Westlake is A City, adjacent to Austin, just west of the city. It is an attractive location due to its proximity to Austin and Lake Travis. Moreover, Westlake is home to the highly acclaimed Eanes School District, consistently ranked in the top ten of Texas and the top one hundred school districts in the country. Westlake homeowners have grocery shopping, retail and entertainment all within a short commute. Residents love living in Westlake with downtown Austin and attractions such as the Barton Creek Greenbelt nearby.
Sold Homes In September
Sales - 51 properties sold ranging from $249,999 to $1,595,096 (August 2020 had 66 sales, and September 2019 had 33)
Average Days on Market - 36 days
Average Price $1,595,096
Westlake is minutes away from The Hill Country Galleria, Barton Springs and Barton Creek Country Club. Full of luxury homes, tree lined neighborhoods and a growing restaurant scene.
If you are looking for the perfect home,contact me today at 512-375-8945.
Here are a few ways you can win the home in a multiple-offer situation.
How can you win in a multiple-offer situation? In Austin, we’re currently experiencing a strong seller’s market with a lot of demand, and most buyers are going to find themselves in a multiple-offer situation.
The first thing people in this position ask is, “Should I offer more than everyone else?” You may want to consider the amount of money you’re using as a down payment. This could allay some seller’s concerns. However, while price is crucial, other factors can determine whether or not you win in a multiple-offer situation.
For instance, do you know what the seller needs? Maybe they need to close by a certain time or require a lease-back, meaning they’ll rent the house back from the buyer temporarily. Another factor may be your financing. If you’re putting down a large percentage, that may make the seller feel more comfortable with the appraisal process.
You may also want to consider writing a personal letter to the seller. A letter may help a seller feel more connected to you and boost your chances of getting your offer accepted.
If you have further questions about how a buyer might win a multiple-offer situation or concerning real estate in general, please feel free to reach out to me via phone or email. I would love to help you.
Last week, we addressed the great amount of uncertainty regarding the impact of the Covid 19 Pandemic on the greater Austin real estate market. This week we are going to measure the last ten days of real estate activity in Travis, Williams and Hays Counties. I will provide considerable empirical evidence to support what is surprisingly positive news. Feel free to reach out for information on your area of town or specific neighborhood.
Where Was The Central Texas Market Prior To Covid 19?
Housing economists track the balance between supply and demand with a metric known as “months’ supply.” It presents how many months it would take to use up the current supply of homes at the current rate of demand. It takes into account current inventory, rate of replacement and the rate of disappearance. A six-month supply is considered healthy.
For the past five years, the Greater Austin MSA (and surrounding counties) saw a number that generally hovered between one and three months of inventory. Additionally, my specific tracking showed twenty five percent of my teams’ transactions were in the form of cash from 2017 to 2019.
2020 was actually outpacing the strong performance of 2019. In January and February the entire metro showed sales of 4,773, up 7.1% from the 4,456 sold homes from the same time last year. The average sold price of $380,127 was up 5.6% from the $359,884 of last year. If we were to narrow the range to Travis, Williams, and Hays County, those percentages are higher.
Why Measure The Last Ten Days Specifically?
Day to day lifestyle activity began to slow down considerably approximately fifteen days ago, when restaurants suspended seated dining. Bars, movie theaters and gyms stopped operations as well. Then, the City Of Austin decided to institute a lockdown ten days ago. The best measure to learn about the resilience of the local market, is to measure from the beginning of that time.
What Have We Seen In The Way Of Activity?
There have been 785 single family homes that have been listed for sale in the previous ten days. Surprisingly, there have been a whopping 432 homes that have been gone under contract within those ten days. 82 condominiums have been listed in that time frame, with 52 going under contract. Those numbers would be evidence of a hot market under normal circumstances. They are flat out impressive during a global pandemic. In approximately ten days, we should have the results from all of March 2020 and measure that against last year.
Is There Any Bad News?
