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Apache is functioning normally

Apache is functioning normally

While the good news about housing keeps flooding in, one piece of negative data jumped out at me today.

The latest Zillow Negative Equity Report released today revealed that nearly one out of every five (18.6%) Las Vegas homeowners with a mortgage owed double what their home was worth as of the end of the fourth quarter.

In other words, if their home’s present value is $100,000, their mortgage balance is somewhere around $200,000.

For most people, this would signal being past the point of no return. After all, most of us have enough trouble paying off a mortgage when we’re above water, so the thought of owing double is daunting, even with a kick-butt mortgage rate.

Of course, if you stick around long enough, home price appreciation should do some of the heavy lifting, but it’s still a big ask for struggling homeowners.

While I cherry-picked a bad piece of data, it should be noted that 26.7% of Vegas homeowners were in this position one year earlier, so it’s not nearly as bad as it was.

And only 8.9% of underwater homeowners are delinquent on their mortgage payments, down from 9.9% a year earlier.

So yes, things are getting better…at the same time, the 200%+ loan-to-value (LTV) ratio bracket was the most prominent in Sin City.

In other words, if you went door to door and asked Vegas homeowners with mortgages what their LTV was, most would say 200%+.

The second largest distribution for Vegas homeowners was the 80-100% LTV tier (15% of borrowers), followed by the 100-120% LTV tier and under 40% tier, both at 13.8%.

3.8% of American Mortgagors Owe More Than Double Home’s Worth

If we expand the data to the whole of the United States, 3.8% of Americans with mortgages owed more than double what their homes were worth at the end of 2012.

That’s pretty scary, though the majority of U.S. homeowners with mortgages (26.6%) have LTV ratios south of 40%.

And 72.5% have a LTV somewhere below 100%, meaning they’re not the proud owners of an underwater mortgage.

If you look at the graphic below, you’ll notice that the LTV distribution is improving in every category, thanks to continued home price appreciation.

The low-LTV brackets are rising, and the high-LTV brackets are declining. All good news…

Overall, Zillow noted that the negative equity rate dropped to 27.5% in the fourth quarter from 28.2% a quarter earlier, and is now well below the 31.1% rate seen at the end of 2011.

As a result, nearly two million homeowners were able to get below the 100% LTV mark in 2012, though 13.8 million remain underwater.

Still, roughly one-third of all homeowners own their homes free and clear because they don’t have a mortgage.

Where’s the Inventory?

Zillow also has a nice little chart detailing how many homeowners will be “freed from negative equity” in 2013.

Using this data, we can guess which metros will see an increase in housing inventory, as that many more borrowers will finally be able to list their homes and move on to greener pastures.

The company expects 72,696 homeowners in Los Angeles to get above water in 2013, making it the leading metro in terms of total numbers.

Nearby Riverside is expected to “free” 62,407 homeowners, which represents a 21.2% decrease in the negative equity rate there, the second largest percentage decrease behind Sacramento (-21.3%).

In hard-hit Vegas, only 8,435 homeowners are expected to get above water this year, which represents just a 4.3% decline in negative equity.

And in Chicago, negative equity is actually forecast to get worse, with 7,019 more homeowners going under in 2013.

But overall, 999,601 homeowners should be “freed” in 2013, thanks in part to Zillow’s 3.3% home appreciation estimate.

This all reminds me of a post I wrote back in 2010, which claimed some real estate markets wouldn’t see a return to peak home prices until 2039.

In other words, while there is plenty of good news, it’s going to take a while to undo this mess.

Read more: How to refinance with negative equity.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

If you think home prices are too expensive, you wouldn’t be the only one.

A new analysis from First American revealed that housing affordability is the lowest it has been in more than three decades.

In other words, it hasn’t been this expensive to purchase a home since the 20th century.

The title and settlement company’s Real House Price Index (RHPI) determines house-buying power using median household income, mortgage rates, and home prices.

And they found that real house prices, adjusted for these factors, were up nearly 17 percent year-over-year in July.

Blame Higher Mortgage Rates and Home Prices for a Lack of Affordability

As for why housing affordability continues to erode, it’s a combination of factors.

The first and most obvious issue is markedly higher mortgage rates, with the 30-year fixed mortgage now priced above 7%, assuming discount points aren’t paid.

Per Freddie Mac, rates on this most-popular loan program are up about 1% from year-ago levels. First American pegs the annual change at a higher 1.4 percentage point increase.

And if we zoom out a bit more, this key interest rate was in the 3% range to start out 2022.

So interest rates alone have wreaked havoc on housing affordability and home buying power.

Just consider a loan amount of $400,000 at a 3% rate versus 7% rate. We’re talking about a monthly principal and interest payment of $1,686 vs. $2,661.

That’s nearly $1,000 based on the interest rate increase alone. Then you have to factor in higher property taxes, higher insurance premiums, and so on thanks to a higher purchase price.

Yes, despite higher interest rates, nominal home prices have also risen year-over-year.

While people logically think there’s an inverse relationship with home prices and mortgage rates, this isn’t always true.

