Year-to-Date statistics bring Fredericksburg’s real estate market picture into focus

Posted on August 7, 2008
Filed Under Fredericksburg Texas Home Buying, Fredericksburg Texas Home Selling, Fredericksburg Texas Ranches, Fredericksburg Texas Real Estate Market, Fredericksburg Texas Real Estate News | Leave a Comment

By Greg Oehler

Greetings from Fredericksburg! Our real estate picture here is becoming easier and easier to bring into focus as we progress further into the year. The seven months year-to-date picture is again a mixed bag; while we are doing well in small acreage sales (1-50 acres), we are facing some of the softer market conditions that others in the state also feel in some categories. Let’s start out by taking a look at the Single Family Home category in Fredericksburg first (2008 vs. 2007).

Residential Home Sales

Concerning the above Single Family Residential Sales, I noted the following:

• Average List Price is down $18,577 or 5.6%
• DOM (Days on Market) is up by 24 days or 16%
• No. of Sales is down by 11 Sales or 7.4%
• The Total Sales Price (Inventory Sold) is up by $1,023,000

There are 299 homes currently on the market in Gillespie County (as of 8/5/2008). YTD, we are averaging 19.71 home sales per month, which means we have a 15 month supply of inventory. Typically, an inventory of six months or less indicates a seller’s market.

Residential Lot Sales

There are 162 lots currently available for sale and they are being absorbed at the rate of 4.57 lots per month. Based on the number of lots available, we have about 38 months of inventory. There are still some surprises in this category.

• Average Sales Price is up $9,093 or 14%
• Average DOM is up 96 days or 53%

Usually, when the DOM increases significantly, the Average Sales Price will decline. I noted that the Average List Price of those currently on the market is already down by $6,600 or 8.9%, so I feel like the YTD Average Sales Price will decline from now to the end of the year.

The Average List Prices of the lots on the market currently, those sold in 2008 and those sold in 2007 is indicative of fact that we have virtually no lower end lots available. My sense of the market is such that we a great deal of pent up demand for this type of product. However, with current City ordinances of 7,500 square feet for minimum lot sizes, impact fees of $3,000 to $4,000 per lot, plus water and sewer tap fees of $400 each, plus curbing and sidewalk rules, development of this type of product is cost-prohibitive.

I should note that the City is currently investigating proposed ordinance changes that may create incentives which may encourage development of more reasonably-priced lots. Any ordinance changes here are not predicted to occur until later this coming fall at the earliest, thus postponing any projected lot development until the spring of 2009.

Acreage Sales 1-50 Acres

This category presents a surprise or two. The total inventory YTD sales figure is up by almost $300,000, the Average price per Sale is up by over $40,000, and the DOM is down by 112 days or 28%. However, the number of sales is down by 5 sales and the Sales Price to List Price ratio is down from 94.84% to 91.78%. This category is holding it’s own for now, but the SP/LP ratio indicates that Buyers are “sharpening their pencils” before they buy.

Acreage Sales 51-500 Acres

The first thing I should note is that the YTD sales numbers for this category on 7/31/08 are the same for 6/30/08; that is, there were NO SALES in this category in July! Through 7/31/08, there were 5 sales in this category; for the same period in 2007, there were 15 sales, indicating a 67% decrease in the number of sales.

In terms of Total Sales dollars, $6,114,000 was sold in 2008 vs. $13,400,000 in 2007 representing a 54% decrease. Consequently, there was a 70 day (or 24%) increase in the DOM. Clearly this category of real estate has been adversely affected by the economy in 2008.

Overall Listings vs. Sales

In 2007 (YTD), Gillespie County had 421 new listings at an average price of $271,000 and an average DOM of 290 days. There were 242 sales for a total amount sold of $69,200,000.

In 2008 (YTD), Gillespie County had 573 new listings (an increase of 152 listings or 136% over the number of listings in 2007), at an average price of $256,000 (representing a price decrease of 5.5%). There were 249 sales for a total amount sold of $66,045,000 (representing a decrease in total sales dollars of about 4.6%).

Summary

The good news is that some of our real estate categories are still up! Small acreage sales are even ahead by some yardsticks. In other categories, the tide has ebbed and the caution flag has been run up the pole. There seems to be a lot of product available and Sellers are becoming more negotiable, so it is a great time to buy!

