013.


    • 3.0 – Months of inventory* of single-family homes, 0.2 months more than July 2013.


  • $938,706,176 – Total dollar volume of single-family properties sold, four percent more than July 2013.

The following sections describe trends in other sectors of the Austin-area real estate market.


Townhouses & Condominiums
The volume of townhouses and condominiums (condos) purchased in the Austin area in July 2014 was 336, which is four percent less than July 2013. In the same time period, the median price for condos was $204,000, which is 12 percent more than the same month of the prior year. These properties spent an average of 37 days on the market, 10 days fewer than July 2013.


In July 2014, a total of 2,110 properties were leased in Austin, which is five percent more than July 2013. The median price for Austin-area leases was $1,500, which is seven percent more than the same month last year.


The Austin Board of REALTORS® (ABoR) is a non-profit, voluntary organization dedicated to educating and supporting Central Texas REALTORS®. ABoR proudly serves more than 9,000 members, promotes private property rights and provides accurate, comprehensive property listing information for the Greater Austin area. Home sales statistics are released by ABoR on a monthly basis. For more information, please contact the ABoR Marketing Department at or 512-454-7636. Visit, a public resource on Austin real estate, for the latest news on the local housing market

Why Homeowners Should Care About Water Conservation

1.  Thanks to climate change, California’s aquapocalypse is spreading. Over the next couple of decades more than 400 counties in the U.S. may be going through an extreme dry spell, according to a study by the Natural Resources Defense Council. How bad can it get?

Dry yard in California droughtImage: Michael Dubois – Hollister

2.  You won’t be able to flush the toilet during daylight hours, take a shower longer than five minutes, or wash your dishes using fresh water. Parts of the Southern plains and Western states already are facing water restrictions.

FYI: The 1930s drought that turned the Great Plains into a dust bowl was also caused by environmental damage.

Shower timerImage: Simon Yeo

3.  Running your sprinkler will be forbidden — just like in water-scarce Sacramento where “water police” fine homeowners for illegal lawn watering.

Fact: If the drought continues through Oct. 1, it will be California’s driest year in half a millenium.

Watering a sidewalkImage: jlsohio/iStockphoto

4.  And since water is vital to agricultural and energy production, drought also causes exorbitant grocery bills, soaring electricity rates, and killer gas prices.

Fact: Lake Mead could dry up by 2021. It’s already hit its lowest level since the dam was built in the 1930s. Currently, it supplies water to 22 million people in the Southwest.

Lake MeadImage: wholden/iStockphoto

5.  Even chilling at home with a cold one can become a pricey luxury. Right now in parts of the country breweries are being asked to reduce their water use. Mandatory reductions may make beer as expensive as a prestigious champagne.

If drought persists, you may not even like how beer tastes in the future. Using quality local water is key when it comes to making stellar suds. Brewing with anything less, which may happen if our rivers run dry, can make your favorite beer taste like a Popsicle stick.

Drought beer bottleImage: Libby Walker for HouseLogic

6.  As our population increases and our water withdrawals grow higher, cities all over the country — including Atlanta, Cleveland, Salt Lake City, and Washington D.C. — may run bone-dry by mid-century, according to NOAA’s Cooperative Institute for Research in Environmental Sciences.

Atlanta skylineImage: Andre Engels/Wikipedia

7.  You CAN take action now to help future-proof your home against drought by eliminating your home’s worst water-hogging habits.

The worst water hog is landscaping. Our yards consume 30% of our home’s total water use — more than the household yearly average for washing clothes and showering combined. What’s the problem? Up to 50% of the water we use outside is wasted on over-watering our lawns.

First steps:

  • Give your sprinkler a break. Grass is not supposed to be bright green during the dog days of summer, according to the EPA. So water your lawn only when it’s truly thirsty. To check, step on your grass. If it doesn’t spring back, it’s time to water.
  • Let the grass grow. Longer grass reduces water evaporation, and as a bonus you’ll have fewer weeds.
  • Give your sprinkler system a tuneup.  Leaks and clogs can waste lots of water. A broken sprinkler head can pour 25,000 gallons of water down the drain over a six month period.

