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Real Estate Big Data

Austin real estate will still be hot post-COVID, just different

(REAL ESTATE BIG DATA) While Austin real estate has gone through some changes in the pandemic, commercial and residential markets are still hot with no signs of slowing down.

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Austin real estate shown in the skyline of the Texas city.

The Austin, Texas real estate market looks set to be just as hot post-COVID-19 as it was before the coronavirus pandemic—though it may look a little different.

In October, the Austin Business Journal convened a panel of experts to discuss the future of real estate in the Texas capital. These included Sean Bukowski, the owner of the Bukowski Law Firm, Investors Alliance Inc., President Diana Zuniga, Affordable Central Texas CEO David Steinwedell, Presario Ventures Principal Darin Davis, and Sabot Development Managing Partner Jim Young.

Despite COVID-19’s adverse effects on the economy, the residential real estate sector has continued to remain hot, with industrial space booming as well.

According to the Urban Land Institute’s annual report, Austin is the second-best real estate market in the country going into 2021, though it did hold the top spot in the institute’s previous reports. That doesn’t mean the Austin real estate sector has come away completely unscathed from the pandemic, however, as leasing seems to be an area of concern.

“In terms of leasing, leasing just came to a screeching halt. We had several good prospects for our building — it’s 123,000 square feet and by April everybody was just on hold.” Zuniga said, “A few people now are stirring but the transaction volume overall, if you read the reports, is really down.”

Downtown offices are also feeling the current effects of the coronavirus. Zuniga stated that the latest surveys found office buildings downtown to be “running at 20% capacity” at the moment. This would affect not only the businesses who are leasing downtown area buildings but the restaurants and retail spaces who make a large part of their revenue from the office crowds. Although many experts on the panel believe that the sector will rebound, it will most likely be with different companies that are there currently.

“The downside is that it’s likely going to be with a lot of different players than it was before.” Bukowski said when asked about the downtown area, “Because we represent a number of music venues, for example, and they’re not coming back anytime soon and probably not going to make it, unfortunately.”

Exactly what things will look like in Austin when the COVID-19 pandemic is over is anyone’s guess, but things are certainly shifting across the country—and Austin might not be immune.

Patrick Auger is a management consultant and entrepreneur who resides in Austin, Texas. He has a Bachelor of Arts in Business Management from Western Illinois University, and is the Founder and Principal Consultant at Auger Consulting Group, LLC. When he's not writing for The American Genius, he's writing about the business of Mixed Martial Arts for The Body Lock or learning how to cook, one burnt recipe at a time.

Real Estate Big Data

Home sales dip in December, yet saw the highest annual bump since 2006

(REAL ESTATE) Despite rising mortgage rates and tightening underwriting standards, home sales jumped annually at a rate not seen since before the crash.

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existing home sales

Existing home sales dipped 4.6% in December from November after three consecutive months of gains, according to the National Association of Realtors (NAR). But it’s not all bad news as the trade group explains that overall sales for the year were actually up 8.5% from 2020, and hit the highest annual level since 2006.

Weather typically pulls sales down in December, but what is interesting in this most recent data is that inventory levels hit an all-time low since reporting began in 1999. The pressure on the market from tight inventory of unsold existing homes has plagued the market in recent years as NAR has continued to emphasize.

“December saw sales retreat, but the pull back was more a sign of supply constraints than an indication of a weakened demand for housing,” said Dr. Lawrence Yun, NAR’s chief economist. “Sales for the entire year finished strong, reaching the highest annual level since 2006.”

Dr. Yun expects existing home sales will continue to slow a bit, given rising mortgage rates, but indicates that employment gains in a tight labor market, and increasingly strict underwriting standards insure sales levels are not in danger of crashing.

“This year, consumers should prepare to endure some increases in mortgage rates,” Dr. Yun cautioned. “I also expect home prices to grow more moderately by 3% to 5% in 2022, and then similarly in 2023 as more supply reaches the market.”

As inventory levels tighten even more, Dr. Yun warns that although homebuilders are increasing supply, “but reversing gaps like the ones we’ve seen recently will take years to correct.”

He’s bullish on home sales and employment gains, but is not exactly observing an overly glowing picture of the market, given the lingering crisis with lagging housing starts.

Home sales fell in all regions (1.3% in the Northeast and Midwest, 6.3% in the South, and 6.8% in the West), and prices rose rose in all ares (up 8.4% annually in the West, 6.3% in the Northeast, 10% in the Midwest, and a whopping 20.2% in the South).

“We wrapped up the year witnessing home sales exceed the previous year’s total and saw millions of families secure housing,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “I think the positive momentum will continue as the market prepares to finally see more supply in the coming months, meaning more buyers will be able to land their dream home.”