There have been buyers, who have decided to terminate contracts on new and existing home purchase contracts. Those terminations could be due to the inability to purchase after sustaining stock market losses. Or the decision to terminate could be a result of trepidation because of the uncertainty of the time. These numbers are harder to determine. But in our discussion with various title companies, the terminations seem to be far outpaced, by the number of sales and refinance activity that has taken place in the last two weeks.
How Has The Real Estate Business Changed
The Covid 19 pandemic seems to have gone on for months, with many of us experiencing life in quite a different way. But the reality is, that we in Central Texas, have been forced to change our normal protocol for two to three weeks so far. In the real estate world that has meant virtual showings, online meetings with clients, electronic banking and remote closings and interestingly enough- home closings in parking lots of title companies. Agents, escrow officers and real estate managers have adjusted, but of course, we have always instituted creative ways to conduct business. The buyers and sellers of real estate in Central Texas have discovered new ways to respectively consume and market real estate. And have proven to be far more resourceful than could have been predicted at the outset of the pandemic. As we have seen in work and education, some of those *adjustments* may translate into long term ways of doing business, often more efficient than the previous way.
Where Do We Go From Here?
Well the truth is, we don’t know. This commentary is aimed at measuring ten days of real estate life in Central Texas. We don’t know what the future holds nationally, or for the state, and in our local area. But if I had to make an educated guess, it would be to look back at 2007 and 2008. Much of the United States experienced a real estate and banking crisis. Although Central Texas was damaged, we fared far better than most of the country and Texas as a whole was a beacon of strength.
The Covid 19 pandemic will certainly affect Central Texas as it does the country as a whole. We will continue to look at local real estate numbers. And I suspect there will be a tendency to follow employment numbers more specifically and economic activity such as that often quoted number of people who move here daily, to see if that changes. So far, the words cautiously optimistic are the order of the day.
There is a great amount of uncertainty regarding the impact of the COVID pandemic on the real estate market. While we don't have a crystal ball, we do have access to Mark Sprague, State Director of Information Capital at Independence Title.
What impact do you think COVID-19 will have on Austin’s economy?
SXSW was a loss of $500+ million annual to the local economy.
Housing is a positive light in Austin. Locally there is not enough shelter inventory in all channels. So real estate will probably have another good year.
If builders quit building, that actually causes values to increase due to the lack of enough shelter being built.
Locally, however, many of our restaurants and businesses are dependent on the many festivals and conventions that are part of our history and culture (SXSW, ACL, F1 races and events, etc.) and their loss of income will definitely be felt. At this point, it’s hard to say how deep that will affect us locally.
Nationally and internationally, it’s a different story with many economies disrupted greatly due to the outbreak. If you are keeping millions home away from productive factories, it will be felt. The question is to what extent. Of the top 20 economies, 18 were not projected to do as well this year as in previous years. So we will have to see. Living and working in the center of the country may have its benefits. On a gloomy note, yes, some international economies could enter into a recession, particularly if their economy is closely tied to China, Italy and other larger infected economies. That’s a sensational idea bound to get lots of attention. Is it real? We’ll see what happens.
Will the United States / Austin enter a recession?
Nationally, I don’t see how you can prevent it. The question is how long? 18 out of the top 20 economies were already projected to be weaker this year, some in recession. 85% of our GDP is in consumer goods. The buying and selling of such products are being prevented by social distancing policies. Therefore, the numbers will show a slowdown.
We have never seen a crisis like this, where people are being kept from working and do not know when they can start again. Capitalism only exists because work exists — but coronavirus lockdowns essentially ban work.
Austin has been blessed in leading the nation in so many ways. That has placed stress on the lack of real estate inventory in multiple channels. At this point, sales have not shown any slowing. Leasing because of its nature has slowed.
Many Austin companies are having their employees work remotely. Historically, that causes stronger output. But remote working hasn’t been measured with the kids at home and so many businesses closed. I would think that all the chaos will have some negative impact.
I do think the strength of the current economy will bode well for when we emerge on the other side of this crisis. So no, I would be surprised if we had 180+ days of negative growth after the crisis
With mortgage rates being so low, what can homeowners/buyers expect on purchasing a new home or refinancing? How does the Federal Reserve move to reduce its lending rate to 0% impact the housing market and real estate?
