Backyard Real Estate!

Capital BuildingIt is no mystery as to the status of Austin’s growth rate. It is growing. And rapidly. Austin has such a high number of people moving in that there is a lot of question as to whether or not the city will be able to keep up with it. Most speculate that it won’t. The roads are already congested with traffic, and only getting worse, a lot of the homes are old and worn out, and there isn’t very much space within the city to add additional homes. All of this contributes to the idea that Austin is growing way too quickly. Which is VERY good news for those of us in real estate. There are so many opportunities to be had, it’s a very good time to get involved, whether you want to invest, manage, or develop properties.

Investors have no shortage of interest in the local market of Austin. There are several new neighborhoods going up in the surrounding suburban areas, as well as in the local downtown districts. The majority of properties in Austin proper need some kind of upkeep or maintenance to make them what they really could (and should) be. The one I personally think is booming the loudest right now is definitely the East Austin districts near Airport Blvd. There are several neighborhoods that up until recently have been rather neglected and allowed to run down into the ground, but investors are seeing more of an opportunity for profit each day.

Austin

For the individual with a little capital and an eye for opportunity, there is a lot of money to be made in the process of flipping houses, that is buying the house from the current owner, who maybe can’t or doesn’t want to invest in renovating it, putting in the money to fix it up, and selling it again for more money than was put in for the repairs. For a little bit put in, you can quickly get back everything and more. But even better than that, some individuals choose to buy and invest, and then live in their dream house. Austin is certainly full of some great homes, and with people putting money into a lot of them, the value of every single home is going up.

The other thing that is driving up the value of homes in all areas is the overwhelming demand. As businesses grow, and more and more people move here for the business, the healthy atmosphere, or the thriving music scene, more and more people are in need of homes. What this does to the market is creates a shortage in which more individuals are looking to buy the same houses. With more interested parties and construction only going so fast, homes that are already built in great locations are very popular, so their prices are going up. Hoorah for economics! But in all seriousness, Austin is thriving when it comes to real estate. Or most anything, for that matter.

The Ins and Outs of Foreclosure

Canal HomeWhen I first heard that the foreclosure process could be completed in as few as forty one days, I was astounded. I couldn’t believe it but, after doing some research, I found that technically, someone could foreclose a property within 41 days of a default on a payment. The way that Texas has laid out the requirements for a foreclosure from default to sale is pretty quick, with only a couple of steps. Obviously, an interest in real estate necessitates at least a basic knowledge of the foreclosure process, but it is such a simple and quick ordeal that, in truth, most everyone should probably know just how swift of a process it is.

The first step in any foreclosure is obviously a default on a mortgage payment. At that point, the borrower can no longer afford to, or simply isn’t paying for the mortgage. From the stand point of the real estate opportunist, this is a chance for some people to go in and work with the actual borrow to take over a home by either offering financial help or some other service that lets them stay in the home, such as a change in ownership and then a rental agreement. This is definitely not the norm when one thinks about taking advantage of foreclosures, but it is an option.

The second step is the filing of a legal notice. At this point, the owner goes to the county office and official puts in that their mortgagee is falling behind in payments and that they would like to sell the house to someone else. There is a mandatory 20 period following that in which the mortgagee may attempt to resolve the issue in whatever way they can. There are two parties that should take particular note at this point. The first is the mortgagee. Chances are, they’re living there. If at all possible, they should work with someone to save their mortgage and figure out their payment situation. The other is the potential buyer. At this point, you may start discussing buying the home, as it is on its way to market sooner rather than later.

The third step is the actual sale. Twenty days prior to the actual sale of the home at the monthly auctions, the owner will now post that the house is going to auction. This is when the home is officially foreclosed and all efforts are now being put into finding a new owner. The current resident can all but be ready to go, and the real estate sharks start circling. After the 20 day period (not always exactly 20 days, but at least) the auction happens on the first Tuesday of the month, and the house gets sold new again. Bidding must reach at least two thirds the original price, and the court handles the financial details of it all.

The fourth and final step is the actual takeover of the home. The buyer now owns the home, but sometimes the previous tenants aren’t gone yet, which is where an eviction can come in to play. The sheriff will assist in clearing out the home, and there you have it. The home is now officially and fully owned by someone else. All in just over a month (assuming you timed it right).

Market Report: 2013

ID-10083915On the matter of a national real estate market, there are a lot of ways of measuring it; from the broad “healthy/non-healthy” aspect, down to very specific statistics. In most any way you look at it, during the year of 2013, the real estate market was doing well. The market on the whole went up 6.92% in average list price, representing an overall appreciation of assets. This is a great sign for all involved in real estate, though there is a lot of talk as to whether or not the market is in fact heading into another “bubble”. Yes, the market went up, as most people would expect it to, but will that be the downfall of the market in the future?

I don’t think it will. Several analysts agree that the indications of a possible “bubble” are present, but nothing is conclusive. So far the growth has been good and “healthy”, steady at nearly 7%, but it would take something closer to 15-16% to outrun the inflation rate and cause the market to crash. I believe the market is in for some very good times to come. Business Insider and Forbes, among other sources, give several reasons why real estate is definitely prepped for the upswing.

The first indicator is the continued rise in home prices, as aforementioned. The continual increase in value of properties in areas that were severely hit during the “bubble burst” of 2008 (such as California) is very promising. On top of that, there is an anticipated influx of demand for homes. Among the expected hopeful home-owners are the young people who are finally back into jobs and are looking to move back out of their parent’s homes, more first-time buyers (or ex-renters), and several investors who are realizing the boom in need for rental places.

Furthering this point, there are a lot of financial indicators, as well as social indicators that the market is set to flourish. Financing for building or purchasing homes is getting easier. Banks are carrying easier credit standards, mortgage rates are at a record low, and foreclosures are becoming fewer as banks are starting to default back to other forms of resolution on delinquent accounts, including selling off home loans and accepting short sales.

In conclusion, the real estate market did well in 2013 and there are no obvious reasons that progress shouldn’t continue into 2014. Things are looking good for the current or hopeful home owner.

Photo courtesy: FreeDigitalPhotos.net

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