Gene Hammonds

Where Is The Water?

2012-01-31T15:53:00Z

Sure enough, the almost impossible is happening at our doorstep. The unlikely severe drought is here and destined to continue through 2012 and become the most severe drought in central Texas history. Lake Travis low lake levels are expected to break all records sometime this summer. Full lake level is 681', normal around 675' and today just above 626'. The record low of 614' is only 12' below today's' 626'. We are 55' below normal today and heading for at least 67' below. Some subdivision wells on the south side of Lake Travis went dry yesterday requiring water to be trucked in. Category or level 4 water rationing is now hitting several areas. That means no water use except for drinking, bathing and washing.

The blow to real estate and businesses around Lake Travis has been devastating. Several restaurants around the lake have closed and others have scaled back to minimum staffs. The normal tourist season with thousands of Dallas and Houston visitors was non-existent in 2011. It's a great time to be a real estate buyer but not so great to be a seller. There are real deals all around the lake that won't be available when the lake comes back. In spite of the lake level, most business owners and real estate agents around the lake look for a much improved 2012. The market - and people - are adjusting to the new reality.

Best Apps for Realtors

2012-01-18T14:06:00Z

Our office hosted an outstanding Awesome APPS class for phones and tablets today. Agents from numerous companies and areas attended a fast and lively 3 hours presented by Independence Title. When it was all said and done, the EVERNOTE and CAM SCANNER APPS were voted the hottest of the bunch. Both are free and work on the iphone, ipad and Android. A close 3^rd was OOVOO video chat which allows multiple people to carry on a video conference call just as if you were all sitting in the same room.

EVERNOTE creates notes and to-do lists, clips web pages and labels notes. CAM SCANNER scans, enhances, shares and stores documents right from your phone. If you check any of them out, post your opinion.

Get the best indicator of your individual neighborhoods by contacting your local realtor.

2012-01-02T14:43:00Z

Also in the news…

Another interesting bit of information from our friend, Mark Sprague, In-house Analyst, Independence title:

The Case-Shiller index made news nationally last Tuesday, showing housing process dropping more than 1% in October, the most recent numbers available. See the full article here:

S&P/Case-Shiller shows home prices down again in October

Many will see this headline and decide that home prices in Austin and Texas are in the same boat. Here is why this is not true.

The Case-Shiller index has reported home values for nearly 30 years. The index has become a widely reported and analyzed measurement of the housing market, looking at home values of repeat sales in particular. It is commonly referred to by the media, especially as the index has dropped in recent years. Few, if any, other statistics are more watched than the Case-Shiller by those in the housing industry.

And, yet, it contains some flaws and limitations. Among my concerns are the relatively small sample size, and the fact that the index only looks at repeat sales, with new homes, condos, and multi-family units out of the mix. Mostly though, the measurement is limited due to the fact that the “national housing market” does not exist. There is no such thing as a national real estate market, and I believe that Case-Shiller should be given less weight by the media.

All real estate is local. No matter what the Case-Shiller Index says about the country, what matters to your local market is what’s happening in your local market. Each neighborhood has its own housing economy and that’s something that can’t be captured by a national report. A sale in Detroit does not affect a sale in Austin. As a buyer / observer in today’s market, you can’t take the Case-Shiller Index at face value. It’s methodology is far too flawed to be the “final word” in home prices.

§ The first big Case-Shiller Index flaw is its relatively small sample size. S&P positions the Case-Shiller Index as a national index but its data comes from just 20 cities total. And they’re not the 20 most populous cities, either. Notably missing from the Case-Shiller Index list are Houston (#4), Philadelphia (#5), San Antonio (#7) and San Jose (#10). Minneapolis (#48) and Tampa (#55) are included, by contrast.* This means that most U.S. home sales are not included in the Case-Shiller Index’s monthly findings. Case Shiller tracks 20 markets that have high regulatory parameters, causing values to be artificially high in those areas, and creating speculation on a limited number of units.

