October 2007

Welcome!

I hope you are well rested and rejuvenated as we close the rainiest summer in Austin and begin the fall season. I’d like to welcome you to the first issue of my monthly newsletter where I’ll be sharing news on the Real Estate market, investment tools and information, home improvement tips, as well as local events, and ways to get acquainted with my native city.

As you know, I love Austin! I still can’t believe I’ve been here 31 years and I am honored to ensure that my friends and family make wise Real Estate decisions. As I track my business sources, I have come to realize the lifeline of my success has been you! I am fortunate for the relationships that I’ve made with you and as a thank you for your continuous support, I hope to use this newsletter as a forum to keep you entertained and informed of current trends in the market. Feel free to tell me if you know anyone else who may be interested in receiving my newsletter.

Whether you are a seasoned investor or first time home buyer, I want to make sure you have up-to-date information so that you can make the most informed decision when it comes to your Real Estate and home buying needs. And remember, I am never too busy for your questions, concerns or referrals.

Sincerely,

Michael A. Quinones, REALTOR®

What’s Your Foreclosure IQ?

Here’s a fun little true/false quiz from REALTOR® magazine online

1. As a general rule, foreclosed homes sell for less than their market value.
2. If you bid on a foreclosed property at an auction, you also may be bidding on tax liens and other debt accrued by the prior home owners.
3. The housing boom masked the high number of home owners who’ve struggled with paying their subprime loans and these home owners may now be at high risk of foreclosure.
4. Home owners who always pay their mortgage on time don’t need to worry about foreclose homes in their neighborhood.
5. Home owners can sidestep foreclosure by transferring the title of their home to a foreclosure rescue company for a year or two.
6. To purchase a HUD home you do not need to hold any special licenses or qualifications.
7. Reading public notices at your local county courthouse — including bankruptcy claims and death certificates — is not an effective method of locating foreclosed properties.
8. Once home owners default on three mortgage payments, the home automatically goes into foreclosure.
9. In many states, owners of foreclosed homes can reclaim their property— even after someone has already bought it — by paying off the loan along with any interest, taxes, and penalties.
10. Lenders stand to benefit when home owners foreclose on properties.
11. Once a bank takes possession of a foreclosed home, the previous owner is free of all financial obligations.

Shoot me an email for the answer key

Halloween Candy Safety Tips

Tell kids not to eat any treats before they get home. If necessary, give kids a meal or light snack before they go trick or treating so they won’t be tempted by their candy.

Carefully check all candy before allowing your child to eat it.

Eat only those treats still in their original, unopened, unpunctured wrappers.

Check fruits and homemade treats for punctures or foreign bodies that may have been injected, such as pins or razor blades. Allow your child to eat such items only if they’re from someone you know and trust.

When in doubt—throw it out!

Austin’s Downtown Condo Market

The skyline of Austin has been changing a great deal lately whether you’re a fan or not (like John Kelso of the Austin American Statesmen who isn't a fan). If you’ve driven through downtown Austin lately, you’ve probably seen the cranes and the men wearing pretty orange vests and chances are good that they were working on either the 360 condo project or the Monarch development. As of now, the 360 condo project has 85% of its units under contract. The Monarch condo development has converted from luxury apartments for lease to condos for sale. I’ve received many questions about this latest trend in Austin’s emerging, rather, erupting downtown condo market.

So, is Austin experiencing healthy sustainable development? Well, according to the Austin American Statesman, Charles Heimsath of Capitol Market Research projects strong demand for the next 2-5 years. Economists understand demand is dependent on supply. Personally, I don't see a "strong demand" in five years with over 5,000 major units in the planning stages for downtown alone. I believe demand will curtail in two years.
Over the next three years, 5,300 condo units will hit the downtown market. The prices for the units range from $200,000 to $1.9 million, therefore, the median price is $1.05 million. (If other projects follow 360’s 90% owner occupant rule, approximately 530 rental units will arrive from investors as well) About half of new units for sale (2,273) will arrive in 2008. To put this in perspective, area DT (downtown) of the ABOR MLS, has shown 119 condo/town home units sold with a median price of $327,000 from January to August of this year. Currently the supply is six months. So, unless demand responds to the new supply, area DT could be looking at a 6.35 year supply of condos. There have been 87 condo/town home units leased with a median price of 1,600 in area DT. The supply of DT condo/town home lease units is a very low 1.6 months.

According to the Austin American Statesman, the Monarch's original plan was to sell the luxury apartments as condos in five to six years. With such a short supply of lease units currently available compared to the six month supply of sales units, why would the Monarch convert from leases to sales? In my opinion, they are cashing out now while they still can. So, if you want a good deal on a downtown condo, call me in about two years.

UPDATE: Apparently the Monarch condo project had problems selling because they have converted back to lease units.

Area 10 Under the Microscope

Many people have noticed that area 10 (Now 10N and 10S) has experienced a very high demand. Statistically, the area split into 10 North and 10 South last March. For the purpose of this article areas 10N and 10S will be referred to as area 10 to keep the stats in an apples to apples comparison. Currently, the supply for all of area 10 is 1.2 months (1.3 for 10N and 1.1 for 10S). After some research on supply for area 10 from January 2005 to August 2007, the largest reduction in supply occurred from Feb. ’05 to July ’05 when supply dropped from 3.2 months to 1.9 months. The reduction in supply directly correlates with the increase in demand. Median price has gradually increased from $123,000 to $165,000 from Jan.’05 to Aug.’07.