Central East Austin Real Estate - Mueller and More

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.

There have been fewer home sales within Austin in the last few years - I don’t think that’s a surprise to anyone. And the under $300,000 price range is seeing the most activity now.

When you see statistics pulled from the Austin MLS, you often see all of the Greater Austin Metropolitan Area included - Round Rock, Pflugerville, Georgetown, Kyle and Buda are in there. I don’t look at these areas further out of town.

I took a look at single family home sales just in the City of Austin - all condos, half duplexes, and houses. I looked at sales closing in April, May and June when the Austin market typically sees some of its higher activity. I’m going to use the $300,000 list price as a cut-off for first time homebuyers - the median price for currently listed homes in Austin right now is $314,900.

The chart above shows that the under $300,000 market shrank more during Q2 in 2008 than the rest of the market. The under $300,000 market is doing much better in Q2 2009. So perhaps the stimulus package is working for first time home buyers.

At a recent real estate conference, Gary Keller described the stimulus package as a way of borrowing buyers from the future. When the tax credit ends in December, it will be interesting to see if the under $300,000 market loses ground.

Garreth Wilcock is an Austin EcoBroker® who helps people find homes in Austin, and can give you a FREE market analysis of your Austin home.

Since June 1st, most homes sold in University Hills have been subject to mandatory energy audits. What does this mean for buyers and sellers in the area?

If a home served by Austin Energy is over 10 years old and has not received $500 in energy efficiency rebates in the last 10 years, it is likely to require an audit. The majority of homes in University Hills were built in the 1960s and 1970s, and often were built in a split level or ranch style - the average size of homes sold in the last three years is 1640sqft.

For buyers this means a perception of older, larger home which may be less energy efficient than a smaller, newer home. 69% of homes sold in the last three years in University Hills have less than two energy efficient features recorded in the MLS. So double pane windows and ceiling fans aren’t the norm.

Buyers looking at a 40 year old home aren’t expecting them to be built to modern building codes with R38 attic insulation. Only extreme energy efficiency problems are being negotiated between buyers and sellers right now.

How do the Energy Audits affect buyers in the area? The results aren’t surprising - I’ve seen HVAC duct leakages between 8% and 80% in the last two months. As it says on the audit form itself:

In homes the average Duct Leakage is 27%. Acceptable leakage should not exceed 10%.

So an 80% duct leakage is something so catastrophically out of the norm that it could be negotiated. And the rule for sellers is that the sooner you can find, fix and disclose, the better you do in negotiations.

One way some sellers are avoiding the audit is to simply apply for energy efficiency upgrade rebates as part of their home sale preparations. Then they can market a more energy efficient home, avoid negotiations based on an energy audit and have a smoother sale.

If you’re considering selling your home in the next few years, check if your home requires an Energy Audit before sale, and consider some of the available Energy Star rebates.

Garreth Wilcock is an Austin EcoBroker specializing in East Austin Real Estate.

Mueller Austin Homes - is now a good time to sell? I take a quick look at some of the macro economic factors driving the Austin market right now and look at resale home availability in the $300k-$350k range.

How is the market in Austin doing in this price range? I took some statistics for the first half of each year for the last 4 years for comparison. The data are for single family homes in the City of Austin with a list price of $300k - $350k sold through the Austin MLS.
Not surprisingly, on the whole, less homes sold in the last two years than in the previous two years. The number of homes that failed to sell (that were expired or withdrawn) took a large increase in 2008 relative to previous years.

So in general there are less home sales in this price range. Or are there? These statistics don’t reflect all of the new home sales at Mueller, and David Weekley and Meritage homes in this price range have been moving briskly.

How has the resale market been at Mueller so far? There have been three resale home listings that I have seen so far in 2009. They have all sold, or been leased before they sold.

Who is buying homes in this price range right now? Interest rates at around 5.25% mean that someone with stable employment, reasonable credit and a 10% downpayment can get around 10% more purchasing power than they could with an interest rate of 6.5%.