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Real Estate Big Data

Real estate myths created during the pandemic

(REAL ESTATE DATA) Real estate is a finicky field, but the most popular myths surrounding the effects of COVID-19 on the market are purely unfounded.

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real estate myths

Since the pandemic spread across the globe, misinformation regarding the Coronavirus, its treatment, and the long-term ramifications of a pandemic has been widespread. This phenomenon that has affected, among other industries, real estate.

As practitioners, here are a few myths you’re likely to experience in the current market.

The first mythand, arguably, the most prevalent oneasserts that selling your home amidst COVID-19 restrictions is a poor choice.

In fact, the opposite is true: Danielle Hale, a real estate expert, explains that people have been able to sell at relatively high rates despite the pandemic. “As long as buyer demand remains strong, I expect the market to remain tipped in favor of sellers,” she adds.

Of course, both taking the proper precautions during showings and maintaining social distancing–along with affording buyers an appropriate amount of grace when settling on a closing date–are important attributes of making a successful sale during this time.

Another myth you’ll probably hear about is tangentially connected to the first–that home prices are declining, thus making it, again, a bad time to sell. This is simply untrue; Lawrence Yun of the NAR points to low mortgage rates, as well as a general lack of people selling during this time, as the culprit. It makes sense that people would want to protect their investments for the time being, after all.

Thirdly, and lastly in the buying-and-selling myth pantheon, you’ll find that people are actually buying houses more now than they were before the pandemica direct answer to the myth that buyers are hesitant to close on properties for now. Just like the last item, you can look to low interest rates and high demand as the justification here.

Then, there is the myth that you can no longer tour homes in person seems real enough, and it may be standard practice for some sellers; however, the majority of homes being sold in the United States, as of now, are viewable in personand, more importantly, with the viewer’s safety at the forefront of the seller’s endeavors. However, SFGate does point out that, due to rising cases in much of the United States, some of these restrictions may eventually return.

Finally, the myth that buyers are actively attempting to leave cities in favor of suburb living seems to be circulating as of late. SFGate acknowledges that this myth is “partly true”, but that doesn’t mean city listings aren’t availablenor does it mean city dwellings will begin to lose their value. After all, urban living has consisted of largely prime real estate for as long as any of us can remember, and the Coronavirus probably won’t outlast that allure.

The bottom line is this: Real estate, like everything else, has been affected by COVID-19but it hasn’t been completely turned on its head and wiped out like some may think.

This story was first published July 31, 2020.

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Real Estate Big Data

Super simple shortcut to attract new (or more) real estate investors

(REAL ESTATE BIG DATA) Without having to spend any money, this shortcut can attract more business to boost your bottom line with real estate investors – a win-win for the nation.

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Whether you’re a real estate veteran, or looking to expand your services to the real estate investment world, a wild shortcut has just been launched, and you already have access to it for free if you’re a Realtor.

Realtors Property Resource (owned by the National Association of Realtors (NAR)), rolled out a map layer to unveil the Qualified Opportunity Zones (QOZ) across the nation this year, and it’s a tool we should all be using regularly…

The QOZ program was created in 2017 as part of the Tax Cuts and Jobs Act and is designed to improve local economies (specifically the economically disadvantaged areas) through long-term investments with real estate investors.

There are 8,700 QOZs in America, and real estate investment and development in those areas are rewarded with tax incentives (potentially reducing their tax liability by 10-15%, and appreciation on the investment is tax free if held for at least 10 years).

And now, you can find the investment opportunities in seconds, generate reports for investors, connect with homeowners (via the “Mailing Labels” feature) in those areas, and so much more – the new RPR features combine to create one hell of a shortcut for you. Check it out:

Opportunity Zones

This is “Opportunity Zones” by Realtors Property Resource® on Vimeo, the home for high quality videos and the people who love them.

“With the Opportunity Zone initiative poised to transform American communities that have long been shunned by investors, NAR has developed resources to help facilitate and expedite investments in these areas. As our work continues, REALTORS® are committed to ensuring Americans can take full advantage of this valuable new initiative”, said Joseph Ventrone, NAR Vice President, Federal Policy and Industry Relations.

“These Opportunity Zones encourage private investment into low-income communities, with the intent of stimulating economic growth and job creation,” said Bob Turner, NAR’s 2019 Commercial Liaison and RPR Advisory Council Member. “Residential practitioners will notice homes that fall within Opportunity Zones gain a boost to their marketability because of increased attention, while Commercial practitioners will likely see properties once being skipped over turn into desirable investment opportunities.”

It’s not just a shortcut for practitioners and real estate investors, but meaningful help for underserved areas. Talk about a real win-win.

This story was first published July 31, 2019.

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