Big strides:

  • Water your lawn more efficiently with a Watersense-labeled irrigation controller. It’s like a programmable thermostat for your sprinkler system because it controls when and how much you water your lawn. 

Drain barrelImage: Karen MacEwan

Giant leaps:

  • Hydro-zone your yard by grouping plants with similar watering needs in the same area. It make it easier to avoid over-watering
  • Landscape using parch-proof plants. It’s a great way to conserve water without sacrificing curb appeal.
  • Go with fake turf. It’s a low maintenance solution that never needs watering.

The second biggest water hog is the toilet. Up to 19% of your abode’s total water-use is flushed down the loo. 

First step:

  • Check if your toilet is hemorrhaging water.  Toilet leaks can waste up to 200 gallons of water daily (and that can total $840 per year!). To test for leaks put a few drops of food coloring in your toilet’s tank (but don’t flush) If the water in your bowl changes color within 15 minutes, it’s leaking.

food coloring on toiletImage: Liz Foreman for HouseLogic

Big stride:

  • Have an ancient commode? Upgrade to one with the Watersense label.  They use 1.28 gallons per flush (gpf) or less compared to standard toilets made after 1992 that meet the federal standard of 1.6 gpf.

Giant leap:

  • Go with a composting potty. They require little to no water, and modern models are easy to use and look like regular toilets. They’re also a great solution to sanitation and environmental problems in unsewered, rural, and suburban areas. 

The third biggest water guzzler is the clothes washer. It can account for as much as 15% of your household’s yearly total.  A washer can also drive up your electricity bill from heating hot water to wringing clothes during the spin cycle.  Here are three ways you can avoid getting hosed:

First step:

  • Check your washer’s settings. Don’t opt for second rinse cycle. If you have to wash a small load use the appropriate water level or load size selection.

Big stride:

  • Your standard washer is about to become an energy-sucking dinosaur. All basic front loaders will have to meet today’s Energy Star requirements by 2015, and top loaders by 2018.  If you replace your washer with an Energy Star model, you’ll use around 35% less water and 20% less electricity.

Giant leap:

Greywater systemImage: Ecology Action/Greywater Action

Showers and faucets round out the top five ways we consume water: Showers account for 12% and faucets account for 11% of our yearly use. Here are the top three ways you can cut back.

First step:

  • Wash like you’re in the Navy. To conserve water on naval ships, sailors would hop in the shower and quickly douse themselves in water, then turn off the water, get all sudsy, and turn back on the water to quickly rinse off.  While a regular shower can use around 60 gallons of water, washing like a sailor can use as little as three gallons.

Big stride:

  • Replace your standard shower and bathroom faucet fixtures with ones marked Watersense. Doing so will shave 700 gallons off your faucet use and trim 2,900 gallons per year off shower use.

Installing WaterSense faucetImage: Jennifer Griffin of Dimples & Tangles

Giant leap:

  • Stop running your faucet or shower while waiting for it to turn hot.  A hot water recirculating system can save water and energy, according to Energy Star. Instead of sending cool water that’s been sitting in your home’s hot water pipes when a water fixture is turned on, the system sends the cool water back to the heater via the cold water line while sending hot water directly from the heater.

Bonus Fact: If you make water conservation improvements to your home now, you’ll not only save money on utility bills, your home will be more marketable and may even garner a higher price than less water efficient homes.

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Austin’s Economy Expected to Continue on Economic Roll

capitol- AustinCentral Texas has seen unprecedented demand in most real estate industry sectors since the recession, local housing market expert Eldon Rude said at a forecast event Wednesday. But the region’s rising home prices could slow population growth in the Austin area, as people and companies choose to remain or locate in cities where home prices are lower.

Rude made his remarks about the local economy to nearly 700 business people and state and local officials gathered for the Real Estate Council of Austin’s mid-year economic forecast event, and in interviews with the American-Statesman. Anika Khan, a director and senior economist with Wells Fargo in Charlotte, N.C., spoke on the national economic outlook at the event.

