Austin Real Estate Blog by Kent Redding & Terrill Fischer

Some cool web resources for anyone

Here are a couple cool resources for anyone looking to buy a home called EveryBlock.com. www.Everyblock.com provides a wealth of information about the five cities they serve (Charlotte, Chicago, New York, Philadelphia, and San Francisco...soon to include all the Texas cities). They display business reviews, permits, crimes, liquor licenses, real estate listings from Trulia and Redfin, restaurant inspections, zoning agenda items, as well as maps pinpointing relevant locations. Another good local site, www.Eventful.com, claims to be the “world’s leading events website” and has a comprehensive list of events occurring near your local address.

FHA Loan Limits - Austin

Ever wondered how FHA comes up with those goofy loan limits every year? In many counties across the nation the loan limit is $200,160 but hardly anyone knows where FHA gets that number. It's a government-backed program so you gotta figure there's some contorted math going on somewhere.

FHA first takes the Freddie Mac loan limits that are announced each Fall, currently at $417,000, then multiplies that number by .48 (why that number, I have no clue) to get, you guessed it, $200,160. This is for "low cost" counties, meaning that 95% of the homes are below the median home price for the area. In "high cost" areas, the multiplier is .87, meaning the FHA limit is $362,790.

This is the traditional method of how FHA sets loan limits, this is not the temporary method used now to calculate the "Jumbo" FHA loan, using 125% of the median sales price of the area, which allegedly expires at the end of this ..(read more)

A Lifetime of Appliances

We have found that appliances are like a good car. Treat them well, and they'll return the favor for years to come. Every appliance needs simple maintenance to keep them running strong and efficient. No matter how efficient and "money saving" new appliances claim to be these days, the cost to purchase and have one installed can take several years to return the investment. By that time, someone else owns the home. Most appliances are bought according to the current style. Stainless steel has been around for six years and is on it's way out. Most color styles last for about ten years and before you know it, orange is back and your kicking yourself for tearing out the wood paneling in the den. Rumor has it hidden appliances and retro white is what's in and we have heard some recent buzz about bronze. Either way, if the fridge keeps the beers cold and the ice cubes flowing, if it ain’t broken, ..(read more)

Prevent "Bad Neighbor Syndrome"

Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} There are all types of bad neighbors, from perverts to noise makers like Satan's barking dog. Sure, there are city ordinances in place that protect us from these people, but good luck in getting them enforced. The only time the police comes out for noisy neighbors is at night. What about during the day when you're barbecuing? Prevention is first rule. Just as the home should be inspected, we recommend all our buyers to ..(read more)

Housing and Economic Recovery Act 2008

Buying smart in Austin just got a little easier recently following the signing of the Housing and Economic Recovery Act of 2008 by President Bush. There are significant benefits in this act aimed at helping Austin home buyers, such as a repayable first-time home-buyer tax credit. Majority opinion is that first-time buyers are very important to the health of the housing economy because their home purchases help to stimulate sales up the price points. Through the home-buyer tax credit, buyers who are purchasing for the first time or who haven’t owned a property in the last three years can now qualify for a tax credit equal to 10% of their home purchase price, up to $7,500. Further qualification requires that the home purchase be made between April 9, 2008 and July 1, 2009. The credit phases out if the buyer’s income exceeds $75,000 for an individual or $150,000 for a couple filing jointly and it must be paid back over a 15 year period in equal installments. The credit can ..(read more)

Update! Texas Home Sales Data 2008

Texas Real Estate data from the first half of 2008 has just been released by The Real Estate Center @ Texas A&M University . A total of 23,847 existing homes were sold in Texas in June, a 15.9 percent decline from June 2007. The median price rose 0.6 percent to $155,900 during the same period, and the state finished the month with a 6.8-month inventory on existing homes. Here is how select Texas cities fared in June: Amarillo 296 homes sold (14.9 percent decrease over previous year) Median price of $122,600 (4.2 percent increase) 5.7-month inventory Austin 2,410 homes sold (21.9 percent decrease) Median price of $196,900 (3.1 percent increase) 6.1-month inventory Beaumont 215 homes sold (6.9 percent decrease) Median price of $127,700 (3 percent decrease) 7.7-month inventory Bryan–College Station 308 homes sold (7.2 percent decrease) Median price of $144,400 (2.8 percent ..(read more)

Austin Housing Inventory Snapshot for July '08

I hope you will find the following snapshot of local Real Estate inventory interesting. The table represents aggregated values based on the Austin MLS data for the month of July. The number of active listings are up over 21% over last year. Pendings (homes under contract) are down over 50% and Sold Homes are down 17% . We are seeing more inventory of homes on the market and it is taking longer to sell them especially if they aren't priced under their competition. The Sold average prices are up about 5% from last year. Even though sales are down the prices are still stable and rising a little. But I think that may change over the 2nd half of the year.
Housing Inventory Snapshot July 08 Average List Price ..(read more)

Popcorn Ceiling Removal

Acoustic (popcorn ceilings) came about in the fifties. This fad was force fed to the public as a great ceiling coating that improved the noise and echo in rooms and looked good. It was actually a cheap & easy way for builders to hide imperfections. Did you know, if the home was built between the 1950s and early eighties, the materials in the ceiling could be made of asbestos. Removal Tips: DO NOT paint your popcorn ceiling with latex paint. That is the biggest mistake homeowners can make. The labor to remove the coating has now doubled. First, removal of furniture is recommended. Lay down contractor's paper or plastic. Make sure to wear a hat, long sleeves and a filter mask because this stuff more than likely contains asbestos, not to mention cooking grease, cigarette smoke and remnants of years of other people's bodily functions....how delightful. Ventilate the area, because it's a smelly job. ..(read more)

Austin Area Foreclosures Up 31%

We are seeing a sizable increase in the number of foreclosures posted for next month (August 2008)) in the Austin area over last year. This was reported recently in the Austin American Statesman.

