Many of us are expecting residential sales to normalize sometime next year, but today the Statesman has a gloomy outlook.  They usually do, as any strong opinion will sell more news than a weak one, however this outlook has some similarities with what local Austin real estate experts expect.

Mark Dotzour of the Texas A&M Real Estate Center has an expert voice that many of us trust when it comes to Central Texas real estate.  Dotzour expects job growth to slow to 1.1% in Austin in the next year, a factor Austin depends on for its strength.  This still represents growth, but should correspond with a decline in new housing starts as fewer Austin immigrants will need homes.  Dotzour expects our economy to spend a year leveling out the effects of the decline in Austin’s growth rate and the growth of our residential real estate inventory.

Austin’s real estate climate, like its weather, overall maintains a better outlook that the rest of the country.  While harsh real estate storms hit the coasts, Austin has remained fairly sheltered, receiving only a trickling effect of the national forecast.  Dotzour expects the summer of 2009 to be key.  This is when the influx of new builders that we saw in 2005-2006 will be tested, and those who fail will likely be forced out of business.  According to Dotzour’s predictions, those who can hang on through to 2010 will likely see the new home market pick back up.

If you ask me, this is good news.  A survival of the fittest for builders, if you will.  Those who create the bad reputation that the good builders have to fight will hopefully move on.  I am hoping for the same for real estate agents.  Those who are passionate about their education and careers will weather the storm while those looking for that quick buck will move on to other ventures.

In the end, Austin’s resilience and relatively low cost of living means experts expect Austin to reep the benefits of the upturn of the economy, whether it appears in 2009, 2010, or later.

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Weekly Green Tip

Recycle Glass
Glass takes 1 million years to decompose.  If you’re not going to wait around to see those benefits, recycle glass containers as well as broken glass (like mirrors and picture frames) to reduce glass related air pollution by 20% and water related pollution by 50%.  That was easy!

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PRESS RELEASE

Immediate release

Contact: Aria Schoenfelt, ariakristen@gmail.com or (512) 771-1776

Russian billionaire’s purchase of French villa sets new world record for most expensive home — $750 million!

Most expensive home on the market in Austin — $17,500,000

August 11, 2008 — The market for the average priced U.S. residence may be soft, but the über rich (especially the Russians) continue to drive prices up at the very top of the world’s luxury market.  Case in point — Villa Léopolda, one of the most historic estates on the French Côte d’Azur, is now under contract by an anonymous Russian billionaire for $750 million (€500m).  This three-quarters-of-a-billion dollar sales price sets a new record for the most expensive home sale in the world. The previous record was set earlier this year by Indian billionaire Lakshmi Mittal, with the reported purchase of a London home for his son for an estimated $236 million.

“While the French Villa is a fabulous property, this sale does put into perspective the value U.S. properties represent,” said Aria Schoenfelt, a luxury home expert with BridgeOne Properties in Austin, Texas.  “The most expensive residence on the market locally is listed for just $17,500,000 and is a to-be-built 17,271 square foot English-style castle in Lago Vista.  Next in line is a $16,900,000 895-acre creek-front ranch with a 5,500 square foot home in Johnson City.”

Villa Léopolda, a cream-colored, turreted mansion with two guest houses, is midway between Monaco and Nice overlooking Cap Ferrat, near Villefranche-sur-Mer.  The villa was originally built about 1902 by King Leopold II of Belgium. The grounds are regarded as among the most spectacular on the Côte d’Azur.  Fifty full-time gardeners look after 20 acres of gardens and terraces, planted with 1,200 olive, orange, lemon and cypress trees.

The property’s new owner is said to be a Russian oil oligarch but not ? despite initial rumors ? Roman Abramovich, the highly visible owner of Chelsea Football Club, who already owns a €100m mansion near Antibes.

According to the Nice-Matin newspaper, a contract was signed last week to transfer ownership of the villa from Lily Safra, the widow of Edmond Safra, a murdered banking billionaire.  Rumor has it that Mrs. Safra held out for months as the persistent mystery buyer kept raising his offering price.  The paper also reported that 60 villas or mansions on Cap Ferrat are now owned by wealthy Russians.

The property has a unique history.  In 1916, King Leopold’s nephew and heir, King Albert I, turned the villa into a hospital for officers wounded during the First World War. It later passed into the hands of the Agnelli family ? Fiat automotive tycoons — and became the scene in the 1960s for legendary jet-set parties attended by Frank Sinatra, Ronald Reagan (in his acting days) and other celebrities.

“This sale raises the bar and makes the half dozen or so $100 million U.S. properties on the market seem like bargains,” said Laurie Moore-Moore, Founder of The Institute for Luxury Home Marketing (www.LuxuryHomeMarketing.com), a US-based organization which trains real estate agents who work in the luxury market and awards the international Certified Luxury Home Marketing Specialist designation.  “Today’s affluent are citizens of the world and the successful luxury agent must know how to reach them and what lifestyles they are seeking. It’s an exciting and active market for agents at the top.”

