Blackburn Properties

November 2011

2011-12-19T20:18:00.001-08:00

Take a look at this graph....

It clearly shows that the Austin home market has turned a corner.

As you know our market started falling off a cliff in 2008. The rest of the country started well before that and has not really begun to recover, but we have!!!

For six months in a row now, our market has out sold the previous year in terms of houses sold and dollars. That is a trend.

Will the trend continue through 2012?

I’m not very good at forecasting, but consider the following:

Total number of homes for sale in our MLS = 8,240

Months of inventory available = 4.5 - 6 months is considered equal. Less is a seller's market, more is buyer's market.

Interest rates are around 4.25%. 6% is the historical average, so anything under 5% is ridiculous.

Population growth - Over 50,000 new residents are coming to Austin each year.

New Construction - 6,500 new homes are built in Austin per year. Look for this number to jump up for 2012.

Unemployment Rate in Austin - 6.6% and falling...

Sales Tax Revenue - Up to 12.2%. This number has risen in for 20 consecutive months now.

Things are looking healthy for Austin. We aren’t getting back to 2006 levels anytime soon, but praise God we are better, much better.

And we even got some rain!!

JUNE 2011

2011-07-18T20:01:00.000-07:00

You’re about to see a big splash in the Austin media about June Real Estate sales.

Look at the red square for June 2011. That represents the most homes sold in the Austin area since August 2007. That’s 46 Months ago!! And, they sold for more money too. July will probably as good. Great news, but one month doesn’t make a trend. Three months of good news and a good rain will make me feel better.

MORE GOOD NEWS:

· Over 50,000 people will move into the Austin area this year

· Only 5,000 new homes will be built this year

· Apartments are full

· Homes to rent are scarce

· The number of homes for sale is moderate

So where are all these yaks going to live?

Check out the website. www.BlackburnRE.com

John Blackburn Broker, Blackburn Properties 512 431 8428

Interest Rates

2011-02-15T10:11:00.000-08:00

Edition 3 March 2011

Interest Rates

Interest rates for home mortgages have started their climb back up. Today in the Austin area a new mortgage will be over 5% probably closer to 5.25%. That is still historically low but compared to the 4.5% we have been looking at for a long time it feels high.

So cheap money is fading away and with it purchasing power.

$100k loan

4.5% interest - $506.00 monthly payment of principal and interest

5.25% interest - $552.00 monthly payment of principal and interest

So if $506 is your budget, now all you can borrow is: $91,750

Your purchasing power went down by: $8,250

But this is a lesson for the next time interest rates go down. Strangely the number of homes sold is going up and the average price is also going up.

I’m feeling better about our real estate market!

Check out the website. www.BlackburnRE.com

John Blackburn

Broker, Blackburn Properties

512 431 8428

January 2011

2011-01-25T10:00:00.000-08:00

Edition 2 January 2011

Thank you very much 2010, but we’re ready to move on. But first a look back:

Austin Area historical sales:

The number of houses sold in the Austin has been relatively flat for the last three years. I think this says we have been at the bottom of the market for quite some time. Look for one more year of slow going.

What about the dollars????

The average home sales price increased by over 4% from 2010. That’s good, but does it say we had a 4% appreciation in home values last year? No. In the first half of the year homes at and under $225K were the hot ticket in town. Second half it was the $300K to $500K houses. The low average price in 2006 was also a very large percentage of lower priced homes selling in a very hot market. Fun with numbers!

So what’s ahead?

Rising interest rates, but who cares? Historically low interest rates last year didn’t help. The issue here may have shifted away from the interest rate and to the lending criteria. Credit score, Income, Debt, Down payment amount, Cash on hand to close, and a variety of new requirements that seem to pop up from nowhere.

We can expect to see FLAT inventory, number of homes sold, new construction starts, foreclosures, number of lots to build on, and probably prices for the next year. Isn’t that exciting???

We can expect to see an improving job market in the private sector especially in the high tech and health care sectors of Austin and those jobs pay better. But layoffs in State and local (School) governments could counter the private jobs increase.. More important than the number of new jobs is they are expected to be high paying jobs and those people with jobs expect to see pay increases. When working folks get pay raises consumer confidence will raise and boom, off we go. We will see extended population growth which will put a strain on housing demand. Hopefully we will see people acting on a tremendous amount of pent up demand. If prices remain stable they will remain affordable. The average wage earner in Austin generates over $47K per year. Two income families can afford a nice house in Austin. Not so in many other parts of the world.

What are the threats to either a growing or stable Austin housing market?

What if underwriting criteria gets tougher? BOOM!

What if Developers and Builders can get money to operate on?

What if consumer confidence takes a dive? CRASH!

What if foreclosures accelerate? POW!

What if State and Local governments stop spending and have huge layoffs? KaBOOM!

So, it’s still a perfect time to buy. Forever real estate has been tied to jobs, interest rates, and inventory. I think we can throw interest rates out of the equation and insert lending criteria. Jobs can be altered to higher paying jobs.

Check out the website. www.BlackburnRE.com

John Blackburn

Broker, Blackburn Properties

512 431 8428

2010-10-14T14:41:00.000-07:00

Edition 1 October 2010

I study the Austin Real Estate market almost to a fault, and I believe you are somewhat interested in what I think is happening and what direction the market might move. It doesn’t matter if you are buying, selling, or just plain interested, you want to know what’s going on. So here goes……………..

Austin Area historical sales:

That doesn’t look so bad. This year looks on the whole to be slightly better than last year. The green line is 2010, Blue 2008, Red 2009. The problem we all have is that we continue to compare the market we’re in to 2005/2006. Well Dorothy this is now, and we’re in a different place.

What about the dollars:

Mid 2010 shows a return to nicer prices, but I doubt it will hold. Again, this is where we are so we have to adjust to that.

And where are we going?

We have extremely low interest rates. 4.5% and getting lower. We have a nice level of inventory, probably about 6 months of inventory and that’s the Goldilocks number. Not too much, not too little. Job growth for Austin looks healthy. About 18k to 26k per year. Population growth is nice. About 50,000 a year with 32,000 coming from people moving here. New construction starts at about 6500. In 2006 Austin started 14,000 new homes.

I told you this wouldn’t be a fascinating read. It’s boring at best.

So with all those numbers why aren’t we selling a ton of houses? Cause people think………………….

Prices are going lower

I can buy a foreclosure for next to nothing

The stock market is going to crash

Double dip inflation

Taxes are going up

I might lose my job

We can’t sell our house for what it’s worth

And the list goes on.

The real answer is we don’t know _________________ (fill in the blank) and we don’t. Well guess what, I don’t know either. I believe that if you are a buyer you best get busy and buy. Low prices and very low interest rates won’t last forever!

I do know how to sell your house for what it’s worth. I also know how to represent a buyer to get the best deal they can get. So call me or one of my agents if you need help with Real Estate.

Check out the website. www.BlackburnRE.com

John Blackburn

Broker, Blackburn Properties

512 431 8428