An extra $30,000 of home for the same mortgage payment makes the difference between a 2 bedroom David Weekley row home at Mueller and a 3 bedroom yard home here - it’s a significant change.

Austin is still growing, and is set to be in the top 5 growing metropolitan areas. Professionals are relocating here, and they need somewhere to live. Mueller certainly sees its share of relocating families in this price point. I got a call from a Realtor® last night who wanted to know if there were any resale homes at Mueller for a relocating family from Colorado for example.

What about competition with the builders at Mueller? Catellus haven’t announced any plan for the development and release of Phase 3 residential lots to the builders yet. There’s an impending availability gap at Mueller, with Meritage having only 7 homes left, and David Weekley selling their homes at a reduced rate to “make stocks last”.

So one tactic for competing with the builders at Mueller is to sell when they have no available inventory. Which could be now or in the coming months.

So is now a good time to sell my home at Mueller, or should I wait until Spring 2010? Whether it’s a good time to sell really depends on your personal situation. Who knows whether interest rates will be low next Spring - I don’t! Who knows what Catellus will announce with regards to Phase 3 - I don’t!

One thing that I do know is that there isn’t much to choose from in this price point in Mueller right now, and less options if you consider what is available for move-in in the next few months.

Garreth Wilcock is a Realtor® specializing in Mueller Austin Homes. Find out how he sells homes at Mueller.

Yes, there are condos coming to the Mueller redevelopment! There are a few different definitions of “condo”, so here’s what’s available right now, and what’s coming soon.

The Greenway Lofts These are traditional condominiums in a low rise four story building at Mueller. There are 34 units planned for residential occupancy.

Units range from a single bedroom unit ‘Jade’ currently selling for $149,000 to some of the penthouse two story units in the $450,000s. This includes the $10,000 discount for pre-construction pricing.

There will be no income qualified units in this development - all condos are market rate. The artists renderings show a great modern finish - granite counters, mosaic backsplashes and stainless appliances.

When Can I Buy A Greenway Loft? The Greenway lofts are available right now. Available to buy, that is. Ground breaking is planned for October, and the units are expected to be ready by summer 2010. The table below shows current pricing information which is subject to change (call me for more up to date pricing)

Townhomes and Row Homes In Mueller, there are two row home builders who currently have availability. Streetman Homes have the Icon Series - modern homes opposite the old airport control tower on Berkman Drive. These start in the $290s and go to the mid $300s.

David Weekley also have townhomes - there are two models on Zach Scott St which show the range of homes which start in the $270s.

When Can I Buy a Townhome at Mueller? The townhomes are available now. There are some homes in inventory that you could move into quickly. Streetman has more homes in Building III coming up for completion in September, and David Weekley have homes coming available steadily over the coming months. There are still a few options for first time homebuyers wanting to take advantage of the $8000 tax credit!

Garreth Wilcock is a Realtor® specializing in homes at Mueller where he lives. Get in touch to find out more about getting free buyer representation at the Mueller Development - 512 694 8873.

The Affordability Gap -The Mueller redevelopment in Austin TX has two gaps. The first is the availability gap which I discussed in part one, the second is the affordability gap which l cover here. What does this mean for buyers and sellers at Mueller?

What is the Mueller Affordability Gap? There are two ways to buy a single family home from a builder in Mueller - with the income-qualified affordable program, and the regular market rate program.

Homes in the affordable program typically cost up to $170,000, and homes in the market rate program started at $219,000, with the majority being at $250,000- $300,000 and above. So the affordability gap refers to the lack of homes around the median home price in the Austin metro area of around $200,000.

How The Affordable Program Might Fill The Affordable Gap

So what does someone looking for a home between $170,000 and $250,000 at Mueller get? There are options in the Greenway Lofts and the few homes that were in this price range were sold extremely quickly.

