Central East Austin Real Estate - Mueller and More

Austin mortgage planner John Schutze gives his weekly market update:

“Mortgage rates are mostly unchanged as we end the week.The biggest influence on mortgage rates this week came from outside the US. Concerns about the possible default of sovereign debt in smaller nations caused investors to seek the relative safety of US fixed income securities. This week’s economic data was roughly balanced in terms of positive and negative surprises. The added demand for safer investments helped mortgage rates move lower during the week.

Friday’s important Employment report contained mixed news. Against a consensus forecast for a gain of 15K jobs, the economy lost -20K jobs in January. The big story, though, was an unexpected drop in the Unemployment Rate to 9.7% from 10.0% in December. The decline in the unemployment rate in January was viewed as very good news by many economists, pointing to an improving labor market. On a more negative note, revisions to older data showed that the economy has lost 8.4 million jobs since the start of the recession in December 2007, from the previous reported level of 7.2 million. So the in the end the negative news carried the most weight and rates didn’t move from their current level.

Current rates:
30 Year Fixed:  4.875 %
15 Year Fixed:  4.375 %
FHA 30 Year:  4.875 %
VA 30 Year:  4.875 %
5 Yr ARM: 3.75 %
Jumbo 30 Year Fixed:  5.625 %
Jumbo 3 Yr ARM:  4.0 %
30 Year Home Equity:  5.0 %

The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount”

John finds buyers the right loan for their Austin home purchase.  Check out his Austin mortgage blog.

Garreth Wilcock is a Realtor® in Central Austin. You can search Austin homes for sale at his website.

Austin mortgage planner John Schutze gives his weekly market update:

“Mortgage rates are unchanged as we end the week.

Rates started to inch up this morning after the 4^th quarter 2009 preliminary GDP (Gross Domestic Product) showed that the economy expanded 5.7%. This is the highest gain since 2003 and a nice improvement over the 3^rd quarter number which was 2.2%. The stock market rallied early but is now on a downturn which is helping mortgage rates improve as the day progresses. In general good news about the economy pushes rates higher however a closer look at the 5.7% increase indicates that most of the growth was due to companies replenishing inventories from earlier in the year when they were saving cash, not necessarily new economic growth. On the inflationary front, it seems that Ben Bernanke’s confirmation for a 2^nd term is building confidence with investors that he will be a good Fed Chairman to fight inflation that seems inevitable in the coming months/years. Again, good news for mortgage rates in the short term.

Current rates:
30 Year Fixed:  4.875 %
15 Year Fixed:  4.375 %
FHA 30 Year:  5.0 %
VA 30 Year:  5.0 %
5 Yr ARM: 3.75 %
Jumbo 30 Year Fixed:  5.75 %
Jumbo 3 Yr ARM:  4.0 %
30 Year Home Equity:  5.0 %

The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount”

John finds buyers the right loan for their Austin home purchase.  Check out his Austin mortgage blog.

Garreth Wilcock is a Realtor® in Central Austin. You can search Austin homes for sale at his website.

Austin mortgage planner John Schutze gives his weekly market update. The FHA changes could make for an interesting time after April. I can certainly understand why the FHA is low on funds due ot national foreclosure rates rising, and this would be a great motivator to tighten their lending and increase the cost.

“Mortgage rates are down .125% this week.While the economic data released this week had little impact, mortgage rates were heavily influenced by two big stories. One was an announcement that China will take steps to slow its economic growth and the other was President Obama’s proposed new restrictions on the activities of financial institutions. Both measures are expected to lead to slower economic growth in the US, which hurt the stock market but helped mortgage bonds. As a result, mortgage rates ended a little lower.

FHA CHANGES: To build capital and reduce risk, the FHA announced that it will raise insurance rates and tighten credit score requirements. The major changes include increasing upfront premiums from 1.75% to 2.25%, reducing the maximum seller contribution from 6% to 3%, and increasing the level of FICO scores from 500 to 580 below which a down payment of 10% is required. This isn’t a big change because most lenders already have a minimum credit score of 620. At this point, the expected timing of the upfront premium increase will be in the spring, and the other changes will take place over the summer.

