Millennial Homebuyers

Millennial Homebuyers are missing from the market, but Austin and Dallas may be better values first-time homebuyers in this generation over San Antonio and Houston.

Where are all the first-time homebuyers? In their cozy rentals, that’s where!

With a market almost completely devoid of newby buyers, and the rental market being as competitive as it is (just ask my friend looking for a single-family home in East Dallas!), and prices going up across all segments, it’s just hard to find a place to put your leather couch and Le Creuset stock pot. Millennials hold a lot of potential when it comes to real estate purchases, but where can the find the best value? Is it San Antonio and Houston?

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Casa Santuraio ext frontYears ago, I sold my home on Park Lane after living there for more than ten years. We agreed on a sales price and yes, like most home sellers, it was less than what I wanted, less than what I thought my home was worth. But I agreed to the sales price and the terms and signed the contract.

Then, one night as I wandered my home, taking inventory of all I had to pack up — some closets could not even be opened because they were jammed with toys, Legos, Hoovercrafts, Fuze Ball tables, dolls, games, you name it, — I called my agent and said the most chilling words an agent can hear:

“Can you get me out of this contract?”

I was what you might call the client from hell. The man had spent THREE YEARS marketing my home, was about to net a commission after pouring thousands of dollars of his own funds into the marketing and so many Open houses I lost count.

Then I ask him to get me out of an executed contract.

Well, that has SORT OF of happened in Austin. Only in this case, the seller just didn’t show at closing.

Recall the auction of the 9700 square foot Tarrytown estate on five acres, Casa Santuario? According to the Austin Business Journal, the seller did not show up for the closing on March 12.

Concierge Auctions founder and co-director Laura Brady told Austin Business Journal staff writer Jan Buchholz that “we’re all very surprised that she did not honor her agreement.”

Brady also said that in all her years of owning and operating Concierge, selling luxury real estate across the globe, nothing like this has ever happened.

So Concierge did what I guess they had to do to protect their company: they filed a lawsuit in New York County Supreme Court on March 13. According to the ABJ story , Concierge claims the owner of the home, Kimberly Granger, broke the contract she signed with the winning bidder at the auction to sell her home at 2600 Kenmore Court for the high bid amount of $7.5 million. The home had been listed for as much as $15 million, and had been on the market for a long time.

“On March 12, 2014, Granger intentionally, willfully, and knowingly refused to close the sale. Because the failure to close was due to intentional actions of Granger and her agents, pursuant to the (Auction Marketing Agreement), Concierge is entitled to be compensated by Granger for it’s services in connection with the auction in an amount not less than $645,000.”

Concierge is also asking for the court to award “punitive damages in an amount no less than $1 million.”

Concierge says they did their part: the five week marketing campaign for the home generated 8,200 website visits from 49 states and 75 foreign countries, 176 open house visits and 84 showings of the property. The buyer, who was not identified, is from Austin.

Here is the full statement from Concierge Auctions:

Concierge Auctions vs. Casa Santuario Owner Kimberly Granger

Casa Santuraio ext frontYears ago, I sold my home on Park Lane after living there for more than ten years. We agreed on a sales price and yes, like most home sellers, it was less than what I wanted, less than what I thought my home was worth. But I agreed to the sales price and the terms and signed the contract.

Then, one night as I wandered my home, taking inventory of all I had to pack up — some closets could not even be opened because they were jammed with toys, Legos, Hoovercrafts, Fuze Ball tables, dolls, games, you name it, — I called my agent and said the most chilling words an agent can hear:

“Can you get me out of this contract?”

I was what you might call the client from hell. The man had spent THREE YEARS marketing my home, was about to net a commission after pouring thousands of dollars of his own funds into the marketing and so many Open houses I lost count.

Then I ask him to get me out of an executed contract.

Well, that has SORT OF of happened in Austin. Only in this case, the seller just didn’t show at closing.

