Austin’s job market held steady for 2009, shrinking by a mere 0.3%. While we’re not at the 4% unemployment rate we enjoyed in early 2008, we’re still at a respectable 6.9%. Here are the best performing metro areas in the country:
Real Estate Taxes: Short Sales and no 1099-C income
Jan 22nd, 2010 10:34:52am +0000
Short sales can make a whole lot of sense and certain provisions in the tax code can really help.
The swimming metaphors are so over used here but also so very appropriate. The long and short of it is, if you are drowning, dump the weight and then swim. If you made an unfortunate investment decisions with your home or rental property and the property is underwater, the federal government will not cover your loss. However, IRS code section 108 lets people in the tightest situations exclude cancellation of debt income.
First, with the passing of the Mortgage Forgiveness Debt Relief Act, you can exclude cancellation of debt income realized from mortgage modification or foreclosure of your principal residence. With this supreme act of common sense from congress, if your home is foreclosed on and you are forced to leave because you can make the payments they won’t tax you on the “gain” realized when you had to abandon your home. The long and short of this is, dump the weight, and get your head above water so you can breathe.
Additionally under section 108 of the tax code, you can also exclude any cancellation of debt income (1099-C) under a variety of situations including “Insolvency”. In IRS terms this means if your Total Recourse Debt exceeds the value of your Total Assets you can exclude the excess.
For example:
Total assets: 300K
Total debt: -450K
Excludable cancellation of debt income 150K
Before you jump, be sure to talk to a CPA (contact us) or tax attorney to understand the rules and exactly what things like “Recourse Debt” means and assess your situation.
Concerns over credit impact are not irrelevant. But, if you are driving yourself into bankruptcy trying to maintain payments on an asset that might recover in a few years, worries about impact of a short sales seem misguided. In the end, it really is just a business decision. The monikers of winning or losing or guilt really have no place here. The fundamental question is how to stay best provide for yourself and your family.
Michael White is an Austin Accountant.
Austin Housing Market Update: A Positive Outlook
Jan 21st, 2010 1:47:05pm +0000
A recent discussion with the Austin Board of Realtors and Home Builders Association of Greater Austin has shown reason to be hopeful for a healthy 2010.
According to Austin real estate experts, the housing market could see a rebound during 2010. On January 13, members from each of these organizations noted the area’s better job market as a possible cause of this.
The city of Austin and surrounding area reported a significantly less loss of jobs during 2009, as compared to other Texas cities. Austin lost 4,300 jobs during November 2008 – 2009, while Dallas lost 50,700, and Houston lost 88,900. Economists also predicted that Austin’s job market would begin growing by the end of 2010.
A residential real estate market study was done that compared Austin to 30 other U.S. cities. Eldon Rude, manager of Austin operations for the study, reported the economic and housing fundamentals in Austin are the strongest among the other markets tracked. Because of this stability, he believes Austin will be one of the first markets to show a strong growth when the U.S. economy improves.
During 2009, Austin builders built 19% less homes than the year before, bringing the total to 6,490 which is the lowest level since 1995. However, the start rate remained stable during the last three quarters of 2009. Because of this, Austin builders have closed more homes than they’ve built in the last three years, resulting in less inventory issues as compared to other cities.
According to the study, new home starts will remain at the same level during the beginning of the year, primarily due to slow job growth. Experts say the test will come as interest rates get higher and the new home buyer tax credits are no longer available.
It’s also predicted that as many as 7,000 homes will be started during 2010. This is due to the current low supply of new homes, as well as the expected rebound in the local economy.
This positive outlook paired with the condition of the area’s job market, continues to make Austin, Texas, a top U.S. location. Add the fact that Austin has been named one of the “Top Cities to Live” by several publications, this capital Texas city is growing in popularity and becoming one of the best cities to call home.
This article was provided by Brian Talley of Regent Property Group, providing Austin real estate services and Austin luxury real estate services to those people searching Austin neighborhoods for purchasing or selling a home.
