So how has residential real estate in 2015 compared to 2014? In short, more of the same. Assuming that our current December sales track the earlier years as we expect them to, we will see few changes. The limiting factor is not demand or interest rates. The overwhelming constraint on home sales is the lack of inventory. As of this writing, the residential inventory is only a 2.6 months supply. For comparison, the Texas A&M Real Estate Center considers a balanced housing market to have a housing inventory of roughly 6.5 months. We have become so accustomed to almost no inventory that six months of inventory would feel like a glut of unsold homes!
The dip of the red line on the chart (2015) is indicative of what we have seen the past several months. November was very quiet. The historical chart shows a sharp increase in sales in the past three Decembers. I question if we will see that same rise when we finally have the sales figures for December 2015. It is too soon to know for certain, but I get the feeling that most sellers are biding their time and are hoping to time the market and hit the spring feeding frenzy that we have seen the last few years.
ODDS & ENDS
¨ Timing. Take another look at the chart above. It tells me two things: a) right now is the perfect time to look for a house, and b) wait until late February or March before putting a home on the market. Yes, the inventory is down during the holidays . . . but if buyers can find that perfect property, they should have better odds of making a deal. On the other hand, it clearly makes sense to wait to list a house in early spring when sales are surging.
¨ Section 8. I failed to mention in my last letter that the state legislature passed legislation that overrode the Austin ordinance that effectively required Austin landlords to accept Section 8 renters. The Austin ordinance had been written such that it was illegal to discriminate against rental applicants on the basis of where they received their income. It was a rather backdoor effort and the legislature decided it was out of line.
| “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
Bill Gates |
¨ Public records. Property taxes are public record . . . well, mostly. The recent attack on Judge Kocurek serves as a horrible reminder of why certain parties should have confidential tax records. While it is possible to search the Travis Central Appraisal District (TCAD) data base for property records, Tax Code Section 25.02 allows certain parties to request that the tax office restrict any information about the party’s name and address. This is typically the case for law enforcement officers, judges, and a number of other public servants who might be at risk. Property Tax Form 50-284 spells out who is eligible for such confidentiality and contains the required application.
¨More flood stuff. We keep learning more and more with each flood. If a property is debt-free and the owner decides to buy FEMA flood insurance or if a buyer is purchasing a property with cash, the new flood policy does not go into effect for 30 days. Also, few owners realize that the policies only cover flood events that flood two or more houses or more than two acres if it is entirely on the insured’s property. In other words, in a limited flood event, it is wise to take photos that demonstrate the extent of the flooding in case of a filed claim.
¨ Blue Santa. My sincere thanks to those of you who chipped in with help for Blue Santa. I always love volunteering on delivery day. If you joined us on that Saturday, you probably got to meet the “real” Blue Santa and his helper Debbie Stone Debbie is a Stanberry agent and the 2015 president of Blue Santa.