There may be another choice however. For someone who has bought an affordable home and owned it for over a year, they have the option to sell. The Mueller Foundation which runs the affordable program has first right to purchase the home in this case. If they choose not to, then the owner can sell on the open market, and the home would no longer be in the affordable scheme.

The appraisals for the affordable homes would put the homes right in the $210,000 to $240,000 range in my opinion. Given that there is little competition in this range from the builders at Mueller (none at present), and a wealth of people who have been enquiring about this price point, I think sellers who fall into this category will do well.

Right now buyers are struggling with the availability of the affordable program (a third affordable availability gap!) and are signing up for waiting lists for homes when they come available in Phase III from the builders. If a current owner of an affordable home sells their home back to the Mueller Foundation, then these too will become available on the resale market at the affordable program pricing.

Garreth Wilcock is a Realtor® living and working in Mueller Austin. He represents buyers and sellers at Mueller and beyond. Call 512 215 4785 to discuss your needs.

The Availability Gap -The Mueller redevelopment in Austin TX has two gaps. The first is the availability gap which I discuss here, the second is the affordability gap which l cover in part two. What does this mean for buyers, sellers and builders at Mueller?

What is the Mueller Availability Gap? The builders are currently selling their remaining Phase II homes. Phase III lots have not been developed by Catellus - it’s an estimated cost of around $5m-$8m to do so according to one source. Some have speculated that this is due to share price concerns of ProLogis - the parent company of Catellus.

So there’s a gap between the last homes of Phase II which may be all sold out by the end of the year, and the start of Phase III homes.

How long will it take for the lots to be developed? Estimates run at 6-8 months, so if the developer started today, it might be February 2010 before the lots were released to the builders. Which might mean a 4-6 month build time resulting in no new homes becoming available until June 2010 at the earliest. And that’s if the developer starts today.

So how many homes are available at Mueller? If you look at David Weekley, they have 13 single family homes available, and 19 row homes for Phase II. Meritage have less homes available than that. Standard Pacific have homes available in the higher price ranges ($500k+) and Streetman have larger homes and around three town homes available. Saldana have two homes available in the second Garden Court.

What does this mean for the Mueller builders? With a dwindling supply of homes, and a fairly bouyant demand, I would expect prices to go up. One builder is already limiting the number of sales per month in conjunction with raised prices.

What does this mean for other sellers at Mueller? One great time to compete with active builders offering new homes is when there is a shortage of supply. If I were going to sell my home at Mueller, I would time it when there is little other builder choice. I would expect to see smart sellers putting their Mueller resale homes on the market here in the next 10 months.

What does this mean for buyers at Mueller? If buyers have concerns that the developer is slowing down, they may start to worry about the town center starting later, and other amenities arriving later. This could put people off. In my opinion it’s not a matter of if the town center arrives, it’s more when.

Buyers are going to be choosing from less new home options in the $300-$400,000 range towards the end of 2009, and may see rising prices there. Buyers still have great options in the $400,000+ range. I would expect there to be more choice in the resale market too.

Garreth Wilcock is a Realtor® living and working in Mueller Austin. He represents buyers and sellers at Mueller and beyond. Call 512 215 4785 to discuss your needs.

The Energy Audit Ordnance is now in effect in Austin, meaning that the vast majority of Austin resale homes require a licensed energy auditor to check a home’s efficiency when it is sold. What are the results so far, and how is the process working?

The Statesman has an article reviewing the statistics from the first 310 home audits. There are no real surprises in the findings - Austin homes have leaky ducts.

The average duct air loss was 22% in the sample, which sounds pretty awful. It is - air loss wastes energy used to run air conditioners and costs money. It also means the commissioning of new power plants.

The mandatory energy audits are raising awareness of the leakyness of our older homes, but are people addressing the leaks?

Are Austin homesellers addressing energy inefficiencies as part of the negotiations?

