Category Archives: Buying

Austin-area home sales, prices hit monthly records in February 2015

Austin Board of REALTORS® (ABoR) released real estate statistics for February 2015 – The following is the ABoR Press Released Report/ Statement: 

AUSTIN, Texas – March 20, 2015 – Austin-area single-family home sales and home prices hit an all-time high for the month of February according to the February 2015 Multiple Listing Service (MLS) report released by the Austin Board of REALTORS®.

Barb Cooper, 2015 President of the Austin Board of REALTORS®, explained, “The first two months of 2015 have broken monthly records for single-family home sales, yet nearly half of the homes sold in the Austin area in February 2015 were purchased outside of Austin’s city limits. This growing urban sprawl has put a strain on our region’s infrastructure. Long-term and sustainable solutions for statewide transportation funding in addition to policies that allow more affordable housing options inside Austin’s city limits will be critical to making Austin an affordable place to live for all residents.”

According to the report, 1,775 single-family homes were sold in the Austin area in February 2015, a year-over-year increase of five percent and the highest number of homes sold for the month of February. In February 2015, 69 percent of single-family homes sold in the Austin area were priced $200,000 or higher, outside of an affordable price range for many Austin homebuyers.

Home prices also set new records for the month of February. The median price for Austin-area homes in February increased eight percent year-over-year to $248,640 and the average price rose five percent to $307,928 during the same time period. While less than the double-digit price increases seen in previous months, the pace of home price appreciation in February 2015 remains higher than the historical norm of around four-and-a-half percent.

Austin-area monthly housing inventory ended February 2015 at 2.2 months, an increase of 0.2 months from the same time period last year but still only one-third of the 6.5 months inventory level the Real Estate Center at Texas A&M University says equals a balanced housing market. Homes spent more time on the market in February 2015, increasing three days year-over-year to an average of 58 days.

Active listings in February 2015 rose nine percent year-over-year to 5,142 listings, while new listings increased three percent to 2,619 listings from the same time frame last year. Pending sales in the Austin area increased eight percent to 2,278 sales.

Cooper concluded, “The Austin area continues to see more homes on the market, rising housing inventory and homes spending more time on the market. While these trends would typically create more favorable market conditions for buyers, most all of the available housing stock within Austin proper continues to be unaffordable for the typical homebuyer. The Austin Board of REALTORS® urges statewide and city leaders to enact solutions now that will ensure the long-term sustainability of our region’s housing market and economy.”

February 2015 Statistics

  • 1,775 – Single-family homes sold, five percent more than February 2014.
  • $248,640 – Median price for single-family homes, eight percent more than February 2014.
  • $307,928 – Average price for single-family homes, five percent more than February 2014.
  • 58 – Average number of days single-family homes spent on the market, three days more than February 2014.
  • 2,619 – New single-family home listings on the market, three percent more than February 2014.
  • 5,142 – Active single-family home listings on the market, nine percent more than February 2014.
  • 2,278 – Pending sales for single-family homes, eight percent more than February 2014.
  • 2.2 – Months of inventory* of single-family homes, 0.2 months more than February 2014.
  • $546,572,200 – Total dollar volume of single-family properties sold, 10 percent more than February 2014.

The following sections describe trends in other sectors of the Austin real estate market.

Townhouses & Condominiums

The volume of townhouses and condominiums (condos) purchased in the Austin area in February 2015 was 201, a four percent decrease from February 2014. The median price for condos was $196,580, which is five percent less than the same month of the prior year. When compared to February 2014, these properties spent the same amount of time on the market, or an average of 50 days.

Leasing

In February 2015, a total of 1,265 properties were leased in Austin, which is 10 percent more than February 2014. The median price for Austin-area home leases was $1,450, which is four percent more than the same month of the prior year.

The Austin Board of REALTORS® (ABoR) builds connections through the use of technology, education and advocacy to strengthen the careers of its 11,000 members and improve the lives of Central Texas families. We empower Austin REALTORS® to connect their clients to the region’s most complete, accurate and up-to-date listings data. For more, contact the ABoR Marketing Department at marketing@abor.com or 512-454-7636. For the latest local housing market listings, visit AustinHomeSearch.com.

