Archives
November 2007
Nov. 29, 2007 - Christmas in Austin Texas
Like most towns during the holiday season, Austin brings out their festive lights. However, there are two areas in town known for displaying an awesome array of lights- 37th Street, and the Trail of Lights in Zilker Park.
Starting back in the early 80s, neighbors on 37th Street in Hyde Park came together to create a completely unique Christmas light experience that is creative, wacky, and fun- what today would be deemed as, "Keeping Austin Weird." Resident Jamie Lipman began wildly decorating his home, and his neighbors followed suit. Discarded motorcycles have been wrapped in hundreds of lights, bushes were sculpted into automobiles (including headlights), BBQ cookout scenes were created, and several strands of lights crisscrossed the street. From the rooftop of one house, massive amounts of lights were strung, and every 5 minutes a volcano "erupted" with a cloud of smoke, and the lights turned red, mimicking lava pouring down a mountain. Lipman would go all out, decorating his front and backyard, with thousands of lights, and covering his home in black plastic to have his homemade creations show up better and brighter.
Though the street has gained national attention for its creativity, it has gone through many changes in recent years. Old residents have moved out, and a new crowd moved in. Even Lipman himself moved from 37th Street last year, though he has offered to come back and help set up his famous lights. Time will tell if the new neighbors will keep the spirit of 37th Street alive.
Boasting 300,000 lights, The Trail of Lights is put on by the city of Austin, and grows bigger every year. The Trail of Lights was originally named "Yule Fest" in 1965, and is a one mile strip of static and moving displays located in Zilker Park. "The 12 Days of Christmas" display was the first created, and still holds a prominent position at the beginning of the trail. Many of the beautiful craggy oak trees have brightly colored lights from the bottom of their trunks to the tips of their highest branches. Along with the 43 lighted displays, shops selling trinkets, hot food and apple cider dot the trail. A variety of local dance troupes perform on the entertainment stage, Santa holds court for a throng of youngsters, and a massive Yule log burns night after night.
For most visitors to the Trail of Lights, their trip begins or ends at the Zilker Tree. Located just south of the trail, the Zilker Tree stands 155 feet tall, and is not really a tree at all, but one of Austin's original moonlight towers. The towers were erected in 1894 as the city's first illumination system, and 17 of the original 31 still stand. The tree hosts 3,309 lights, and children and adults alike can be found underneath the tree with their heads up staring at the lights, and spinning in circles until they crash to the ground. This year's tree lighting ceremony will be held on December 2nd at 6pm, with the Trail of Lights open evenings through December 31st.
If you are interested in Austin you can find information on Ki's Austin Real Estate Blog. Ki's site also is filled with information about the Austin real estate market along with a search of the Austin MLS for Austin Homes.
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Nov. 26, 2007 - Hyde Park: An Austin Original
Imagine a neighborhood of adorable medium houses seated comfortably on shady streets lined with trees. But then splash a rainbow across the entire area. That could get you close to what the Hyde Park neighborhood in central Austin is like. This old part of town has a lot of history, and was one of Austin's first developments north of the Capitol. Many of the houses are over fifty years old, but are lovingly cared for by tenants and successive owners, often with a heavy dose of their personality thrown in for good measure.
Spanning the area from Dean Keaton street in the south to around 45th street or so to the north, and from I-35 to the east and Guadalupe street to the west, Hyde Park is a fairly large neighborhood. As it is located comfortably between many of the major thoroughfares in Austin, Hyde Park has long been a staple area for college students at the University of Texas, which has contributed heavily to the area's looks and atmosphere. Many of the houses are painted exuberant colors with eye-catching designs and artistic sensibility, a legacy of many resident's desire to "keep Austin weird." This also contributes refreshing diversity when compared to the cookie-cutter houses that so many other neighborhoods primarily consist of.