Current rates:
30 Year Fixed:  4.875 %
15 Year Fixed:  4.25 %
FHA 30 Year:  4.875 %
VA 30 Year:  5.0 %
5 Yr ARM: 3.875 %
Jumbo 30 Year Fixed:  5.75 %
Jumbo 3 Yr ARM:  4.125 %
30 Year Home Equity:  5.0 %The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount”

John finds buyers the right loan for their Austin home purchase.  Check out his Austin mortgage blog.

Garreth Wilcock is a Realtor® in Central Austin. You can search Austin homes for sale at his website.

Austin mortgage planner John Schutze gives his weekly market update:

“Mortgage rates are unchanged this week.While mortgage rates climbed in December, they have decreased during the first two weeks of January. A combination of factors was favorable for mortgage markets this week. Low inflation, weaker than expected economic growth data, and strong demand for the Treasury auctions all helped mortgage rates move a little lower.

One primary long-term concern for mortgage investors is that the enormous level of stimulus intended to boost the economy will lead to higher inflation. Inflation erodes the value of fixed income investments, so future inflation expectations are a major determinant of bond values, including mortgage-backed securities (MBS). Inflation has not been a factor in the short-term, however, as virtually all of the data in recent months has shown it to be low. This week, the Consumer Price Index (CPI), the most widely watched inflation indicator, showed that core inflation rose only 1.8% from one year ago. The Fed’s comfort zone is for core inflation to rise at a 1.0% to 2.0% annual rate, and Fed forecasts are for low core inflation this year. Mortgage lenders will be watching these levels closely, and any surprises down the road could push mortgage rates higher. We do still expect the trend to be higher as we move further into 2010.

Current rates:
30 Year Fixed:  5.0 %
15 Year Fixed:  4.375 %
FHA 30 Year:  5.0 %
VA 30 Year:  5.125 %
5 Yr ARM: 3.875 %
Jumbo 30 Year Fixed:  5.875 %
Jumbo 3 Yr ARM:  4.25 %

30 Year Home Equity:  5.0 %The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount”

John finds buyers the right loan for their Austin home purchase.  Check out his Austin mortgage blog.

Garreth Wilcock is a Realtor® in Central Austin. You can search Central Austin homes for sale at his website.

The federal tax credit was expanded to include move-up buyers who buy a new home in the first part of 2010. What is a move-up buyer, and do you need to sell your current home to qualify for the program? What are the implications of selling later in the year? If you want to go to the source, you can check out H.R.3548.

What is a move-up buyer? In this instance, it’s someone buying another home who is a long-time resident of their current principal primary residence - having lived there for five consecutive years of the preceeding eight. The move-up buyer in this case doesn’t have to buy a more expensive home - it can cost more, less or the same (as long as it’s below the $800,000 program limit).

When do I have to buy my new home to qualify? You must be in a binding sales contract by April 30th 2010, and the home must be purchased by the end of June 2010.

What do I need to be careful of as April 30th approaches? You have to watch your negotiating position as you approach the deadline as a buyer. If you have an inspection contingency which goes over the April 30th deadline, your negotiating position may be weakened on repair items for example. The seller may know that this is your chance of getting $8,000 or $6,500 as a tax credit if you go ahead with the sale, and may be less willing to agree to repairs.

Do I need to sell my current home by April 30th to qualify as a move-up buyer? The short answer is No. (check out the IRS FAQ) You just have to transfer principal primary residence (where you live) to the new home. Whether or not you want to own multiple homes will depend on your finances.

Another factor which plays into the decision on whether to sell before buying is your take on the market if selling your former home. If you think that the removal of the tax incentive will reduce buyer demand, you may want to consider marketing your former home in the early part of 2010 to take advantage of stimulated buyers.

Garreth Wilcock is a full-service real estate agent who offers a listing discount for move-up buyers. You can search available homes in Austin at his website.

Austin mortgage planner John Schutze gives his weekly market update:

“Mortgage rates are higher this week…up almost 0.5%! The final two weeks of December have not been kind to mortgage rates. Stronger than expected economic data, comments from Fed officials, and a stock market rally all were negative for mortgage markets, and mortgage rates moved higher during the period.

