People often ask me the “crystal ball” question, “What do you think the market is going to do?”  I check off the many indicators I watch, including unemployment, demand, and inventory.

I then follow up with one of the most important indicators, “What do you think the market is going to do?”

In 2008, Austin’s real estate market was relatively healthy but flat.  We saw slight appreciation in the median price.  However, when speaking with clients & friends not in the business, it was their impression that the sky had and was falling.

Luckily, in Austin, the sky didn’t fall, but it did drop.  Home prices have depreciated slightly in 2009.  There are many factors that combine to cause this, but the public’s general impression of the market is a big one.

Since all real estate is local, it seems a bit counterproductive to watch national real estate trends closely.  Continue reading this post

The economy’s decline leveled off significantly from April through June, confirming  that the worst is behind us.

GDP declined at an annualized rate of 1 percent in the second quarter, after shrinking an amazing 6.4 percent earlier this year. But consumer spending, 70 percent of economic activity,  continues to fall as Americans continue to save and  reduce debt. Economists express concern that our basic spending habits have been permanently altered by this great recession. This is also having an effect on rentals as renters downsize or insist on rent reductions.

With this as a backdrop we looked at rental rates which a are a prime factor in evaluating a property. We clearly have a long way to go. The Dept of Commerce chart indicates we are at a fragile beginning of a recovery. The key to successful property ownership now will be to keep it occupied and ride this out. Continue reading this post

Home Sales Results by MSA For AgentEvaluator® Subscribers

Earlier this week, MDA Dataquick reported that in HomeGain’s backyard, the San Francisco Bay area, home sales in June had jumped by 20% YOY. Solano County, a long term poster child and whipping boy for the foreclosure crisis, saw a whopping 67% increase in sales during the same time and reached sales levels not seen since August 2006.

The million dollar question is, have things bottomed out?

It’s sure starting to seem that way. Prices have started to stabilize, or in some markets actually beginning to go up as foreclosures are accounting for a less percentage of the total properties sold.

In the recent HomeGain home prices survey, Gillian Goldrich of Coldwell Banker Residential Brokerage in Woodbridge, CT noted “Markets are definitely picking up…buyers  are getting off the fence and taking advantage of tremendous buys.” Many of our agents expressed similar opinions as they are seeing declining inventory levels , raising prices and multiple offers.

Looking Back

The first half of 2009 was a memorable one for HomeGain agents as several achievements were reached. We  inducted our second agent (Alan Shafran) into the HomeGain Million Dollar Club for generating over 1 million dollars in gross closed commissions. Seventeen agents were inducted into the HomeGain Diamond Club for generating a half-million dollars in gross closed commissions.

Combined with the dozens of agents inducted into each of our Silver, Gold and Platinum Clubs, HomeGain AgentEvaluator agents used the turbulent conditions to further grow and expand their market opportunities.

Top MSA’s for First Half of 2009:                    Continue reading this post

We’ve all heard it; “real estate is local”. I’m not so sure.

I believe that all of the different “local” real estate markets are in fact intertwined with one another. While there is not much value in a national average or median real estate price, there is value in national sales volume, national inventory levels and other national housing statistics.

Think of them as a barometer – a measure by which you can assess your local market. Perhaps your market is selling more homes on average at a higher price point than the national average. Perhaps it’s less. Either way, national market statistics matter. You can use this information as part of a general wellness test of your local market. Not to mention that what actually is happening in other local real estate markets can directly affect what happens in your local market.

We in fact just ran into a scenario where a client of ours could only buy a home at a certain price here because the home he owns in Michigan cannot sell for a reasonable price there. They wanted to spend about $600,000, but, bought for $250,000 until the home in Michigan can sell. This is an example of exactly how these markets are intertwined and why in fact real estate is not all local.

To truly understand your local market, you must stay abreast of and understand more than just your neighborhood, town and city market statistics lest someone else who does understand will be the “local expert” instead of you. Continue reading this post

According to reports in the Wall Street Journal and the Miami Herald first time home buyers are accounting for a large portion of the recent boost in existing home sales. The reports cite lower home prices and the provision in the Obama stimulus plan that gives first time home buyers an $8,000 credit.

Indeed, on a conference call following HomeGain’s release of its survey of Realtors on Home Values, HomeGain member Jeffrey Bastress of Starpoint Realty in Massachusettes cited that he had recently received numerous offers from first time home buyers citing the $8,000 credit as a reason for their interest in purchasing a home.

Andrew Duncan of Keller Williams of Tampa also cited the new tax incentives, lower home prices and great interest rates as driving new home buyers to make their first purchases.

Could it be however, the reason that first time home buyers are making up a good portion of existing home sales is that they haven’t been burned yet?

Continue reading this post

I’ve been looking through some recent reports to try and sleuth out the general economic level of malaise and I’m am happy to say that we are not yet feeling the pain in a serious way. The San Francisco Apartment Association magazine prints a nicely detailed economic overview by Mat Sheridan. The first chart shows us that the San Francisco employment rate is less that the state unemployment rate by a little less than half. At 4 to 5%, our jobless rate is painful, but not devastating. Our vacancy rates are still less than 5% and we are among the top rental markets in the country.

I have this theory…..San Francisco is host to huge commuter busses that stop in most areas of the city. They pick up workers from Google, Apple, EBAY, Genentech and other south bay companies. The commuters are picked up in central locations throughout the city and driven to work and back. This has brought huge numbers of well paid employees whose only alternative to living and in San Francisco and working in the south bay was to endure a hour plus commute or take Caltrans.

The bus alternative is a no cost convenient way to live in San Francisco and work in Silicon Valley. The net of this, (my theory) is that San Francisco and Silicon Valley are becoming economically interdependent and this has fueled our rental boom. The health of the tech industry is even more closely aligned to the economic health of San Francisco than ever before. The human typography of this city has been undeniably altered.

San Jose as a Leading Indicator Continue reading this post