Per First American, nominal home prices (not adjusted for inflation) were also up 4% year-over-year.

This means a prospective home buyer faces both a higher purchase price and a significantly higher mortgage rate.

And though household income increased 3.7% since July 2022, it wasn’t enough to offset the higher costs associated with the jump in rates and rising nominal home prices.

Real Home Prices Are Now Above the 2006 Peak

If you recall the year 2006, you might remember that home prices peaked and then began to fall.

Back then, unsustainable home price gains were fueled by exotic financing.

Many home loans were underwritten via stated income or no documentation at all, while the products offered may have been option ARMs and other adjustable-rate mortgages.

Additionally, the typical down payment was at or close to zero, while the loan-to-value (LTV) ratio was often 100% when it involved a mortgage refinance.

In other words, home prices were too high, borrowers had little to no skin in the game, and many weren’t even qualified to be homeowners.

Without the widespread use of loose underwriting, home prices would not have been able to continue rising as high as they did.

As we know, the housing bubble burst set off the Great Recession, leading to double-digit home declines and scores of short sales and foreclosures.

Today, unadjusted home prices are 53.7% above those during the peak in 2006, while real prices are 0.7% higher than that housing boom peak.

While this might be reason to worry, consider the new mortgage rules that were born out of that crisis.

The Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) essentially outlawed much of what I just mentioned.

Borrowers today must be fully qualified when taking out a mortgage, and the vast majority are going with a 30-year fixed-rate mortgage.

Gone are the days of stated income underwriting and negative amortization. That makes the current situation more of an affordability crisis than a housing bubble.

It is driven more by a lack of supply than it is loose financing, with not enough inventory to meet demand.

Housing Is Overvalued Nationally, But Some Markets Remain Affordable

As noted, the July 2023 Real House Price Index (RHPI) increased about 17% from a year ago.

This meant the median sale price was roughly $345,000, while the median house-buying power was just $337,000.

Since house-buying power is below the median price, it means housing is overvalued. In an ideal world, it should be at or below the median.

However, that applies to the national median price of real estate. Only 24 of the 50 top markets tracked by First American are overvalued by this measure.

Granted, it has worsened over time, as only 15 markets were considered overvalued last July.

At the moment, San Jose, California is the most overvalued metro, with the median sale price nearly $1,440,000 and consumer house-buying power just $700,000.

San Francisco and Los Angeles were also quite overvalued by this measure, though to a lesser degree.

Meanwhile, some undervalued markets still exist, if you can believe it. The metros of Detroit, Philadelphia, and Cleveland are undervalued by roughly $126,000.

How Do We Fix the Unaffordable Housing Market?

We know home prices are out of reach for many, but how do we fix it? Well, the Real House Price Index (RHPI) takes into account home prices, mortgage rates, and incomes.

So if you want housing to be more affordable, you need relief via those three elements.

This means either mortgage rates need to fall, home prices have to come down, or incomes must increase.

Or you get some combination of the three, such as a 1% drop in mortgage rates and a pullback in prices, which boosts affordability.

The problem at the moment is mortgage rates might be higher for longer, and home prices are pretty sticky due to a major lack of inventory (why are there no homes for sale?).

Incomes also don’t look to be increasing by a material amount, making it difficult for prospective buyers to get in the door.

One exception is new home sales, which have relied heavily on temporary and permanent mortgage rate buydowns to tackle the financing piece.

But there are only so many new homes for sale, and such sales only typically account for 10% of the overall market.

This explains the current housing market dynamic. Ultimately, there aren’t many existing homes on the market, not a ton of demand, and not a lot of sales.

And until something changes, this will likely be the status quo.

Read more: Why are home prices so high right now?

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

When it comes to the Los Angeles housing market, the numbers speak volumes.

As we navigate the contours of 2023, the Los Angeles housing market continues to dominate conversations, not just among locals but also among potential buyers, sellers and investors nationwide. Recent data shows a complex narrative: a market that is both competitive and costly, while simultaneously in a state of flux.

While the towering home prices persist in their upward trajectory, a marked reduction in the volume of homes actually changing hands year-over-year offers a nuanced and intriguing subplot.

Climbing the million-dollar ladder

As of July 2023, the median sale price for a home in LA sits at an astonishing $1 million. This represents a 4.3% elevation since the previous year.

To place this figure in a broader frame, the median sale price in Los Angeles is a whopping 132% higher than the national average. But it’s not just the overall home prices that have climbed; even the cost per square inch is inflating. The median price per square foot has ascended to $627, a 2.0% increase from last year.

Market dynamics

In the Los Angeles housing market, homes don’t linger. The average home is sold after a mere 37 days on the market, a slight but meaningful increase from 35 days in the prior year. This suggests that while the market remains fiercely competitive, it is not a feeding frenzy. On average, homes in Los Angeles receive three offers.

However, adding a layer of complexity, the number of homes sold in July 2023 reached only 1,477, plummeting 18.8% from the same period last year. These numbers indicate a fascinating conundrum: Although the demand is astronomical, supply is staggering behind, making it predominantly a sellers’ market — but with intriguing twists.