* The inventory of homes for a market can be measured in months, which is defined as the number of active listings divided by the average sales per month of the prior 12 months. The Real Estate Center at Texas A&M University cites that 6.5 months of inventory represents a market in which supply and demand for homes is balanced.

Austin-area home sales set records again!!!

This report is a direct copy and paste from the Austin Board of Realtors site. Click here for a direct link to the article on ABoR site.
Austin-area home sales set records for the month of December, annual home sales volume in 2014

Austin Board of REALTORS® releases real estate statistics for December 2014 and 2014 year-end totals

AUSTIN, Texas – January 21, 2014 – According to the December 2014 and Year-End 2014 Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS®, the Austin-area housing market set a record for single-family home sales volume for the month of December, as well as a record for annual home sales volume in 2014. This marked the fourth-straight year of annual home sales increases.

Barb Cooper, 2015 President of the Austin Board of REALTORS®, explained, “The Austin area experienced a strong, stable housing market in 2014, with year-end 2014 showing similar market conditions to those one year ago. Last month, the U.S. Census Bureau named Austin the third-fastest growing big city in America since 2000. That steady job and population growth has continued to drive increases in home sales volume and, combined with low housing inventory levels, home prices as well.”

According to the report, 2,283 single-family homes were sold in the Austin area in December 2014, a 14 percent increase compared to December 2013 and an all-time high for Austin-area home sales in the month of December. In 2014, home sales volume slightly exceeded 2013 levels to set a new record for the number of Austin-area homes sold in a year with 27,768 homes sold, a two percent increase from 2013.

Over the course of 2014, median price increased eight percent over 2013 to $242,500. In December 2014, the median price for Austin-area homes was $246,530, 10 percent higher than December 2013. As a result, the total sales dollar volume for single-family homes in 2014 topped $8.6 billion, an increase of more than $673 million from 2013.

Housing inventory levels remained low in 2014, despite breaking an 18-month trend of monthly decreases in the second quarter of 2014. In December, Austin-area monthly housing inventory was 2.2 months, 0.2 months higher than December 2013 but still well below the 6.5-month inventory level the Real Estate Center at Texas A&M University cites as a balanced housing market.

This slow rise in housing inventory was driven by an influx of listings throughout the last half of 2014. Active listings in December 2014 jumped 12 percent year-over-year to 5,077 listings, while new listings rose 10 percent to 1,546 new listings from December 2013. Throughout the year, new and active listings each rose four percent in 2014 to 35,423 and 5,734 listings, respectively.

In 2014, homes spent an average of 47 days on the market, or three days fewer than homes sold in 2013, while pending sales increased one percent from 2013 to 28,325 sales. Homes sold in December 2014 spent three more days on the market than December 2013, or an average of 55 days, and pending sales increased 18 percent to 1,623 sales during the same time frame.

Cooper concluded, “The Austin-area housing market is consistent, but so are its challenges. More homes on the market, at all price ranges and throughout all areas of Austin, will be crucial to maintaining Austin’s affordability in 2015. As one of the fastest growing metropolitan areas in the U.S. we must look to our new city council for a regulatory environment that stimulates and grows housing stock in a healthy, sustainable way.”

December 2014 Statistics

  • 2,283 – Single-family homes sold, 14 percent more than December 2013.
  • $246,530 – Median price for single-family homes, 10 percent more than December 2013.
  • $311,082 – Average price for single-family homes, six percent more than December 2013.
  • 55 – Average number of days single-family homes spent on the market, three days more than December 2013.
  • 1,546 – New single-family home listings on the market, 10 percent more than December 2013.
  • 5,077 – Active single-family home listings on the market, 12 percent more than December 2013.
  • 1,623 – Pending sales for single-family homes, 18 percent more than December 2013.
  • 2.2 – Months of inventory* of single-family homes, 0.2 month more than December 2013.
  • $710,200,206 – Total dollar volume of single-family properties sold, 21 percent more than December 2013.

