Austin Market Cooling Down - Lowest home sales (Round Rock, Portland: unemployment, buying)

[mrsengle]

To put it harshly, it is incompetent and negligent, in my opinion, for an agent to advise a seller to disclose her bottom line price based upon nothing more than the existence of a lowball offer. Nevertheless, I’ve heard many veteran agents claim that this is the best response to any offer - that “any offer is a good offer and deserving of a counter-offer”.

Why would an agent wish to disclose the bottom line? To hurry the transaction? If so, wouldn't that be a breach of fiduciary duty? Would it be appropriate to counter-offer slightly less than the list price? Would this response be the same as telling the buyer that they're willing to negotiate, but that the low-ball is unacceptable? Or would this put the seller in a weaker position by letting the buyer know that they're willing to come down? How much do market conditions and seller situation affect the bottom line on this strategy?

[Austin97]

Originally Posted by mrsengle

Why would an agent wish to disclose the bottom line? To hurry the transaction? If so, wouldn't that be a breach of fiduciary duty? Would it be appropriate to counter-offer slightly less than the list price? Would this response be the same as telling the buyer that they're willing to negotiate, but that the low-ball is unacceptable? Or would this put the seller in a weaker position by letting the buyer know that they're willing to come down? How much do market conditions and seller situation affect the bottom line on this strategy?

Agreed, holding firm is very different than laughing at the offer and not bothering to respond. I think holding firm is a fine strategy.

[austin-steve]

Would it be appropriate to counter-offer slightly less than the list price?

Whatever achieves a desired outcome could be deemed to be a good strategy. 10 different agents might tell you 10 different things. Austin has varying degrees of market conditions in different areas of town. There are a lot of factors.

But as a general rule of thumb, my point was simply that if an offer isn't even in the ballpark, and is so far below anything a Seller would even consider accepting, it's best to simply say "no thanks" and reject it rather than immediately drop the sales price.

Steve

[gigi927]

We have had the experience of sellers coming down a couple of thousand dollars when they get what they perceive is a lowball offer. In a surprising number of cases, the buyer actually came up to the seller's counteroffered price. Sometimes you can never tell what the buyer's thinking is when they submit a lowball!

[FromCalitoSteinerRanch]

Economist: National real estate attention focused on Texas

Dealing in residential real estate in Austin? You're better off than you would be elsewhere around the country, according to a state economist.

Texas continues to buck the trend of declining home sales that's sweeping the nation, aided by factors from net population growth to affordability, says Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University. He says national attention is being focused on Texas as markets decline elsewhere around the United States. Austin is further ahead of other Texas cities, with a very modest 3.2 months inventory of unsold homes, making it one of the tightest markets in the country. Still, recent figures show a slowdown in building permit activity in Austin, Dallas and San Antonio.

"Texas housing is still very affordable," Dotzour says, "and the low tax structure and pro-business climate makes Texas a destination for corporate relocation for firms that are striving to compete in the global marketplace."

The latest figures show Texas is increasing its population by about 400,000 people annually, says Dotzour.

"All of these people need homes or apartments in which to live," he says.

One caveat in the economists' rather positive forecast for the state could come in the foreclosure arena, particularly among houses priced under $200,000.

"Relaxed lending standards have increased the number of homeowners dramatically," Dotzour said. "Consequently, higher levels of foreclosures are to be expected."

[desu30]

This is third slow month in a row...Realtors can chime in.....

http://www.statesman.com/business/content/business/stories/realestate/04/21/21homesales.html (broken link)

[jwb123]

I read that this morning. One thing it does mention though, is that Austin is still at the top, in comparison to other cities within the country.

[austin-steve]

The problem with the newspaper real estate articles is they don't go below the surface to look at the total market activity. In this case, they put "Number of Sales" forward as some sort of indicator of a market that's "cooling off". That's simply not the case in Austin on the whole.

For example, in MLS Area EL (Elgin), for the first quarter of 2007 compared to 2006, number of sales is up 15%, not down. But the average sales price is down 13%. Not good. A newspaper article might report "record sales" based on the number sold, but if the values are in the tank, who cares?

In Hutto, number of sales is up 24%, but average sales prices are up only 1%

In area CLN (Cedar Park/Leander North) # sold is down 12% but average price is up 9%.

In RN, # sold is up 22%, and price is up 18%.

I track all this each month by MLS area and the numbers are all over the place with no real consistency.

Austin overall is very strong, but there are pockets that are hurting and pockets that are exploding. I wish I could post my first Q1 2006/2007 appreciation chart broken down by MLS area. Last time I did, the moderators deleted the post though since I guess it's viewed as promotion or advertising.
Maybe I'll create an unbranded generic version and post it up. It's real interesting to see the wild swings in our market right now and how it varies from area to area by wide margins.

Steve

[iguanas4]

Originally Posted by austin-steve

Austin overall is very strong, but there are pockets that are hurting and pockets that are exploding. I wish I could post my first Q1 2006/2007 appreciation chart broken down by MLS area. Last time I did, the moderators deleted the post though since I guess it's viewed as promotion or advertising.
Maybe I'll create an unbranded generic version and post it up. It's real interesting to see the wild swings in our market right now and how it varies from area to area by wide margins.

We've been here in GT for about 5 months now (from Los Angeles) and are worried, after talking with an informed neighbor, that we paid way too much for this property. We had a local buyer's agent who advised us on pricing for offer, but perhaps she wasn't as familiar with this particular pocket of town as we thought and overestimated the market value. Anyway, I'd be interested to see a recent comparison of the different Austin-area markets.

[futurecitizen]

Originally Posted by futurecitizen

Can anyone speak to what the difference is between the list sales and the prichase prices? We are hoping to relocate there and want to get a sense of bargaining power...

Thanks.

Last April, there was a great thread exchange about the market in Austin and I asked this question. At the time, the consensus seemed to be that the market was holding strong and barring a recession offering anything less than 10% on asking price would be laughable. Can anyone speak to whether this is still the case? Has the recent downturn halted the bidding wars, or is Austin still a uniquely strong center? (I was concerned to learn that the muse studios development was blocked. Is that a harbinger of things to come?)