Agent’s Blog

04 August

Foreclosures in the Austin Market

Posted by Gary Thompson

 

Foreclosures in the Austin real estate market have not been as much a part of our sales as has been seen in other parts of the country. This is simply because we did not see the rapid increase in prices during the high points of the previous up market so that we did not have the amount of decline in our home prices as seen in many other parts of the  country.  However, we do have a significant number of foreclosure properties available in most price ranges in the Austin area.  These properties require an educated approach though, in order to determine whether they are a good value or not.  Most often these properties are now bank owned because the first lien note to the original buyer became higher that what the property should be priced at in this present market.  In other words the property was not worth what the buyer owed such that it was not possible to sell the property as in a more normal market condition, and that is most likely the reason it became a foreclosure.  The banks now most often offer these properties at or above the mortgage amount owed on the property by the original buyer in an effort to avoid taking a loss on their balance sheet, which means the price may or may not be a good value.  If the mortgage amount owed on the property is too high compared to the other sales of similar properties in the same area of town the foreclosure sale may not be a good value, unless there are some unique qualities of the home and/or home site that offset the comparison.  Another factor to take in to consideration is the physical condition of the home and property. If there are a significant number of repairs or remodeling items that are required then obviously a higher priced resale in better condition, or even a new home in the same or nearby area may actually be a better value to the buyer.  This is why a good real estate professional should always ask the right questions in order to understand what the potential buyer really wants to make happen in our present real estate market.  One important question of course, is whether the home is to be a potential investment property or is it to be the buyer’s next home to live in for some time to come?  My point here is that serious potential buyers should not limit themselves in looking only at foreclosures in their search for a good value in a home.  Obviously, they should be a part of the consideration when looking at homes in a certain area, but in some cases there are often many excellent homes on the resale market, and in some cases even new homes that are priced at such a level as to be a better value than many of the foreclosure properties. Ultimately it is all about what the potential buyer really, really wants, and an experienced real estate professional can help put that into perspective as regards our current Austin real estate market.

 
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16 June

Austin, A Relocation Real Estate Market

Posted by Gary Thompson

 

Having been such a long time Austin resident I have watched our beautiful town be discovered.  It all started in the late 1950′s when UT began exploring computer science research programs, which then resulted in the creation of the Balcones Research Center. Through this they attracted both MCC, with research in computer software, and Semetec, with research in computer chips.  These were major consortiums of various business groups with federal subsidies to do research in those areas.  When I graduated UT in 1967 student enrollment was approaching twenty thousand, and the university had become one of the first in the country to initiate a degree program in computer science.  IBM was just then completing one of their first major facilities here with a type writer manufacturing plant for the old “Memory Writer”.  As the computer industry evolved that facility then became one of the first places to manufacture personal computers in the US, and Austin was off and running.  Up until this happened Austin had been a sleepy little-known town where the main sources of employment were state government and UT.  The computer industry, along with UT then began to accelerate growth as it brought many more talented people from all over the world, and our real estate market began it’s long and steady process of expansion from all of the relocation business.  Austin has since evolved into one of the major high tech cities with UT student enrollment now in excess of fifty-five thousand.  This brings us a wide mix of people who continue to come here from so many different places providing us with such a youthful and vibrant culture, and such a healthy real estate market place. This combined with our natural beauty has made Austin one of the most desirable relocation cities in the US, and the world now knows we are here.

 
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04 June

Perspective on Real Estate Financing

Posted by Gary Thompson

 

As we all know, the financial system itself is at the center of this recent down turn in the real estate market.  The combination of the lack of governmental controls combined with the over zealous lending practices resulted in the creation of what has been so aptly termed “the housing bubble”.  I was in a position with one of the nation’s largest home builders and watched it all take place.  It all centered around making housing more affordable as prices got higher and higher.  I watched as it became easier and easier for virtually anyone to get a real estate loan, often with no money out of pocket.  Now the banking system is holding a large percentage of everything from questionable loans to non performing loans to foreclosed properties on their balance sheets.  This combined with the over-due governmental requirements and regulations for higher reserves and our lending institutions are by necessity making it much more difficult to acquire real estate financing.  All of this is occurring while the mortgage lending rates are at all time lows, providing only a very marginal profit potential for lenders.  The banks have little inclination in this financial environment to loan out more money.  They simply have to see interest rates increase before they will be encouraged to take the risk.

