Market Conditions in Austin>Question Details

Flight Of The…, Renter in Austin, TX

Relocating looking 4 a new build rental property. Found a prop and contacted a realtor. Turns out it belongs to a builder whose last

Asked by Flight Of The Phoenix, Austin, TX Wed Apr 7, 2010

sale was 2008. I was offered a owner carry deal to purchase via deed (legal?). Wow! I feel lucky. Only issue is they are offering a 2% discount from YESTERDAY's prices (try 2007). The asking price is the mid $600's. It is a nice build out at a bit under 3k sq ft, BUT comps are hard to come by & seem dated with no proximal sales since mid 2008 when market was still spiraling down. In NW Austin, how much have homes in that range lost in value pertaining to current and realistic expectations? Better to lease and save or take risk? I'd really like to have the opportunity to be a home owner and not just another sucker (Plus, word is the remaining unsold properties may be in jeopardy of foreclosure)! How much have house values decreased in the last 2 years in this area? What is a realistic price based on the new average of cost per square foot?

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Where is this located? If there is any chance the remaining properties will fall into foreclosure, I would strongly advise you not to buy, as that will typically depress prices as the banks sell for below market just to get them off their books. So you would be looking out your window at homes just like yours that sold for less, and you will end up upside down on it. Just my opinion...
0 votes Thank Flag Link Wed Apr 7, 2010
Dear flight,
You mentioned the price was about $3K per square foot, this is a big red flag to me. There is nothing in Austin for $3K PSF. I would run away and fast. This does not sound like the deal you think it is. I would get a local Realtor to give you the most recent comps. The Builders list price means nothing if there is not a market for this property. It sounds like a jewelry store add "50-75% off when the truth is they mark them up 100%-500% and then knock off 50%. Hmmm is that really a deal, I think not?!? I would keep looking, there are a number of lovely homes in NW Austin for $600K that are priced right. I suggest you contact a local Realtor. Remember in Austin the Seller pays for the Buyers agent. So I adise you to get an agent to help you to know your getting the right price for your next home.
0 votes Thank Flag Link Sun Feb 19, 2012
Congrats on the relocation to Austin. This market has taken its hits like other major markets throughout the U.S. but not nearly as severely. Overall prices have softened but not everywhere and in every price range. It really depends on what you are looking for. There are some great deals out there if you know where to look and how to negotiate them. Softened prices coupled with homebuyer incentives both from the builder anf the Fed. Gov. can yield some fantastic opportunities for you if bundled properly.

I specialize in New Home product. We offer over 25 years experience in new home sales/construction. To get the maximum benefit you deserve you need someone with that background representing your interest not the sellers. Feel free to visit our site- You may contact me directly at 512 876-3116 for a private consultation on how best to achieve your objectives and maximize your savings. Remember- you get the benefit and the builder /seller pays my fee. There is no costs to you.

Stephen B. McClain, Broker/Owner

512 876-3116
0 votes Thank Flag Link Mon Apr 12, 2010
There really isn't an intellegent way to respond to this question without a lot more data. Some areas in town have actually gone up! But sadly, most have gone down. At the $600k mark, you have so many options that you should be hearing words like "was $700k now $600k" and frankly if you aren't hearing that, BEWARE. Elizabeth Haag knows that are areally well and just sold a preperty for me off of Old Quarry, contact her
0 votes Thank Flag Link Thu Apr 8, 2010
Flirht Of The Phoenix,
You have a lot going on here. I would point out that you mention contacting a REALTOR. This was a good idea. If you agreed to work with him/her then get back to them and they should be able to answer all your questions. If on the other hand he/she could not give you a satisfactory answer then run for the hills and find a new REALTOR.

I would be happy for you to sit down with me, ask me all the questions, analyze my answers and then if you are comfortable we can agree to work together.

Bill Austin ~ 512-709-6343
0 votes Thank Flag Link Thu Apr 8, 2010
Only details will tell the true story about the particular market, the actual home conditions/value, the builder, neighborhood conditions/values/sustainability, etc.

There are many cases where builders have gone "belly up" and quit building for different reasons. Some reasons are more to worry about than others.

Everyone was trying to "get theirs" in 2007, so many builders surfaced in the market building homes without certain standards that hold reputable.......

Anyhow, there's quite a few angles to look at here to determine a wise decision,

Have you not hired a professional to help you? Do that. Do it. Just go do it my friend.

Without the help from someone who knows and cares what happens to your bottom line, you are blind luck out there, and I recommend a lottery ticket any day over that.

To add to the answer ot your question, I can show you 2003 pricing going on right now, so don't feel that 2% or 2007 pricing is necessarily a solid foundation for your decision.
0 votes Thank Flag Link Thu Apr 8, 2010
Actually, this sounds like an interesting opportunity. I know several ways to tweak that deal. Let's use that February 2010 median sales price that Steve provided as the current market value of the unit in question. It would take roughly 20-32.5 years for the property value to appreciate from $275K to $650K. Besides offering to purchase via a short-sale, you could offer to pay the builder's price using split funding. Have the seller take back 2 notes: you'll make regular payments on the first; you'll make the second performance-based.

Please feel free to PM me for more details. Also, please let me know who this developer is; I might be able to help them move the remaining unsold properties.
0 votes Thank Flag Link Thu Apr 8, 2010
There is certainly a lot of price variance in the NW Austin market. According to the Austin Board of Realtors, the MLS area 1A has the following stats for February for 2009-2010. This market data only goes back 1 year. Would take some additonal analysis for the 2008 pricing.

February 2009 Median Sales Price: $336,500
February 2010 Median Sales Price: $275,000
Year to date Median Sales Price remain at $325,00 2009/2010.

February 2009 Average Sales Price: $331,100
February 2010 Average Sales Price: $309,317
Year to date 2009 Average Sales Price: $290,082
Year to date 2010 Average Sales Price: $350,070

Keep in mind this is data for one specific MLS area. Prices could have some varriance from one sub-division to another inside any given MLS area.

Currently price per square foot in the 1A MLS:
Active: 196.27 Average 377.39 Max
Pending: 191.38 Average 295.56 Max
Sold (Last 30 days): 183.69 Average 262.99 Max

Hope this gives some perspective.
0 votes Thank Flag Link Thu Apr 8, 2010
Renter, it will depend on the area, the Feb Median Price change is up in some areas and down in others. Focus on a smaller area and have your agent give you some pricing. I would bet you will find the historical numbers are low as you know and some homes are sitting due to slow price reductions. But i am seeing some of these go under contract in certain areas. Test the waters and get out there, look to those areas that have strong long term growth in value, and with good schools. Long term these will be of benefit. Good luck and happy hunting!
0 votes Thank Flag Link Wed Apr 7, 2010
I'm a little confused. Did you say you have a realtor? If so, he/she should be able to answer your question about how much prices have changed in that area for that type of property. If not, if you will email me some details about the property -- ie, address, features, year built I will try to answer your question. Based on the information provided, any attempt to provide an assessment of price changes would be little more than an W.A.G.

With a bit more info I'll do my best to provide some real data.
Web Reference:
0 votes Thank Flag Link Wed Apr 7, 2010
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