Tips Blog

The following article was published in the December 9th edition on Realty Times’ website by Kenneth Harney:

If new mortgage applications are a reliable gauge of forthcoming home purchases, looks like we’ve got a bumper crop taking shape out there.
Last week the Mortgage Bankers Association’s national survey registered a record 37 percent jump in applications for new conventional loans to buy houses, and a 39 percent increase for home purchases using FHA mortgages.
The reason for the sudden surge? A half point drop in 30 year fixed mortgage interest rates to 5.47 percent — which was down from 6 percent the previous week — and to just 5.13 percent for fifteen year loans.
The rate drop happened almost overnight, after the Federal Reserve announced plans to pump up the housing sector by buying $100 billion worth of bonds issued by Fannie Mae and Freddie Mac.
The Fed also said it plans to buy about half a trillion dollars of mortgage-backed securities issued by Fannie, Freddie and Ginnie Mae beginning this month. Ginnie backs the FHA side of the market, just as Fannie and Freddie do on the conventional side.
So why did the Fed’s moves mean so much? Because mortgage rates have been higher than they should recently due to bond investors’ uncertainty about the safety of Fannie and Freddie.
Both companies racked up multi-billion dollar losses last quarter, causing investors to demand extra-high premium returns before they’d buy Fannie or Freddie debt.
But now that’s over. The government’s backing of Fannie and Freddie is explicit and big. Investors are reassured. They’ll take lower premiums, allowing consumers to get lower mortgage rates.
Although lenders report their phones were jammed with applications from people who want to refinance, the big surprise was the huge jump in applications from consumers who plan to buy houses.
With prices down in the majority of markets, more and more people are finding that the equation now works: Fixed rates in the mid-fives combined with pricing at 2003 and 2004 levels make a compelling case that this is an excellent time to buy - provided you’ve got a downpayment and reasonable credit.
The bright spot in housing finance came in a week that was otherwise pretty much an economic downer: More bad news on Wall Street; followed by the official designation that we’re now in a recession.
One additional bright spot to report: Unsold inventory — the backlog of houses that weighs down local markets — dropped by a full point and is now down 4 and a half percent for the year.
That’s a very positive sign and should only get better with lower mortgage rates.

With interest rates still near historic lows and a huge amount of inventory on the market, now is a great time to start looking for your new home.

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com

Summarized from an article by Jerrold Stern, research fellow with the Real Estate Center at Texas A&M University, in Tierra Grande, Journal of the Real Estate Center at Texas A&M University

As the end of the year approaches it’s time to start putting together information for your 2008 Income Tax Return. If you have moved during the year for employment purposes you may be eligible for a tax deduction.  Three types of tests need to be met to obtain moving-related deductions-a “start of work” test, two distance test and a time test.

The taxpayer must begin working in the new location within one year of the move, but it is not necessary that employment actually be obtained before the move.  For example, if you moved on January 1, 2008, you must start your new job by January 1, 2009.  If you delay your move so that your child can finish the school year, the one-year rule could be waived.

In Distance Test No. 1, the distance from the new home to the new job location must be less than the distance from the previous home to the new job location. A second distance test is applied to make certain the taxpyer’s new job location actually requires relocation. The test is met if the distance from the old residence to the new job is at least 50 miles greater than the distance from the old residence to the old job.

For the time test to be satisfied the taxpayer must be employed on a full-time basis at the new workplace for 39 weeks during the first 12 months following the move. Of course, there are exceptions to each requirement and the calculations can be very complicated; therefore, you should consult with your tax adviser for your personal situation.

All moving expenses deductions are “above the line” deductions meaning they are deductible whether you itemize deductions or take the standard deduction.

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service.  Info@CarolDochenRealtors.com

According to the Austin American Statesman, Thomas Properties Group, Austin’s biggest landlord, still remains very optimistic on Austin and Central Texas.  Thomas Properties Group owns the Frost Bank Tower as well as 9 other Austin office buildings.  CEO Jim Thomas said that occupany levels rose to 89% in the 3rd quarter, up from about 78% in the second quarter.  Austin was cited as 1 of only a handful of markets that continue to be very healthy despite the economic problems.