2014 Year-End Totals

  • 27,768 – Single-family homes sold, two percent more than 2013.
  • $242,500 – Median price for single-family homes, eight percent more than 2013.
  • $309,975 – Average price for single-family homes, seven percent more than 2013.
  • 47 – Average number of days that single-family homes spent on the market, three days fewer than 2013.
  • 35,423 – New single-family home listings on the market, four percent more than 2013.
  • 5,734 – Active single-family home listings on the market, four percent more than 2013.
  • 28,325 – Pending sales for single-family homes, one percent more than 2013.
  • $8,607,385,376 – Total dollar volume of single-family properties sold, nine percent more than 2013.

The following sections describe trends in other sectors of the Austin real estate market.

Townhouses & Condominiums

The volume of townhouses and condominiums (condos) purchased in the Austin area in December 2014 was 222, which is six percent more than December 2013. In the same time period, the median price for condos was $229,750, which is five percent more than the same month of the prior year. When compared to December 2013, these properties spent five additional days on the market, or an average of 55 days.

Over the course of 2014, 3,150 Austin condos were sold, which is statistically unchanged compared to 2013; the median price was $215,000, or 10 percent more than 2013; and condos spent an average of 43 days on the market, nine days fewer than 2013.

Leasing

In December 2014, a total of 1,214 properties were leased in Austin, which is 17 percent more than December 2013. The median price for Austin-area leases was $1,450, which is five percent more than the same month of the prior year. In all of 2014, a total of 16,960 properties were leased in Austin, which is four percent more than 2013, and the median lease price was $1,480, or six percent more than 2013.

Great Loan Programs Available!

I get a lot of emails about various real estate products, but at least one really caught my eye from a mortgage broker at BBVA Compass. They are advertising a loan for 3% down payment with NO mortgage insurance for eligible borrowers.  BBVA Compass even advertises that they may even pay certain closing costs (excluding discount points and prepaid items) up to $4,500 (Great FHA alternative)

There are three separate ways advertised by BBVA Compass to qualify for this loan.
  • Property is located in a LMI area (Low-to-Moderate Income Census Zone)
  1. 100% financing available for Single Family Home
  2. 97% financing available for Condo and Non Warrantable condo
  3. Up to $4500.00 Lender credit to help pay for buyer’s closing costs 
  4. 620 mid credit score
  5. 43% debt to income ratio
  6. NO PMI
  7. Current rates are 4.00% on a 30 year fix – according to BBVA Compass flyer that was distributed and dated January 17, 2015.
  • Borrower is a HERO (Fireman, Policeman, Teacher, Nurse)
  1. Income restriction: not to exceed HUD median income (Austin is 75400.00)
  2. 100% financing available for Single Family Home
  3. 97% financing available for Condo and non warrantable condo
  4. 620 mid credit score
  5. 43% debt to income ratio
  6. NO PMI
  7. Current rates are 4.00% on a 30 year fix
  • Any Borrower who makes less than 80% of HUD median income (Austin is 60,320.00)
  1. Income restriction: not to exceed 80% pf HUD median income (Austin is 60,320.00)
  2. 100% financing available for Single Family Home
  3. 97% financing available for Condo and non warrantable condo
  4. Up to $4500.00 Lender credit to help pay for buyer’s closing costs 
  5. 620 mid credit score
  6. 43% debt to income ratio
  7. NO PMI
  8. Current rates are 4.00% on a 30 year fix

If you are interested, contact me, and I will put you in contact with the Mortgage Broker who has provided me with all of this information. She seems very knowledgeable, and she can help you make a decision to see if home ownership may be in your near future.

Mortgage Insurance Cut, Prices Low in early January…

The White House announced and CNN reported on January 7 2015, that the Federal Housing Administration will make dramatic cuts associated with the costs of mortgages it backs. FHA Mortgage Insurance premiums are designed to protect the agency against borrower default. These rates will be cut from 1.35% to 0.85%.

As a result, a typical first-time home buyer will save $900 a year on their mortgage payments. Existing homeowners who refinance into an FHA loan will see similar savings. “Too many creditworthy families who can afford — and want to purchase — a home are shut out of home ownership opportunities due to today’s tight lending market,” the White House said in their announcement. The reports released estimates that the lower premiums will enable up to 250,000 new buyers to purchase a home.

