December 2008

Season’s Greetings Everyone!

I hope everyone’s been enjoying the holidays. As I mentioned last year this is my favorite time of year. I look forward to my annual trip to Milton, DE where I’ll stay in a home built in the late 1800’s for a few days.

Anyway, I decided to utilize my website: www.q4uhomes.com, as resource for promoting my newsletter, which is now quarterly. I’ve realized it doesn’t hurt to drop one in the mail either. Hope you enjoy!

Market Update

Right now, we’re in the slowest market since 2004 when sales units were 18,532. Below is a chart of Year-to-date stats for 2008 and the change from 2007.

Relationship between Austin’s Real Estate Market & the State of the Economy

I recently attended a seminar at the Austin Institute of Real Estate (“AIRE”) on the recent economic recession. The discussion included causes, challenges, opportunities and a general outlook. The seminar hosts were Hugh Parrish, David McMillan and Wayne Morgan who discussed effects on local real estate, the mortgage industry and general causes, respectively. About 100 local agents and brokers attended the seminar.

It seems the national economic bubble has finally hit Austin. Wayne Morgan, AIRE owner, led the discussion and soon attention was on the familiarity of the busts from the 80’S and 90’s to our current decline. They stem from fewer banking regulations and seem to be part of the Capitalistic ebb and flow. Mr. Morgan soon became Kiosaki-like and generally discussed trends, transfer of wealth and paradigm shifts but his point was clear: in a down economy comes real opportunity.

Hugh Parrish, my broker, spoke next and discussed the foreclosure rate and states of greatest loss. Apparently, Fannie Mae’s average loss on property in Texas as about 9%.

Largest losses are found in Florida, Nevada, Arizona and California. In fact, Fannie Mae once based in Dallas recently opened a new branch in Florida. To handle the volume, the entity will utilize asset managers, auction and perhaps package sales. Here in Texas, foreclosures have nearly doubled since last year. More homes are in default as well.

The final speaker, David McMillan, felt things were back to normal and compared market fluctuations to a pendulum swing. He explained the sub-prime lending practices were a market exception. The recent restrictions on lending requirements have actually put things back to normal on the lending side. As for FHA loans, the required buyer initial investment will soon rise to 3.5% from 3%.

The consensus was we are at the beginning of a depressed market cycle economically and in real estate, which creates opportunity for those with the means to take advantage of it. Unfortunately, we won’t know where the bottom is until we are on the way back up.

If you have any questions about the state of the Austin real estate market feel free to give me a call.

Butternut Squash Soup (Serves 6)

2 butternut squash, halved lengthwise, seeded 2 TBL vegetable oil 2 C thinly sliced onion 1 TBL golden brown sugar 4 TSP minced fresh ginger 3 garlic cloves, coarsely chopped 1 medium apple, chopped 1 C white wine 1/2 cinnamon stick 5 cups (or more) canned low-salt chicken broth

Preheat oven to 375° F. Oil baking sheet. Place squash, cut side down on baking sheet. Bake until very soft, about 50 minutes. Remove peel and cut squash into 2-inch pieces. Heat oil in large pot over medium-low heat. Add onion, brown sugar, ginger, garlic, apple, wine, and cinnamon. Cover and cook until onion is tender, about 15 minutes. Add squash and 5 cups chicken broth. Bring to boil. Reduce heat to medium-low. Cover and simmer 10 minutes. Discard cinnamon. Working in batches, pureé soup in blender. Return soup to pot and season with salt and pepper. Bring to simmer and thin with more broth or milk, if desired.

Upcoming Local Events

Ice Skating on the Plaza - Whole Foods (11/28 - 1/11)
The Nutcracker - The Long Center for the Performing Arts (12/6 - 12/23)
Armadillo Christmas Bazaar - Austin Convention Center (12/12 - 12/21))
Trail of Lights - Zilker Park (12/14 - 12/23, 7pm-10pm)
Santaland Diaries - Zachary Scott Theatre (11/28 - 1/11)
First Night Austin - Downtown (12/31; see firstnightaustin.org for details)
32nd Annual Carnaval Brasilero - Palmer Events Center (1/31/09, 8pm)
Austin Marathon (2/15/09)