Austin Ranked Fastest Growing Large Metro by Forbes
Jan 8th, 2010 10:15:21am +0000
Forbes recently released its fastest growing large & small metro areas in the country. Austin hit #1 with projected growth of 32% from 2007-2012. It’s very encouraging, as Austin is expected to grow by 50% more than the #2 fastest growing market.
QR Codes: Next Step In Mobile Real Estate?
Jan 7th, 2010 8:36:56am +0000
The cool factor is not just about showing off. Sometimes it’s about showing people that you have the capacity to imagine the next generation of real estate technology, that you have what it takes to appeal to the bleeding edge of modern home shoppers, and—this can’t be overlooked—that you’re willing to try something different and pique our very human curiosity.
A QR code looks like this:
It’s not your fault if you don’t know what it is, either. The vast majority of U.S. phones have no native support for reading QR codes, which is really just a 2-dimensional bar code. This added dimension, however, adds an entirely new layer of information—the kind of information that you can’t squeeze onto a 6 x 24 rider sign. Yes, you can put it on a flyer, but that’s so boring, isn’t it?
What’s the message behind the Pollock-meets-cubism mess above? A listing pulled off Eric Bramlett’s website:
6029 Mount Bonnell, 78731 / $329,000 / Built: 1984 / Sq. Ft. 2043 / 3 bed 2.5 bath / Acres 0.09 / Austin ISD /
Here’s what it looked like on my phone:
Most modern smart phones can read QR codes with the help of a 3rd party app. From what I gather, the next generation of phones, like Google’s Nexus One, will have native support (as phones in Europe and Japan already do). On my iPhone, I have i-nigma, which is free. Using the phone’s camera, it converts the pattern into readable text.
Here’s where it get’s interesting: QR codes can also store links. Have a mobile website? The QR code can contain a link to a page with all the listing info you can dream of, complete with pictures, your contact information, you name it, displayed perfectly and loaded quickly on the average web-equipped smart phone.
This QR code looks the same, but contains a link that most readers will recognize:
The image above references a listing mock-up page of my personal blog, which contains the same basic listing details, but also a picture of the listing (it could contain many). Since my blog is equipped with mobile device detection, if one were to read this code from their mobile phone, they would be automatically directed to the mobile-friendly version of the listing on my site. Try both versions to see the difference.
Here’s another screen shot. It’s not the prettiest, but it took me all of 1 minute to put together this page:
So what about those that don’t have a QR reader on their phones (the majority of Americans)? Explain it to them on your website. Put a URL next to it that corresponds to an area on your site that discusses QR codes. And, what do you know? You got them to visit your site, with your listings, contact info, and all that other killer content you have to capture leads.
Who’s going to be the first to try it?
Ian Greenleigh works for Flat Rate Web Jobs, creating and monetizing blogs for small businesses, real estate & independent professionals.
Employment Trends Looking Up
Dec 31st, 2009 11:18:51am +0000
Employment trends are finally starting to look up. Unemployment has been the most difficult aspect of the recovery, and most analytst agree that unemployment will be the last element of the recession to recover. We’ve received some good news nationally & locally:
Reuters reported today that jobless claims hit a 17 month low.
Google trends is reporting that Travis County unemployment has now fallen to 6.9%.
Macro Economy Recap & 2010 Predictions
Dec 29th, 2009 4:28:00pm +0000
So the end of another rather interesting year is behind us. Some of us lost astronomical amounts of wealth in many asset classes and some of us have taken advantage of a down market and capitalized on opportunity, as a result making money. Regardless of where you are there, how about making a side New Year’s Resolution that you will make a conscious effort to build your personal net worth. Those with IRA’s, you’ve seen your accounts recover a little this year, right? That’s a start! This article will be a brief recap of 2009 and some of my predictions for 2010, mostly concerning the housing market. By no means should these predictions be taken in an advisory capacity. They are rather my gut feeling on a few main topics I like to research.