With prices still low early in January, interest rates still down though threatening to go up, AND MIP is down…it is a good time to get started and get into home ownership for the first time, down-size or up-size or buy that second home at the lake. It is a good time to buy regardless of your situation.

Time to Sell This One! Great Spot in Pflugerville!

2216 Callaway Garden Ct. Meadows of Blackhawk, Pflugerville, TX

You really have to see this one if you are looking for a home in this price range! This is really a gorgeous home in Pflugerville located in the Meadows of Blackhawk. This one has custom 42″ mahogany kitchen cabinets and a very modern kitchen open to the rest of the house. It comes already wired with surround sound, remote control ceiling fans. The  Brazilian hardwood floors and crown molding really set this one apart. It is a 3 bed plus Den/Office/game room.  It has an extended patio in the backyard. It is near Lake Pflugerville, Hawaiian Falls water park, shopping, schools, storage facility, convenient stores, and toll roads 2-6 miles radius away, as well as midway located in the ATXplex with easy access I-35 Hwy. Recently Reduced to sell! $227,500!

house_edited-1 kitchen

 

Median Sales Prices West of Austin

20150107_114352I get a lot of questions about affordability in Austin. What about the suburbs? Is it worth it to live close to town? Where is the next growth? My answers to those questions depends on the audience. Beauty is in the eye of the beholder. The one thing I can say without question is that I like West of Austin for those who want to spend $500,000 or less and who want the Austin feel. I did some number crunching on a few areas out West.

Bee Cave is West of Austin and it is a booming place. It is almost contiguous city to get there, except the views you get on the way out are quite beautiful depending on your route. It is being developed. You can find traditional homes alongside a brand new home. It is a hot place for investors.  There are new shopping centers being built. It is also not far from Austin, and the traffic is not as bad as the North trudge, in my opinion. My calculations from Austin Board of Realtors Multiple Listing Service (MLS) statistical reports indicate that the Median Sales Price for homes in Bee Cave has remained consistent over the past five years between $450k and $500k. That is an impressive amount of median home price, but you get a lot for the money out there.

Keep going up the road, and you have Lake South and into Lake North. Those areas have a median home sales price according to my calculations from MLS reports of $406,101 in 2014. There has been a steady increase in the median price for the past four years of just under 10%. Lake Travis is a booming area, and it is quite beautiful. There are some deals to be had in those areas, and I expect to see more growth that way. I am also a fan of Dripping Springs. The median sales price for Dripping Springs is $355,251 in 2014, consistently increasing from $281,042 in 2010 according to my calculations from the MLS statics reports.

To give a good frame of reference for these numbers, my calculations from MLS reports indicate that the Median Sales Price for homes in Austin as a whole for 2014 is $311,504, up consistently from $245,664 in 2010. What does all that mean? It means that buying in and around Austin has proven to be a sound market for real estate investment for the past five years.

My Top Ten Reasons To Live or Invest in Austin Texas

  1. The Weather.

I love the climate. Austin has a humid subtropical climate, and I like the humidity. Austin is sunny when it is not raining, and I do love a good rain storm down here. But, I really love the sunshine. The Weather Channel documents that Austin reports nearly 2650 hours, or 60.3% of the possible total, of bright sunshine per year. Summer dewpoint averages at around 68°F. That’s my kind of town. We still have some seasons, but mostly, they are sunny and beautiful. I don’t mind the heat either, but it is hot down here in the Summer for sure. The same report cites that Austin documents highs that reach 90° F on 116 days per year, and 100° F on 18. So, if you can’t take the heat, you might want to get out of Austin in the Summer. But, it only freezes on average 18 days a year. I like that statistic.