A common misconception is that mortgage rates are tied to the Federal Reserve rates. Remember the Fed rate is for its member banks, like the federal reserve in Dallas. They, in turn, lend to the member banks. The member banks then lend the money out. To support the costs of lending (meeting all the legal requirements over the 30 years of the note, etc.), the banks need a margin of least a point and a half. So we are up to around 3% lending rates.
Secondly, remember someone must buy these mortgage notes. Lower rates mean lower returns. When the Fed dropped the rate to 0.75 last week, anyone who wanted to invest a million dollars in US treasuries was only getting $675 per month return, which is not a strong enough incentive to invest.
Thirdly, since 2018, over 85% of mortgagees have refinanced under 4.5%. That being said, the mortgage companies, banks, etc. also do not have enough personnel to handle the business. Current low rates have already caused a boom in refinancing activity. And demand among homebuyers remains elevated, despite the short supply of homes for sale. As a result, lenders don’t need to give Americans much more incentive to apply for new home loans.
If you don’t have enough people to process the volume you’re getting in, you’re not going to lower rates to attract more volume. The result is mortgage rates may increase slightly, due to the reasons above.
We saw that last week, mortgage rates increased slightly, in part because some lenders had artificially raised rates to stem the number of people applying for home loans and give themselves some time to work through the backlog of applications that accumulated as rates fell. Lenders will also face pressure to hedge with interest rates since bond yields could increase from the time when a borrower locks in a rate until when they close the loan, which would make it harder to sell the loan on the secondary market.
How long before we begin to see an economic recovery once the virus has subsided?
The coronavirus pandemic has already thrust parts of the global economy into a recession by bringing some of its most vital parts to a screeching halt.
The crisis has caused a slowdown in economic activity across the US and the world. Restaurants and bars have scaled back service or closed altogether. Airlines have slashed flights amid widening travel restrictions. Many companies have closed offices and/or have employees working remotely. Millions of people have hunkered down at home to stop the deadly virus from spreading further. And many may be out of their jobs or working reduced hours.
But when do those massive changes become a recession? The most common definition is two consecutive three-month periods of negative economic growth as measured by gross domestic product, or GDP — the value of the nation’s produced goods and services. Healthy GDP growth is somewhere between 3.5% and 5% annually. The US ended at 2.3% last year. Texas 4.7% last year. Austin at 4.7%
While economists expect the nation’s GDP to tumble in the second quarter of this year as the pandemic unfolds, some experts aren’t waiting that long to declare a recession given the virus’s immediate and devastating effects on the economy.
The Dow Jones Index was above 29,000 the start of the year – as of today (3/18/2020 10:20 am) in the mid 19,000’s. The ability to recapture those values will take time and trust in the market. That could happen in 2 to 3 months or perhaps take a couple of years.
Recovery depends on the economic strength of your local market. Austin and most Texas metros should rebound quickly due to the low unemployment, need to fill jobs, not enough real estate inventory, etc.
The last US recession came amid the financial crisis of the late 2000s and lasted from late 2007 into 2009. In 2011 Austin led the nation in recovery with the shortest stint of the to 50 metros in recession. The rest of the state turned in 2012-13. In the rest of the nation, unemployment peaked at 10 percent and the nation’s GDP plunged more than 4 percent.
Experts have varying answers — some expect a brief downturn while others say trouble could stretch until a coronavirus vaccine is widely available, which may not come until next year. But it will ultimately depend on getting the virus under control. Until then, we will be treading water at which point the economy will take off because it’s relatively easy to reopen a restaurant, it’s relatively easy to reopen many offices, etc.
However, do understand that this crisis will have a lasting effect on how business is conducted. Anywhere that people gather en masse, we’ll have to put a protective protocol in place. There is a cost as well as public concerns for those businesses. Recovering economically will take some time.
If it is brought under control in a couple of months, we are probably looking at a local economy recovering through the 3rd quarter of this year with a much stronger 4th quarter. Again, it just depends on the severity.