§ A second flaw is that it doesn’t measure supply or demand, which is the true measure of any product. Over 50% of the cities are not forecast as growth areas by the Census Bureau. Supply and demand imbalances are the ultimate driver behind real estate prices, and local, regional as well as national data shows the balance is improving, with months of resale supply recently declining from 12 to 10 months nationally and much less here locally. Normally, those inventories are approximately seven months, and until the overhang of unsold homes is reduced, prices will not recover.

§ Another Case-Shiller flaw is how it measures a change in home price. Because the index throws out all sales except for “repeat sales” of the same home, the Case-Shiller Index fails to capture the “complete” U.S. market. It also specifically excludes condominiums and multi-family homes. In some cities — such as New York and Chicago — homes of these types can represent a large percentage of the market.

§ Another limitation is that the Case-Shiller Index is on a 2-month delay. The Case-Shiller Index is far less useful than real-time data of a city or neighborhood.

§ Also, the Case Shiller index relies exclusively on transactional data from home sales, a flawed methodology since less than 0.5% of homes are sold each month. That is too small a sample size from which to make broad conclusions about the national housing market,

§ The biggest problem with Case Shiller is that current market transactions are not representative of overall market trends.

It’s a great time to be in Texas! Happy New Year!

More signs that point to a healthier Central Texas housing market in 2012, experts say

2012-01-02T14:20:00Z

The article above appeared in the Austin American Statesman last week, and our friend, Independence Title, in-house analyst, Mark Sprague, had some comments. In taking apart some of the numbers reported by the Statesman, there are some revealing insights into our local markets, and how we can expect them to perform in 2012.

http://www.statesman.com/business/signs-point-to-healthier-central-texas-housing-market-2067020.html?viewAsSinglePage=true#.Tv3Mobmmqag.email

To begin, the local real estate market turned from the bottom over a year and a half ago. But it was a slow turn, only lately has it begun to showing stronger activity, primarily in the resale market. Other portions of the local real estate market (commercial on almost all channels) have also begun to show strength. Is it back to 2005 /2006 numbers? No, but showing more signs of strength than the past 3 years.

Is it time to buy? Absolutely! Those that have been shopping will tell you that below $700K the market is very tight in Travis County. The home (that’s priced correctly) you look at today, will not be there tomorrow.

If we look at Travis County, we have had a fair appreciation the last year, particularly when compared to the rest of the nation or even the region. (And keep in mind, very few property owners hold a home for a single year.)

Historical Home Price Appreciation
Last Quarter 0.89%
Last Year . . . . . . . . . . . . . . . . . . . .. 1.6%
Last 5 Years ……………………….10%
Last 10 Years . . . . . . . . . . . . . . . . . .31%
Last 20 Years ……………………...152% or 7.6% annually

Remember this is an overview of all the submarkets in Travis County. Not all will see appreciation, and some submarkets will still be challenged by foreclosures. For example, 1 in 1401 homes are in some stage of foreclosure in Travis County. By contrast, that number in Hays County is 1 out of 475, and in Williamson, 1 out of 474 (according to the Foreclosure Listing Service). Travis County (particularly the west part of Austin and the CBD) has had strong appreciation in the low 20% range. However, there were other softer markets within Travis that brought that average down.

To put it in perspective, the highest annual home appreciation rate in the Austin Real Estate Market was 21% in the twelve months that ended with the 2nd Quarter of 1980 as Austin was coming out of the 1976 – 79 recession. The worst annual home appreciation rate in the Austin Market was -20% in the twelve months ended with the 2nd Quarter of 1989 at the bottom of the oil bust.

The highest home appreciation in the Austin Real Estate Market over a three year period was 49% in the three years ended with the 3rd Quarter of 1980. The worst home appreciation over a three year period in the Austin Market was -27% in the three years ended with the 2nd Quarter of 1989.