The bottom line here is that it has never been a better time to finance real estate for as long as I can remember, and I have been around since the 1940′s.  One of the most obvious lessons I have learned about the markets in general is that there are always the least number of people buying when it is the best buying opportunity.  And, conversely there are always the most buyers when a market is topping out and it is the worse buying opportunity.  The Austin real estate market is only on the fringe of this market decline.  Since we have not had the extremes in highs we have missed the extremes on the lows.  And, because we have such a desirable place for people to live with everything from job opportunities to affordable housing to a beautiful environment we are experiencing a relatively stable real estate market compared to most of the  rest of the country.  All indicators are pointing to an increase in real estate mortgage rates, and from my years of experience buying demand will increase dramatically once the public realizes that reality.  It is one of the major factors that influence our real estate market.

 
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01 June

Austin Real Estate in Transition

Posted by Gary Thompson

 

Two basic indicators that I always look at to decide the basic health of our real estate market here in Austin are, first there are more jobs being created here than we are losing, and second there are more people moving here than are moving away.  Austin has been, and continues to be high on almost every statistical list for being one of the most desirable cities to live.  This began in earnest in the 1980′s and has been continuing ever since, with surges coming in waves.  Now with our recent down turn in the national economy, and with Austin being one of the most desirable places for recent college graduates, and younger professionals to find employment we are having another strong influx.  The most obvious aspect of this wave is that most of these people are looking to rent, not own at least in the immediate future.  This, together with many of our existing residents wanting to continue renting has created an ever increasing shortage in rental homes, with apartment complexes gaining higher and higher occupancy levels.  With this increase in demand and the shortage of rental properties coming on the market in most areas we are seeing an increase in rental rates.  Combine this with the very restrictive lending climate for investors, together with the long lead time to build new apartment complexes and this upward trend in rental rates is predicted to gain momentum.  This is actually a healthy sign for our resale market, since many of the homes in inventory are still priced where the resulting mortgage payment is higher than an equivalent rental property even when you consider the tax benefits of ownership. This imbalance should continue to correct itself as the rents rise, and should accelerate more rapidly if and when we see an easing of lending requirements for investor purchases. The most notable aspect is that the price of homes in Austin seem to be holding strong with price increases in some areas.

Next time I will discuss the entirely different real estate market that exists for the one million and above homes, otherwise known as luxury homes.

 
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24 May

Lakeway

Posted by Gary Thompson

 

Imagine an Austin where there was no Capital of Texas Highway, otherwise known as 360, or a Loop 1, otherwise known as Mopac. Ranch Road 2222 was just that, a ranch to market road as in FM, or farm to market road.  It was a small lightly traveled two lane road winding through the Texas Hill country.  This was the same with Ranch Road 620 which became a lightly traveled artery after the Mansfield Dam was completed in the late 1940′s, where it then ran across the top of the dam as a very narrow two lane with spectacular views.  At the time the developers began work on the Lakeway community there was a very small trickle of traffic going by on RR 620.  A landmark then was a small gourmet restaurant known as Alpen Hause that sat almost all by itself in what is now Lakeway.  The restaurant was very unique in that it was created by an internationally known chef that had migrated from Europe to avoid the Nazi occupation.  His older son became one of the first Realtors to sell properties in Lakeway, where the buyers would then have to work with mostly very small custom builders to design and build their home.  The community was initially created as a retirement village and remained so until the road improvement on RR 2222 in the late 1960.s, which required very expensive and time consuming dynamite blasting of the cliffs along the way.  Our access into town at the time from Steiner Ranch, and our small resort on Lake Austin would often take over an hour as the few cars on the road would have to wait for the construction process.  As Austin grew to the west Lakeway would eventually begin to grow ever more rapidly as the transportation time became more acceptable for commuting to work.  Lakeway has now become world renown as a community that affords a resort lifestyle with all of the conveniences of a very prosperous city.  When I was representing a large national builder there four years ago I was amazed at the size and scale that the city had become.  It is amazing now how many people come from so many far away places to explore living in Lakeway and Steiner Ranch.

 
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21 May

West 6th. Street

Posted by Gary Thompson

 

In 1968 my mother and I sold the Lake Austin Lodges.  We took in trade an old turn of the century home at 1102 West 6th. Street near the Lamar Street intersection. The home had been redone “a la 1950′s” style into three apartments. It is still there, now nicely redone back to it’s Victorian heritage and serves as offices for Thundercloud Subs. The large wrap around front porch overlooks the street below as it sits high up looking across at what is now the Whit Hanks Gallery building, a modern day landmark in itself. Very few people know or remember however, that the Whit Hanks Gallery on West 6th. was originally a Coca Cola bottling company with large glass windows all across the front of the building. After my wife and I moved into one of the apartments of  the West 6th. street house we discovered a great amusement in that very quiet period of Austin’s history.  We could sit on the porch at night and watch the brightly lit assembly line of Cokes move through the process of filling and capping the bottles across the street.  The great excitement of the evening was when a bottle would explode, and the red lights and siren would go off to shut the assembly line down in order to clean up the mess.  Austin was another world back then when downtown emptied out at quiting time on weekdays, and there was little else besides the few bars and restaurants that existed in that time.  The automobile traffic past the house in those days after hours could be counted on one hand so that it was all a part of Austin being such a sleepy little town back then. My mother and I sold the home in 1982 for approximately $85,000.00 and we thought that was a great price, since the home was only valued at $16,500.00 at the time of the trade 14 years prior. The Austin real estate market, combined with inflation had begun to rise. What changes we have seen since then!  It is now great fun for me when I am able to show prospective clients homes in the older parts of Austin, with those ever present images forever lodged in the back of my mind.  I love what the inner city of Austin has become.  It is now so vibrant and alive.