China has seen about a 20% decrease in consumer spending, effectively hurting GDP by 3 to 5 points. Hopefully the US is ahead in disease prevention, so similar numbers or less for the U.S.
Good news is that most of the Texas metro economies have been leading the nation. Presently they do not have enough real estate inventory. Sales continue to be robust comparatively. So far, 2020 sales and real estate values are remaining strong and should remain that way throughout 2020.
Do you think that the fact that Austin has confirmed cases will impact it as a destination for employers?
Presently no. Most of the major metros have confirmed cases.
Austin has not been a destination for corporations because of the health of the workforce. The attractiveness has been the level of education of its populace (see below), fair weather, and relatively low cost of living compared to similar metros.
What have previous disasters taught us about how our economy responds to events like this?
The main lesson is that Austin and Texas economically turned quicker than the rest of the country after the last crisis. Why? Because we did not have the amount of speculation or financial leverage that so many markets had.
Presently, the Austin economy continues to be based strongly on technology, higher learning, and state government with multiple other channels contributing. That’s important because many of the metros that experienced the economic crisis were dependent on one or two industries as well as highly leveraged financing. Highly leveraged financing has gone away, and the Austin Chamber’s focus on recruiting multiple segments of the industry should help tremendously.
As discussed earlier, a large segment of the local population’s employment is dependent on Austin’s multiple festivals, sporting events, etc. They will recover, but their patience and assets will be tested as the length of this crisis are uncertain.
No one likes uncertainty. Particularly when it comes to where our next paycheck is coming from.
Local Market Outlook
What can we expect in the Austin real estate market as this event continues to play out?
Any slowdown in construction will increase values presently, due to lack of inventory, labor, etc.
There is not enough inventory presently in multiple channels. Slowing production exacerbates the problem, driving values up.
There is not enough labor now, closing job sites to labor crews, allows your competition to potentially hire them away. The same can be said about multiple industries in the current local market.
The local residential market has maintained and increased to a robust number of sales locally and regionally.
We have not seen national numbers yet. However, remember year-over-year sales from the west coast and east coast (where state income tax, tax burden, and regulation are high) were declining before this crisis. I would think they will continue that trend presently. Which in turn bodes well for Austin and the region.
Do you maintain a strong forecast for the Austin housing market through the remainder of the year?
If the market returns to normal within 30 to 60 days, yes. Longer than that, it becomes a concern economically, because of the disruption and stoppage on revenue to multiple sources. We will have to revisit at that time. As a metro, region, and nation, we have shown remarkable resilience in the face of crisis.
We are all in this together. So those industries that have and will take a beating should come back. Again, it just depends on the length and depth of the crisis. Presently we have not seen an economic slowdown in the Austin and regional housing market.
Westlake is A City, adjacent to Austin, just west of the city. Westlake is an attractive location due to its proximity to Austin and Lake Travis. Moreover Westlake is home to the highly acclaimed Eanes School District, consistently ranked in the top ten of Texas and top one hundred in the country. Westlake homeowners have grocery shopping, retail and entertainment all within a short commute. Residents love living in Westlake with downtown Austin close
There were 58 homes sold in July. with 59 listings being added in the same month. The average sales price in Westlake for the month was $1, 153, 526. The average home sells for $345 a square foot.
Location Is Perfect
Westlake is minutes away from The Hill Country Galleria, Barton Springs and Barton Creek Country Club. Full of luxury homes, tree lined neighborhoods and a growing restaurant scene. If you have any thought about buying or selling a home in Westlake in the near future contact me today at 512-375-8945.