The biggest advantage of owning a house over an apartment or condo is the lot on which it lies, and Hyde Park has this attribute in spades. While many of the houses are modest in size, with most in the 1-to-2 bedroom range, the expansive yards more than make up for it. With more privacy and more space, Hyde Park houses are cozy and comfortable. The larger back yards also lend themselves to Austin ingenuity, with expansions, garage apartments, and other conversions being common. This also contributes to the value of each house without changing its character.
And what character! Most of these houses were built in a time when different trends were popular, and these designs have often proven to endure to maintain their popularity in a way that more modern houses cannot. While most houses built in recent years have good design behind them, one often gets the impression that a house is devoid of personality and designed to be as inoffensive as possible. While this approach is safer for an architect, it makes houses like those in Hyde Park that much more desirable. Some features that were often viewed as necessary in years past have either become unfashionable or become viewed as excessive, such as high ceilings and large porches.
However, these aspects of houses are very important to many prospective homeowners. This is evident by the continued value of the neighborhood over many years. Many houses in Hyde Park have higher ceilings than newer houses, especially because many are one story. This contributes to a feeling of space that many newer homes lack. Hyde Park houses also often have a disproportionately large number of windows, which provide increased sunlight and adds to the increased sense of spaciousness. The characteristic large porches also make the homes seem cozier, more inviting, and help to connect neighbors. I personally think one of the best benefits to having a house over an apartment is having a large porch on which to relax, and this seems to be an attractive attribute to many potential homeowners as well. So, with these positives in mind, I encourage you to check out Hyde Park if you're looking for a home in Austin. I don't think you'll be disappointed.
If you are looking for a home in the central Austin tx real estate market Escapeso Realty can assist you. Their website provides users a search of the Austin MLS along with information on their blog about Austin Real Estate.
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Nov. 22, 2007 - Why People are Moving to Austin
Austin, Texas is no longer a hidden destination buried in travel books. It is projected to grow in population by about 30 of the Austin population has college degrees compared to the US average of 27.0 have graduate degrees compared to the US average of 9.9%. A lot of this has to do with the University. Many students who come to Austin for school end up not wanting to leave their beloved city. So, you run into a lot of waiters and book store cashiers with college degrees refusing to leave.
The University is just north of the Capital of Texas, which is pretty much the opposite vibe of UT. UT has the young, huge crowd of kids finding themselves, and the state government has all the politically driven players pushing ahead in their careers. This government component of Austin provides the city with all the various official establishments like the Texas School for the Deaf, the Texas School for the Blind, the Texas Real Estate Commission, the Secretary of State, IRS, etc. The deaf and blind schools are interesting in that they provide the city with a more diverse community of people.
The tech sector, which is mostly huddled around up north, brings another layer to the town. The big players are IBM, Dell, Sun, Intel (which is actually south), NI, and AMD (actually south too). This keeps the programmers and computer people a dominant sector in the Austin landscape. Many startups and entrepreneurs have sprouted from the bringing together of these people, which keeps the industry vibrant.
Then there is the music and film scene, which is extremely vibrant. The music scene became know probably in the 60s when Janis Joplin and the Vaughn brothers became known. Now, Austin has many various festivals. The biggest one is South by South West or SXSW for short. It began as a music conference for unknown bands all over the world, music producers, and record labels to all meet up, hang out, and hopefully make some deals. Now, a lot of bigger bands play the circuit and labels have their showcases mixed in with the to-be-discovered. SXSW is more recently become a host to a major film and interactive festival as those industries are growing more and more in Austin. Another more recent music festival that has become popular is The Austin City Limits, which was a well known TV show, and has now become a full-fledged 3 day event showcasing many popular bands. The art scene in East Austin is growing each year as well, with the East Austin Studio Tour and other various promotions. The film, music, and art in the city keep Austin well-balanced.