“We (in Austin) are in a really, really fortunate place in time,” said Rude, principal of 360 Real Estate Analytics, an Austin-based consulting firm. “Things are very good.”

Drawn by Austin’s job growth, “a lot of people are moving to Austin, and they’ve got to live somewhere,” Rude said.

Annual job growth has topped 20,000 since late 2010, and exceeded 30,000 for the past two years, Rude said. “That’s phenomenal.”

Central Texas’ strong economic growth has spurred an influx of newcomers seeking opportunity — an estimated 110 a day are moving to Central Texas, according to U.S. Census Bureau counts. And that has spurred “tremendous demand” for houses and apartments. Some 17,700 apartments are now under construction in 76 projects, according to local real estate consulting firm Capitol Market Research, and housing starts have climbed to a pace of about 10,000 a year, up from a trough during the most recent recession of 6,000 and the pre-recession peak of 16,000 to 17,000, Rude said.

And forecasts show the region’s population growth is expected to grow more than 3 percent annually from 2013 to 2020, which will continue to fuel demand for housing, Rude said.

However, Rude said the region faces challenges, including transportation woes and escalating housing prices, that could slow the growth of the last few years. Those concerns could prompt people and companies to re-think a move to Austin in favor of cities that are also enjoying low unemployment and job growth — but which have lower home prices. Those cities include Dallas, Phoenix, Ariz., Raleigh, N.C., Las Vegas, Orlando and Atlanta.


“Relative to those cities, we have significantly higher home prices,” Rude said. The median price of an Austin-area home has risen 28 percent since June 2009, and the average sales price is up 23 percent since then.

“I don’t like to see price increases that steep, because it plays into affordability,” Rude said.

As the economies strengthen in those other rebounding metros, “we may see fewer of those people moving to Austin” in the next couple of years, Rude said. Cost of living, traffic congestion and other concerns also could lead companies to choose somewhere other than Austin to relocate their businesses.

Rude said the Austin area is four years into its current upcycle. As for when the good times may stop rolling — inevitably there will be another downcycle — Rude thinks it will likely be due to “some event outside of Austin.”

“But I don’t see anything on the horizon that would make that happen,” he said.

Khan said that nationally, the economy has been in recovery for more than five years — albeit a slow one — and noted that the longest economic expansion lasted 10 years.

She said Wells Fargo’s forecast calls for the nation’s economic growth to start picking up a bit more, moving forward. And when the Federal Reserve moves to raise interest rates — which most forecasters think will happen in 2015 — “it means we’re seeing economic growth pick up and overall we’re moving in the right direction,” Khan said.

Courtesy of Austin American Statesman

3 Things That Make the Best Real Estate Investment

Pays a Fair Cash-on-Cash Return

mortgagesWhen you buy property you are taking money out of your liquid financial assets – stocks, bonds, CDs – and investing it into a very illiquid asset – real estate. You were earning a rate of return on your financial assets, such as 4 percent or 6 percent, and you should strive to earn a fair cash-on-cash rate of return on your real estate. To do this, you need to pro forma your deals and buy cash flow-positive properties that earn you decent returns – not those prize properties that are negative, negative, negative. For more guidance on this, see Smart Investing – A Tale of Two Townhomes.

Isn’t Too Risky an Investment

All real estate is extremely high risk. Development of real estate, land, Tenant-In-Common (TIC) investments, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property. In many of those investments, you will never see a dime of your money again because there are just so many things that can go wrong! So if you want to own real estate, consider simply taking fee simple title in your own name – or an entity you wholly own – to the properties you purchase. In addition, you must do the proper due diligence, analyze, test, review reports, etc., to make a lower risk real estate decision.

Doesn’t Require a Lot of Time or Managing

Some properties just require way too much time and management to make them smart investments. Examples include vacation rentals, low quality properties in bad areas, college rentals, etc. Nice boring properties rented for as long as possible to decent credit profile tenants seem to take the least time to manage. In addition, treating your tenants fairly and with respect goes a long way towards keeping good relations with them; and reducing your hassles when there is an issue you need to address. And believe me — there will be issues!