The housing market and commercial market are directly related.  Jobs are the number 1 factor in maintaining a healthy real estate market and continued strength in the office market is a good indicator for Austin riding out the current economic problems significantly better than the rest of the country.

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service.  Info@CarolDochenRealtors.com

America’s Recession-Proof Cities
Excerpt Forbes.com

By Joshua Zumbrun
Nationally, home prices are falling, unemployment is on the rise and the economy is expected to grow slowly–or even contract–in the first half of the year. But some cities are doing just fine.Take Oklahoma City, Okla. With falling unemployment, one of the country’s strongest housing markets, and solid growth in agriculture, energy and manufacturing, it looks best positioned among the nation’s largest metropolitan areas to ride out the current crisis.San Antonio is right behind. It also features solid employment figures and affordable home prices that continue to rise. Its industries are growing; it can’t hurt that the new AT&T was formed when San Antonio-based SBC Communications swallowed the old AT&T Corp. and BellSouth. The others holding steady or improving include Austin, Texas; Houston; Charlotte, N.C.; Dallas; San Jose, Calif.; Raleigh, N.C.; Salt Lake City; and Seattle.
Behind The Numbers To find them, Forbes.com examined the country’s 50 largest metros and looked at several key measures.
We examined unemployment data supplied by the U.S. Bureau of Labor Statistics for the year ending in February 2008 to see which areas are most adding or subtracting jobs. Next, we looked at the BLS data on job growth in non-farm payrolls, through February 2008, for construction, education and health services, financial activities, information, leisure and hospitality, manufacturing, natural resources and mining, professional and business services, trade, transportation and utilities, and the BLS’s catch-all category, “other services.”

We also took into account median home price data from the National Association of Realtors–from the fourth quarter of 2006 to the fourth quarter of 2007–to see which areas posted the largest annual gains. Our data did not account for the impact of declining sales in the first several months of this year.

Finally, our rankings were adjusted using data from a November 2007 report, “U.S. Metro Economies: The Mortgage Crisis,” by the U.S. Conference of Mayors. It lists each city’s estimated gross metropolitan product growth by projecting how rising foreclosures and falling home prices would affect overall levels of productivity in local economies.

Sunny Southern Skies-Texas cities fared best under these measures. San Antonio, Austin, Houston and Dallas-Fort Worth have benefited from historically lower home prices, which have been affordable to a large segment of the population. The availability of land–and, in some cases, little zoning–helped keep prices in these cities low. Instead of competing for homes, Texans could move to a new subdivision a little farther out.
What’s more, all four boast falling unemployment rates, with Austin dropping from 3.8% to 3.6% and San Antonio from 4.3% to 4%.
Cities that are expected to see growth in non-farm payrolls include Raleigh, which is expected to see 7.4% growth in professional and business services and 6% growth in education and health.

If you’re tired of waiting, these might be the best places to go.

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com
 

As down payment requirements are rising, did you know that you may qualify for a tax savings in the form of tax-deductible mortgage insurance payments? Congress created a provision in 2006 that allows some home buyers to deduct mortgage insurance payments for mortgage insurance contracts issued after Dec. 31, 2006 and for mortgage insurance payments made before Jan. 1, 2011. The deduction is allowed for premiums related to a principal residence and even a secondary non-rental residence, but not for home equity loan debt. The deduction is subject to an income phase-out. The amount allowable as a deduction is phased out for taxpayers with adjusted gross income in excess of $100,000 ($50,000 for a married taxpayer filing a separate return). Partial deductions are allowed for taxpayers with adjusted gross incomes between $100,000 and $110,000 ($50,000 and $55,000 for married filing separate). Combine this with the new first-time home buyers credit and you may find significant tax savings! This information was gathered from an article in the Nation’s Builder News.

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com

The following article was printed in the October 21st edition of the Austin American Statesman:

In September, Central Texas home sales fell for the 15th consecutive month as the Austin area continued to feel the effects of the national real estate slowdown, tighter lending standards and heightened uncertainty about the economy. But the median price of $182,600 was unchanged from last September, ending an almost four-year streak of increases, the Austin Board of Realtors said.

Local real estate experts said it was a sign that prices will begin to fall, which could bring more buyers into the market.