How competitive is the Los Angeles housing market?

Measuring competition in any market is complex, but when it comes to the Los Angeles housing market, there are some quantifiable indicators. According to the Redfin Compete Score™, the market ranks as “somewhat competitive.” The average home here is sold for approximately 1% above the listing price.

Migration and relocation trends

The Los Angeles housing market isn’t solely affected by prices and competition; it’s also swayed by the tides of migration. Between June and August 2023, a considerable 81% of LA homebuyers expressed intentions to remain in the metropolitan area, affirming their loyalty to the City of Angels.

Conversely, 19% are looking to spread their wings and fly to other destinations, with Las Vegas, San Diego and Bakersfield topping the list. However, Los Angeles continues to exert its magnetic pull, drawing in new residents chiefly from San Francisco, followed by Chicago and New York.

LA’s housing market at a glance

The Los Angeles housing market of 2023 is an intricate choreography of rising prices, intense yet waning competition and fluctuating migration patterns. For prospective buyers, the city’s market poses challenges, but they are not insurmountable walls. Sellers, too, need to navigate carefully. The diminishing number of homes sold indicates a potential saturation point or perhaps signs of buyer fatigue.

For everyone involved — whether you’re an investor eyeing long-term gains, a first-time buyer looking to plant roots or a seller aiming to capitalize on high prices — knowledge is power. Staying abreast of the ongoing trends and dynamics in the Los Angeles housing market is not just advisable; it’s imperative. After all, in a market as multifaceted as this, understanding the lay of the land can make all the difference.

The Los Angeles rental market

While the focus has largely been on home buying and selling, the rental sector adds another complex layer to the Los Angeles housing market. As one of the most sought-after places to live in the country, it’s no surprise that Los Angeles’ rental rates are a significant talking point as well.

Average rent and annual changes

The average rent for a studio apartment in the City of Angels hovers at $2,421, marking a 3% increase from the prior year. One-bedroom apartments haven’t been left behind in this upward trajectory, clocking in an average rent of $2,905, which also reflects a 3% annual increment. Two-bedroom apartments, meanwhile, cost an average of $3,894, but have seen a more modest annual growth of 1%.

This data paints a picture of a rental market that, much like its home-owning counterpart, experiences its fair share of challenges and costs. Apartments in Los Angeles are not for those hunting for bargains, with the average rent ranging between $2,421 and $3,894.

Rent ranges

The Los Angeles rental market shows an overwhelming skew towards the higher-end. While 0% of apartments rent in the $501-$1,000 range, a staggering 80% of them command a rent north of $2,100. This underscores the upward pressure on the cost of living in Los Angeles and speaks volumes about the limited affordability.

Neighborhoods

When it comes to neighborhoods, Bel Air tops the list for studio apartments with an average rent of $3,695. On the other hand, areas like Beverly Grove and Westwood Village have seen decreases in average rent by 11% and 14% respectively. Silicon Beach, however, is bucking the trend with an 18% annual increase, echoing the tech boom that the area is experiencing.

For those looking for more budget-friendly options, South Park, South LA and Crenshaw offer average one-bedroom rents ranging from $1,650 to $1,900, compared to the Los Angeles average of $2,905 for a one-bedroom.

Comparing Los Angeles to nearby cities

In terms of rent, Los Angeles still commands a premium compared to other nearby cities. For instance, a studio apartment in Santa Monica averages $3,540 with a 6% annual increase, while the same in Long Beach costs $2,850 but has soared by 37% in the past year. Glendale stands at $2,755 for a studio, with an 8% rise.

Understanding the trends

The fluctuating rental rates over the past year indicate a market that’s anything but static. For instance, studio rents went from $2,302 in September 2022 to peak at $2,422 in July 2023 before slightly reducing. Similar patterns are observed for one-bedroom and two-bedroom apartments, showing the market’s elasticity and potential volatility.

The Los Angeles rental market at a glance

The rental landscape in Los Angeles is a vital part of the overall housing market, influencing and influenced by similar factors like location, demand and economic status. Whether you’re a potential tenant eyeing the city’s ritzy neighborhoods or someone seeking more affordable options, the Los Angeles rental market provides a plethora of choices — albeit at a generally high price point.

For individuals and families not yet ready to commit to homeownership, or those who prefer the flexibility that renting provides, understanding the dynamics of the rental market is as crucial as grasping the trends in home buying and selling.

When you’re ready to enter LA as a local, there will be an apartment waiting for you on Rent.

Rent prices are based on an average from Rent.’s multifamily rental property inventory as of July 2023.
Other demographic data comes from the U.S. Census Bureau.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

Apache is functioning normally

Apache is functioning normally

The Halloween spirit began to possess Goodwill Southern California back in August.

In Lincoln Heights, a creepy doll with blood-red tears and a stuffed animal in a Grim Reaper cloak posed amongst the seasonal tchotchkes. At the regional flagship store in Glassell Park, a witch and a flapper were amongst the mannequins dressed in their Halloween party finest to welcome shoppers.