Recall the auction of the 9700 square foot Tarrytown estate on five acres, Casa Santuario? According to the Austin Business Journal, the seller did not show up for the closing on March 12.

Concierge Auctions founder and co-director Laura Brady told Austin Business Journal staff writer Jan Buchholz that “we’re all very surprised that she did not honor her agreement.”

Brady also said that in all her years of owning and operating Concierge, selling luxury real estate across the globe, nothing like this has ever happened.

So Concierge did what I guess they had to do to protect their company: they filed a lawsuit in New York County Supreme Court on March 13. According to the ABJ story , Concierge claims the owner of the home, Kimberly Granger, broke the contract she signed with the winning bidder at the auction to sell her home at 2600 Kenmore Court for the high bid amount of $7.5 million. The home had been listed for as much as $15 million, and had been on the market for a long time.

“On March 12, 2014, Granger intentionally, willfully, and knowingly refused to close the sale. Because the failure to close was due to intentional actions of Granger and her agents, pursuant to the (Auction Marketing Agreement), Concierge is entitled to be compensated by Granger for it’s services in connection with the auction in an amount not less than $645,000.”

Concierge is also asking for the court to award “punitive damages in an amount no less than $1 million.”

Concierge says they did their part: the five week marketing campaign for the home generated 8,200 website visits from 49 states and 75 foreign countries, 176 open house visits and 84 showings of the property. The buyer, who was not identified, is from Austin.

Here is the full statement from Concierge Auctions:

Concierge Auctions vs. Casa Santuario Owner Kimberly Granger

Lance Armstrong Lake Austin

I guess it’s good to be in the middle of the pack sometimes, especially when it comes to making lists that label cities and towns as “Most Expensive” or “Most Affordable” real estate markets. It’s a lot like dating, right? You don’t want to come off as too easy, or seem too prude, either, when you’re meeting someone for the first time.

Well, Dallas doesn’t have that problem, and neither does Austin, Houston, or San Antonio. In fact, no Texas towns made Coldwell Banker’s “apples-to-apples” comparison of more than 1,900 towns in their Home Listing Report. The report, which compares similarly sized four-bedroom, two-bath homes across the nation shows where potential homebuyers will pay the most, and the least, for what they get.

This year’s report has Malibu coming in first as the most expensive place to find a four-bedroom home at $2,155,900, not a shock to anyone familiar with the exclusive beach community that is practically littered with celebrities. What’s really interesting is that the top five most expensive cities are all in California — Newport Beach, Saratoga, Los Gatos, and San Francisco. In fact, only three towns outside of California managed to squeak into the top 10 — Stone Harbor, NJ, at No. 6; Orono, Minn., at No. 8; and Weston, Mass. at No. 9.

Coming in as the most affordable is Cleveland, Ohio, where you can find a good family home for just $63,729. The “Most Affordable” list is a bit more diverse than the “Most Expensive” list, with Ohio, Michigan, New York, Georgia, Florida, Missouri, and Illinois, having more than one city on the list.

Are you shocked that this report skipped Texas altogether, with no mention of how pricey Austin is getting for single-family homes?

 

New Home Construction

I know “housing shortage” should sound very ominous, but really, we should be celebrating! Thanks to a growing job market, Texas is adding more workers faster than it can build housing for them. According to this story in Bloomberg News, there are bidding wars all over Texas, with some sellers turning down cash offers that would have seemed ample just a few years ago.

While the Bloomberg story is a bit general and doesn’t show that in some neighborhoods homes sit on the market for 90 days or more depending on location and price, it sheds an interesting perspective on why Texas wasn’t hit so hard when the housing bubble burst and why home builders are slow to meet brisk demand:

Values also didn’t inflate as much because builders could move quickly to meet demand given the state’s abundance of land and relatively easy zoning requirements. Texas home prices fell about 2.5 percent from a peak in 2007 to a trough in 2011, according to the Federal Housing Finance Agency.