It’s the nice, boring, wholly owned, in good shape, cash flow-positive properties that are the best investments. They are out there for your picking, but it’s not as simple as finding a property on the MLS and buying it.

You need to do some hard work, research, read up, and make smart, educated decisions to acquire the best real estate investments!


Tips For For First Time Home Buyers

The Right Steps

millennialA little research and prep can go a long way to getting you through the homeownership door with minimum stress.

Make sure your credit is in good shape:

The better your credit score, the better your chance of getting a lower-rate mortgage. Check your credit report for mistakes and for any credit problems you can correct. You can get a free report from each of the three credit bureaus once a year at

Work with a REALTOR® who’s a buyer’s agent:

A buyer’s agent will advocate and negotiate for you, not the seller.

Learn about the neighborhoods you’re interested in.:

What’s the crime rate? How are the schools? A REALTOR® can help you with that and help you target your buying interests. For instance, what tops your priority list? Short commute to work? Lots of land? Three bedrooms? A community governed by a homeowners association?

Understand the broader real estate market:

Are home prices going up or down? Is the economy strong or shaky? These economic factors will affect the value of your home today and in the future.

Figure your buying budget: 

Besides the downpayment, which could range from 5% to 20% depending on your circumstances, you’ll want to plan for costs such as:

  • The appraisal (about $300 to $600). It estimates the property’s value at a point in time. It lets you and the lender know how the sales price compares with the appraised value.
  • Loan origination fees. The cost of making the loan, including an origination charge, processing fee, underwriting fee, and even points on the loan. These fees are usually .05% to 1% of the loan.
  • Title insurance. Protects a buyer or lender against loss from title defects, liens, or other issues. Fees are generally 1% of the loan amount.
  • The inspection. A thorough inspection (roughly $300 to $500, depending on the property type) can reveal hidden defects, reducing your risk of incurring surprise expenses later. Plus, it offers the opportunity to negotiate for a price reduction or for the sellers to make repairs, depending on the findings.

A Few More Safe-Buying Tips:

Shop around for the best deal on a mortgage:

Consider your financing options: The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment, but an ARM may adjust dramatically.

Get prequalified:

Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. That lets sellers know you’re serious.

To get prequalified, you’ll need to gather some paperwork for your lender. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.  If you’re self-employed, you’ll need your current profit-and-loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Invest in a home warranty,:

Such as one from American Home Shield, when you buy a home. Sometimes the sellers will cover the cost of a year-long warranty, which protects many of your home appliances and systems in the event that they need repairs or replacement — the last thing you want when you first move in.

Sponsored by AHS courtesy of Houselogic

How to Get Pre-Approved for a Mortgage Home Loan

mortgagesOne of the best things you can do to help ensure that you have the best possible shot at getting the home you want to buy is to get pre-approved for a mortgage. Pre-approval is basically a promise from the lender that you’re qualified to borrow up to a certain amount of money at a specific interest rate, subject to a property appraisal and other requirements.

But there’s one step you should take before trying to get pre-approved for a home loan: check your credit reports and credit scores. By taking care of this early on, you’ll have an idea of what kinds of loans you may qualify for, and you’ll have time to clear up any mistakes or problems you find on your reports before you start home shopping.

You can get your free annual credit reports once a year and your free credit score, along with a personalized action plan for your credit, at

In the pre-approval process, the lender looks closely at your credit and verifies your income (as opposed to pre-qualification, for which your information is not verified). The lender then gives you a pre-approval letter, which says that your loan will be approved once you make a purchase offer on a home, and once you submit the following documents – the purchase contract, the preliminary title information, the appraisal, and your income and asset documentation. Keep in mind, though, that pre-approval is not an absolute guarantee that your loan will be approved.

What does “pre-approval” mean?

Pre-approval means that the lender is confident that you can make the necessary down payment and that your income is sufficient to cover the mortgage payments. At this stage, only one concern remains. The lender needs to make certain that the property’s value offers sufficient collateral in relation to the loan amount. In other words, the home must be appraised for an amount more than, or equal to, the purchase price.