“Halloween is like Christmas for us,” says Marla Eby, director of marketing and media relations for Goodwill Southern California, which covers Los Angeles County north of Rosecrans, as well as Riverside and San Bernardino counties.

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While seasonal items might pop up at one of the 80+ stores in Goodwill Southern California’s territory throughout the year, staffers often save Halloween donations for the two months leading up to the holiday. It’s a popular spot for costume shopping; in fact, that’s the focus of Goodwill Southern California’s September and October lookbooks. But like most thrift, vintage and antique shops, it’s also a great place to source decorations. As we toured the Glassell Park facility, I spotted a small chandelier, a smattering of goblets and an ornate mirror amongst the Halloween merchandise.

There are a lot of benefits to shopping secondhand for Halloween decorations. Choosing a pre-owned item over something new is an environmentally friendly option since you’re extending the lifespan of a good and potentially saving it from a landfill. Depending on when, where and how you shop, it can be easier on your wallet, too. But perhaps the most attractive benefit of shopping secondhand is the knowledge that you’ll find something far more interesting than the seasonal products at big box stores.

“They’re a statement piece,” says Chuck Garcera, who co-owns King Richard’s Antique Center in Whittier. “It’s exciting because it’s broken-in. It’s got some character.”

At King Richard’s, where more than 140 dealers occupy 302 spaces in the four-story complex, the Halloween season starts around mid-September. However, some vendors, like Creep & Kitsch, located downstairs from the main floor, offer spooky items all year. On a trip to King Richard’s in August, I came across potential Halloween decorations throughout the market, including a Wigglin’ Hand, a painting of a skull surrounded by candles and even a prop electric chair.

But shopping secondhand for Halloween can be tricky. If this is your favorite holiday, you might be on the lookout for themed goods all year. If not, know that you should start your shopping early. “Now is the time to shop because I promise, the closer it gets to Halloween, the more treasure hunting you have to do,” says Eby.

If you’re working with a small budget, Goodwill Southern California has a plenty of affordable options, including monthly coupons for those who sign up to their email list and discounts for military, seniors and students. They also have color tag sales. When you’re shopping, you’ll probably notice that the tags are coded in various colors. Each week, one of those colors is half-off. On Thursdays, a designated color tag will be sold for $1.99. “It’s a really great way to save,” says Eby.

This is also a good option for those who like to reimagine secondhand items for Halloween. Eby points to a recent social media trend where people paint spooky images on existing artwork. You can find base pieces for these projects amongst the home decor at Goodwill.

For those with a larger budget or who want items that can hang around the house long after October 31, vintage and antique shops might be the best option. Your choices here aren’t just the ones that scream Halloween. Vintage horror movie posters and memorabilia, memento mori and home items with a Victorian look are just a few things that can take you through the spooky season and beyond.

Wherever you shop, look beyond the designated Halloween displays. Pick up horror movies on VHS, DVD or Blu-Ray to play in the background at parties. Seek worn books, particularly ones with creepy cover illustrations, that can be used as coffee table decorations. Thrift clothes and accessories to outfit any prop witches and creatures you might be building. Look for old dolls and toys to reappropriate as Halloween decorations. Sift through photographs, film slides and postcards, which can be used in a variety of different projects.

Whether you are thrifting or antiquing, you should use the same plan. Note the best shopping options in your area, including both brick-and-mortar stores and events like flea markets. Make time to shop and break up the excursions over a period of weeks if that’s easiest on your schedule.

Be sure to shop with an open mind. You never know what you’ll find inside a thrift store or an antique shop. The most important advice, though, is to be prepared to buy what you love when you see it.

Says Garcera, “It’s like we tell customers, if you see something at an antique store, you better buy it now. It might not be there tomorrow.”

Source: sandiegouniontribune.com

Apache is functioning normally

Apache is functioning normally

In the world of real estate, where property expertise reigns supreme, it comes as little surprise that the most successful real estate agents own some of the most remarkable and envy-inducing residences.

With their extensive knowledge of market trends and investment potential — not to mention their keenly trained eye for luxury living — real estate pros are the first to spot desirable properties, often before they are even listed for the general public to see.

They then leverage their design expertise and Rolodex of industry connections to turn their homes into personal sanctuaries that serve as living testaments to their industry acumen and discerning tastes.

Such is the case of Billy Rose, realtor to the stars and co-founder of luxury real estate brokerage, The Agency.

Rose, rated as one of the best real estate agents in Los Angeles (and the entire country, once being named the Number 10 real estate agent in the U.S. by The Wall Street Journal), owns an architecturally distinct home in one of Los Angeles’ best areas, which he’s now bringing to market.

Priced at $5,895,000, the elegant abode has served as Billy Rose’s personal residence for 20 years.

Located in the sought-after Westword neighborhood, the property sits on the “first lot bought in highly coveted Westwood Hills”, per the listing, and is known as the Murrow Residence, named after its original owners.

Rose himself provided a little bit of background on the home’s history.