The state’s homebuilding industry, which fell into hibernation during the recession, awoke to a rebound that it was unprepared for. Developers, constrained by banks reluctant to make construction loans, had few lots in its backlog, and many homebuilders closed or downsized. Trade workers left for jobs in the energy industry as oil prices surged.

You have to read some of the anecdotes in the story, too, which we’ve heard some version of from Realtors in the Dallas area. In the story, CoreLogic economist Sam Khater says that Texas’ surge in prices “begins to defy fundamentals,” noting that the swing from moderately brisk to frenzied isn’t driven by normal market forces. Instead, Khater wages, it is driven by investors.

Which brings up another point: Are investors driving up prices too much? According to Trulia’s “Bubble Watch,”  Dallas, Austin, San Antonio, and Houston residential real estate markets are becoming “overvalued.”

Trulia Bubble Watch Table

 

 

(Table: Trulia)

Interesting to see these cities among locations such as Orange County, Calif., Los Angeles, San Jose, San Francisco, and Portland, Oregon. And while Dallas is experiencing a surge in both demand and prices, it’s heartening to know that we came in last.

Still, these numbers and observations seem a little too general for me, as residential real estate is best gauged looking from home to home within a neighborhood, rather than comparing areas as disparate as Portland to Dallas.

So, what do you think? Are these Texas cities poised for another bubble? Or will low inventory and high demand maintain the market for the foreseeable future?

You’ll have to jump for the video and details, but this is just about the craziest thing I have ever seen about Austin homes for sale!

I am going to let the video do the explaining, but here’s my breakdown:

– Who puts two toilets right next to one another without any kind of divider? Did this homeowner want to have conversations with their spouse while they were both indisposed?

– A large anthropomorphic pig is just creepy wherever you may think to put it, but I am sure it will run afoul of neighbors if you have it staring into their backyard.

– WHAT IS A TREE DOING IN THE KITCHEN?

– Someone needs to do a better job of hiding their copy of “Trisexual Adventures 2.” I’m just sayin’.

– Nothing turns off a prospective buyer faster than a fake crying child. Not even “Trisexual Adventures 2.”

Sean McCormackThe video was posted by Austin real estate agent Sean McCormack (left), who, besides having a wicked sense of humor, is absolutely in love with Austin after having lived in the city for 15 years.

“These were taken 3-plus years ago all over Austin,” McCormack said. “I saw too much porn and guns haphazardly laid out in listings that I knew I had to document it (and eventually I did). All of these homes, with the exception of the doll crying on the ottoman, are from central-ish Austin. The doll was up in Round Rock. Everything was under $250,000, except for the doll house which was in the 400k range.

“I guess sellers have actually watched an episode of any show on HGTV over the past couple of years because I really haven’t seen anything too interesting lately,” he added.

Still, who would have two toilets next to one another? McCormack has his own ideas about that:

“I pictured a sweet old couple helping each other with crosswords and sudokus on the double toilets,” he said. “There would be one of those old school tall ashtrays between them for their cigarettes.”

What weird stuff have you found while touring homes?

Dallas Vs AustinChris Galis of Realty Austin has helped client after client find a spot in Austin that feels like home regardless of the area from which they hail. While no two cities are exactly alike, neighborhoods often have quite a bit more in common than we realize. Gallis shows us how Dallas compares with it’s southern compatriot, acknowledging that these two rival cities have plenty similarities.

As Austin continues to grow and develop more tourist-attracting bastions of international commerce (i.e. F1’s Circuit of the Americas), the Austin real estate community emerging around this growth is becoming a full-fledged poster child for a healthy Texas housing market (which, much like Dallas, fared well during the housing bust in early 2008). Let’s take a look at a few comparable Austin and Dallas neighborhoods and what it is that makes them so attractive to their residents.

Highland Park, Dallas | Westlake, Austin

Highland Park and Westlake

Dallas’ Highland Park neighborhood is infamous for the financial means of its residents. In 2010, the average price of a home in Highland Park was over $1 million, so the finer things in life are no stranger to your typical Highland Park resident. Likewise, Austin’s Westlake real estate features exquisite estates and homes, usually for the well-to-do members of Texas capitol city. The average home price in Westlake was also over $1 million a couple years ago.