Some observers say prices could drop as much as 10 percent within the next year as a near-record supply of homes for sale, anticipated rising mortgage rates and aggressive incentives by new-home builders pressure sellers to cut their prices.

Nationally, the median home price is down almost 10 percent this year. But Austin area prices have held up despite sales declines across all price ranges.

Last month, however, there were signs of change. Though prices kept rising in many areas, the median fell 26.4 percent in the real estate zone that includes affluent neighborhoods such as Barton Creek. It was down 7.6 percent in Pflugerville, 6.3 percent in eastern Round Rock and 18.2 percent in western Georgetown.

September sales of single-family homes totaled nearly $407 million, down 11 percent from a year earlier. To local real estate consultant Charles Heimsath, that suggests a turning point on prices. “I bet (the median price) goes negative before the end of the year,” said Heimsath, president of Capitol Market Research.

But Heimsath said a drop would not be “a bad thing, and I don’t think it will last very long.”

He noted that Austin is still creating jobs, although the rate of growth has cooled to below 2 percent.

“I still believe the fundamentals for growth in Austin are solid … and as long as we continue to grow some in the economy, we’re going to continue to generate demand for housing.”

He said the area’s median price had been “artificially inflated” by sharply slowing sales in lower price ranges, where the credit crunch has severely curtailed first-time buyers’ ability to obtain mortgages.

A decline in the median price, he said, would more accurately reflect a market in which sales have been falling and homes are sitting on the market longer. The 1,670 sales last month were 8 percent below September 2007 and the lowest for the month since 2002.

It took an average of 71 days to sell a house — 11 days longer than a year earlier.

Heimsath didn’t predict the amount of the price drop. But at a real estate forum last week, John McClellan, branch manager of Supreme Lending in Austin, and Jay Otto, chief executive of Dwellgo.com, a real estate Web site, said how much they expect the median to fall. Otto’s prediction is 5 percent to 10 percent by June. McClellan said a decline of at least 10 percent could be in store for homes in the upper price ranges, with smaller declines for homes in lower-price areas.

McClellan predicted that mortgage rates, now about 6.25 percent, could climb to the mid-7 percent range in the next six months, further squeezing buyers and forcing some sellers to cut prices. He said more-affluent buyers will be affected also by declines in the stock market.

Helen Edwards, Central Texas regional president of Coldwell Banker United Realtors, said a recent national price-cut promotion brought in offers to 10 percent of the 160 Central Texas sellers who participated.

“This proves that buyers are, in fact, willing to buy as long as the sellers understand that they want an excellent value for their dollar,” Edwards said, adding that clients have been having to price their homes “very aggressively” to compete with new homes.

“The rate at which prices have been increasing in the area has been slowing for a number of months,” said Eldon Rude, Austin director of Metrostudy, which tracks the housing market. “Over the next year, I expect that resale prices will come down, with some areas experiencing greater price declines than others.”

Ryan Rodenbeck, owner of Spyglass Realty and Investments LLC, disagreed.

“While we are seeing an increase in inventory, houses are moving, just at a slower pace,” Rodenbeck said. “That — coupled with the upcoming bottom of the market nationally that most experts predict — should help a national recovery, which in turn will allow people in other parts of the country who are trying to sell their home and move to Austin” to do so.

Heimsath said he expects consumer confidence and the stock market to improve by spring, when there will be more certainty about the direction in which the country is moving under the new president. He predicts interest in home purchases and other big-ticket items will pick up by then.

“If you have to sell, I would just hold off until the spring buying season,” Heimsath said.

And if you’re a buyer? “Look for the bargains,” Heimsath said. “Look for the people that have to sell.”

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com

Re-printed from The Milken Institute September 10, 2008

Powered by a cluster of high-tech employers, Provo, Utah, has seized the number-one spot in the latest edition of the Best-Performing Cities index. It is joined at the top of the 2008 rankings by other growing metro areas in Utah, Texas, Washington, Alabama and the Carolinas.

This year’s rankings of where America’s jobs are being created and sustained shows the impact of a broad rebound in the technology sector, along with strong activity in exports and energy production.