In the upcoming months, the surrounding county markets (particularly where production homebuilding was strong in 2004 through 2006) continue to see resistance due to foreclosure values. On a larger scale, there has been over 2500 potential developed lots being negotiated or sold over the last 30 days, a strong indicator of the vitality and interest in this market.

What will 2012 bring?

With unemployment continuing to drop locally as well as regionally, rental housing continuing to tighten, and for-sale residential and commercial markets tightening, it should be a better year. I hope that history will show that our local market in 2011-2012 mirrored the positive turn we saw in 1992-1993 after the last major recession.

If we look at residential re-sales locally, the appreciation rate should be somewhere between 2% to 4% in 2012-2013 (barring a catastrophic event). Anything stronger would cause some concern because it will create the appearance of a ‘bubble,’ which is never healthy to a market. The outlying counties around Travis will still have some resistance to appreciation for a while, due to foreclosures pressures.

The main factor holding the Austin housing market in check has been the national housing market. Note that Austin, San Antonio and Houston have made the turn regionally. D/FW continues to struggle – we are not out of the woods yet.

True Grits of Jonestown...Down for the Count

2011-12-23T16:21:00Z

These are tough times for a lot of small business owners and a closure now & then is expected. But True Grits? This was the home of real Texas chicken fried steak, chicken fried chicken, napkin soaking hamburgers & breakfast pancakes that hang over the plate. And the doors are closed. The talk on the street is that LCRA backed the owners against the wall over too much water usage with a limited septic system. Just like a divorce, there's always more to the story but whatever the cause, this is a real bummer. The owners, John & Anita, are about as hard working, energetic & committed a couple as you could ever hope for. They poured blood, sweat, tears & whatever money they had into the business. And now - True Grits is history. Anytime a small business fails, it is always a great personal tragedy for the owners. It's downright sad. I'll miss it.

Residential Housing Market Predictions Look Bright for 2012!

2011-12-20T17:12:00Z

Good news for Real Estate in 2012…the predictions look bright and according to many experts, the residential market is ready to awaken. Click here to read a recent article from Yahoo Finance.

Why so positive? Per the Yahoo article, industry analysts, experts and other industry VIPs think there are a number of reasons - some traditional (employment), others unique to the post-credit bubble era (foreclosures) - for the long-awaited sea change. An analysis of industry and government data also supports the forecast, which is a very good sign.

Who else thinks so? The latest housing data report from Alamo Title came in this morning and it also looks positive.

The Austin Area Market according to Alamo Title:

· New listings are down 4.58% this week compared to the same week last year.

· Pending Sales are up this week 34.78%.

· Current number of pendings is 2,359 with an average list price of $236,756.

· Sold residential units are down 32.71% compared to the same week last year.

What does that mean for you? If you are a home buyer, it may be time to step up to the plate. Stories of homes selling in multiple offers are not uncommon in markets on the upswing. This means you could soon find yourself paying both a higher interest rate for your mortgage and a higher price for your home.

If you are a seller who is buying up, now may be the time to pick up that dream home. And if you are selling because of a personal or financial situation, don’t wait for prices to rise dramatically unless you have a lot of time.

A few of my predictions:

Rents will continue to increase as apartment occupancy continues to push 100% for good locations.
Investors from Asia and especially China will be major buyers of single family rental homes in 2012.
Builders will scratch the 5 year itch and start building homes and taking down lots in 2012 and 2013.
Foreclosures will increase in 2012 but will not overwhelm the central Texas market.

The War That Never Should Have Been Ended Today.

2011-12-15T22:08:00Z

Over 9 years, 4500+ dead boys & girls, thousands disabled and billions of dollars that could have been put to better use in the USA, the Iraq war officially came to an end this morning. Am I missing something? Shouldn't the headline take up most of the front page, scream a banner when opening Google, or at least be splashed as the top story on TV? Instead, almost nothing - like maybe it really didn't happen or somebody else was over there fighting. It just seemed to me that we should be celebrating the end at least as much as some of us celebrated the start in 2003.