"The number of Austin area residential foreclosures posted for the upcoming August auction increased 31 percent over last year. There are 741 postings for August in the four-county region, up from 564 in August 2007, according to the latest report from Addison-based Foreclosure Listing Service Inc. The largest increase in activity was in Travis County, which experienced a 62 percent surge in postings in August compared with the same month last year. It's also the seventh consecutive month that Travis postings have exceeded 300. Through the first eight months of the year, there have been 5,715 foreclosure postings, a 20 percent uptick from the same period in 2007. In the four counties included in the Austin metro, year-to-date postings are: Travis: 2,902, up 23 ..(read more)

Can A Little Wire Improve My Home's Value?

You can't turn on a TV today without someone selling you telecom services. From cell phones to high speed net access, the deals are abundant. In this five-part series, we are looking at novel ways to understand trends that impact our home's value.

<See PC Magazine: How to Future Proof Your Home with Fiber>

In most parts of the country there are two major providers of telecom services for phone and Cable TV. For the last year or so the battles have been fierce to get homeowners to sign up for bundled services. This "triple play" is comprised of telephone service, Cable TV and internet access. The theory is that if you sign up for all three from one provider, you will save money and build allegiance with one carrier. They are hoping for that too!

One trend that is seen in most planned communities and new developments is the deployment of Fiber To The Home (FTTH). This process runs fiber optic cables ..(read more)

Austin - a hidden Real Estate Gem

We have long suspected that Austin is a hidden treasure in the housing market, and now the facts are beginning to back it up. The financial and business Web site Bloomberg.com last month named Austin as one of the country's select few attractive, low-risk housing markets. And according to the Office of Federal Housing Enterprise Oversight (OFHEO), Texas has seen almost a 5% increase in housing prices in the first quarter of 2008 with the Austin-Round Rock metropolitan statistical area (MSA) experiencing an average appreciation of almost 7.75% (ranking 4th nationwide). How can this be true in light of the national downturn? Well it is commonly know that "Most people pay attention to the national weather, but dress for the local conditions" The good news is this; since the housing downturn wasn't directly caused by a decline in the economy or job losses, but instead by lax lending standards and too much over built inventory, this should correct itself over ..(read more)

Why the new FHA standards, now?

We noticed a strange story coming out of Washington a few weeks back: Fannie Mae and Freddie Mac -- the huge companies that buy most conforming loans from local lenders -- agreed to tougher standards for appraisers. Under the deal worked out with New York state attorney general Andrew Cuomo, the big loan buyers agreed to create a "New Home Valuation Protection Code" which has three baseline requirements: Mortgage brokers will be prohibited from selecting appraisers Lenders will be prohibited from using "in-house" staff appraisers to conduct initial appraisal, and; Lenders will be prohibited from using appraisal management companies that they own or control. At first all of this may seem like technical gibberish, but the benefits to borrowers -- and to lenders -- are huge. Cuomo is effectively removing potential points of conflict, opportunities where appraisers can be pressured to over-value properties. As a borrower you want a ..(read more)

IRA Real Estate Purchasing

We received a question from one of our valued Austin clients inquiring about whether they can purchase real estate through their IRA. We are not tax advisers or financial gurus (so seek their assistance!), but in general terms it is possible to buy and sell real estate thru your IRA. Section 408 of the Internal Revenue Code permits individuals to purchase land, commercial property, condominiums, residential property, trust deeds, or real estate contracts with funds held in many common forms of IRAs. This is a fairly common practice, but certainly one where you will want to work closely with your financial adviser. You’ll need to locate an independent IRA custodian that allows real estate investments and work with that company to set up an IRA account. Most banks and brokerage companies—the most common IRA account options—limit your choices to certificates of deposit, stocks, mutual funds, annuities, and similar financial ..(read more)

Bonded? Insured? What's that all about.....

Oftentimes clients ask us for contractor referrals from an electrician, re-modeler to ground up new home builders. When are happy to share our best contacts, but inevitably the question of "Are they Bonded and Insured?" come up. A contractor is not just the guy you hired to build your home or install a new shower. A contractor is anyone hired to perform services, whether the lawn guy, or even your dentist. Most "contractors" are bonded and insured in some sort of way or different term. Let's use the building contractor in this case. He or she should be bonded and insured to protect their customers, and themselves as well. It is well known that many contractors may advertise being "bonded and insured" but are not. It is also well known that the customer seldom calls the contractor's insurance carrier for verification. I myself recently shopped for someone to cut down three small to ..(read more)

Austin Mayor Will Wynn on Energy Efficiency

This is the letter that Mayor Will Wynn sent out a couple of weeks ago about the Austin energy efficiency issues with homeowners. A “green home tax” was being considered on Austin homeowners by the City Council. The City Council Task Force wants all Austin homeowners to get an energy audit but they don’t have to do the upgrades which could be expensive. Read the Mayor’s letter below and see what you think. There has been a lot of misunderstanding and controversy over it.
Mayor Wynn on Energy Efficiency
June 11, 2008

Dear Friend: Over the last several months, you may have heard talk about a proposed City plan for achieving improved energy efficiency in existing homes. Some have called it the “point of sale” ordinance, or even the “green home tax.” There’s been a lot of confusion and misunderstanding on this issue, so I want to try to set the record straight. I hope that you will take a moment to ..(read more)