Why is it important to get pre-approved?

When you’re ready to make a purchase offer, both your real estate agent and the seller will want to see a pre-approval letter. This proves that you’re likely to be able to make the purchase and, therefore, you can be taken seriously. In a competitive housing market, sellers prefer a pre-approved buyer to those who, for all anyone knows, might be unable to close the deal.

How do I get pre-approved?

Before you roll up your sleeves and look into the details of getting pre-approved, you should first understand all three basic stages of the mortgage application process: pre-qualification, pre-approval, and mortgage commitment.


Getting pre-qualified is an informal process in which you are interviewed by a mortgage professional about your income and expenses. This gives you a general idea of the price range you can afford. It really doesn’t bring you any closer to securing a mortgage.


When you are pre-approved for a mortgage, it means that a lender has looked closely at your credit report, your employment history and your income and has then determined which loan programs you qualify for, the maximum amount that you can borrow, and the interest rates you will be offered. Be aware, however, that your loan representative is not the one who will ultimately approve your loan. That is the underwriter’s role, and these days underwriting is automated. In order for your loan representative to submit your application for pre-approval, you must provide your last two years’ tax returns and W-2s, your most recent pay stubs, bank account statements, and a signed authorization to order your credit report. The automated underwriting system will deliver a pre-approval letter within minutes, and will list any conditions that need to be met for full approval.

Mortgage commitment

A lender will issue a loan commitment after it has approved both you and the property you intend to purchase. Having examined all of the necessary documentation to verify your ability and willingness to repay the loan, your loan representative will submit your complete application to the underwriter. The underwriter will return one of four decisions: approval, approved with conditions, suspended (which means they need more documentation from you before they can make a decision), or denied.

The process of getting pre-approved

The process of getting pre-approved is actually quite simple. All you have to do is provide your lender the documentation that they require. Be prepared to supply your loan representative with pay stubs, bank account statements, tax returns and W-2 forms from the previous 2 years, and documents to show other sources of income (which could include a second job, overtime, commissions and bonuses, interest and dividend income, Social Security payments, VA and retirement benefits, alimony, and child support). Beyond that, the ball is in the underwriter’s court.

Courtesy of

Are You Ready To Sell Your Home?

home for saleWhen you put your home on the market, you may think you’re really ready to sell, but if you’re throwing roadblocks in front of buyers, you’re really not ready at all.

When you’re not really ready to sell, you tend to be unrealistic and say things to your friends, family and your real estate agent like this:

“I can sell it myself.”

“My home is worth more than that.”

“The buyer can fix things themselves.”

“Let’s price it higher, and see what happens.”

Let’s address these one at a time. About 15% of homes sold by their owners are successful. Sure you can sell it yourself, but your home is competing with listed properties that are effectively marketed and represented by professionals.

You may believe your home should be money in the bank. It should be worth more than you paid for it, it should never go down in value, and it should provide you with enough equity so you can trade up to another home, put your kids through college, retire, or meet some other financial goal.

There are times when you can really make out selling your home, and times when you won’t meet your goals. If you stay in your home long enough to build equity (at least 4 years or more), don’t take out equity loans or lines of credit, and you keep your home in good repair, you’re likely to make some money when you sell.

Realistically, your home is only worth what a qualified buyer will pay for it today, not what it was worth yesterday or what it will be worth tomorrow.

Last, most buyers don’t want to fix anything, so if your home needs work, you’re cutting down on the number of buyers who will make offers on your home. That leaves you with only the buyers who want a bargain or a fixer-upper, which means you won’t get top dollar for your home.

If you’re serious about selling your home, you’ll hire a professional to advise you and help you. A real estate professional will show you the current numbers and comparables and explain current market conditions and how they will impact your pricing and marketing strategies.

You’re ready to sell if you’re prepared to listen to your real estate professional and follow his or her advice. You’re ready to sell if you’re willing to do the hard work to make your home appeal strongly to buyers.

You’re ready to sell if your price your home to current market conditions, not what you believe you deserve.

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