Keep checking The Burg for more market statistics to come or stop for a visit and we can do some custom design analysis for your purchase or sale needs. We are happy to be of assistance.

Greg can be contacted at Greg@fbgliving.com. View his agent bio.

Affordable Housing Task Force releases initial recommendations to tackle Fredericksburg’s ‘market failure’

Posted on August 5, 2008
Filed Under Fredericksburg Texas Real Estate News | Leave a Comment

By Bart Schaetter

Councilman David Pedregon and the Affordable Housing Task Force unveiled their initial recommendations to address the lack of affordable housing in Fredericksburg at Monday night’s City Council meeting.

Click here to view the full report, provided to The Burg by Mayor Jeryl Hoover

The Task Force’s recommendations were divided into three categories: Entity, Development and Communication. Pedregon emphasized in his presentation that this was merely a preview of where the Task Force was, and that more work would have to be done before acting upon any recommendations.

Read more

A look at four Fredericksburg subdivisons

Posted on August 4, 2008
Filed Under Fredericksburg Texas Home Buying, Fredericksburg Texas Real Estate Market | Leave a Comment

By Sheila Bingham

The below information shows the approximate average sales price per livable square foot for houses in four Fredericksburg subdivisions.

Cross Mountain Acres (from 8/4/07 to 8/4/08)
$119/sq. ft.
2 houses sold

Cross Mountain West (from 1/1/08 to 8/4/08)
$129/sq. ft.
6 houses sold

Oaks of Windcrest (from 8/4/07 to 8/4/08)
$129/sq. ft.
3 houses sold

Stone Ridge (from 1/1/08 to 8/4/08)
$149/sq. ft.
6 houses sold

Sheila can be contacted at Sheila@fbgliving.com. View her agent bio.

Affordable housing in Fredericksburg farther from reach

Posted on July 28, 2008
Filed Under Fredericksburg Living, Fredericksburg Texas Home Buying, Fredericksburg Texas Real Estate Market, Fredericksburg Texas Real Estate News | 1 Comment

By Bart Schaetter

An application for a change in zoning from R-2 Mixed Residential to Planned Unit Development (PUD) for Barons Crossing, an ‘affordable housing’ subdivision just south of Highway Street across from the livestock auction barn was denied 3-2 Friday, July 25, by the City Council after nearly seven months of negotiations.

A motion was made Friday morning at a special workshop meeting held in the second floor conference room of City Hall to deny the PUD and Councilmen Tim Dooley, David Pedregon, and Tom Musselman voted in favor of denying it. Mayor Jeryl Hoover and Councilman Jeff Jeffers were the only two votes in support of the PUD, according to Director of Development Services Brian Jordan.

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Want to see how the entire Fredericksburg real estate market is faring? Look no further

Posted on July 2, 2008
Filed Under Fredericksburg Texas Real Estate Market, Fredericksburg Texas Real Estate News | Leave a Comment

By Greg Oehler

It is about time to look at what we have done this first half of the year here in the Hill Country. These numbers cover the first six months of 2008 and compare them to the same period in 2007. I must admit, some of the numbers surprised me!

Residential Sales

First, let’s look at housing sales. The charts show a few more residential sales and about the same total amount of inventory sold, but the average price of a home dropped from $322,000 in 2007 to $285,000 in 2008.

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Prices for large acreage properties in Gillespie County vary widely

Posted on June 26, 2008
Filed Under Fredericksburg Texas Ranches | Leave a Comment

By Sheila Bingham

In evaluating acreage over 100 acres sold in Gillespie County during the past year there was a large range in price per acre. The lowest price was approximately $3,280 per acre for about a 250+ acre property west of Harper and the highest price was approximately $13,900 per acre for about a 150+ acre property off Highway 290 East with river frontage. The average price per acre was approximately $7,295. There were eight properties sold during the past year with the largest being about 270 acres.

There are currently approximately 36 listings of more than 100 acres in Gillespie County on the Multiple Listing Service with the largest being approximately 512 acres. Please let me know if you would like to see any of these properties.

Sheila can be contacted at Sheila@fbgliving.com. View her agent bio.

Reminder: Home Buying 101 tonight at 6pm

Posted on June 24, 2008
Filed Under Fredericksburg Texas Home Buying | Leave a Comment

By Bart Schaetter

Just a reminder: Our two-part Home Buying 101 informational seminar on the home buying and home lending processes begins tonight at 6pm in the second-floor boardroom of Chase Bank located on the corner of Llano and Main in Fredericksburg.