Heading into December, mortgage rates were close to record low levels, but a combination of factors caused them to increase throughout the month. First, an improving economic outlook, which is good news for the country, is negative for mortgage markets because it generally leads to higher inflation. Second, the government already will need to issue an enormous amount of debt to pay for its spending, and it now looks more likely that additional expenditures are on the way for job creation and health care bills. Higher yields are required to attract investors to purchase the extra debt, pushing up yields for competing investments such as mortgage-backed securities (MBS). Finally, the Fed is winding down its $1.25 trillion MBS purchase program, reducing demand for mortgage investments.

With mortgage rates that are still historically low, high levels of affordability, and the homebuyer tax credit, the housing sector outlook for 2010 is for improvement from 2009. According to projections from the Mortgage Bankers Association (MBA), sales of existing homes are expected to increase by more than 10% next year. In addition, housing starts will rebound sharply from extremely low levels, and median home prices will move a little higher. Forecasts from the National Association of Realtors (NAR) and from Fannie Mae are generally consistent with the outlook from the MBA.

Current rates:

Current rates:
30 Year Fixed:  5.125 %
15 Year Fixed:  4.5 %
FHA 30 Year:  5.125 %
VA 30 Year:  5.25 %
5 Yr ARM: 4.25 %
Jumbo 30 Year Fixed:  6.125 %
Jumbo 3 Yr ARM:  4.375 %

30 Year Home Equity:  5.0 %The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount”

John finds buyers the right loan for their Austin home purchase.  Check out his Austin mortgage blog.

Garreth Wilcock is a Realtor® in Central Austin. You can search Austin homes for sale at his website.

New homes have dominated the sales at Austin’s Mueller Development in 2009, though there has been a mixed bag of results for the resale homes. Here’s a quick recap and some thoughts on how to sell your home here. All data is from the Austin MLS.

The successes: Three resale homes have sold in 2009.

Time on market: The number of days on market averages at 18, which is outstanding for an average list price of $341k. Compare this with an average of 81 days for other homes in the city of Austin sold in 2009 between $300,000 and $400,000.

Other listings that didn’t sell: Two were leased out rather than sold, one failed to sell (expired) and one is temporarily off the market. So 25% of listings have failed to sell, though the statistical sample is laughably small.

Other resale homes available: There is one other home available on Pinckney Street opposite the pool. There are around 14 new homes in various stages of completion available as of this morning.

What’s the price per square foot of homes at Mueller? I’m not a big fan of this basic type of analysis - it misses out the detail of what makes each home unique, and sales between $150/sqft and $202/sqft give a very wide deviation. I don’t put much stock in the number.

How do I price my home at Mueller for sale? Pricing is always interesting when there have only been a few resales and the builders are still active in a neighborhood. The good news for those considering reselling right now is that the Mueller builders only have very limited inventory, and no fixed plans are in place for the next phase of development.

Pricing must be realistic and is based on competition, supply and demand. If your home is competing with a builder model, then pay attention to the incentives that they are offering, and what upgrades and options your home has.

For example, an inventory home listed at $369,000 might seem like fair competition for your two year home unless you consider that the builder may be offering seller paid closing costs or other incentives to use their preferred lender. The builder will also offer a warranty with their new home, while much of your warranty might have expired.

When pricing your home, get professional advice from a local real estate agent who has been involved in the new home sales. There are several that live in Mueller including myself.

Garreth Wilcock is a Realtor® specializing in new and resale homes at Mueller.Call him on 512 215 4785 for a chat about home sales.

Why is there a “for rent” sign where the Meritage model home on Antone Street used to be? There’s not much left for Meritage to sell of their existing lots. One home at the last count. So there’s not much reason for them to have a model home in Mueller right now.

Is this normal? This is pretty standard operating practice for some builders. They will sell their fully furnished models and then rent them back to use as model homes.

Meritage haven’t owned the home in some time, but given that they had a “Meritage model home” sign outside, no-one noticed.