  1. It’s Affordable.

Texas consistently ranks as one of the nation’s most favorable business climates based on its low tax burden and competitive regulatory environment. The Real Estate Center at Texas A&M University cites Texas as one of the most affordable housing markets in the country. Stable home prices and historically low mortgage rates make Central Texas homes very affordable relative to household income. The Cost of Living Index is considerably lower in Austin than most other comparable areas, and remember, we have the weather and other cool things along with relative affordability. It is also a great place to invest. Metrostudy, a housing information and consulting firm, reported recently that their quarterly survey of the Austin market revealed a 17% increase in new home starts compared to Q1-3, 2013. The following chart is a copy and paste from the Austin Chamber of Commerce web site.

chart-cost-living

3. It’s Innovative

Ranked as the second-most innovative city in May 2010 by Forbes magazine, Austin is one of the top cities in the country for entrepreneurs. Perhaps that’s why leading companies such as Dell, Samsung, Facebook, Google and National Instruments and me all have key offices here.

4. It’s fun down here.

There’s something for everyone in Austin. Austin boasts major music festivals; a world-class nightlife; more than 30 museums; and is the host city for the Formula 1 United States Grand Prix through 2021. There is always something going on! And just wear your shorts. I like the glitz and glamour sometimes, but once I got all settled in, I am like the casual atmosphere. Austin City Limits festival is awesome. South By South West is amazingly fun, even if you don’t have no stinking wrist bands. I have enjoyed SXSW for many years. Maybe this year I will get a wrist band and really go all in since I live right here.

Reason #4 also has some real estate tie into it. These big festivals bring in big money for those who rent their place out for the weekend. Go look on Air BnB and see what condos down here are going for during any of those venues.

5. The Lakes are very much alive.

Austin is a lake community.  The drought and over-irrigation of Lake Travis put it in a state of change. Some establishments went out of business because the lake line moved about 150 feet in some instances. What was once lakefront is now a distant lake view. However, that did not stop the boating community in Austin. I highly recommend Devil’s Cove if you have not been there. It is a whole lot of fun and that party has not changed much over the years.

I like helping my Dallas and outside folks find lake properties. It is a great time of the year to invest in that second home. There are some great deals to be had, and the drought is over. The lake is back up, not where it was, and it never will be again, but it is still Lake Travis. There are some really cool homes that are below tax records and a few REO’s out there to be had. There is also a lot of new development going on in Bee Caves, Lakeway, Steiner Ranch areas. If you have not driven out there lately, it is a whole new place blowing up out there. I like that area a lot.

6. It’s fit and healthy

  •  Austin is named one of America’s Best Bike Cities by Bicycling Magazine (September 2014) 
  • Austin is named one of the Top 10 Fittest Cities in America by Sharecare (January 2014) 
  • The American College of Sport Medicine ranks Austin the 11th Fittest City in America and number 1 fittest city in Texas in their latest American Fitness Index  (May 2013)
  • Women’s Health magazine ranks Austin the 4th healthiest city for women. (January 2012)
  • BBC.com Travel names Austin as one of the healthiest cities in America (may 2012)
  1. The downtown vibe is super cool.

It’s safe. It’s chic. It’s hip. It’s fun. It’s a beer town. It’s pet friendly. It’s gay friendly. It’s race friendly. It’s all that! It’s the heart of Austin Texas.

  • Forbes ranks Austin among America’s Coolest Cities to Live (July 2012)
  • Forbes names East Austin #7 of America’s Best Hipster Neighborhoods (September 2012)
  • Matador Network names Austin #2 best beer town in America (May 2013)
  • CQ Press names Austin’s crime rate as the fourth lowest in the nation among cities with more than 500,000 people (February 2013)
  • Austin is named the #20 top meeting destination in the United States by the Professional Convention Management Association (August 2013) 
  • Austin is ranked the No. 4 safest city in the United States with a population over 500,000 by the FBI (2013) 
  • Priceline.com ranks Austin #7 on its list of America’s Most Pet-Friendly Cities for Travelers (April 2013)
  • Austin is one of the friendliest cities in America for lesbian, gay, bisexual and transgendered people, according to personal finance website NerdWallet (May 2014) 
  • Moneyunder30.com ranks Austin the #1 City in America to Be Young, Broke & Single (June 2013)

8. Live Music

Austin is known as “the live music capital of the world.” According to Austin Relocation Guide report in 2013, the slogan became official in 1991, after it was discovered that Austin had more live music venues per capita than anywhere else in the nation. It has been registered and trademarked. There are reportedly more than 1,900 bands and performing artists living in and around our city. From Austin Blues to Emo, Austin’s nearly 200 live music venues mean you can catch a show any day, at almost any time. Austin is also home to some of the largest music events and festivals in the world, including South by Southwest (SXSW), Austin City Limits Music Festival (ACL), The Urban Music Festival, Fun Fun Fun Fest, the Pachange Festival and more. I love love love the music in this town. It’s just everwhere and it’s a vibe down here that is unique and only paralleled in places like Memphis and Nashville.