National Housing Market
The national housing market experienced one of the largest downward adjustments in American history. My opinion is that the bulk of the adjustments are behind us and there are indicative factors pointing to a slow recovery as inventory levels fall and sales volume increases. The main reason for this acceleration…..? It is no secret that it is entirely due to Four Factors:
- Affordable prices
- Historically low lending rates
- Extension/expansion of government homeowner tax credits
- Continued foreclosure pressure
Absorption Rate
Nationally, existing home inventory is down about 13% from its peak levels in mid 2008. An absorption rate indicates the number of months it takes to sell the current inventory at the present rate of sales. The national absorption rate went from almost 12 months in early 2008, down to just about 7 months today. That is a huge positive indicator for a skeptical housing market. Let’s call a spade a spade: The surge has been largely artificial sales from government incentives and the Fed’s reducing interest rates to near mill. Can this sustain? Well, my opinion is that this creates a very weak base for any real estate bottom that some feel is so imminent in the immediate future. Example: Cash for Clunkers. How have car sales been since that expired?
Mortgage and lending rates have already risen, however continue to fluctuate weekly it seems. That said, I believe rates will slowly climb and one of my Four Factors will no longer be a main component in the rate of sales. On April 30 when the First Time Homebuyer Tax Credit expires, that will be 2 of the 4 factors gone.
What Will Happen
With unemployment expected to peak sometime in 2010, expect further pressure on rents which will ultimately present further downward pressure on home prices. There are still plenty of deals to be had. Today, you can take the very low rates and buy at current value, additionally getting any government tax incentives. Or, you can sacrifice today’s lower rates and government incentives and pay a lower price for real estate as we get further into 2010. Kind of Catch 22’ish, don’t ya think? Those who fear that they are missing the boat while they repair their credit could be in for better deals in 2010, albeit without the incentives.
The Unknown of Bulk REO’s and Backlogs
The biggest unknown today is the inventory that we don’t know exists. Bulk REO’s, backed foreclosure logs, and new PUD/High-rise units. I have banking experience and have a great relationship with 2 major banks that have bulk REO’s. They mentioned to me that there are a few states that are showing indicative signs of a recovery with record sales and rising median home prices. They warned not to count them out of the crisis yet as they said there is a HUGE backlog of foreclosures in the pipeline in both residential and commercial units.
Hint: The states happen to be in the south and were major speculative markets during the boom. That said, I am glad to be a real estate investor. At first glance when things were moving quickly, I would think that I needed to buy in 2009 or I would miss out. I am definitely wrong. I WILL GET GREAT DEALS BEYOND 2010… and you can take that statement to the bank!
The expiration of government incentives and Fed Mortgage Backed Securities purchases should be a factor in the decline of real estate demand that we are currently experiencing.
In conclusion, I truly do think that today is a great time to buy. The advantages and incentives are there. On the other hand, I believe that we will see stagnation in prices into 2011 and it will be a bunny slope recovery, not a triple diamond 70 degree slope. Recovery will not be easy, nor will it be quick. We will have to remain patient and see what the labor markets provide because unemployment is the leading indicator in the recovery of our home values and economy.
I recently read that major corporate giants who experienced cutbacks are now behind on inventory and orders. Hiring is going to start up again very soon and that could be a major player in the employment/unemployment problems. Whether the current rate of home sales are propped up by government incentives or any other phenomenon, money is being turned over and inventory is moving. That’s all we can ask for at this time. I’ll take it.
About the author:
Scott Allan is the owner of New Jersey Real Estate Guys in Northern NJ where he focuses on macro economic research and residential home sales. Scott also owns My Realty Source (SW Florida Wholesale real estate and REO’s). In New Jersey, Scott focuses on all northern NJ residential markets in the New York metropolitan area where he started in 2003 in selling Hoboken real estate and Montclair NJ homes for sale. Scott also is co-owner of TPM Properties in SW FL where he assists in individual or bulk foreclosure sales with his investors, utilizing his banker contacts for exclusive deals.
