Just read an exuberant post about how “Austin Real Estate Is Kicking Major Butt”: with relatively low 6.7% unemployment rate, Austin’s job market is a magnet, home sales are up, values are stable, mortgage rates are low. According to this post, it’s a healthy market.

Though the Austin American-Statesman doesn’t say Austin’s “kicking butt,” it suggests that the “housing market might be recovering”, noting that home starts were up 27% in 3Q 20ll and there was a 2% growth rate in jobs over the 12 months ending in August – that’s 15,500 new jobs. The Statesman’s piece is not altogether rosy. It quotes Eldon Rude of Metrostudy: “Although Austin continues to exhibit the key drivers for housing demand — job creation and population growth — the one ingredient we are missing is strong consumer confidence. Considering the dark economic news that has circulated in the last 60 days, it is hard to expect that the demand for new homes will pick up strongly in the short term.” However the Statesman says that “a number of builders are putting new homes on the ground and say they are seeing encouraging signs.” Scott Eckley, vice president of sales for Pulte Homes in Austin, is quoted as saying “for the month of September we are going to sell more than 75-plus homes net, which is obviously a robust number.” He says that the key to the healthy market is continued job growth.

Another good sign from the Statesman: 221 homes will be added to the local inventory via new development in the Mueller subdivision, the former site of the Austin airport which was repurposed as a sustainable development project by the City of Austin and Catellus Development.

My view is that the market has picked up steadily for the last year, and we are approaching a balanced market where there’s around a six month supply of homes on the market. I think this will hold into the spring, meaning a robust 2012 and contninued strong sales through the fall and winter, if the economy remains fairly stable. This is probably due to pent-up demand and the incredibly low interest rates.

Contact me (mlebkowsky at cbunited.com) for more specific and concrete information about the neighborhood you’re interested in.

Now called Circuit of the Americas, the new Forumula One track in southeast Austin will have a big impact on the area. Big news today is that the track will also host MotoGP, a premiere motorcycle racing event. (More on Circuit of the Americas at Wikipedia.) Follow this link for images of the site southeast of Austin.

These events could trigger a surge for Austin real estate through the creation of new jobs, and through potentially attracting new real estate investment.

Here’s the recent press conference video:

Interesting chart from Mortgage News Daily:

Each line represents a different 30 year fixed mortgage note rate. The numbers on the right vertical axis are the origination closing costs, as a percentage of your loan amount, that a borrower would be required to pay in order to close on that note rate. If the note rate graph line is below the 0.00% marker, the consumer may potentially receive closing cost help from their lender in the form of a lender credits. If the note rate line is above the 0.00% marker, the consumer should expect to pay additional points at the closing table to cover permanent buydown costs and origination fees.

Read the complete article, and note the disclaimer, here.

Available for iPhone or Android…

As a University of Texas football fan, I was happy to see an end to the team’s four game losing streak yesterday. In yesterday morning’s paper, I read a fascinating article about Eddie O’Connor, Ph.D, whose business is to overcome losing streaks and who talked about the psychology behind ‘em. In a recent paper, according to the article, O’Connor lists “nine common reactions to losing streaks: focusing on losses, focusing on mistakes, blaming teammates, blaming one’s self, utterly giving up and so on. He suggests that none of those helps.” He says that losing kills motivation.

The Statesman reporter also talked to Art Markman, a UT psychology professor, who suggests that winners are focused on positive outcomes, and you have a problem when your focus changes to avoiding negative outcomes. When you’re trying not to fail, you tend to think “about skills that are better left un-thought about,” for instance, “A quarterback who’s worried about the position of his arm isn’t thinking about the pass rush or where the linebacker went.” You get into an “avoid” state rather than an “approach” state. “Approach states result in high-energy emotions such as elation and joy. Avoid states foster sadness and despondence.” One way around this is to focus on “process goals” associated with specific tasks. “Process goals ask a question: ‘What’s your job? Don’t worry about the score.’”

In reading all this, I was thinking about the state of the economy – as a Realtor, I have to be an economy-watcher, so I think about this every day. The U.S. economy has felt like a losing streak lately – some people are using terms like “collapsonomics.” However because of the increase in jobs and the continuing popularity of Austin and the Hill Country in general, our area leads a national trend toward recovery.

How do you move from a near-depression to a winning economy again? I still hear some people say that it’s impossible, that there are too many downward-spiraling variables. But isn’t that just a symptom of losing-streak thinking? We have to turn our heads around.

So I come back to the last paragraph, and apply it to the economy, starting with myself…

“Approach states result in high-energy emotions such as elation and joy. Avoid states foster sadness and despondence.” One way around this is to focus on “process goals” associated with specific tasks. “Process goals ask a question: ‘What’s your job? Don’t worry about the score.’”

Austin home sales are down, but we had a 2.4% increase in jobs since October of 2009. Austin still feels relatively healthy, economically, compared to other parts of the U.S.

However the front-page headline in today’s Austin American-Statesman says “Austin-area home sales set for 4th annul tumble.” (The web version says drop, rather than tumble – is “drop” more SEO-friendly?)

According to the Statesman, October sales were down 31% from a year earlier, and sales have been down over the previous year for five months in a row. Last year we had the tax incentive, which bolstered sales. It would be interesting to see how last year’s numbers would have looked without the incentive, but that would involve guesswork.