Does Santa Buy Homes?

2011-12-15T22:05:00Z

He doesn’t...but Mrs. Santa is a different story. Every year the same question comes up concerning selling a house during the holiday season. There are fewer buyers, and many sellers wait until spring so there are fewer choices and less competition. Remember, a serious buyer does not delay the home search over the holidays. Mrs. Santa has time on her hands and a new home in her sight. Santa is busy and out of her hair so she can zero in. Except for the hassle of all those showings right in the middle of turkey dinner, the holiday season is an excellent time to have a home on the market. Since late October, the Austin MLS statistics showed a 30% increase in pending homes. That refers to current local activity. The market is strong right now & should continue active through the holidays. My advice – do it now.

The Importance of A Brand

2011-12-06T16:15:00Z

It Really Works – Proudly Display Your Brand

As I was waiting in the airport after the NAR conference leaving Anaheim for Austin, I met the President-Owner of Oakley Signs of Orlando & Chicago. He saw the Highland Lakes Real Estate logo on my windbreaker and within a couple of minutes we were in deep conversation about the real estate business in Texas and began throwing ideas around for redesigning and upgrading our real estate signs. Branding is important to us as realtors, and we are proud to display our name on shirts, signs and other literature, but it is much more that a logo to me. It is our signature, our promise to the community, our badge of honor and dedication to each and every client.

While the logo on my shirt opened the conversation at the airport, that conversation has continued via email, and in the not so distant future, I’m sure that my new acquaintance and I will do business. It's another lesson in marketing. Let people know what business you are in and promote your brand proudly.

By the way, he also shared a really neat productivity newsletter www.TuesdayTactics.com which is designed for real estate agents but would be extremely interesting to anyone selling for a living. I also found some free help for real estate agents at www.fhfrea.org/facebook. Try it. You'll be glad you did.

What About the Cloud?

2011-11-30T15:27:00Z

The mysterious CLOUD kept surfacing at the NAR convention in Anaheim. Many agents are already using programs like Google Docs and storing everything in the cloud with ipads, smart phones and such without a hard drive for storage. As best I can tell, the CLOUD is a group of thousands of generic servers floating out there somewhere gathering all this data & pictures from the earthlings below.

Wikipedia defines cloud computing as a marketing term for technologies that provide computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services. A parallel to this concept can be drawn with the electricity grid, wherein end-users consume power without needing to understand the component devices or infrastructure required to provide the service.

Whatever it is – Highland Lakes Realtors plans to go there.

And how do those solar-powered trash cans in Jupiter, Florida work? They send an email to the garbage collector when they are ready to be picked up. Holy cow! Do they also pick up the phone & call when Wi-Fi is down?

What are short sales?

2011-11-24T20:11:00Z

One thing they are not - homes for short people. They are sales of homes short on sales price when compared to the loan balance. Basically, the home value has decreased to a point below the amount of the loan and allows the home to be sold for an amount that does not fully pay the loan and costs of closing.

The bank or lender can accept a short sale of thousands less than the loan balance and still be far better off. There are huge costs involved in a foreclosed home. The costs to hold, repair, maintain and market can easily add up to 30% of the sales price.

The owner must be in a hardship situation, in default on house payments, not having the ability to pay the mortgage and have someone willing to buy their house. Many banks will even pay relocation expenses for the owner.

Banks prefer short sales over foreclosures so if someone is struggling with late payments, hire a realtor to help you before it is too late.

Failure is OK

2011-11-14T12:58:00Z

One other thought on the Michael Eisner speech from Saturday night. He also talked about his failures and thought they could be just as important as his successes. You only experience failure if you take risks. And you cannot achieve success if you never take a risk. Being risk free is not a goal for anyone that wants to achieve success. Disney took a huge risk building a Disney Theme Park in France. When making the public announcement, protestors threw eggs, tomatoes and assorted rotten trash at the stage in protest of the development. At first, it appeared that the project idea was a failure before it ever got off the ground. Today, it is the most visited tourist attraction in Europe.