Is Austin Texas Donation Town USA?
Dec 22nd, 2009 1:22:12pm +0000
Well pretty close says the source of all sources…Men’s Health 
This month’s “MetroGrades” focussed on cities that were most giving during the holiday season — also noting the cities that were less magnanimous.
Madison took top spot as the most charitable holiday but Austin was right in the mix at #5 . Other notable Texas cities (on the higher end of the “charitable spectrum”) included Houston at #28, San Antonio at #31, and Lubbock rounded off the top half at #50 (“Highest” and “Lowest” Contribution cities with their MetroGrade included below)
How They Rated Each City & The “Online Factor”
- Online Contributions:
Bear with me on this one because IMHO, this metric wasn’t articulated amazingly well…maybe you can help me in the comments!
“To find the most giving cities, we first factored in who’s making the largest online charitable donations during the holidays (from Convio, a software provider for nonprofits).”
I don’t know enough about Convio to tell you how they track their contributors and their locations — but I hope they use more sophisticated systems than IP tracking. In this transient culture of ubiquitous computing…where you can access Wifi on airplanes, the analytics programs would need to be extraordinarily detailed. I have a feeling this metric alone could be a post in itself unless I’m missing something…in which case, let me know
The more Tangible Metrics?
- Donations given to Goodwill in December
- Donations given to Salvation Army’s Red Kettle Campaign in December
- Number of toys donated to the Marine Toys for Tots Foundation.
How Do You “Define” Donation Nations’ “Cities”?…
The the “definition” of a city always seems to create comparison problems. Whatever the semantics, Los Angeles isn’t a city, it’s a Metropolis with a population of over 4 Million. How do you compare the “New Yorks” to the “Madisons”, & “Austins”…or even the “larger small cities” like Washington, DC or San Francisco?
Does anyone really care about the “city definition” in the context of this list? It doesn’t bother me. But when the mass media uses broad boundary generalizations to define real estate markets, it may very well create more compelling data, but it also surely sacrifices accuracy. It can be defined as nothing but irresponsible. And this is precisely why those of you interested in real estate information need to find a reputable local resource, like Eric’s here, and stay in the loop.
…Speaking of Real Estate & Thoughts?
You’ll see I’ve included the list of “Most Charitable” and “Least Charitable” cities according to MetroGrades. Given that small glimpse, I ask for your thoughts?.
- Thoughts on how the real estate market may have effected this list? Any patterns?
- Thoughts about better ways to summarize data without over-generalizing?
- Anything else you’d like to contribute is always welcome, too…
MetroGrades Rankings
“Most Charitable”
1. Madison, WI (A+)
2. Richmond, VA (A)
3. Seattle, WA (A)
4. Cincinnati, OH (A)
5. Austin, TX (A-)
6. Spokane, WA (A-)
7. Columbia, SC (A-)
8. Pittsburg, PA (A-)
9. Tampa, FL (A-)
10. Norfolk, VA (A-)
11. Charlotte, NC (B+)
12. Salt Lake City (B+)
13 Omaha, NE (B+)
14. Cheyenne, WY (B+)
15. Willmington, DE (B+)
16. Portland, OR (B+)
17. Atlanta, GA (B+)
18. St Louis, MO (B+)
19. Birmingham, AL (B+)
20. Burlington, VT (B)
“Less Charitable”
80. Corpus Christi, TX (D)
81. Fremont, CA (D)
82. Phladelphia, CA (D)
83. Buffalo, NY (D)
84. Baltimore, MD (D)
85 Poenix AZ (D)
86. Anaheim, CA (D-)
87. Cleveland, OH (D-)
88. Kansas City, MO (D-)
89. Little Rock, AR (D-)
90. Jersey City, NJ (F)
91. Jackson, MS (F)
92. Columbus, OH (F)
93. Riverside, CA (F)
94, Oklahoma City, OK (F)
95, Los Angeles, CA (F)
96, New York, NY (F)
97. Fresno, CA (F)
98. Nework, NJ (F)
99. El Paso, TX (F)
100. Yonkers, NY (F)
Licensed in Virginia, Maryland, and D.C., Kevin Koitz, with The Koitz Group @ Long and Foster RE specializes in high end Washington DC real estate and surrounding luxury communities in Montgomery County Maryland & Northern Virginia. Visit his Bethesda Real Estate blog or his Chevy Chase Real Estate guide to get a flavor for some of finest communities in the DC Metropolitan Area.
