Flood Insurance By Jeff Stewart, CCIM, SRES

FLOOD INSURANCE – Did you know that according to FEMA roughly 80% of the houses damaged by Hurricane Harvey did not have flood insurance? Of those homes which did have flood insurance, the average flood insurance claim was $116,000.   Are you properly insured? Are safe from flooding?

Perhaps, but consider that the Atlas 14 weather study determined that the 500-year flood zone in our area should instead be approximately what we currently call the 100-year flood zone.  Because of that study, the City of Austin has formally designated the FEMA 500-year zone as the 100-year zone in the City for development purposes. They fully expect the next FEMA maps to reflect similar changes.

The public has long misunderstood what those zones mean.  The 100-year zone is NOT an area with a 1 in 100-year chance of flooding.  Instead, it is an area that has been determined to have a 1% chance of flooding in any given year, which equates to a 26% chance of flooding over the life of a 30-year residential loan. Those figures remind me of the old joke where fellow asked the rancher how much rain do they get out at Snyder.  The old fella replied, “Justa ‘bout 28 inches a year . . . and boy-howdy, you ought to be here the day it comes.”

So going back to the 500-year flood zone . . . that sounds pretty safe doesn’t it?  I mean, the mortgage companies do not even require flood insurance in the 500-year zone.  Well, that are has a 6% chance of flooding over a 30-year loan.  Do you feel lucky?

PLEASE READ: Texas law requires all real estate licensees provide the Information About Brokerage Services (IABS)  to prospective buyers, tenants, sellers and landlords. Please see the link above. Consumer Protection Notice



    Appraisals – “Hurry up and wait.”  By Jeff Stewart, CCIM

     Astonishingly low interest rates and a tidal wave of newcomers have swamped lenders and appraisers in the greater Austin area. Unfortunately, appraisers have become the bottleneck for most resale transactions. Since the appraisal process is largely unseen by the public, most of our clients only learn about the process whenever a problem arises, so let us look behind the curtain.

First, it needs to be said that a real estate license does not give agents the right to perform an appraisal.  We may offer an opinion of value or do a competitive market analysis (CMA), but absolutely nothing we do may be called an appraisal. Appraisers are licensed by the Texas Appraiser Licensing and Certification Board.

Regarding the bottleneck comment, until the last six months or so, a typical residential sale transaction took roughly thirty days from contract to closing.  Recently, many transactions are taking forty-five to fifty-five days to close, simply because of appraisal delays.  After the frenzy of working through multiple offers and hurried inspections, waiting for weeks for an answer on the appraisal definitely gives buyers and sellers a feeling of “Hurry up and wait.” So, what is the cause?

First and foremost, sales are just off the chart, but that is not all. In our Texas REALTOR magazine, I recently read that the number of appraisers in Texas has been declining as aging appraisers have retired and fewer young people are choosing it as a profession.  Perhaps one reason fewer people have an interest to become appraisers is that FANNIE MAE now has an automated system for lenders that looks at past sales data and often determines that an appraisal is not even required for a new loan.  Technology probably does not bode well for the long-term future of the appraisal industry.

Nevertheless, most mortgage loans still require an appraisal, and we must deal with the various rules and requirements that the public never sees . . . such as the changes brought on by Dodd – Frank regulations. After the financial debacle of 2008, the Dodd – Frank Act of 2010 was passed and greatly altered the way lenders, appraisers and title companies do business. For this article, we are sticking to the appraisers.

The Dodd – Frank Act sought to limit the ability for lenders to influence appraisers. Mortgage lenders are no longer allowed to use on-staff appraisers or hire specific appraisers. Appraisal management companies have been created to act as a buffer between lenders and appraisers.  The lenders submit a request for an appraiser and the management company broadcasts that request to their selected list of appraisers.  The appraisers are then free to bid on the job, or not. The bidders name a price and a promised delivery day, and eventually someone is chosen. The idea of the management company buffer was to stop the undue pressure that many lenders once put on the appraisers to get them to hit a value that would allow the loan to go forward.  Trust me . . . it was a common complaint that I heard from my appraiser friends.  While the lenders are no longer allowed to directly communicate with the appraisers, the same rules do not apply to the brokers. In fact, I often find it very beneficial to meet the appraiser at the subject property . . . and generally the appraisers seem to appreciate the input.

The types of items I have shared with appraisers varies, but it is often helpful for them to have a copy of the survey, a list of my sales comps, and most important of all – an accounting of any recent improvements. This is especially important on the big-ticket upgrades. Documentation of the more expensive improvements will aid the appraiser in making value adjustments when comparing the comps.

