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.)

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

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.

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.

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.

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.

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.

Best States for Retirement 2011

Report: Austin listed among top 5 markets to watch in 2012

What makes Texas attractive?  Here’s an interesting compilation of reports from the business journals in Austin, San Antonio, Houston, and Dallas:

Grow Texas