Several metros that once dominated the rankings fell due to a sharp downturn in their housing and construction markets; locations in Florida and California took particularly sharp hits. Cities that depend on industry and manufacturing also continue to show a steady long-term decline. The lowest performers on this year’s index once again come from the industrial Midwest, with nine of the lowest-ranked cities found in Michigan or Ohio.

Among the nation’s 200 largest metros, these are the top 10 performers of 2008 (with their 2007 rankings in parentheses):

1. Provo-Orem, Utah (8)
2. Raleigh-Cary, North Carolina (10)
3. Salt Lake City, Utah (18)
4. Austin-Round Rock, Texas (20)
5. Huntsville, Alabama (16)
6. Wilmington, North Carolina (2)
7. McAllen-Edinburg-Mission, Texas (7)
8. Tacoma, Washington (50)
9. Olympia, Washington (37 in the 2007 ranking of small metros)
10. Charleston-North Charleston, South Carolina (12)

Among America’s 20 largest cities, Houston-Sugar Land-Baytown, Texas, posted the best performance of 2008. Previous standouts Riverside-San Bernardino-Ontario, California, and Phoenix-Mesa-Scottsdale, Arizona, both experienced significant declines, largely due to their housing markets.

In a separate ranking of 124 small metros, Midland, Texas, came out on top, besting last year’s number-one performer, Bend, Oregon. Like other booming Texas towns, Midland is enjoying a strong boost from oil and gas production.

Each year, the Best-Performing Cities index ranks U.S. metros based on economic growth. It includes both long-term and short-term measurements of employment and salary growth, plus indicators of high-tech output.
There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com

Special Edition: Fannie/Freddie Takeover

Over the weekend, the government announced that Fannie Mae and Freddie Mac were placed in conservatorship. This means that the two companies will temporarily be run by their regulator, the Federal Housing Finance Agency. The Fannie and Freddie Boards and Executive Officers were replaced, but employees were encouraged to stay. The stated objectives of this action were to stabilize the mortgage market, insure the availability of funding for new mortgage loans, and insure that new mortgages are affordable.

While a conservator will have control over Fannie Mae and Freddie Mac, product availability and day to day operations for the origination of mortgages are expected to continue uninterrupted and essentially unchanged. Fannie and Freddie are expected to increase the number of mortgages they own this year and next year, before reducing their portfolios beginning in 2010. Fannie and Freddie together own or guarantee roughly half of the $12 trillion in outstanding mortgage debt, and they are currently responsible for about 75% of all new mortgage originations, so the viability of the two companies is essential for an efficient mortgage market.

As a result of the takeover, the government now explicitly guarantees the obligations of Fannie and Freddie securities. This has removed uncertainty and increased the demand for mortgage securites. Both domestic and foreign investors had recently reduced their purchases of mortgage securities, and they are now expected to be comfortable stepping up their purchases again. Mortgage rates reacted favorably
to the news on Monday.

Also Notable:
*   The government will provide up to $200 billion in capital to Fannie and Freddie
*   The government will own 80% of Fannie and Freddie
*   The US Treasury will begin purchasing mortgage securities issued by Fannie and Freddie
*   Foreign investors own more than $5 trillion of Fannie/Freddie debt and mortgage securities
There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com

State Farm Insurance offers the following tips for avoiding water damage inside your home. Visit their home safety page for more details.

Water damage can often be avoided with routine maintenance and assistance from qualified contractors.

General Tips
Check for hidden leaks by turning off faucets, all water-using appliances, and not flushing toilets for one hour. Record the water meter reading. If the flow indicator (triangular or diamond-shaped rotating button) is spinning or the meter reading has changed while no water is being used, a leaking pipe may exist.

Know where the main water shut off valve is located in your home and check it frequently to make sure it is operational.
Inside Your Home
Water leaks can happen anywhere in the house, but they occur most frequently in the kitchen, bathroom and laundry rooms.

Kitchen
Dishwasher - Periodically check under the sink to see if the hose connection to the water supply line is secure and is not leaking. Check around the base of the dishwasher for evidence of leaks. Look for discolored, warped, or soft flooring materials or water damage to nearby cabinets.