9. Growing Economy

According to Monster.com report on job growth, Austin holds great employment potential for residents. Its unemployment rate is consistently lower than the national average and the average wage is growing faster than anywhere in Texas. In fact, Austin’s favorable business climate and considerable growth in clean energy and technology led.

  • Forbes names Austin America’s fastest growing city (January 2013)
  • Forbes names Austin America’s #1 Fastest-Growing City for the fourth year in a row (February 2014) 
  • Nerdwallet.com ranks Austin 3rd Best City to Start a Business (April 2013)
  • Bloomberg News ranks Austin #1 on its list of Top 12 American Boomtowns (April 2013)
  • Forbes names Austin #1 City for Future Job Growth (August 2013) 
  • InvestmentNews ranks Austin, Texas No. 1 best city to open your small business (September 2013) 
  • Austin’s economy ranked No. 1 in the country by The Business Journals’ On Numbers (October 2013) 
  1. It’s Educated
    Home to the University of Texas, 7 other public and private universities, 29 public school districts, 17 charter schools and 69 private schools, Austin is an educated city. Among Austin residents age 25 and older, 40% hold bachelors degrees or more.

Fannie, Freddie taking loans with 3% down again

As I wrote about in an earlier post, things are about to change in the real estate mortgage world. Some say it is not going to have a huge impact, but on those who it does affect, it will have a huge impact. Fannie Mae and Freddie Mac are ready to ramp up purchases and guarantees of mortgages in which borrowers put just 3% down, and first-time home buyers are able to apply for the loans as of a few weeks ago, Federal Housing Finance Agency Director Mel Watt announced earlier this month.

Borrowers will still have to meet the usual underwriting, income documentation and risk management standards. All loans in which buyers put less than 20% down including Fannie and Freddie require that borrowers take out private mortgage insurance or other risk sharing thereby affecting monthly payments.

Watt shared details about the new credit options to a roomful of bankers in Las Vegas, where there was marked optism that these actions will encourage first-time buyers to join the housing market. The loans will also allow homeowners with partial equity who are not eligible for the Home Affordable Refinance Program (HARP) to refinance, although they’ll have little or no ability to take cash out of their homes in the process. This will get some things going in the banking industry.

The new initiative builds on a program Fannie Mae offered through state housing finance agencies and will include home ownership counseling, and FHFA will monitor loan performance on an ongoing basis, Watt said in a statement released Dec 8, 2014.

Fannie Mae reports that borrower’s paperwork could have started as early as Dec. 13. Freddie Mac’s new Home Possible Advantage program will become available for mortgages with settlement dates on or after March 23.  So, this is a good time to get into the market. Interest rates are down. Incentives are up. Things are about to change. Now is a good time to lock in and make that first home purchase or sell and downsize or upsize.

Data for 78703- December 2014

As a resident of this fine zip code, I love enjoying all the amenities that is unique to the ‘03’ as it were. With that being said, home ownership is valuable in this area. If you are considering selling your property for whatever reason, ‘tis the season. As a researcher for 20 years, I have a keen eye for data analysis. I took some time to really get to know the zip code in which I live and enjoy. The results are why I am writing this report.

