Texas-Sized Housing Boom

The Texas A&M Real Estate Center reports a huge increase in home values and bidding wars in Houston and Dallas.  Over 15% median price increases in Dallas and 14% in Houston represent the highest year over year increases in over a decade.  Although it doesn’t mention anything about Austin, we’ve had our own share of bidding wars and multiple offers for the better half of 2013 and still going on in many pocket neighborhoods.

A hot real estate market can be a difficult ocean for both sellers and buyers alike to navigate so if you need an experienced and savvy real estate agent to sell or purchase a home in a hot market, give me a call.

Source: http://realtormag.realtor.org/daily-news/2013/10/10/everything-including-housing-boom-bigger-in-texas?om_rid=AACLKS&om_mid=_BSVxHPB81u25$z&om_ntype=RMODaily

Rising Interest Rates Means Homes are More Expensive

With interest rates at historic lows, home buyers have been taking advantage of “cheap” money for the past couple years.  But interest rates are set to rise with the federal reserve’s decrease in bond purchasing.  The availability of cheap money will be gone soon so if you’re on the fence about purchasing, take a hard look at the following numbers:

Example: A buyer gets a 30-year fixed-rate mortgage at a 5 percent interest rate on a $300,000 loan.

Monthly payment: $1,610.46
Total payment: $579,569.69
Total interest: $279,769.69

Example: A buyer gets a 30-year fixed-rate mortgage at 6 percent interest rate on a $300,000 loan.

Monthly payment = $1,798.65
Total payment = $647,515.44
Total interest = $347,515.44

Just a 1% rise in interest rate increases the monthly payment $188 and the total interest almost $68,000.  To avoid this increase, give me a call today!

Source: http://realtormag.realtor.org/daily-news/2013/10/10/why-it-might-be-cheaper-buy-now?om_rid=AACLKS&om_mid=_BSVxHPB81u25$z&om_ntype=RMODaily

Government Shutdown Effects on Real Estate

With interest rates steadily rising, the government shutdown has caused a slight dip in interest rates to its lowest figures in four months.  For the week ending October 3, national averages of mortgage rates went down for a third straight week.  Freddie Mac reports the following averages:

30-year fixed: 4.22%
15-year fixed: 3.29%

These are approximately 0.5-0.75% higher than the rates 12 months ago, which we all know were historically low.

The other big effect is most FHA, USDA, and VA loans are experiencing delays in closing since the… government… is… shut… down.  Trust me, it’s not that obvious to everyone.

Source: http://realtormag.realtor.org/daily-news/2013/10/04/gov-t-shutdown-pushes-mortgage-rates-down?om_rid=AACLKS&om_mid=_BSTyVLB81mOjB$&om_ntype=RMODaily

Rental Vacancy Rates Lowest in Ten Years

Nationwide rental vacancy rates are now the lowest in the past ten years, according to real estate research firm Reis Inc.  Current vacancy rates are 4.2%, the lowest since 2001 when it was 3.9%.

If you’re looking to diversity your funds into real estate to generate instant cash flow and build long-term wealth, call Edwin Lui at 512-554-9594.

Source: http://realtormag.realtor.org/daily-news/2013/10/03/rental-vacancy-rate-lowest-in-more-decade?om_rid=AACLKS&om_mid=_BSTdPPB81kybEn&om_ntype=RMODaily

Top Ten Rental Markets for Investors

According to RealtyTrac and RentRage, Williamson County, Texas, is the fourth best rental market nationwide for investors.  The stats are based on gross yield percentages.  If you’d like more information on investing in Texas real estate, call Edwin Lui, a licensed Texas Realtor with an Economics degree that might be of use when determining gross yield.  He’s also a fellow investor.

Williamson County, Texas:
Median market value: $158,000
Median rent value: $1,403
Gross yield: 10.7%

Source: http://realtormag.realtor.org/daily-news/2013/09/20/top-10-hidden-gem-single-family-rental-markets?om_rid=AACLKS&om_mid=_BSPKI6B81T4DuK&om_ntype=RMODaily

Always have a plan “B”

Buying a home is tricky business.  You want to buy a home you love, but you don’t want the other party to know it, otherwise you give up negotiation leverage.  On the other hand, sometimes if a seller knows you really love it and appreciate the property, they may feel a “connection” with you and want to sell it to you even if it’s not the highest offer.  Recently, I chose the second option and here’s my story:

My family and I decided to move back to Northern Virginia and we finally saw a home we liked.  We liked it enough to put an offer on it without even seeing it.  It had the land we were looking for, it was “off the grid” for water, and was fairly close to the school that our kids will be attending in Centreville, VA.  Check out the home by clicking here.