 
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20 May

Steiner Ranch

Posted by Gary Thompson

 

It was the mid 1960′s and my wife and I were living in the married student apartments on Lake Austin Blvd. when my parents bought a small lake front resort called Lake Austin Lodges.  It was at the end of Quinlan Park Road, which is now the main road through the Steiner Ranch community. Then it was slightly wider than a one lane road running over three cattle grates as it wound through the wild native landscape of the working ranch populated with prize quarter horses and other livestock.  We moved out to the property and I became the operational manager of the business as I completed my bachelor’s degree at UT. It was comprised of thirteen guest cabins, a small restaurant, a bar with pool table, a larger cabin used for family gatherings and two apartments.  There also was a swimming pool and boat docks with a gas pump.  It felt like it was way out in the wild hill country accessed then by lonely two lane country roads now known as RR 620 and RR 2222.  Lakeway was just beginning to sell lots for custom homes.

You can imagine what this does to your mind when you have the contrast of those memories and driving through Steiner Ranch as it is today.  The small resort turned in to a first class spa resort now called the Lake Austin Spa and there are approximately 15,000 people living in the community.  The memories come flooding through every time I go there to show homes to prospective buyers. What a beautiful master planned community it has become.

 
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16 May

Living on Lake Austin

Posted by Gary Thompson

 

Imagine a UT sophomore being able to rent an apartment in Westlake Hills on Lake Austin for only $30.00 a month, and it included a boat slip.  That was in 1963 and Austin was a very different place.  It also was when I started exploring the lake by boat, which is the only way to get a real picture of what Lake Austin is all about.  The apartment was on old Westlake Drive next to the old Westlake Beach on the part of the road that has long been bypassed from the main traffic flow. Then it felt like it was an isolated spot out in the hill country with a diverse collection of very rustic homes that blended into the native landscape. In this old Austin setting, as in the city itself, larger homes of 3,000 square feet or more were the exception.  It was a whole different economy, and with the exception of some of the activities around the UT campus, a very quiet lifestyle.

This is how it all began for my wife and I as she moved in to that little apartment with me when we were first married in 1964.  We have now been living the waterfront lifestyle on Lake Austin off and on for almost 30 years, and continuously since 1986. The lake front home we are living in now has been our home for almost 19 years.  Lake Austin waterfront living has been our way of life for a very long time.

 
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14 May

Tarrytown Perspectives

Posted by Gary Thompson

 

The first home I remember in Austin was when my aunt and uncle (very close relatives) moved from San Antonio in 1949. They purchased a home in Tarrytown on Bonnie Road just a couple of blocks from Lake Austin for approximately $9,900.00. It was a small native stone home with only two bedrooms, one bath and one living room. It had a small one car detached garage on the back corner of the property that was accessed by a gravel driveway down the side of the home. It was a very typical home for that part of town in that period. As a perspective, my mother purchased a home in Tarrytown on Norwalk Lane almost twenty years later in 1968 for $14,500.00. It also was a small two bedroom, one bath and one living area home with only a one car carport on the front of the home and was located across the street from the O’Henry Middle School. As you can see there was very little change in real estate values during that period of time. Austin was still a small town where most of the jobs were centered around the university and the state capital. The real changes did not start to occur until the late 1970′s, but I will save the reasons I saw those happening until a later time.

 
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12 May

A New Beginning

Posted by Gary Thompson

 

Perspectives are a very valuable tool in understanding our current real estate market conditions.  As a person who has memories of Austin going back to the late 1940′s it is a constant source of fascination when comparing the “then and now” of Austin real estate.  Add to this my involvement in the sale of new homes in the Austin area since 1986, and I now have an expanded view to include some outlying areas as well.  Now whether it is central Austin going west out Lake Austin Blvd. or Enfield Road through Tarrytown or Westlake Hills following along the portion of the Colorado River known as Lake Austin all the way out to Steiner Ranch, it is all a part of the experience that I love to share.  It is this knowledge of where Austin has come from combined with an understanding of what drove the growth to the many different areas that many people find of interest.  At this stage I am here to share and to be of service.

 
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