According to reports I custom ran from the Austin Multiple Listing Services (MLS) Matrix Actris data reporting system, the sales in 78703 either remained consistent or surged in December 2012 and 2013 (TABLE 1). Compare active listings this year to historic data, and the number is down from previous years leaving a reduced supply situation (TABLE 2). The data indicates that there was an increase in home sales this time last year, so we can reasonably anticipate an increased demand along with a documented reduced supply

TABLE 1

TABLE 1_

 

TABLE 2TABLE 2

TABLE 3TABLE 3

Source: http://matrix.abor.com/Matrix/Stats/Stats

The overall median prices are up this year home sales in 78703 over the past decade (TABLE 3).  So, the number of listed homes is lower than in previous years. Median sales prices are at a ten-year high. And, historically, sales data show an increase in December sales in this area. If you are contemplating timing, I hope this helps. If you are not, then I hope you find this interesting. I know that I do. If you see me around, be sure to say hello. And, if you know of someone who has some real estate needs, even leasing, send them my way.

A New Era for Real Estate Starts Today

I sat with two of my children on a patio at Glorias in Dallas in Uptown with my good friend John Mauldin one warm summer night in July, 2007. He said, “kids remember this moment in your life. Tomorrow a bunch of banks are going to make some announcements that will affect all our lives forever.” That was a landmark moment in my life as the economic crisis unfolded before my eyes. I had just sold a home with a sub-prime loan and paid the pre-pay penalty in June 2007 and ‘dodged a bullet’ as it were.

Today, as I sip my coffee, I feel that today is another one of those significant days in our economy in my opinion. December 1, 2014 is the date that an agreement with Fannie and Freddie to relax lending standards takes effect. According to the Wall Street Journal, the new guidelines resulted from an agreement in October meant to clarify when lenders would be penalized for making mistakes on mortgages they sell to Fannie and Freddie. This paves the way for more applicants to qualify for loans, which will have a positive outcome for our economy, regardless of the current oil price wars. According to the WSJ report, lenders are preparing to further ease standards for borrowers after the release of new guidelines by Fannie and Freddie.

According to the WSJ report, relaxing the lending standards potentially could make it possible for hundreds of thousands of additional consumers to get mortgages. This is significant across the board in my opinion. The Urban Institute Director of Housing Finance Policy Center says, the moves are “going to be big,” but she added that “it’s going to take time” to see the full impact of the changes. The Urban Institute, a Washington think tank, earlier this year estimated that as many as 1.2 million additional home loans would be made annually if mortgage availability were at “normal” levels.

According to the reports out there, lenders also are expected to widen the scope of the types of borrowers they will accept by reducing credit-score requirements and giving greater leeway to consumers whose credit history suffered because of one-time events, such as a job loss or big medical bill. The conjecture out there according to multiple reports is that the big banker guys believe that this shift is going to be substantive and meaningful. Not all lenders are on board yet. Some of them learned a tough lesson a few years ago.

All that being said, and that is great news, this is a great time to invest. Mortgage interest rates have done some interesting adjusting recently. The benchmark 30-year fixed-rate mortgage slipped to 4.08 percent from 4.1 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.44 percent. Four weeks ago, it was 4.1 percent. This is the third weekly decrease in a row. The mortgages in this week’s survey had an average total of 0.29 discount and origination points.

  • Over the past 52 weeks, the 30-year fixed has averaged 4.36 percent. This week’s rate is 0.28 percentage points lower than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage fell to 3.29 percent from 3.3 percent.
  • The benchmark 5/1 adjustable-rate mortgage fell to 3.19 percent from 3.21 percent.
  • The benchmark 30-year fixed-rate jumbo rose to 4.14 percent from 4.13 percent.

“Rates should be going up because all you have to do is look at the revision to third-quarter GDP number. The U.S. economy is growing,” said Joel Naroff, founder and president of Naroff Economic Advisors as reported on www.bankrate.com. “Why they’re where they are is because of the rest of the world.”

This translates in lower than expected market mortgage rates at a time when the market is about to open to first-time, entry-level or even re-entry level buyers, like myself. I have been in the leasing game since they stopped lending to us ‘fringe’ credit scores. For investors, now is a prime time to invest in building and/or refurbishing existing single family homes, duplexes and four-plexes in the prime areas in Austin or anywhere in the Central Texas area actually. This is an exciting time to be in the real estate business. I look forward to seeing how this unrolls on all ends, from helping my investor clients find that perfect little morsel before December 31 or helping those like myself back into home ownership.