Buying a model home can be a good opportunity for an investor - typically a builder in a model home is a great tenant. They pay the rent and keep things in tip top condition -did you ever see a model home with dead grass or bad landscaping?

So Meritage don’t need a model home right now. David Weekley have sold one of their model row homes, and have their Willie model for sale right now too.

Why is the sign big and red? Well it made you notice didn’t it!
Are there any more homes for sale at Mueller? Yes, there are some new homes and some resale opportunities pop up too. Right now there are 24 homes in the MLS, of which 10 are under contract. What this means is that the remaining homes are selling quickly and that inventory is low.

Given that the available 14 and a few custom home lots represent all the remaining lots that the builders have to work on, it’s likely that homes under $600k won’t be around for long.

When is the next phase of development in Mueller? That’s the million dollar question right now. We’re anticipating some news from Catellus in 2010. For now, all is quiet on the western front.

I want to buy a model home at Mueller. How do I do that? There are still some remaining models on the ground - David Weekley, Standard Pacific and Streetman still have model homes. While they’re not listed for sale, you might want to consider getting a Realtor and making an offer.

How do I rent a home at Mueller? Many leases at Mueller pop up on the MLS - here’s a link to active leases in Mueller.

So while I might not expect any more “for rent” signs on model homes at Mueller, I fully expect some “for sale” signs until the developer reveals the next phase of development.

Garreth Wilcock is a resident and Realtor at Mueller Austin where he keeps his finger on the pulse of homes for sale.

Austin mortgage planner John Schutze gives his weekly market update:

“Mortgage rates improved slightly this week.

This week the Fed reiterated that the Mortgage Backed Security purchase program will end on March 31, 2010. There had been some speculation that the program might be extended to help keep mortgage rates low. So for now we have to assume rates will increase at some point before March 31^st . Also, the Consumer Price Index for November was within expectations signaling tame inflation…good for mortgage rates in the short term.

Current rates:
30 Year Fixed:  4.75 %
15 Year Fixed:  4.25 %
FHA 30 Year:  4.75 %
VA 30 Year:  4.75 %
5 Yr ARM: 3.625 %
Jumbo 30 Year Fixed:  5.625 %
Jumbo 3 Yr ARM:  4.25 %

30 Year Home Equity:  5.0 %The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount”

John finds buyers the right loan for their Austin home purchase.  Check out his Austin mortgage blog.

Garreth Wilcock is a Realtor® in Central Austin. You can search Austin homes for sale at his website.

The continuing development at the old Mueller airport in Austin has seen fast paced sales in 2009, and the developer Catellus is remaining tight lipped about plans for 2010.

New home sales in 2009 have been brisk to say the least, and I’m grateful for all the business. At a recent development budget meeting, the number of residential homeowner assessments was announced as 671.

Compare that with the number of occupied units at the end of 2008 (around 350) and assuming 20 unsold units, that means that around 300 new homes have sold in 2009. Mueller is certainly Austin’s fastest selling development.

Another example is a success in a tricky price point. The 2009 Parade of Homes showcased five million dollar five star green homes. This is a slow selling price right now - the absorption rate of homes in the $900k-$2m range within Austin is very low - there are over 15 months of inventory right now. Nevertheless, one of the five in Mueller has sold this year - congratulations to The Muskin Company and Kevin Burns.

During 2009, most of the remaining builder lots have been sold and much of the construction completed. Visiting the model homes right now shows that there are only a handful for each builder available. I ran into Bob Brock at Streetman Homes a few days ago and he has only three townhomes available and three other lots to build on (and the Parade home).

There are some new homes still available at Mueller, but not many.

So what’s in store for 2010 at Mueller? The developer’s original plans have certainly changed. While we had anticipated an announcement from Catellus on the next phase by the end of this year, it looks like this has been pushed back until 2010. So when will we see new homes under construction at the old airport? It’s unclear at this stage.

I’ll talk about what this means for the resale market in Mueller in my next post.

Garreth Wilcock is a Realtor® specializing in new and resale homes at Mueller. Get in touch at 512 215 478, or leave a question in the comments below!