It takes an average 92 days to sell a home in Central Texas currently, up from 73 days a year ago. This might also be attributable to the loss of the incentive; it could also be because it’s harder to get a loan. The Statesman quotes JB Goodwin Realtor Robin Curle, who said “lenders are scared and are really tightening up their requirements.” She noted that they’re also busy with refinancings and appraisers are being more cautious, so it takes longer for deals to close, like 45 days instead of 30.

Earlier in the article, Curle is quoted as saying she’s working with some buyers that are looking for great deal – Cynthia Mattiza, also with JB Goodwin, is quoted as saying many buyers are dropping prices, though median prices are up 10% over a year ago (possibly another explanation for the increased days-on-market).

The great deals are out there, to be sure – and I can help you find ‘em. If you’re interested, email me at mlebkowsky at cbunited.com.

Joe Etherton and Karen Cotter's modular home.

The Statesman has a feature about a high-end modular home prefabricated, delivered in two chunks, and set on a robust foundation. The project,  coordinated by MA Modular for Joe Etherton and Karen Cotter, was not exactly what you think of when you think modular. “The couple paid $235,000 for the lot and about $237,000 for the 1,500-square-foot house, including the cost of some upgrades such as massaranduba (Brazilian redwood) siding,” according to the article.

Etherton’s and Cotter’s abode doesn’t scream “modular.” It looks like any upscale, contemporary South Austin house, with a standing-seam metal roof and moss-green stucco along with the rich-looking massaranduba on the exterior. The bathrooms have subway tile, and the kitchen is sleek with Silestone countertops and Merillat cabinets. Bamboo floors and light woods throughout, along with a wealth of windows and a ceiling that slopes from 9 feet to 11 feet, make the house look bigger than it is. Triple sliding-glass doors open from the living room onto a back deck of more than 500 square feet. The master bedroom opens onto the deck, as well. Beyond that, there’s a big, grassy yard for the kids to play in.

[Link to the full article] | [Link to images of the home]

Who wears the pants in making decisions about real estate? Coldwell Bander found that, in most cases, it’s a mutual decision – here’s a video showing a few of the specific responses…

Ladybird Lake

Walking Austin’s hike and bike trail around Ladybird Lake on a recent glorious day, my husband and I ran into an acquaintance, Tom, and got into a discussion of the local real estate market. “This market’s really inflated,” he said. “Realtors are driving home prices up so they’ll get bigger commissions.”

“That’s not exactly right,” I said.

“Of course it’s right,” he said. “The commission’s based on a percentage. If you sell the house for more money, you get a bigger commission.”

“That’s true,” I said. “But even if a Realtor saw this as an incentive, she can’t charge more than the market will bear. It’s the market, not the Realtor, that determines the price.”

“But Realtors inflate the market by charging more for homes,” he said.

At that point the conversation was circular. The idea that Realtors can influence market values is embedded in buyer psychology. But we generally can’t produce a sale, however hard we market, if a home is priced too high. We advise a price range based primarily on an analysis of comparable homes that have sold recently, which tells us what people are willing to pay. We also look at what’s currenlty listed, to get a sense of the competition, which is a factor in determining the market.

A good Realtor won’t suggest the highest possible price, but will suggest a range, and relate it to a time factor. If you have to sell quickly, price at the low end of the range; if you have more time, price closer to the high end.

What if a seller wants to price a home well above the high end? A good Realtor may not take the listing. Why? When the property is priced well above market, it won’t sell, no matter how hard or creatively we market. We therefore won’t earn a commission, try as hard as we might, and yet we put hours of time and hundreds of marketing dollars into the effort.

That’s why Tom’s logic doesn’t work. If Realtors were persistently pushing for higher prices, they would almost certainly get fewer commissions. Pricing is as it is because of supply, demand, and specific property features. In a market where prices are truly “inflated,” few homes are selling. That won’t last. If homes really are selling for higher and higher prices, that suggests not Realtor shenanigans but an increasing demand and/or decreasing supply.

Realtors prefer a balanced market, which is good for everybody.

Put another way – under a six month supply of homes (absorption rate) and the real estate market is generally moving and balanced. Over a six month supply and it’s stagnant, a buyer’s market with lots of homes for sale and stable or falling prices.

When it gets much less and is definitely a seller’s market, we see lots of activity, multiple offers on homes and rising prices. Luckily for all of us, the market is self-correcting and attempts to stabilize itself, setting its own prices depending on very localized conditions.

701 North Main, Elgin, Texas

Fabulous Historic Home! Many wonderful touches will draw you into the heart of this home. You’ll love the spacious rooms, high ceilings, & wood floors. Dine with the finest in the formal dining room graced by a wide arch, columns, & antique lighting. The plantation shutters, French doors, & crystal doorknobs will take you back to a gentler time. The lovely master fireplace and walls of windows will relax you beyond words. The detached garage & apartment above have been rehabbed with new windows & paint. Use as a rental, (many have asked), create a studio space, or have an office away from it all. Appreciate the outdoor space, the recently added deck, the tall pecan trees, & room for a pool, garden or a whopping big barbecue with friends and family! You will fall in love! Come see it today!

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