Another small town experiencing rapid development along the IH-35 corridor, Kyle is located 22 miles south of Austin at the corner of the IH-35 and FM 1626. A relatively new town, Kyle experienced a population explosion from 2000 to 2017, when it grew from 5,314 people to 39,060 people. With that growth came the construction and amenities required to support Kyle’s popularity - several master planned communities, Plum Creek and Stagecoach being two of the first, with homes from the high $100s to the low $300s, and the newer Cypress Forest Executive neighborhood with homes up to the mid $400s. 600,000 square feet of medical facilities and more than 3 million square feet of mixed use retail space are currently under construction, and will not only to support Kyle’s growing population, but also provide thousands of job opportunities. Golf courses, parks and the Balcones Fault Line Cave also provide plenty of outdoor recreation. Drive quickly to Austin, or take advantage of living and working in Kyle - its proximity and affordable housing will continue to encourage growth and make it a great option for Central Texas living.
The last quarter 2018 showed 228 properties sold, all of which were free standing houses.
Options ranged from a manufactured home on a quarter acre lot, to a huge 4200 square foot custom build on 1.5 acres for $574,950. Median prices are approximately $220,000, generally for new or newer builds in established planned communities with 3-4 bedrooms and 2 baths.
214 properties were sold in this same timeframe in 2017, bookended by a tear down property in need of demo right off I35 for $55,100 to a $471,260, 4 bedroom, customizable incomplete new build in a planned community.
Currently, there are 175 properties for sale, ranging from an old farmhouse in need of complete renovation for $120,000 to a 1980s ranch on 25+ acres ready for development or subdivision for just under $1.5 million, with most sale properties 3-4 bedroom homes in planned communities in the $230-245,000 price range.
The Tax Advantages Of Buying A Home
We all know the advantages of buying a home. The pride of ownership, greater privacy and the freedom to call the shots as it were, with your living situation. But there are additional benefits to owning a home, whether it is your first purchase, or if you are an experienced buyer.
Home ownership can also provide attractive tax deductions, that can be of great benefit during the course of home ownership, and when you sell.
One of the best tax benefits of home ownership is the mortgage interest deduction, which means homeowners can deduct the interest they pay on a mortgage for debt related to buying, constructing, or improving either a primary or secondary home.
Before Dec. 15, 2017, the mortgage tax deduction was limited to interest paid on a maximum of $1 million debt on the property for married people filing a joint tax return, $500,000 for married couples filing separately, and $1 million for single filers. Now, however, the rules are different. For home mortgages taken out on or after Dec. 15, 2017, debt caps are lower: $750,000 in for married couples filing jointly; $375,000 for married couples filing separately; and $750,000 for individuals.
Save receipts and records for improvements (not repairs) you make to your home, such as a new hot water heater, central air system, or storm windows.
You can't deduct these expenses now, but when you sell your home the cost of the improvements is added to the purchase price of your home to determine the cost basis in your home for tax purposes. Although most home-sale profit is now tax-free, it's possible for the IRS to demand part of your profit when you sell. Keeping track of your basis will help limit the potential tax bill
Some borrowers pay points on their mortgage in exchange for a reduced interest rate. Points are essentially an up-front fee you give your lender when you sign your mortgage. One point on a mortgage is equal to 1% of your loan value, so if you take out a $300,000 mortgage and pay one point, you'll spend an extra $3,000. The good thing about points is that they can work as a tax deduction, if not right away then over time. If the points you pay are in line with the industry standard, and the purpose of your mortgage is to purchase your primary home, then you're allowed to take a full points deduction right away. Otherwise, you can still take the deduction, but you'll need to spread it out over the life of your home loan.
Private Mortgage Insurance (PMI)
Homebuyers are typically required to buy private mortgage insurance if they put down less than 20% of the cost of a home. Meanwhile, PMI insurance is required for any mortgage obtained through the government-insured loan program offered by the Federal Housing Administration (FHA). With FHA loans, down payments can be as low 3.5%, but PMI costs can add up quickly.
Consult Your CPA
As a best practice, consult your trusted accountant or tax software to determine the best course of action when it comes to deductions. There are additional items not mentioned, such as home offices, moving and landscaping, that may very well be deductible.
Austin 2018 Market Report And What To Expect In 2019
2018 In Review
The Austin Metro area showed no signs of slowing down in 2018. Rising property values and an increased demand led to record setting sales volume, once again in 2018. According to the Austin Board Of Realtors, 30,713 homes were sold last year, with a value of 11.9 billion dollars in sales.