“The Murrows considered the lot to be the trophy of Westwood Hills,” Billy Rose tells us. “Mr. Murrow, for whom the home was built, was (as I understand it) a bit of a “mucky muck” at the Rand Corporation. He had rigged the front door such that he could attach a 35mm projector to the door and project through to the living room.“

But it’s not just the location that appealed to The Agency co-founder.

The home’s distinct design played a big role too. The 1940-built residence is an outstanding example of International Style architecture (post Deco and pre Mid-Century Modern).

Photo credit: The Agency

“I find International Style architecture to be sublime,” Billy Rose shared in an exclusive comment for Fancy Pants Homes. “The style is best described as stripped of all unnecessary ornamentation and about accentuating the strengths of the home (the view, the layout, the light, the circulation, the air flow). Le Corbusier (one of the pioneers of what is now regarded as modern architecture) summed it up best when he called a house a “machine for living”.“

Vintage and collectible lighting, designer finishes, and terrazzo and custom-milled walnut floors complement the home’s unique style, while broad expanses of glass in every direction bring the outdoors in.

Photo credit: The Agency
Photo credit: The Agency
Photo credit: The Agency

The house has a total of 5 bedrooms — all suites — with the primary being touted as “one of the best primary suites in its class with extremely generous dual closets and baths”, per the listing.

Photo credit: The Agency
Photo credit: The Agency
Photo credit: The Agency

The inviting chef’s kitchen has its own claim to fame.

“My wife is a chef and she filmed her show “Taste of Melrose” from there,” shared Rose whose wife, model-turned-chef Melissa Rose, has been filming her cooking show in their camera-ready kitchen for years.“It was not only a great exhibition kitchen, but it served us well for our numerous dinner parties.”

Photo credit: The Agency
Photo credit: The Agency
Photo credit: The Agency

When prompted to pick his favorite area of the house, The Agency co-founder signaled out the primary bedroom suite, along with “the original stairway, with its two-story Torrance steel window system“, which he says was one of the things that drew him to the property.

Photo credit: The Agency

Heading outside, we find a secluded backyard oasis with a cascading pool, spa, fire pit, grassy yard, dining and lounging areas, with mature landscaping, tall hedges, and privacy walls shielding it from prying eyes.

Photo credit: The Agency
Photo credit: The Agency

Unsurprisingly, Billy Rose holds the listing along with Stefan Pommepuy, also with The Agency.

And while Rose hasn’t yet been part of the cast of Buying Beverly Hills, the Netflix series starring agents from the luxury real estate brokerage he co-founded alongside Mauricio Umansky, we’re hoping his house will — and that the second season of the show will give us a better look inside his inviting abode.

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Source: fancypantshomes.com

Apache is functioning normally

Insurance executive Jawed Barna will succeed Sven Odia as the CEO of international luxury real estate brokerage Engel & Völkers, the company announced Thursday.

Odia, who led the Hamburg-based company for nine years, has stepped down from the management board and will assume the newly created role of president.

Barna most recently served as deputy CEO at Zurich Insurance Group Germany, where he has worked since 2005.

“We are excited to welcome Jawed Barna as a strong leader with a proven track record. His successful experience in building digital platforms and managing a complex sales organization makes him a perfect fit for E&V,” Christian Völkers, founder and chairman of the advisory board, said in a statement. “Together with our majority owner Permira, we are convinced that Jawed Barna has what it takes to lead E&V into the next phase of growth, with the goal of becoming the best platform for high-quality real estate worldwide.”

In his most recent role at Zurich Insurance Group Germany, Barna was responsible for driving sales and partnerships, and successfully led large business units serving private and SME clients, as well as managing thousands of external brokers and insurance agents, Permira, said.

In a statement, Odia, who has worked at E&V for 26 years, said he would “actively support” Barna.

“With its strong growth and digitization strategy, E&V is perfectly positioned to continue its success story,” he said. “We have significantly increased revenue and earnings in recent years and look back on a stellar performance in 2023 so far, even in a difficult market environment. Throughout my career, my top priority has always been empowering people to write their own success story under the E&V brand. I would like to express my heartfelt gratitude to the entire team worldwide for the terrific collaboration over the past two decades.”

Odia led E&V through Permira’s acquisition in late 2021, in which the global private equity firm bought a controlling stake for an undisclosed amount.

Operations for E&V North America are led by Anthony Hitt, who’s been at the helm since 2014.

The global luxury real estate brand recently partnered with Dilbeck Real Estate, which achieved $1.04 billion in sales volume last year, according to the RealTrends 500 rankings. Dilbeck was #373 in the nation by sales volume last year, and its agents averaged $2.99 million in volume. Dilbeck ranked as the 178th largest independent brokerage in America in 2022 and nine of its agents cleared $16 million in sales volume last year, according to our rankings.

Under the arrangement, Dilbeck will retain partial ownership and oversee the day-to-day operations of Los Angeles and Ventura county locations.

Engel & Völkers Gestalt Group, based out of Park City, Utah, ranked as E&V’s top affiliate in the most recent RealTrends rankings. The affiliate posted $3.77 billion in sales volume last year, with the average agent generating $4.88 million.