Refrigerator - If your refrigerator has an icemaker, check the hose connection to make sure it is securely attached to the water supply line. The wet spot you see on the floor near the refrigerator may be melted ice cubes or it may be a crimped icemaker line about to burst.

Sink - Recaulk around sinks and pay attention to slow-draining pipes. This may indicate a partially blocked drain. Check the pipes under the sink for signs of water leaks.
Bathroom
Showers and bathtubs - Discoloration or soft areas around floors and walls near showers or bathtubs may be your first indication there is a leak. Check caulking at joints where the walls meet the floor or the bathtub, looking for cracks or mold. If either is found, clean and remove loose material and apply new sealant. If the shower walls or floor are tiled, a leak may develop if there are cracks or missing areas of grout.

Sinks - Check under the sink for signs of leaks from water supply lines or drainpipes.

Toilets - Placing inappropriate objects or too much toilet paper in the bowl can accidentally clog toilets, especially low-flow toilets now required in homes. Hanging bowl deodorants are frequently the culprits. These objects can lodge deep in the plumbing system, and can block the line or create an obstruction that grease and other materials can cling to - eventually causing blockage. In addition, some chlorine tablet cleaners may corrode some of the internal components, eventually leading to a leak.
Laundry/Utility Room
Washing Machine - Inspect washing machine hoses regularly for wetness around hose ends and signs of bulging, cracking or fraying. Replace the hose if a problem is found or every three to five years as part of a proactive maintenance program.

Water heater - Most water heaters last 10 to 15 years. Wet spots on the floor or a rusted tank may signal a problem. Hot water heaters should be installed on the lowest level of the home and always located next to a floor drain. If installed above or adjacent to finished spaces, the hot water heater should be placed inside a drain pan with the drain pan piped to the floor drain.

Air conditioning - At the start of the cooling season, have the A/C system serviced by a qualified contractor. Make sure their service includes inspecting and cleaning the air conditioner condensation pan drain line to keep it free of obstructions. Change the air filters on a regular basis.

There are always lots of opportunities in the Austin housing market. We are always pleased to talk with you about selling or buying homes. We want you to buy or sell only when it is right for you. Call or email us if we may be of service Info@CarolDochenRealtors.com

DJCC Rezoning Effort Shifts to City Council
The City of Austin Zoning and Platting Commission (ZAPCO) unanimously approved new zoning for the Dell Jewish Community Campus (DJCC) on August 19. The new zoning would change the DJCC from a single family residence (SF-3) district to a planned unit development (PUD) district. The PUD contains a number of negotiated terms and conditions acceptable to the DJCC. The rezoning process now moves on to the Austin City Council where opponents may continue to delay or oppose the agreement.
More than 200 people–primarily from Northwest Austin– attended the ZAPCO hearing on a rainy Tuesday night. Ninety-five percent identified themselves as supporters of the DJCC. Jewish Community Association of Austin (JCAA) President Robert Krumholz presented the Commissioners with petitions containing over 1,000 signatures in support of the PUD.
Our DJCC PUD is scheduled to be on the August 28th City Council agenda at 4:00 p.m. However, our opponents may request and receive a one-time postponement. We will keep you informed of any and all changes via email and the JCAA website at www.shalomaustin.org.
We need your active support throughout the zoning process and will need an even bigger turnout at City Council.
We are grateful to everyone who signed petitions, emailed comment forms, telephoned public officials and attended City Hall hearings. We are grateful to our congregation and organization partners for their support and assistance. We are grateful to friends of all faiths, such as former Mayor Bruce Todd, who have spoken out publicly in support of the JCAA. However, we must stay informed and continue to advocate responsibly until the final votes are in.
Nothing less than the future of our crown jewel and visionary community campus is at stake.
Below are the e-mail addresses for our Mayor and City Council members. Please take the time to drop them a note expressing your support of DJCC rezoning.
will.wynn@ci.austin.tx.us
lee.leffingwell@ci.austin.tx.us
laura.morrison@ci.austin.tx.us

brewster.mccracken@ci.austin.tx.us

mike.martinez@ci.austin.tx.us

randi.shade@ci.austin.tx.us

sheryl.cole@ci.austin.tx.us