Seats are still available so call us at (830) 997-6123 or email me to reserve yours now!

Click here for more information on the seminar.

Or read Greg’s blog post on the seminar.

Home warranty plans provide some peace of mind in the first year of home ownership

Posted on June 23, 2008
Filed Under Fredericksburg Texas Home Buying | Leave a Comment

By Sheila Bingham

When you buy a single family home, you may want to consider a Home Warranty Plan.  The cost of the plans I have seen recently range from about $330 to $350 for one year and whether the seller or buyer pays for the warranty may be negotiated in the contract.

Some of the common items covered include the heating system, plumbing, dishwasher, oven/cooktop/range, and electrical system among other items.  The buyer should, however, be aware that to cover certain other items such as the washer/dryer and refrigerator requires additional coverage for an additional fee.

The warranties I am familiar with charge an additional $95 for the washer/dryer and $45 to $50 for the refrigerator.  Other items such as pools, septic systems, and well pumps can be covered for an additional fee as well.  There are also several upgrades available.  Warranties may be purchased for condominiums, townhomes, mobile homes, and multiple units as well.  The cost of the warranty can be paid at closing.

The seller of a home can also purchase a Home Warranty Plan.  The cost of these warranties is about $50 to $60 at this time.  The items covered are usually the same for the basic plan for the buyer, but the seller should check the coverage plan chosen to be sure.  The seller’s plan covers the home while it is on the market and the cost is paid at closing.

Be aware that the full cost of the repairs may not be covered under these plans.  Deductibles and/or service call fees may apply and the home warranty company must be notified prior to the repair.

Please contact me concerning any questions concerning Home Warranty plans.

Sheila can be contacted at Sheila@fbgliving.com. View her agent bio.

Chase Mortgage Market Pulse: What is inflation and how does it affect mortgages?

Posted on June 20, 2008
Filed Under Lending & Mortgages | Leave a Comment

Contributed by Tony Stevenson

What is Inflation?

There are three different terms used to describe situations of price movement: inflation, disinflation and deflation.

Inflation is a sustained increase in the price of goods and services that are produced and sold in the economy. During periods of increased inflation, money loses its power to purchase the same amount of goods and service that it once could. Here’s an example: During the last 12 months, the price of goods and services increased by 5 percent. At month one, a family has an overall budget $2,000 for normal household expenses. At month 12, for this family to buy the same goods and services, they would need a budget of $2,100. In month 12, each item would vary in price increases, but on the whole, expenses increased by 5 percent or a monthly increase of $100. If that family’s income does not grow to match the 5 percent, then they must buy less or substitute less costly items.

The other types of price movements are disinflation, which describes a decrease in the rate of inflation, and deflation, which is when the inflation rate falls below zero and the price of goods and services fall over a period of time. Deflation sounds good for the consumer, however, it can lead to rising unemployment and falling production.

The price of goods and services generally increases, and a normal amount of inflation is expected in a healthy economy. The Federal Reserve Board actively tries to keep inflation in check by targeting a normal inflation level of 2 to 3 percent.

Inflation’s Impact on Interest and Mortgage Rates

The main components of interest rates include the real rate (risk-free rate), inflation rate and risk premium (default and liquidity). Actual or anticipated changes in the inflation rate will have a direct correlation to interest rates charged. If inflation increases and the interest rates do not increase by the same amount, then the real rate of return will be lower than anticipated. All lenders and investors know that inflation will erode the underlying value of money over the long term and will increase the interest rate they require to compensate for this loss in value. The rise in inflation is the main reason why mortgage, auto and credit card rates nationally have been increasing during the last few weeks. Fears of increased inflation due to higher input costs (fuel, etc.), have caused lenders and investors to demand higher rates to adequately compensate for future inflation levels.

MBA & Chase Product Mix

The MBA reported that during the last week, application levels across the industry declined 11.2 percent. Chase reported a decline of 10.7 percent, which is comparable to the industry average.

Chase Weekly Lock Product Mix

Conventional fixed 53 %

Government 26 %

Interest only 7 %

ARMs 13 %

Other 1 %

Tony is a Senior Loan officer for CHASE Bank in Fredericksburg, Texas. He can be contacted at anthony.w.stevenson@chase.com.