The inspirational breakfast on Sunday morning was definitely a tear in your eye session. Aaron Thomas, son of football coach Ed Thomas that was shot and killed by one of his players in Parkersburg, Iowa, brought tears to most of the audience. Coach Thomas was shot by Matt Becker. Within 2 hours, the Thomas family held a press conference on ESPN and reached out to the Becker family with open arms, compassion and forgiveness. You couldn’t help but be touched. It was a powerful message.

More to come on the latest tech tools, the cloud, mobile technologies and Apple vs. Android.

Keep it simple – Keep it Creative – Seize the Day

2011-11-13T15:11:00Z

That was the message from Michael Eisner last night. He is the CEO that took Paramount pictures from last to first place in the movie industry and Disney from a 1.3 billion dollar company to a 30 billion dollar multi-media powerhouse. In the days of mega buck pictures, he made the low budget “Poet Society” film with only one major actor in Robin Williams surrounded by a cast of unknowns. Most of us remember how that turned out. The most powerful and final scene was structured around a simple very old classroom desk. That was one of his many examples of simple and creative. It’s not necessary to empty the bank account in order to accomplish great things. His closing statement; this is the day – seize it.

It was even more exciting to meet and hang out with Le Roy Bendickson and his wife Cheryl from Edina, Minnesota. Le Roy (pronounced La Roy as he reminded me numerous times) was one of 5 winners of the NAR Good Neighbor award. Le Roy has raised over a million dollars for MS over a 20 year stretch. He raised $147,000 in 2011. What started as a simple bike ride for MS has turned into a 250 rider 150 mile annual event with Le Roy as the leader. He is an agent with Edina Realty. This is one impressive guy. Although quiet and mild mannered, it doesn’t take long to understand how passionate he is about his MS fund raiser and the fight for a cure. This Sunday morning starts at 6:15 at the Hilton for breakfast with Aaron Thomas for a little inspiration to start the day. Aaron is the son of the football coach that was fatally shot by one of his players a few years back. I’m really looking forward to his story of forgiveness and compassion.

Crazy for QR Codes

2011-11-12T13:28:00Z

After the typical travel shuffle, Clara and I made a brief stopover in Las Vegas. "Viva Las Vegas" is a far cry from "Livin' la Vida Loco", however, we got some great ideas for the Lago Vista/Jonestown Las Vegas Night in January.

Day one in Anaheim at the NAR convention registration was a wakeup call. Where was I when the world changed to those oddball squares as a new level of communication? The QR squares are everywhere. And people are using them right and left like it's normal pointing their phones - snapping the scan - and opening whatever message or web site is hidden behind that mess. I must have looked pretty helpless when a guy named Eddie from New Mexico stepped in for the rescue. I loaded "BarCodeScanner" app for my HTC Droid and Eddie gave me a path to the new world.

More to come about today's exciting events...

Stay tuned for more from the NAR (National Association of Realtors) 2011 Conference in Anaheim, California

2011-11-07T22:20:00Z

The National Association of Realtors (NAR) 2011 Conference & Expo opens Thursday in Anaheim. I’m heading there in the morning with a stop over in Las Vegas. Every educational opportunity imaginable is offered from sunup to sunset. Diana Ross is our headline concert and Michael Eisner, former chairman and CEO of the Walt Disney Company, is our keynote speaker.

There are tons of must go sessions with attention grabbing headlines. Marketing without Money sounds like a must. 5 Social Media Failures, How to work in the Cloud by Google, 8 HOT Mobile Apps you’ll use every day and The One Thing power brokers can’t live without are just a few. I’m not sure what a power broker is so they may not let me in that last one. And Technology - Non stop sessions with a waiting list.

I’ll give you a heads up every day or so with the latest & greatest stuff I discover.