On several of my most recent sales, the appraisers have had to make major value adjustments in the appraisal due to the differences between the subject property and the sales comps.  For example, one home was several hundred feet larger than any home in the neighborhood . . . and had a pool, which no other recent sale had.  Appraisers have to use their best judgement in determining how to adjust for the value of other differences such as an extra-large lot or four baths instead of two, but the recent trend in flipping or tearing down houses is complicating the process.  Neighborhoods in transition can run the gamut from tear-downs to extremely remodeled flips to new McMansions.

To be sure, this is what the appraisers get paid for.  The issue for lenders and buyers comes when appraisers have so much work that they can pick and choose what appraisal assignment they wish to accept.  Why take on a complicated sale in East Austin when an appraiser can get plenty of easy work in a homogenous neighborhood of ten-year old homes in Hutto? It has been very difficult to place some appraisals in outlying areas. The appraisal cost can really climb if a property is extremely far out, unique or it is needed in a rush.

Finally, it is interesting to think about the price whiplash that appraisers are experiencing, along with the rest of us.  Imagine trying to support the sales value of a home that sold $40,000 over asking with eighteen offers – all over the asking price.  The odds are very good that the appraiser cannot arrive at an appraised value that reaches the sales price, yet if the buyers still choose to close (and by putting down more cash, many are), that sales price just becomes the new sales comp for the next appraisal.

It is crazy times.  All we can do is remain calm and practice patience.

PLEASE READ: Texas law requires all real estate licensees provide the Information About Brokerage Services (IABS) 

to prospective buyers, tenants, sellers and landlords. Please see the link above.

Consumer Protection Notice

Jeff Stewart, CCIM, SRES

Broker Associate

Stanberry Realtors


Get Outside – Safely By Jeff Stewart, CCIM

Looking to get outside?

If you are like most folks now days, you are trying to spend a little more time outside – and socially spaced.  While we are all very tired of COVID 19 and the limitations it has imposed on us, I would like to suggest spending some time outdoors . . . in a park.  Specifically a Texas State Park near you.

Some of you may know that I have served on the Texas State Park Advisory Committee for years.  Parks are my passion, and they do not get much better than our own state parks. While the coronavirus has definitely had a negative impact on the state budget, our state parks are hopping.  In fact, Rodney Franklin, the Director of Texas State Parks, recently reported to our group that every day seems like spring break as Texans seek to safely spend time enjoying our wonderful parks.  The camping is limited to 75% capacity and many parks hit their limit on day users, so reservations are definitely recommended; but with a little planning, Texans can find that perfect place to get away for a day or a week.  If you have never visited any of our nearly 90 state parks, well now is the perfect time. Get out and do something!  We as like to say, “Life’s better outside.” Come join us.  You won’t regret it.


PLEASE READ: Texas law requires all real estate licensees provide the Information About Brokerage Services (IABS) to prospective buyers, tenants, sellers and landlords. Please see the link above. Consumer Protection Notice

Jeff Stewart, CCIM , SRES

Stanberry, REALTORS


A Crazy Housing Market By Jeff Stewart, CCIM

A Word From Jeff

This seems like a pivotal time to reach out, so I want to share some thoughts with you about what I currently see in the housing market.  For those of us in the residential real estate world, it seems like we went from going at breakneck speed before COVID, to a total shutdown, and now we are surging to warp speed. With limited inventory due to concerns about exposure to the virus, a now unflinching demand has led to extraordinary stories of multiple offers.   Buyers, while frustrated, are generally willing to visit occupied homes and cope with the COVID showing protocols, which often include masks, gloves, booties, and signed COVID statements / releases.  In short, we are working hard to keep everyone as safe and it seems to be effective.

In a market as tight as ours, it is critical that buyers and their agents craft their offers to be as creative and competitive as possible.  This is where the experience of the agents AND their clients can be of a great benefit.  If you are interested in a property, but are concerned about seeing it in person or convinced that  you will simply be out bid,  I am available to discuss the various strategies we use to enhance offers.

On the other hand, if you have been holding off on selling due to COVID, I would urge you to reconsider. Now is absolutely the time to move any residential property while inventory is almost non-existent. This period is offering sellers a rare moment in time. As for selling your personal home, we have made great strides in safely marketing occupied homes.  If you would like more information about our company protocols, please do not hesitate to call.  In the meanwhile, please stay safe and healthy!