Source: housingwire.com

Apache is functioning normally

Here’s what you need to know to secure a home in Austin, Texas.

Welcome to the ever-changing landscape of the Austin housing market. Known for its quirky culture, burgeoning tech industry and eclectic lifestyle, Austin has been a safe bet for real estate investments for the past decade-plus.

However, as we venture past the midway point of 2023, Austin’s real estate climate is experiencing some intriguing twists. Whether you’re a potential homeowner, a first-time seller or an investor eyeing the Austin housing market, buckle up — there’s a lot to unpack.

Median sale price

The median sale price of a home in Austin is a meaty $571,000. This may sound impressive at first glance, but when you stack it against last year’s figures, there’s a 9.94% year-over-year decrease. This pivotal number is a heartbeat monitor for the Austin housing market, and right now, that beat is slowing down a bit.

So, what does this drop really signify? Is it a sign of market stabilization or a canary in a coal mine?

Average time on the market

A home in the Austin housing market now spends an average of 48 days on the market before being sold. This is a significant increase from the 34-day average of 2022. While the Austin housing market remains competitive, it’s evidently losing some of its previous ferocity. If you’re a buyer, you might find this elongated timeline a tad comforting.

Volume of sales

Let’s talk numbers — 883 homes were sold in Austin in July 2023. This is a 3.8% decline from the previous year. Though the decline is marginal, in the world of the Austin housing market, even a small drop can ripple across the real estate pond.

Opportunity in the Austin housing market

In yesteryears, the Austin housing market was practically a gladiator arena for buyers. Homes would receive multiple offers, almost like suitors vying for a rose in a reality show. Now, the terrain seems a bit more even.

Homes in Austin are selling for about 3% below the list price, and the Sale-to-List Price ratio has declined by 2.6 points to 97.5%. To put the cherry on top, only 17.1% of homes are now selling above the list price — a stark contrast to previous years.

Austin housing market migration

Here comes the really juicy stuff: migration patterns. About 29% of Austin homebuyers are planning their exit, while a more substantial 71% are committed to staying in Austin. On the other hand, people are flocking to Austin from metros like San Francisco, Los Angeles and Chicago. It’s a fascinating migration dance that’s shaking up the Austin housing market dynamics.

But where are Austinites going? Turns out, they have their sights set on places like San Antonio, Denver and Corpus Christi. Whether it’s the allure of a different Texas city or the Rocky Mountain high, Austin’s outbound traffic is certainly something to keep an eye on.

The Austin lifestyle

Let’s not forget why people love Austin in the first place. The city boasts schools like Forest Trail Elementary and Canyon Creek Elementary, rated 10/10 by GreatSchools. The Austin housing market remains a family-friendly arena.

However, climate risks, like moderate flood and fire factors, are creeping into the Austin housing market narrative. Plus, a severe risk of heat waves over the next 30 years is something the Austin housing market simply cannot ignore.

The Austin housing market at a glance

The Austin housing market of 2023 is not what it used to be, but it has not entirely lost its luster either. Prices are more balanced, homes are staying on the market a bit longer and new migration patterns are reshaping its demographics.

For buyers, sellers and investors, understanding the nuances of the Austin housing market is essential for making informed decisions. The market may be in a cooler state, but its complex interplay of factors keeps it as fascinating as ever.

Renting in Austin

So far, we’ve been talking about buying and selling homes. But what about those of us who aren’t ready or interested in making a long-term commitment?

The Austin housing market has a lot to offer renters, too. With the city’s unique culture and growing job market, it’s no surprise that renting remains an attractive option for many. But before you sign that lease, let’s delve into what’s happening in Austin’s rental market.

Austin’s average rental prices

When we talk about rentals, the numbers are quite striking. According to recent data, Austin is witnessing some fascinating shifts in average rent:

In essence, while studio and two-bedroom apartments seem to be getting somewhat more affordable, one-bedroom apartments are moving in the opposite direction. So if you’re considering a roommate, Austin might be a good fit for you.

Neighborhoods in Austin

If you’re looking for the perfect apartment, understanding the Austin housing market at a neighborhood level is essential. Neighborhoods like Market District and Zilker have seen a surge in studio apartment rents, with a 24% and a staggering 147% annual increase, respectively. On the other hand, areas like East Austin and Oak Hill are experiencing decreases in average rent for studios by 8% and 17% respectively.

For the budget-conscious renter, the most affordable neighborhoods for a one-bedroom apartment are Cherrywood, Montopolis and South Austin, with average rents ranging from $1,033 to $1,100. These figures are significantly lower than the Austin one-bedroom average of $1,677.

Breaking down apartment rent ranges

Where does the majority of Austin’s apartment rents lie? According to the data:

  • $501-$700: 0% of the market
  • $701-$1,000: A mere 3%
  • $1,001-$1,500: Occupies 16% of the market
  • $1,501-$2,100: Commands 22% of the market
  • $2,101 and above: The lion’s share at 58%

Clearly, if you’re planning on renting in Austin, you’re more likely to encounter higher-end rental costs.