Hyde Park, Austin | M Streets, Dallas

Hyde Park and M Streets

The Greenland Hills/M Streets in Dallas proper sits between Highland Park and Lakewood and features quaint tree-lined roads in close proximity to Dallas’ urban core. Hyde Park in Austin, TX is a similar historic neighborhood that features many early to midcentury homes along quiet streets. Homeowners in both neighborhoods have taken to expanding their existing homes, as larger space needs have become the norm. For professionals and families looking for the quintessential suburban residential lifestyle, M Streets and Hyde Park have it all.

Victory Park, Dallas | Warehouse District, Austin

Victory Park and Warehouse District

If you’re looking for a hip urban setting, modern condos, and plenty of nightlife and entertainment choices, then Dallas’ Victory Park and Austin’ Warehouse District both provide plenty. In Victory Park, you can find top-notch shopping, entertainment in one of Dallas’ oldest, yet most modern neighborhood hot spots. Similarly, Austin’s Warehouse District features several modern, luxury high-rise Austin condos in close proximity to its infamous live music and nightlife districts. Both of these neighborhoods provide young professionals and others looking for a hip, urban setting a place to call home.

Austin’s Steiner Ranch | North Dallas

Steiner Ranch and North Dallas

The suburban lifestyle is a way of life unto itself. The further from the urban core you get, neighborhoods and your commute to work tend to grow. North Dallas is the perfect candidate for such a lifestyle. As more and more development occurred in the late 20th Century, Dallas residents moved north to one of North Dallas’ many neighborhoods that feature large model homes and planned developments. Likewise, Austin’ Steiner Ranch neighborhood is a self-subsistent, gated community with its own shopping centers, schools, and plenty of neighborhood amenities. Both sit a ways from Dallas and Austin’s economic centers.

 What do you think? Do these neighborhoods compare?

Now here’s the perfect first, second or third home for your Valentine. Brooklyn Decker is a gorgeous super model married to Andy Roddick, and they live in Austin. She is also the star of a new film out just this weekend called “Just Go With It“, the story of a plastic surgeon who convinces his loyal medical assistant (Decker) to come to Hawaii and pose as his soon-to-be ex wife for various reasons. (Oh I could tell you some war stories about this. I know of a local plastic surgeon who did take his two office assistants to a medical conference once and asked them to be a lot more than a soon-to-be ex wife. Needless to say, they soon both became ex-employees.) ¬† But Brooklyn and Andy are trying to sell a delicious home in Austin so, we presume, she can get on with her film career.

Down in Austin, the market is fairly brisk for multi-million dollar homes, and this waterfront estate ought to fetch a premium.  Though they are both under 30,  tennis star Andrew “Stephen” Andy Roddick and his beautiful bride of just over one year, Brooklyn, will likely be moving on up. Their 5558 square foot starter home at 4104 Shimmering Cove in Austin is listed for $3,600,000 is on a cul de sac in an exclusive private gated Westlake community overlooking Lake Austin.  The lot is approximately .71 acres, with four bedrooms, three full baths and two half baths, soaring ceilings, cedar closets, master suite with sitting room and two huge closets — I cannot fathom what Brooklyn needs that space for since all she’s ever seen in are teeny tiny bikinis. Also jetted master tub, tons of marble and separate shower. The gourmet kitchen has all the usual upgrade perks, from Sub-zero appliances to granite center island and breakfast bar and gorgeous cherry custom cabinets. There’s also a pantry, formal dining room, game room, exercise room (that’s how these young “thangs” stay so fit!) library, media room, utility room, huge deck, boat dock all in the Austin school district. There is also a private tennis practice court, of course.

Get her this home and a little lingerie from Victoria’s Secret, and you ought to have the perfect Valentines’ Day.