Is this a good time to buy property in Austin? (West: house, transfer)

[mimimomx3]

Originally Posted by achtungpv

Austin-Steve, just curious what do you think will happen to prices if banks wake up and go back to requiring a 10%+ down payment with a 15 or 30 year fixed interest rate note? I would think that by itself would dry up a large pool of buyers and force prices down.

Seriously, would that be a BAD thing??? I don't think so, personally.

[handy dan]

Originally Posted by mimimomx3

Seriously, would that be a BAD thing??? I don't think so, personally.

Not a bad thing if you're renter and are willing to wait it out for the next 4 or 5 years and have enough savings to put down a 20% down payment on a house that is 30% to 40% off from its peak price.

[austin-steve]

Originally Posted by handy dan

Not a bad thing if you're renter and are willing to wait it out for the next 4 or 5 years and have enough savings to put down a 20% down payment on a house that is 30% to 40% off from its peak price.

Renters have had it reall good since 2002. I just leased a house I own in Leander for $1,225. It had all new flooring, paint, fixtures, exterior paint. I spent $10K sprucing it up and making it real nice. It still only rented for $1,225.

I rented the exact same house in 2001, when it was 7 years old, in decent, average condition, for $1325.

How is that for rents staying reasonable for 8 years. The average rental rate in Austin is still below the year 2000 rate actually. It peaked in 2001 and is moving up, but still not to where we were in 2000.

[Torontonian]

It doesn't look good for the metro Austin as a whole based on the info on this site
HousingTracker.net: Median Home Asking Price & Inventory Data for Austin, Texas

Inventory is up, median prices are down

PS. Option, interest only ARMs will start resetting soon. My observation is that some (maybe even most of them ???) of out-of-state investors were using these types of mortgages for their investment houses

[mimimomx3]

Originally Posted by handy dan

Not a bad thing if you're renter and are willing to wait it out for the next 4 or 5 years and have enough savings to put down a 20% down payment on a house that is 30% to 40% off from its peak price.

I think that being fiscally responsible is a good thing. So you have to wait. Wow, what a concept. It's all the quicky loans to unqualified people based on pipe dreams that got us in trouble. Anyone remember the trillion dollar housing bailout of July?? Real Estate Bubble - Housing Bubble

[handy dan]

Originally Posted by austin-steve

Well, anything that reduces demand hurts sales at least short term. But returning to normal is a good thing. Many people in the 2000s, who had no business purchasing a home, were given loans. That's partly what created the surge in real estate in many parts of the country- easy money. The other factor was when the stock market cratered, starting March 2000, investors fled the stock market and started buying real estate instead.

So, starting in 2000, demand was artificially pumped up by 1) unqualified buyers able to nevertheless get loans and 2) investors who needed to invest money somewhere other than the stock market.

I was on the phone with a real estate consultant this morning who does market research all over the country, mainly of the "30,000 foot view" variety, for large institutional investors, developers trying to see if a certain development might make sense, etc. He says, and I agree, that Austin is easily at the top of the list for good places to invest in real estate if you have at least a 5 year horizon.

Steve

FNM announced today that they will stop buying Alt-A loans. If FNM isn't buying Alt-A loans, then nobody else will be either. Expect Freddie to follow suit within the next few days. And between the two of them they account for 90% of the mortgage market. Since Alt-A is now dead, then prime/conforming is the only thing left. If people are really required to put 20% down on an 80% LTV, prices are going to crater.

[austin-steve]

Originally Posted by handy dan

FNM announced today that they will stop buying Alt-A loans. If FNM isn't buying Alt-A loans, then nobody else will be either. Expect Freddie to follow suit within the next few days. And between the two of them they account for 90% of the mortgage market. Since Alt-A is now dead, then prime/conforming is the only thing left. If people are really required to put 20% down on an 80% LTV, prices are going to crater.

Well, they won't stop buying Alt-A until Jan 2009, so buyers can still obtain those loans if qualified, between now and then.

Alt-A loans are a notch up from sub-prime loans and include "no doc" loans and adjustable rate loans. Those of us who are self-employed and use "stated income" loans, or "no doc" loans have Alt-A loans.

Alt-A and subprime, when the market was in full swing, comprised about 40% of all loans. That was too high a percentage and never should have happened.

What's left is conforming loans. A conforming loan does not require 20% down payment, but will have the additional Mortgage Insurance payment as part of the loan payment if less than 20% is put down. They are also going to be a lot more strict on allowing second mortgages to avoid MI with an 80-10-10 loan. In fact, that may be gone altogether, I've have to check.

But your point is valid. Restricting the number of prospective buyers who can obtain a loan will mean fewer buyers which means less demand.

Steve

[Austin-Willy]

I would caution you that real estate agents have a vested interest in making you think that now is the time to buy. Buyer beware -- that goes for information as well as real estate.

[austin-steve]

Originally Posted by Austin-Willy

I would caution you that real estate agents have a vested interest in making you think that now is the time to buy. Buyer beware -- that goes for information as well as real estate.

Even if your presumption were true, the Austin real estate market cannot be influenced by free advice/opinions posted by Realtors on a forum such as this.

And I agree that everyone should do their own homework or hire a trusted adviser to provide guidance, based on the wants and needs of the buyer or seller.

Steve

[Exiled Texan]

We met with a real estate agent we trust to list our NYC place SINCE I JUST GOT AN AUSTIN JOB OFFER. Anyway, I've always thought I was realistic and conservative and they recommended a list price 5% of my estimation. 15% below what my neighbor's apt has been listed.

Jumbo loan financing is killing the high price points. Hoping the hit we take will be okay b/c Austin's market will take a proportionate hit.

Someone was showing me the appreciation in the past two years in Tarrytown etc, citing a 100% appreciation. If that ain't a bubble waiting to let out some air, I'm not sure what is.