Within the City Of Austin the median price for a home is $375,000 while the greater metro area
has seen the median home price increase to $310,000. Home values in surrounding counties
are 285,000 for Williamson County and $264,000 for Hays County, respectively.
Home sales volume were strong in November, although they fell off ever so slightly in
December. There could be a number of reasons for that. But our our belief is that it was a mix of
several factors- a slight increase in inventory, some interest rate ambiguity, stock market
volatility and the looming government shutdown.
Cash Is King
We noticed a trend starting in 2017, that carried over in 2018. Approximately 35 percent of the
transactions in our office involved buyers using a down payment above the 20 percent mark to
avoid private mortgage insurance. Many of those transactions were all cash. Moreover the price
points for all cash transactions were far above the area median of $310,000 with some of our
luxury sellers and buyers brining all cash to million dollar purchases. This is not the climate of
the highly leveraged real estate market that we saw in the lead up to the housing crash of late
What To Expect In 2019
We are less than a month in to 2019, and the early returns bode well for an even stronger year.
Single family buyers and investors, many of whom sat out the end of the year, have come on
strong to start the year off. Buyers are more active, open houses are well attended given the
time of year and investors activity has noticeably increased.
Austin is one of the hottest real estate markets in the country but the question we often get, is
what areas are hot within the city. As affordability continues to be a challenge, look for areas
such as Northeast Austin to be a destination for first time buyers and investors alike. With a nice
mix of resale homes and new construction, we think this once overlooked area, will continue to
grow. Within central Austin, we think the The Grove development will greatly benefit the
neighboring areas such as Rosedale, Allandale and Shoalmont. As far as bedroom
communities, expect continued growth in Cedar Park/Leander, Kyle and Hutto. Furthermore,
look for San Marcos, our affordable neighbor to the south, to see rapid growth. A growing
number of retirees are seeking out the area, and the city seems to have a better handle on that
dreaded word- traffic, than those of us in the capital city.
At the beginning of 2018, two possibilities that led the news was the possibility of Austin’s first
major league franchise and the strong possibility of retail behemoth, Amazon, descending upon
the city. After many twists and turns, Austin did in fact land Austin FC, a MLS soccer franchise,
expected to start play in 2021. Amazon however, decided two split its second headquarters
between New York and Virginia. Austin did become the headquarters for The United States
Army Futures Command. We believe this will be a significant coup, which is flying a bit under
the radar, so to speak. Similarly, Amazon grabbed all the headlines, but it was tech giant Apple,
that came in late, and decided to expand their already strong presence, in Austin adding 5,000
employees, with the capacity to grown to 15,000.
Does This Ever End?
Trees don’t grow to the sky. Which is our answer when we are asked most often, about the
Austin real estate market. When we study historical data and recent trends, a few things stand
out. The Austin housing market is strong, but more importantly its stable. We don’t tend to see
large spikes, where values increase without the empirical evidence to back it up. Also, our
economic foundation is diverse and solid. The people that move to the area come for a variety
of job opportunities, far more diverse than the recent past. Finally, the word that often comes up
is investment. Companies are investing in the area. And buyers, as mentioned before, are
investing a larger percentage of funds when buying real estate, than in previous, highly
leveraged boom markets.
Q1 2018 Market Report
January through March 2018 showed 408 properties sold, 402 of which were free standing houses.
Options ranged from the rare condo of approximately 900 square feet built in 1985 sold for $53,500, to a 70s era 3/2 for $145,000 to a 5300 square foot custom build with resort style pool for $1,350,000. Median prices this quarter were approximately $270,000, which bought a 2000 square foot 4/2 new build in the Savanna Ranch subdivision. Median time on market is approximately 40 days.
354 properties, all of which were free standing houses, were sold in the first quarter of 2017, with a median price point of approximately $269,000.
Currently, there are 430 properties for sale, ranging from an approximate 1600 square foot two story 1980s construction for $190,000, to a 6000 square foot, 14.8 acre custom estate overlooking Lake Travis for $4,900,000.