Romeo Manzanilla

Spring is in the air and homeowners across the city are preparing to put their homes on the market. Some of my clients have managed to get ahead of the pack while others are still getting their homes ready to sell. Either way, I'm making sure they realize the statistics indicate they may have a lot of competition this summer.

I have noticed a definite increase in buyer traffic over the last month. I'm not sure how much of this is related to Obama's Housing Stimulus Plan which offers certain buyers an $8,000 income tax credit versus an overall perception that good deals can be had in this buyer's market.

While media reports continue to focus on negative news, you might be interested to know that 1,730 single family homes actually sold in the Austin area during January and February, which are the slowest months of the year. Additionally, the median sold price of $185,000 was actually $5,000 higher than the median sold price two years ago. However, those that sold took an average of 89 days compared to only 64 days two years ago.

At the end of February there were 11,519 homes on the market compared to 9,864 two years ago, representing a meager 16% increase in inventory. The homes currently on the market have a median list price of $245,000 and have been on the market an average of 114 days. The number of new listings coming on the market in February actually decreased 15% compared to February of 2007.

So what does all this mean? First of all, the data clearly indicates that home prices in Austin are holding steady. Inventory is climbing, but not at an alarming rate. This is likely because fewer people are putting their homes on the market when they don't absolutely have to move. Unfortunately, this also means there are fewer local buyers in the market. However, of those that are moving locally, I am starting to see a trend of families looking to ‘right size' their home in order to reduce the overall expenses involved in having a larger home than they actually need. This is certainly a reversal from the 'move-up' trend that has been so common over the last 5-10 years.

Many people I talk to from other cities find it hard to believe that Austin continues to stand out as a relatively bright spot in the national housing market. As I've said before, Austin did not experience the big upswing in home prices and has therefore been less susceptible to price depreciation. Builder Magazine, a national trade magazine for the home building industry, just released their list of healthiest housing markets in the United States. The top five were all Texas cities: Houston ranked first, Austin second, Fort Worth third, San Antonio fourth and Dallas fifth.

If you like to look at charts and analyze the data, you can see how the market has evolved over the past 2 years at our Austin Market Statistics page. If you would like to see similar charts for a specific neighborhood, community, price range or property type, please let me know.

For more Austin Texas Real Estate information, please visit http://www.RomeoM.com

The White House website posted a Q&A on its blog yesterday for homeowners in distress to learn how the President's plan will help them specifically. Here are a few excerpts:

Borrowers Who Are Current on Their Mortgage Are Asking:

• What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

• I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

Borrowers Who Are at Risk of Foreclosure Are Asking:

• What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

• Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.

To read the full Q&A, click here or to learn about Austin Texas Real Estate visit http://www.RomeoM.com

Part of the current stimulus bill that is about to be signed by President Obama includes an $8,000 housing tax credit. There are a many misconceptions about the tax credit that need to be clarified. This is what we know for sure about the bill in its present form. Let's start with the good parts:

• the credit is not limited to first time homebuyers, nor is there an income limit
• it is a tax CREDIT, as opposed to a tax deduction. A tax deduction is something that reduces your taxable income. Think mortgage interest deduction or daycare expenses. A tax credit reduces your tax liability. So, for example, if your total tax liability is $6000, you could take $6000 of the $8000 credit and take the remaining $2000 in the following year. This tax credit is also independent of your tax withholding. So if your tax liability is $6000 and you withheld $7,000 throughout the year, normally you would get a tax refund of $1000. But if you purchased a home within the specified time period and used the credit, your tax refund would be $7,000 because you could use $7000 of the $8000 credit!
• you can take the credit on your 2008 taxes even if you purchased the home in 2009
• the tax credit does not have to be repaid

Now let's talk about what the bill does NOT do (the "bad" parts, you might say):

• the bill does not give you money you don't have to buy a house. This is perhaps the biggest misconception about the tax credit. I hear people all the time, who don't have enough money for a down payment say they want to use the $8,000 credit to buy a home! If you don't have the minimum required down payment to buy a home, you still won't be able to buy a home. All this credit does is replenish the money you used for the down payment
• since the credit is only a reduction to your tax liability, by definition the credit will not help people who don't have a tax liability. If, for whatever reason, you don't pay taxes, you will not be eligible for the credit.
• The bill does nothing to address the tightened lending requirements currently enforced by lenders. This bill will not help you qualify for a home that you do not currently qualify for.
• The credit does not apply to refinances.
• You cannot use it to buy a second home.
• You have to pay back the credit if you sell the house within two years. Not a big deal for most people, but it will prevent "flippers" from using the credit.

I hope this clears some of the confusion about the proposed tax credit. Please visit my Austin Texas Real Estate website at http://www.RomeoM.com for more real estate information.

As of January 1st 2009, HUD began allowing a reverse mortgage to be used as a means to purchase a home. Qualifications for this option were comparable to typical reverse mortgage options (buyer must be the primary resident, over the age of 62, etc.) but there are some differences. For clients that are utilizing a portion of their equity from selling their existing home and looking to purchase a new one, HECM for Purchase could be an ideal option. To Learn More about this purchase option, visit the HUD Website.

For more Austin Texas Real Estate information please visit http://www.RomeoM.com

Most of us set goals and resolutions at the beginning of each year, but how many of us actually keep them? I'm not talking about goals about losing xx # of pounds, quitting smoking, going to the gym, etc., I'm talking about financial goals. During troubled times, reaching those goals may seem like an impossibility, but with some self-discipline and perserverance, you can accomplish those goals even in a recession. Afterall, most successful business people have actually prospered during troubled times. The key is to reinvent your lifestyle or businss to reflect these goals. Success lies with maintaining good habits and not falling back into your "old" ways of doing things. Some tips to acheiving these goals are to:

• Stop putting things off and start now
• Learn as much as you can about your goal and become an expert in that field
• Consider the long-term effect of every financial decision you make. Live today, die tomorrow.
• Set time limits on goals. A goal with an infinite due date will never get accomplished.
• Set milestones along the way to celebrate each accomplishment. People thrive on praise and this will help us continue on our path
• Fine tune your behavior to adopt "best practices"
• Make your goals public so as to motivate you
• Keep a balance between your goals and family and friends. No one wants to celebrate alone.

Remember, Thomas Edison and Walt Disney "failed" many times before accomplishing what made them famous. You're never too old to set goals and keep them. Good Luck!

For Austin Texas Real Estate information please visit http://www.RomeoM.com