It’s too early to say how buyers are reacting to the audits, and whether they are asking for repairs or allowances. There’s an argument that says if a home is too far from the norm (allbeit a very leaky duct norm) then a buyer may ask for certain fixes or compensation.

What can a smart seller do to get more money for their Austin home?

There are a few ways of getting top dollar for your home and using the energy audit to your advantage. The first is to treat it like an inspection. Homes that are preinspected and have had the major inspection findings address will net more money. There are a few reasons why - one is that the seller can choose who does the work if they aren’t under contract with a buyer. They can even do the work themselves.

In my opinion, the same applies to the energy audit. If you do an audit in advance of listing and address the findings, your buyer will know that they are buying a premium home.

Another way of netting more from your home sale is to make it exempt from the audit, and show that it is already a cut above the rest. That could be by doing some energy efficiency upgrades e.g.:

• Three energy efficient upgrades in the last ten years
• Receive over $500 in Austin Energy rebates

What buyer wouldn’t want to buy a home that was quantifiably more energy efficient than all the other homes for sale and save on their energy bills?

Who is paying for the energy audits in Austin?

Like all things in real estate, it’s negotiable. What I’m seeing so far, and the advice that I’m getting from the Austin Board of Realtors is that it’s a seller expense. It can be included on the sellers’ disclosure as part of the additional licensed inspection section. If the results are good, this can be a positive marketing piece.

Despite the uproar about the mandatory energy audits, the results may be worth the expense. If this means that home buyers can figure out how to save a significant portion of their utility bill wastage by using rebate programs from Austin Energy, then perhaps we’ll see some results in the next few years.

Garreth Wilcock is an Austin Realtor® and EcoBroker® who helps buyers find homes in Austin, and helps sellers get top dollar for their homes.

How do you sell your home at Mueller? The second attempt is under way right now. The first resale ended up leasing their home recently, after 37 days on the market. And now the second resale home is available.

I’m a little surprised by the listing for a number of reasons - there are no photos of it, and no sign is on the street.

Given the challenges of competing with the builders when selling a home in a development under construction, pricing and marketing are critical. Right now there are no photos of the home in the Austin Multiple Listing System. The one below I snapped while walking this morning.

There is no sign letting neighbors know it is for sale. (or the predicted 20,000-80,000 people coming to Mueller for the 2009 Austin Parade of Homes starting this week) I think this is a pretty good time to sell your home at Mueller - builder inventory is low, thousands of people are coming to the area, and there are few choices for people who want to move right away. To buy it, they have to be able to see it and they have to know about it!

One person who does know it is for sale is Hilary Herrin. I was at the Streetman home preview last night, getting ready for the Austin 2009 Parade of Homes at Mueller, and I caught up with another active Realtor who lives here - Hilary. I mention this not to name drop, but to make a point.
Hilary also focuses on Mueller, and has a deep knowledge of prices, buyers and floorplans here. She holds open houses here, lives here, and like me, she works here. We work with home buyers here at Mueller, and have a good grounding in the local market.

She would be a good person to interview if you were looking to sell your home at Mueller. I think I would be too. We’d work pretty hard to get your home sold.

That’s the end of my rant about “horses for courses”. Here’s the home:

The David Weekley home is only a block and a half from the pool at Ella Wooten.
4105 Scales St, Austin TX, 78723

• 3 Beds, 2 Baths
• Single Story
• 1437 sqft
• Austin ISD (Maplewood Kealing McCallum)
• MLS# 5917323
• Built in 2008
• $305,000

I haven’t looked inside this home yet, and all the listing says is that it has “many upgrades”.

Compare that with the builders who have model homes, fliers, staged furniture and people on-site to answer questions. It’s not hard to see who has mindshare of future Mueller residents.
[listing courtesy of Don Cox]

Garreth Wilcock is a Realtor living and working in Mueller Austin, TX, and represents buyers and sellers there. Read more about selling your home at Mueller in this 3 part series. Call or email to set up a viewing of the home above, or any other home at Mueller.