Schoenfelt is a member of The Institute for Luxury Home Marketing and has received special training in assisting upper-tier buyers and sellers.

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In the hectic buzz of daily business, it’s easy to sometimes get caught up in the fuss and to forget why my job is great.  Let me take this moment to tell you why I love what I do for a living, and why I am greatful for the amazing relationships that have grown from my career.

I am currently represending a seller with a listing here in Austin that expired recently.  We allowed the listing to expire while some changes were made to the property even though we are renewing the listing.  Now, I know the market is down, but they received more calls than I could have imagined soliciting the expired listings (Do-not-call did not apply as the property is owned by a company).  I was hugely surprised at the lack of tact and at some of the names that were calling.  My sellers reported to me regularly, taking the entire experience with laughter rather than frustration, which is exactly the type of working relationship that I hope for.  I warned them that the phones would be ringing off their hooks and that their mailbox would be full, but even I was surprised both at how many #1 agents there are in Austin as well as how hungry these #1 agents are (especially for luxury listings).  I was even with my clients as they received several of these phone calls and it was obvious that they would never even consider considering anyone else.

It was through this experience that I realized that I had accomplished exactly what I set out to do.  I don’t want to be everyone’s agent.  I don’t want to be a part of every sale.  I set out to develop great, lasting relationships with the kind of people that can appreciate all of the work I do and who will stand by me.

With the image of Realtors hovering near shady used-car salesman, I just wanted to stand out in the crowd and attract those who value my services and my hard work (because I really do work hard!).  I’m not one who will use dishonesty to get what I want, and I feel that the services I provide do hold a great deal of value to my clients who save and make more money will less headache.  I’m not here to make a quick buck, I’m here for the long haul and to be the expert that serious clients can turn to.

So thank you, for reminding me that I am appreciated as much as I appreciate you!  I do it for the love and the money because this is the business I grew up immersed in and know as well as I know myself.

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(I am in no way associated with this contest, the homeowners, or this house)

Creativity is key when selling your home in anything but a seller’s market.  Although still new, this “Win This House” concept is picking up speed throughout the country.  Although our local market is holding, we are faced with steadily climbing prices but also a climbing number of homes on the market.  This is especially frustrating in Austin’s suburbs, like Leander, where homes are selling more slowly than in more central parts of Austin.

And this Leander seller is taking matters into her own hands with a creative approach… a photo contest!  To be honest, I’m tempted to enter myself.  And if you enjoy photography as well, you may feel the grips of temptation yourself.  This is an opportunity to own this Leander home valued at $170,000 free and clear if you win the seller’s photo contest which challenges entrants to capture the spirit of Austin in a photograph.

So get out your camera and $150 for your entry fee and this home could be yours!

EDIT: I forgot to include the link to this contest, sorry!  Here it is:

http://www.contestreet.com/

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Weekly Green Tip

Use the light, not the door!
When you’re checking on your goods baking in the oven, use the light not the door.  Make an exception if and when you need to do a tooth-pick check on treats like cakes and brownies, but just keep the glass clean and use the light to check in on your baking items!

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There has been a lot of buzz lately about new regulations, in particular, the Economic anf Housing Law.  It’s a lot to keep up with, so here are the highlights of the Capital Gains section:

Changes to Capital Gains Tax Relief Laws - Before, any homeowner who lived in a home for 2 of the past 5 years could enjoy up to a $250,000 profit tax-free (up to $500,000 for married couples).

Beginning January 1, 2009, this changes to a ration.  Now, you must use this equation:  Captital Gains Exclusion = Profit from sale of home = # of days the home was primary / # of days the home was owned. In simple terms, that means that if you live in the home 100% of the time, you can enjoy your profits capital gains free, otherwise you may need to split the difference with the government.

For example, let’s say you purchase a home for $300,000 on September 1st of this year.  You live in the home for 1.5 years, then rent it out for a year, then move back in for an additional 6 months.  You sell the home 3 years after you purchased it for $500,000.

Profit = $200,000
# of days the home was primary = 730 Days
# of days the home was owned = 1095 Days
730/1095 = 2/3 = Amount of the profit that is Capital Gains Free = $133,333.33

In this example, you would pay Capital Gains taxes on 1/3 of the profit or $66,666.67     The federal portion of the Capital Gains tax is currently 15%, so the owner of this example would owe $10,000 to the federal government for this profit.  Sure beats $30,000, but this may entice you into not hopping from one of your rental properties to the next and selling them after living in them for two years instead.

A benefit to this reform is the ability to claim an exemption on more than $250,000 per person.  Many say this is a benefit to the rich, but as a proponent of flat taxes (and an opponent to any socialist-type laws), I am in favor.

Tags: Taxes, austin // 2 Comments »