After my wife and I talked about it, we decided it was probably a 7 out of 10 on the scale of how much we liked it.  In order to get to a 10, it would have needed a pre-existing fruit orchard, be about 5 minutes closer to the school, and have a more updated and “normal” floorplan.  The home was over 100 years old and it wasn’t the “perfect” home, but we loved the property, the pond, the creek…..ok, I better stop now before I get sad again.

There were two other offers besides ours and I knew I didn’t want to offer full price.  My offer was probably the lowest, but I explained to the listing agent our reasons for moving back to Northern Virginia and our dream for owning a farm and raising our kids in that type of lifestyle.  At the end of the day, it didn’t work out, and they probably ended up going for the highest offer in financial terms. But boy did they miss out on a chance to get free fruit from Lui Fruit Farms!

Autumn and I decided that rather then blame our real estate agent (me) for not getting the property we really wanted, that maybe God has a plan “B” for us.  So now we’re looking at buying a townhome that is closer to the school in Centreville and then turning it into a rental property after a year, and taking our time to identify some raw land to build our farm on.  So, if you know of an investor looking to buy a property under $300,000 within 10 miles of Centerville, Virginia, I know how every neighborhood stacks up!

So if you’re going to be making an offer with me in Virginia, or with Edwin in Texas, we’ll fight our hardest to help you with plan A…..but make sure you come ready with a plan B.

~ Your Favorite HOMEboy, Edward

 

Austin a Top City to Retire

We all know that Austin is the Live Music Capital of the World, attracting thousands of young visitors every year.  It’s also home to one of the largest universities in the country and boasts a very low unemployment rate.  But did you also know it’s a great place to retire?

CNN just put out an article ranking Austin the #5 city to retire due to its low state income tax (0%), amazing outdoor trails and parks, and top tier health care.

Full article here: http://money.cnn.com/gallery/retirement/2012/10/16/best-places-retire.moneymag/5.html

Silver Increase in Sendero Springs

Two more homes for sale sprang up in the Sendero Springs neighborhood in Round Rock.  Unfortunately neither of these reaches the Gold standard, but they aren’t too bad and the $/sf is very low so these can still be seen as great deals!

4421 Angelico Lane – Silver

How often do you see a 6 BR, 4 BA home come on the market for $70/sf?  This 4,700 sf home is huge and is listed at $330,000.  The master and 4 bedrooms are located on the top floor along with a 5th bedroom downstairs, separate office, and formal dining room.  The kitchen has granite counters, breakfast area is big, the backyard isn’t huge but it’s nice, and it’s located in a cul-de-sac with only one neighbor to its side and a greenbelt behind.  So why isn’t it Gold?  It’s really close to being gold, but as I previewed the home, I counted about 12 beds and three refrigerators throughout the home!  It’s in overall solid condition, but it also means the home is taking as much wear and tear as three homes combined!

3008 Asombra Lane – Silver

This 5 BR, 3 BA home has the exact same floor plan as the home three doors down from it (3002 Asombra), which has been withdrawn from the market.  This one is offered at slightly lower price of $259,900 ($74/sf), which makes it a better value.  It’s also in better condition with granite counters, and custom floor tiles and back splash.  Carpet in the entire house will be replaced and most of the walls will have a fresh coat of paint on it.  But I still can’t get past the guest bedroom and bathroom in the middle of the home.  It creates an uneven flow to the home.  I’m sure someone out there will like it, but it’s a turn off for the majority of buyers.  It’s a good $/sf, but there are smaller homes out there for less money and a more efficient and pleasant floor plan.

Gold Index:

There are now two Gold homes in Sendero Springs for sale.  3203 Lazada is one of the most expensive homes on the market at $399,900, but has tons of extras and is a very nice home with good value ($88/sf).  4307 Pasada lowered their price to $198,000 ($77/sf) and should be snatched up quickly.  There aren’t many Gold homes for sale in Sendero Springs and to find one under $200,000 makes this a great purchase.

If you’ve got a home in Sendero Springs that you want to sell, get in touch with me to make it a Gold home.  If you are in the market for real estate in Round Rock or Sendero Springs and you need a Realtor, give me a call or email and I’ll gladly help you.

