Home Sales statistics for June 2015

A quick look at the recent housing sale data released by Austin Board of Realtor shows a healthy growth in Northern corridor of Cedar park, Leander and Round Rock. These three community constitute close to %50 of the total houses sold in Austin Area. That is tremendous, because a lot of those sold houses are in the newly developed communities in those areas. Remember that these are the ‘MLS listed’ sold houses and many of the houses in new development communities never make it to the MLS and are not park of these statistics.

I have personally witnessed and worked with a lot of transferees to Austin and the one part of time often mentioned by these people is Cedar Park. A while ago I read an artice about Cedar Park and how it came about. One interesting tidbit  of information was that  in  the early 1960, totak poulation fof Cedar Park owas a grand total of 263. many ofAs I mentioned in my post a couple of weeks ago, new developments are all around us and

Austin Board of REALTORS® Median Price Percent Change in Price from Prior Month Percent Change in Price from Prior Year Total # Units Percent Change in Sales from Prior Month Percent Change in Sales from Prior Year
Jun-15 May-15 Jun-14 Jun-15 May-15 Jun-14
MLS Wide
ACTRIS (Single Family) $270,000 0.6% 8.2% 2,599 8.1% -1.6%
ACTRIS (Condo) $225,500 2.5% 10.0% 292 5.0% 5.0%
ACTRIS Region Cities
Single Family Only
Austin $348,900 -0.7% 7.0% 1,053 5.6% -3.3%
Cedar Park $278,500 1.3% 11.4% 118 -0.8% -28.5%
Leander $215,000 -1.4% 10.8% 124 17.0% 7.8%
Round Rock $230,000 -4.2% 5.5% 283 20.4% -1.7%
 Moe Dadseresht

Austin Skyline Realty, Inc.

  •  p:  (512)740-6945                   c: (512)740-6945
  •  w: www.moeproperty.com  e: moe@moeproperty.com
  •  a:  11507 Hare Trail
  •       Austin, TX 78726
      

Texas Real Estate Commission

Why rents in Austin are so high

If you have been in the rental market lately, you know what I am talking about.  Except for certain part of Austin, populated by high rise buildings, our rents are not as high as most metropolitan areas, but the are high for Austin. This is true, especially if you have rented for a few years and now confronted with rate hikes and are looking for a more affordable place to live. Regardless of the motivation to rent, one can not overlook the high rents.  So, why the rents are so high? Or if the rents are high, why not get out of the rental market and start paying mortgage and build equity instead of paying hight rents? The easy answer is that there is a housing shortage and demand for rental unit is high, so the rents are going up! But that is just one part of the story. The real answer lies in the ‘affordability’ of buying a house in Austin.

Let’s examine how much a household earning equivalent to the median income in Austin is expected to pay, if they were to buy a house. According to the latest (June 2015) statistics the median household income in Austin is $52,431. Austin board of Realtor’s statistics  reports that the median price of a house in Austin during the same month was 272,250.

So, at this income level, with a %4.25 interest rate and a 2.2% property tax rate, this  family is expected to pay a monthly mortgage of $1771.46. That is about %40.5 of  the family income, well above the %28-%33 range that most bank qualify a person for a loan and even above the %38 total debt ratio (ratio of total debt payments, car payment, credit card payments, etc.) which is another qualifying ratio. This explains why people can’t afford to buy a house and, wanted or unwanted, need to rent.

So, unless the housing prices comes down (anyone thinking a housing downturn is around the corner!), or the income level rises the equation is not going to change dramatically. If anything, with talk or interest rate stabilizing or even going up, things may get even worse.

So, when this is upward trend is going to end? The answer is more ‘affordable’ housing built and, with improving economy, a rise in household income. Both factors help the equation.  You can see the signs of the first part all over the suburbs. Houses built in Cedar Park, Leander, Round Rock, Georgetown in the nOrth and Manor and Kyle and Buda in the south. Not all of houses under construction is to be considered ‘affordable’ but enough of them are below that ‘median’ price to make a difference.

One last variable in this equation is the influx of new people into Austin. Every article mentioning Austin as desirable place to live adds to that influx. No matter how one thinks about the new people moving into Austin, it is the life blood of a vibrant city and should  continue.  With the right planning and infrastructure put in place, it should be managed correctly.

 Moe Dadseresht

Austin Skyline Realty, Inc.

  •  p:  (512)740-6945                   c: (512)740-6945
  •  w: www.moeproperty.com  e: moe@moeproperty.com
  •  a:  11507 Hare Trail
  •       Austin, TX 78726
      

Texas Real Estate Commission

Price of progress

Recently I went to one of the new development sites sprouting out around Austin in Cedar Park. These days Cedar Park and Leander area are the center of the new housing construction and I was in Reagan’s Overlook development site in one of Century Communities home builder.
Back in a day, new home sites were cookie cutter homes that were build in a densely populated areas, but now these houses are all built on one acre lot sites and include all the amenities. You have to drive 7, 8 miles from Parmer and 1431 to get there, but  I believe 10-15 years from now they are at the center of activities and population. Exactly where FM 620 used to be 20 years ago. When I built my house in 1994 Lakeline Mall was on the drawing board and 620 was a Farm-to-Market road (Farm to Market Road, there is no more farm or market to take you there).  Not to be nostalgic, but I want to provide a point of reference for those who are considering new homes, or considering to build ‘in the county’.  Whichever way you look at it 10-15 years from now a “Leander Outdoor Mall” that is on the drawing board now will be a thing of the past and these new communities are right in the thick of things.