Jeff Stewart, CCIM

Broker associate

Stanberry Realtors


PLEASE READ: Texas law requires all real estate licensees provide the Information About Brokerage Services (IABS) 

to prospective buyers, tenants, sellers and landlords. Please see the link above.

Consumer Protection Notice


Frozen Tax Values Part II By Jeff Stewart, CCIM

The Travis Central Appraisal District (TCAD) is not going to re-appraise residential properties for 2020. Marya Crigler, the Travis County Chief Appraiser, has stated that the county only has access to roughly 15% of the home sales and that is insufficient to appraise most areas.  TCAD had been buying Austin MLS data in violation of the MLS vendor’s contract with the Austin Board of Realtors.  All MLS data is copyrighted and owned for the exclusive use of its members. The vender, CoreLogic, and TCAD were issued cease-and-desist orders by the Board and the transfer of MLS data was stopped.  As mentioned before, this is a risky tactic that is likely to fail.

The unprecedented step of freezing tax values presents a number of questions.  First, will tax agents have no work in Travis County? Will owners protest in 2020, if they did not last year? Or, second, will TCAD have no timely comparable sales that they can use in a arbitration hearing to combat protest challenges?

ProTax, a well-known firm which contracts with property owners to protest their real estate valuations, has changed their business model from charging a success fee of 40% of the saving to charging a base fee of $150 per property and the same success fee.  One has to wonder if they are of the opinion that frozen tax valuations will automatically be too low to reduce further?

The TCAD position also makes one wonder if many of the currently employed appraisers in that office will be told they are no longer needed.  It will all be very interesting as we move into something I have only seen once before in Hays County.

In the late 1980’s, it appeared that Hays County’s hierarchy mad the decision not to re-appraise residential properties since the values were in free-fall.  Some of the values had not been lowered once in the three years of sharply declining values.  Since I had built and sold many homes in the Norther Hays area, I was very familiar with the actual values and Anna and I started a tax agent business.  We represented 55 families.  During the course of all the many meetings I had with HCAD, it was finally acknowledged that the values were left artificially high in order to fund the schools.  I believe the comment was something like, “If we drop the appraisals to the real values we might have to close some schools.”

It was during my time protesting tax values at HCAD that I discovered something worth sharing.  The state law is adamant that the valuations and taxes shall be equitable.  In the case of HCAD, it was easier to get them to lower the improvements than it was the land for the simple reason that technically the lots were to stay roughly the same value.  The rare exceptions were homes next to detention ponds, hones on the corner of a busy entrance, or some other unique issue that justified a reduction in valuation.

In any event, I am betting that this issue of full disclosure is a hot topic in the Legislature again.

TCAD Freezes Residential Tax Values For 2020 By Jeff Stewart, CCIM

Each year a great deal is made of the fact that Texas, like 11 other states, does not require the public disclosure of real estate sales prices. This year the discussion of the pros and cons of full disclosure will be intensified. The Travis County Chief Appraiser, Marya Crigler, has taken the unprecedented step of announcing that she is going to freeze the 2020 home valuations at the 2019 tax values. This announcement has caused a great deal of angst with local officials who have to prepare the budgets for everything in Travis County from school districts to the county expenditures.  It was a clear orchestration to put intense pressure on the Austin Board of Realtors.

One aspect of a boom like Austin is experiencing is that the local politicians can usually brag that they, “held the line on tax increases.” Of course, this is seldom true.  It is often the case that the taxing entities decide to “hold the line” on the tax rate, but with rapidly rising values we end up with significant tax increases. This happens so often in Travis County that the various taxing entities count on the revenue bump . . .  as if it is a built-in tax increase that they did not have to approve.   It provides the politicians with a degree of cover, all the while netting the revenue increases that they seldom own up to.

About a year ago the MLS discovered that our vender, CoreLogic, had been secretly selling our MLS data to the Travis Central Appraisal District (TCAD).  This was blatant breech of the contract and once it was discovered the MLS immediately sent the district a cease-and-desist order.

Cut off from the surreptitiously acquired sales data, the chief appraiser has announced that there is no way for her to do her job without MLS data and that TCAD will not change any residential tax values in 2020.  This leads me to two specific points.  First, I knew Art Cory when he was the chief appraiser and he had to scratch and fight for sales information as well, but he found ways to fulfill the role of appraising all the property in Travis County. Second, like Art, Ms. Crigler is facing an uphill battle without the MLS data, but she is trying a novel approach in an effort to gain full disclosure.