A New Home, An Old Republic

My wife and I recently purchased a home in Sendero Springs in Round Rock, Texas.  This was our first resale purchase and we wanted to make sure we went with a good builder.  The builder of the home is Streetman Homes.  They build a high quality home and it speaks volumes that as other builders are going bankrupt or not able to secure construction loans, Streetman Homes continues to build new homes in a new section of Sendero Springs.  In addition to a quality builder, we wanted some home protection.  No, I’m not talking about guns!  We decided to purchase a home warranty protection from Old Republic Home Protection.  My brother has been recommending Old Republic to clients for many years and has always received positive feedback from them.  It may have been the best (and most affordable) “upgrade” to the value of our home and to our peace of mind!

As the Texas heat approaches historic records for most 100-degree days in a year, what could possibly go wrong with a three-year old home built by a quality home builder?  The air conditioning, of course!

My first call was to Old Republic.  Actually, I went to their website and did everything online – it was fast, easy, and very convenient.  I was very excited to put my warranty plan to use.  The plan charges me $60 for the service call.  I was contacted by Adams Air Care and promptly scheduled the next available appointment (two days).  The technician was very professional in assessing the situation.  He suspected a leak in the system as he refilled about two pounds of 410A.  He even poured vinegar down the drain pipe for me and hosed down my condenser in the scorching sun!  A couple of hours later, he left my home feeling cooler than it had all summer!

A couple of weeks later, the air conditioner wasn’t keeping up with my thermostat so I called Old Republic to have Adams Air Care come out again for a service recall (no charge).  The technician came back, added about four pounds of 410A and was determined to find the leak.  He said my evaporator coil needed to be replaced.  No problem.  I’ve got a warranty plan that will cover the parts and labor for this.  Upon further investigation by the technician, he would need to remove and re-install the furnace and several ducts in the attic in order to have proper access to the coil.  That would probably cost me about $2,000 and would certainly not be covered by my warranty plan.  Problem.

So I called my local Old Republic account executive and told her the mess I was in.  An hour later I got a call from an Old Republic representative telling me I had the option to get a second opinion and I could get a cash settlement from Old Republic to the tune of $953, which is what they would’ve paid Adams Air Care.  That means if it costs me $1,000, I pay $47 out of pocket.  It also means if it costs me $900, I pocket $53.  Originally, I thought having a leak in my air conditioner would make a major dent in my wallet, but after hearing this news, I couldn’t wait to shop around (my specialty) and find someone to “git-r-done.”

I contacted the original company that installed the unit.  They said it could be done and would charge a $650 flat rate to replace an evaporator coil.  Two guys spent over five hours to git-r-done.  The air conditioner is cooling like a champ and I’m about $300 wealthier.  Thanks to Old Republic, I can’t wait until something else needs fixing or replacing at my home.  Just kidding!  In all seriousness, I wish my home could be 100% problem-free, but it’s still great to have a back-up plan.

On your next real estate purchase, make sure you get a home warranty plan from a company like Old Republic.  It should give you immediate peace of mind and if anything were to happen, it just might save you some money and pay for itself.

Williamson County Real Estate – 2010 Review

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One of the trends that I’ve been following this year is the level of activity for sold homes in Williamson County, Texas.  This graph (courtesy of the Williamson County Association of Realtors) shows some interesting trends that I thought I would share with you.

At first, you’ll notice that the amount of homes that sold from January through May was actually higher than 2009 numbers.  That’s good.  However, keep in mind this was when a majority of Americans were buying homes and taking advantage of the $8000 tax credit.  This tax credit probably caused a lot of people to buy in the first half of the year who wouldn’t have otherwise…or would have waited to buy in the second half of 2010.

After the tax credit expired, the level of activity dropped significantly lower then the amount of homes sold in any of the years from 2006 and 2009.  However, in November that number surpassed the 2008 levels.  432 homes were sold in the month of December , continuing the trend upwards, surpassing both 2008 and 2009 levels.

I see this as a positive sign for 2011 and I am optimistic that the level of real estate activity will continue to improve through the Summer of 2011 before slowing back down again.  Traditionally, there are 400+ homes that sell in Williamson County in the month of January but the last 2 years that level has been closer to 250-300 homes.  It will be intersesting to see how many homes actually sell in January and whether or not we’ll continue to see the upward trend.

If you’re a buyer or seller in this market, there are ways to leverage your position in any market.  Just ask me how and I’d be happy to share with you the systems I use to help you save the most money and time.

~ Your Favorite HOMEboy, Edward

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