Austin Market Update: 12/09 Inventory, Absorption, & Volume
Dec 17th, 2009 12:50:57pm +0000
I last ran these numbers in July to analyze the semi-annual numbers. Now is as good a time as any to see how the market is faring. We’re through November, which is when the Home Buyer Tax Credit was anticipated to expire, so we should see how it, coupled with historically low interest rates, has affected the market, along with the news that Austin has officially exited the recession. Here are the Austin statistics for the past 6 months – 6/1/2009-11/30/2009 & their year/year changes.
Total sold volume was up just under 7%. If you look at the price point break down, it’s obvious that the tax credit helped significantly. Over half the volume sold was under $200k. As you move upwards in price point, the sold volume steadily decreases (the anomaly being $2mm+, which requires little movement to see big percentage changes.) Looking at these numbers, it appears to me that the market is or has stabilized. It can be argued that the tax credit affects the $300k+ market very little, yet we’re seeing volume change settle across the board.
Running inventory statistics at this time of year can be a bit misleading. We’re pulling absorption rate from the summer months (busiest) and running inventory stats during the winter months (slowest.) A certain percentage of sellers will have withdrawn their homes during November with the intention of putting them back on the market around February. Since 11/1/2009, 1526 properties have been pulled from the market. Regardless, if you add these properties into inventory to bring the # listed to 11431, we still have a total of 5.68 months of inventory. This is an improvement over the 7.54 months/inventory we saw at the end of June.
We’re seeing the same price striations we saw at the end of June, though the levels aren’t as pronounced.
VA Loan Foreclosure Rates
Dec 14th, 2009 2:50:08pm +0000
VA loans have helped millions of veterans and active duty military achieve the dream of home ownership. But these flexible, low-cost loans are also the nation’s best lending program when it comes to keeping people in their homes.
VA loans have the lowest foreclosure rate of any home loan on the market, according to the Department of Veterans Affairs.
“The dedication of VA’s loan professionals, the support of our partners in the mortgage industry and most importantly, the hard work and sacrifice of our veterans have made this possible,” Secretary of Veterans Affairs Eric K. Shinseki said in news release issued on Dec. 7, the 68th anniversary of the attack on Pearl Harbor. “VA is making good on its promise to help veterans buy homes, and veterans are achieving their dreams.”
The increasing security of VA loans comes amid a boom year for this government-guaranteed lending program, which has helped more than 18 million veterans become homeowners since 1944. The VA guaranteed more than $68 billion in single-family loans for the fiscal year ending Sept. 30, an 80-percent increase from last year.
The VA’s success in the face of rampant foreclosure is all the more staggering considering its signature benefit — qualified veterans can purchase a home without putting down a single dollar. In fact, more than 90 percent of VA loans are made without a down payment.
VA loans come with a host of significant benefits for veterans, active military and their families, including:
- No private monthly mortgage insurance
- No penalties for loan pre-payment
- Higher debt-to-income ratio allowed than for most conventional loans
- Sellers can pay up to 6 percent of closing costs
VA loans are often more accessible for military home buyers than conventional financing. About 80 percent of VA borrowers would not have qualified for conventional loan options.
But people interested in serving those who served are a major reason why VA loans continue to thrive and help protect military buyers, said Secretary Shineski, who credited VA employees and loan servicers across the country for helping keep veterans in their homes.
This guest post was written by Brandon Laughridge of Mortgage Loan Place. MLP specializes in teaching consumers about government loan programs such as FHA loans and VA loans.