The housing market in University Hills was under my microscope this morning. Is this somewhere that investors and buyers should be looking right now?
The image below shows the currently active homes under $170,000. The red arrow means a price drop which has happened in 11 out of 17 active listings. The “Frclsr” column on the left indicates the home is foreclosed, and 5 of 17 current listings in this price point are, with a few more short sales on top of that.
What does this mean for prices in the neighborhood? Well, this is only one end of the spectrum, and there are remodeled homes in other parts of the subdivision that are faring well. Looking at the lower end of the market though, it seems that prices have dropped, and the number of distressed homes may mean that appraisals on the regular resale homes will come in low. I’ve had one resident get in touch to say he was shocked at his appraisal value on a recent refinance request – 19% below what he paid three years ago.
I don’t think that values in the neighborhood have fallen that far, though they are certainly lower than peak at this price point. Another interesting data point is that two of the last three offers I’ve received on my listings in the area have been from real estate agents or brokers.
What this implies to me is that if the professionals are swooping in to buy, then maybe it’s a good time for investors and homeowners to buy too. Investors would want to see that single family home leases in the last 12 months in the area have attracted a median lease price of $0.73/sqft.
If you take a couple of distressed single family home listings that are move-in ready and consider the rental opportunities at the above broad brush lease price:
2602 Dunbarton : 4 beds : 1910 sqft per TCAD : typical lease $1350, price $125,000 (listing courtesy of, well, me)
2110 Vanderbilt : 4 beds : 1692 sqft per TCAD : typical lease $1200, price $129,900 (listing courtesy of Prudential Texas Realty)
things actually look quite appealing. If you follow the “one percent rule” idea for residential rentals, then the home on Dunbarton could rent out for just $1250 and still beat the game.
My crystal ball is a little cloudy in terms of predicting the future value of real estate, or anything else for that matter. If I was Jim Cramer, I might be yelling “Buy!” and firing off an airhorn or two.
Garreth Wilcock helps buyers and sellers in East Austin. You can search for homes in University Hills at his website.