How does Austin compare to other cities?

For those looking outside the Austin housing market, cities like Manor, Round Rock and New Braunfels offer alternatives with differing rental prices. For example, a studio in Manor is going for an average of $3,500, whereas in Round Rock, the average studio is priced at $1,500, a 17% annual decrease.

Austin’s rent trends

Looking at the trend data, rents for all apartment sizes have fluctuated throughout 2023, but one-bedroom apartments have seen a consistent increase. While studios and two-bedrooms show somewhat stabilized rents as of September 2023, only time will tell what the last quarter holds.

The Austin rental market at a glance

Renting in Austin? You’re not alone. Whether you’re here for live music, tech jobs or the infamous Austin weirdness, understanding the rental market is crucial. While Austin’s rental market is complex and dynamic, with neighborhoods and apartment sizes all showing different trends, one thing is clear — the Austin housing market, for buying and renting, remains a topic of captivating shifts and turns.

A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.

Source: rent.com

Apache is functioning normally

Is the housing boom already over? Did home prices peak before summer?

Well, a new report from Redfin revealed that competition among home buyers eased in May, which may be an ominous early sign of what’s to come.

The company noted that 69.5% of Redfin real estate agents that wrote an offer last month faced competition from another agent, which while high, was down from 73.3% in April and well below the 2013 high of 79%.

Additionally, the percentage of homes that received multiple offers was nearly at year-ago levels again, when the number was 69.3%.

Meanwhile, 49% of Redfin’s winning offers were above the original asking price, down from 51.9% in April.

Why Is the Housing Market Cooling Again?

If this report was for June, as opposed to May, one could look to the higher mortgage rates as a potential housing market buzz killer.

But these are the May numbers, when mortgage rates were still relatively low for a decent chunk of the month. So the obvious issue is an increase in inventory.

Housing inventory always rises in spring as it’s the start of the traditional home buying/selling season, and that’s exactly what happened this year.

In April, the number of homes for sale increased 6.4% month-over-month, the largest monthly increase since March 2010, when the homebuyer tax credit was phasing out.

At the same time, inventory was down 26% compared to April 2012. Home buyer demand was also down, with home tours and written offers slightly lower in May, per Redfin.

Of course, housing demand is definitely local, with Los Angeles and San Francisco still red-hot in terms of competition, while San Diego and Orange County saw significant month-over-month declines in interest.

And not every major market is seeing home prices go for well above the asking price, despite all the rosy media reports.

While that was the case in a staggering 96.8% of properties in San Francisco, which on average sold for 9.7% above list, just 19% of winning offers went above ask in Chicago.

In some major metros, including Baltimore, Chicago, Los Angeles, and Washington D.C., the average difference between offer price and asking price was actually negative.

Now we’ve got the prospect of even more homes coming to market, coupled with significantly higher mortgage rates.

As I’ve noted in the past week or so, mortgage rates are about 1% higher than they were a month ago, so there’s definitely going to be some kind of effect, though it’s too early to tell what that may be.

Plenty of pundits think housing can recover in the face of higher mortgage rates, even with rates in the 5-6% range.

But others are questioning the entire rally now that rates have begun to tick up, calling the recovery nothing more than a weak attempt to keep home prices inflated.

In any case, competition will remain elevated, even if not at levels seen earlier this year.

Characteristics of a Winning Bid

Wondering what it takes to get your offer accepted? Wonder no longer. Below are the most common attributes of a winning offer in May, per Redfin:

– 68.3% were conventional loans, up from 61.7% in April
– 29.4% had a cover letter, up from 28% in April
– 11% waived the inspection contingency, up from 8.3% in April
– 8.9% waived the financing contingency, up from 7.1% in April

As you can see, government loans have fallen out of favor with prospective home buyers, most likely because of the recent increase in annual FHA mortgage insurance premiums.

Additionally, many FHA loans now require insurance for the life of the loan, which clearly isn’t economical, let alone feasible for many would-be borrowers.

Both FHA and VA loan volume decreased from April to May, accounting for just 8.5% and 6.6% of winning offers, respectively.

Meanwhile, all-cash offers grabbed a 5.5% share of the market, up from 5.1% in April – 16.1% of offers were all-cash in Orange County last month, up from 9.7% a month earlier.

What this all means is that if you’re a seller, you better get on it, as things appear to be trending down. And if you’re a prospective buyer, you might be able to bide your time, though you’ll have to contend with the prospect of rising rates.

Read more: Slowing mortgage market could lead to looser lending.

Source: thetruthaboutmortgage.com

Apache is functioning normally

If you’ve been living in the U.S. these past few years, you know that rental rates have skyrocketed. Because of this, many renters cannot avoid spending more than the recommended 30% of their gross monthly income. This makes it all the more aggravating to find out your monthly rent has been raised by your landlord before your contract is up.

Raising rent can make sense in certain cases such as the market value going up. However, in other circumstances, a rent increase may be unnecessary or downright illegal.