By announcing that TCAD is freezing values for 2020, Ms. Crigler is waging war on the Austin Board of Realtors and the MLS.  It is a risky tactic.  I cannot imagine what the taxing entities are telling her, but it cannot be pleasant.  They were expecting their politically free revenue increase.  If this freeze holds, many elected officials will find themselves on the hotseat if they have to vote to increase tax rates to balance their budgets.

Clearly Ms. Crigler is betting her employment on successfully creating enough bad press for Realtors that we acquiesce or the elected officials finally alter the non-disclosure rules.  I doubt either will happen, which will be interesting for Ms. Crigler’s future.

Thinking of Being a Landlord? By Jeff Stewart, CCIM


    The HGTV channel continues to excite people’s interest owning residential real estate, including rental property. I have seen more interest the past few years than in several decades.  The biggest development in home rentals (besides Airbnb, which is huge in itself) has been the national firms buying and leasing single family homes. In addition to that we now have what I believe is our first completely new single family rental subdivision in Southeast Austin. (More on this later.) All this competition has to make it more difficult for the small investor to find deals . . . not impossible, just more challenging.

It is one thing to find a good rental property to buy, but another thing entirely to secure financing. Now most lenders require landlords pay 25% down, as well as charge approximately ¼% more than the going rate for homeowner occupied loans. Most lenders also require a valid signed lease prior to closing, which can prove challenging. On top of that, most lenders limit small investors to no more than four investment property mortgages.

Despite all financing challenges, I am still a strong proponent of owning a rent property or two.  In fact, I often suggest that young people consider purchasing their first home with the ultimate goal of moving in a few years and converting the initial homestead into a rental unit.  It is a reasonable way to begin investing with more advantageous financing. While very difficult to find in this market, a duplex is usually a great choice for a first home.  The other side provides an income and the duplex homeowner gets the important hands-on experience of dealing with a tenant and property ownership. That is exactly how we learned the landlord business.

Yet, I should qualify all of this by stating the obvious: not everyone should be a landlord. And for those folks who have an interest in real estate but no spare time, they can still successfully own rental property, but they probably should engage a professional property management company.  Needless to say, good property management comes at a cost.

As for the owners wishing to personally manage their rental property, I tell my clients they should know several things upfront. First, it can be time consuming.  I may go several months without a problem, but dealing with vacancies and make-readies can take time.  Sometimes it seems that air conditioners are almost guaranteed to go out while you are on vacation! You have to have contractors you can truly trust.

Second, landlords need some degree of “do-it-yourself” ability.  I still try to personally see any problems in order to understand the scope and severity before calling out service people. Often, the tenants are mistaken about what is a problem really is.

Third, it helps to be a people person. Landlords are in the service business. Renters are our customers and it is expensive to lose them. Successful landlords are fair, but firm.  I believe in clearly setting expectations before tenants move-in.

Finally, I recommend to my clients that they strongly adhere to a policy of requiring excellent credit.  People with near perfect credit conduct their lives responsibly.  They pay their bills, they follow the rules, and they do what they say they will do.  Admittedly this policy can lead to a longer marketing time, but I find it is worth it in the long run. A number of companies make screening tenants much easier now.  National Tenant Network is a long-established firm that researches my applicants.  A newer, on-line company, Cozy (Cozy.co), does screening, payment processing and much more.

Rent property is truly a path to financial freedom for the people who are willing to put in the effort.  It is like a combination of a monthly savings account and an appreciating asset.  In essence, the goal is to buy something with borrowed money and let the tenants pay it off.

I looked back and in December 2009, I wrote an article suggesting it was a great time to buy a rent house.  In that same newsletter, I wrote that the median price house in Northwest Hills was $258,333!  What will it be in another ten years?

     If you have an interest, give me a call and I will be glad to help you decide if this is for you. 

    Jeff Stewart, CCIM

Broker Associate

Stanberry REALTORS


The MLS data for September is out and late summer sales were very strong.  Sales, compared to one year ago, were up in four of the five counties of the Austin MSA.  Only Bastrop saw a drop-off in transactions, but median sales prices were up across the board. Median sales prices were as follows:

City of Austin Median Price                $406,000             Up 11.9% From Sept 2018

Austin – RR MSA Median Price           $320,000              Up 6.7% From Sept 2018

Williamson Co. Median Price            $ 295,000              Up 6.1% From Sept 2018

Hays Co. Median Price                      $ 269,950               Up 5.2% From Sept 2018

Bastrop Co. Median Price                 $ 258,000               Up 11.2% From Sept 2018

Caldwell Co. Median Price                $ 206,930               Up 6.1% From Sept 2018