It’s important to be educated on what can and can’t be done when it comes to your lease. Here is what you should know about your tenant rights and what you can do about it.

Can your landlord raise the rent?

The short answer to whether or not your landlord can raise your rent is yes and no. The city you live in, rent control laws and your lease will determine if it is legal or not. These are the circumstances when your landlord can and can not raise the rent.

Month-to-month leases

If you signed a month-to-month lease, landlords are within their rights to raise the rent at the end of each month. Similar to a 12-month lease, a monthly lease is still a binding contract. So your landlord would still be required to give you advance notice (generally about 30 days) and can only raise the rent at the end of the month.

Year-long leases

Typically, rent increases occur when your lease is up. So if you signed a year-long lease and your landlord tried to raise the rent six months in, that is not acceptable. Rent increases are only legal once the 12-month lease has finished.

The terms and conditions of your rent should all be laid out clearly in the rental agreement you sign at the beginning of your tenancy. Unless stated otherwise in the lease agreement, yearly and monthly rent increases are only allowed under the above conditions. That’s why it’s important to thoroughly read through and understand your rental agreement.

Keep in mind that a rent increase can also impact your security deposit. Since the rent is now higher, you may have to up the amount of the deposit as well.

Adequate notice

There are some circumstances under which your landlord legally cannot raise your rent. The first is without providing adequate notice. This is generally is about 30 days ahead of the proposed increase. It’s also illegal for a landlord to increase rent for discriminatory reasons or in retaliation for previous conflicts.

Discrimination

If you believe the rent increase is in response to a past conflict you had with the landlord or because they are discriminating against you based on your race, gender, sexual orientation or other reason, those are grounds to possibly have the increase overturned.

What to do if your landlord raises your rent

Receiving a rent increase is jarring and upsetting for anyone, especially since rent is already inflated. Finding out you may have to pay more or move is bound to trigger some strong emotions.

But you’re not without recourse and options for how to handle the situation. If you receive a rent increase notice and are unsure what to do, there are a few steps you can take.

1. Know your city’s laws

Renter’s rights can vary widely at both city and state levels. What’s legal in one city in your state isn’t always legal for other cities you may live in. This is why it’s crucial that, if you learn of a rent increase, you check your local laws.

This can pertain to whether the timing of the notice is legal, or if the increased amount is legal. Some states or cities don’t have set or maximum amounts for rent increases, leaving it up to the landlord’s discretion. So if there are no laws that set a cap or limit, your landlord can hike up the rent as much as they see fit.

2. Get it in writing

In most states, it’s required that any rent increase notice be served to the tenant in written form. This could be as a letter or email. If your landlord verbally told you they will raise the rent, that is not legal. If your landlord is trying to raise your rent and doesn’t provide written proof, that’s evidence you may use in case the situation goes to court.

3. Double-check your lease

Read through your lease to make sure that the rent increase notice is legal. This includes checking that the notice arrives in an appropriate time frame and adheres to any other relevant clauses.

4. Report any illegal actions to the proper authorities

If you determine that the rent increase is unlawful for whatever reason, you should report your landlord to the respective authorities in your area. This could be a local government agency or department related to housing or a housing and tenants’ rights advocacy group. They can point you in the right direction.

5. Speak with your landlord

Assuming the rent increase is legal, you still may not want to pay it. Maybe you are unable to afford the new proposed amount. Maybe you feel that based on your good rental history in that unit, it’s unnecessary or unjustified. Whatever the reason, you can try to negotiate with your landlord. You can do this in two ways.

The first would be to send them a rent negotiation letter. In the letter, you should describe in clear terms why you can’t or don’t think you should pay the increase.

You can detail your financial situation, or make reference to your rental history. Have you always paid the rent on time and in full? Are you a model tenant? Highlight those reasons the landlord will want to keep you on as a renter.

You can also arrange a meeting or call your landlord to negotiate the rent increase. When doing this, make the same points as you would in a negotiation letter but are able to have a straightforward conversation.

6. Organize with the other tenants

If all other attempts to negotiate with your landlord have failed, you may find strength in numbers. Check with the other tenants in your building to see if they are OK with the rent increase.

Collective action is a powerful tool. If the majority of the building opposes the rent increase and the landlord moves forward, they could be facing multiple people moving out at the same time. This gives them more work to suddenly try to fill the empty units. Having reliable, trustworthy tenants makes their job easier. This incentivizes them to work in good faith with the tenants they have.

7. Pay the increased amount

Unfortunately, if your landlord won’t budge and they are within their rights then you will have to pay the increased rent or find a new apartment to rent.

Getting a rent increase notice isn’t the be-all, end-all

Unless you live in a city with rent control, occasionally dealing with rent increases is, unfortunately, a necessary part of a renter’s life. Sometimes they can also feel very unfair. But by using the above resources, you can fight or even stop a rent increase.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Ashley Singleton is a writer who loves following and writing about current lifestyle, DIY and home improvement trends. You can read some of her other work on the Lady Spike Media website. In her spare time, she performs stand-up comedy in Los Angeles.

Source: rent.com