With all these different aspects of Austin, there is a good mix of everything. All kinds of people live there, and almost everyone can find a place to be happy. And the best part of it all is that everyone is just fine with each other. It is often that a mix of all these people will be at different tables a t a coffee shop and everyone respects each other, no matter which way you decided to go. They enjoy each other's difference, and that is really what makes Austin a special place.
Ki is a realtor covering the Austin Real Estate market. His website allows users to search for Austin Homes along with providing general information about Austin on his Austin Real Estate Blog
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Nov. 20, 2007 - Keep Austin Weird
One cannot possibly spend time in Austin, Texas without hearing its motto repeated countless times: "Keep Austin Weird." The phrase, which was coined by an Austin Community College librarian who uttered it while calling in to a radio show, spread like wildfire and was picked up and used by the Austin Independent Business Alliance as a means of encouraging the support of local businesses.
Like most catch phrases, "Keep Austin Weird" has a basis in reality. Austin is many things: political, vibrant, intelligent and fun, but it is also undeniably weird.
For example, where else in the world would you find a cross-dressing vagrant who wears high-heeled shoes and runs for mayor? Leslie Cochran, a man who has been dubbed "The Queen of Austin," is one of its most beloved characters-so beloved, in fact, that local stores sell "Leslie's What to Wear Refrigerator Magnets" that act as a magnetic version of a paper doll kit.
Leslie is not the only local attraction that keeps the city interesting. There is Hippie Hollow, the only "clothing-optional" beach in all of Texas, as well as the fact that Austin, in addition to being the state capital, is supposedly the Frisbee Golf capital as well. Also consider the Alamo Drafthouse, a series of movie houses-slash-restaurants-slash-performance theatres, which has an eclectic event calendar and funny promotions to keep patrons coming back for more. There are not many places where you can attend a showing of "Harold and Kumar Go to White Castle" that includes all the miniature burgers you can eat.
Down in South Austin, one can visit the infamous "Cathedral of Junk," which was started in 1988 and is constructed of an array of throw-away items like bottles, bumpers and wheels (oh my!). Despite its appearance, the cathedral is structurally sound, passing inspection by the city each year. While in that part of town, there is also the Museum of Ephemerata, which has hosted such weird items as the last cigarette Marilyn Monroe ever smoked.
Each year, Austin plays host to biker rallies, burlesque shows, rodeos, political demonstrations, theatre events, street markets, live music performances and festivals, poetry readings and barbecues. There truly is never a dull moment.
And yet, perhaps it is simply the people of Austin who keep it weird. Austinites, both native and self-made, continually contribute to the city's atmosphere, full of flair, fun and energy. It is they who buy from the funky shops, they who attend the crazy shows, and they who take pride in occupying such a unique place in the world
Austin real estate properties works to help client locate properties in the Austin market. For people interested in the purchasing a property their website provides users a search of the Austin MLS along with his Austin Realtor Blog.
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Nov. 20, 2007 - Avoiding Sour Negotiations
1. Don't sweat the small stuff. It is common that people will haggle or get attached to small things like refrigerators. I try to put these things in perspective for my clients. Would you rather convey a $1000 used fridge to these buyers who are ready to move forward with just this one concession, or do you want to put it back on the market and pay more mortgage payments until the next buyer is interested? A lot of times, if you look at the overall picture of how much it will cost to put something back on the market, including mortgage, taxes, and insurance, there will be a breaking point at which the seller understands it is not worth the money. From the buying perspective, if we take the fridge example again, is it really worth the fridge to spend more time looking and spend money on another inspection? Sometimes your client will say that it is worth ending the deal, and in that case, you will represent them as they want, but most people become rational after they get past the initial emotions of "wanting" something. And some clients will even thank you for helping them through the small things.
2. Negotiating other issues. Think creatively. Sales price is not the only issue in a transaction. Closing a couple weeks earlier may be the best for both parties and can be negotiated rather than concentrating only on sales price. One new home buyer offered her home to be on a property tour once a month in exchange for $5000 in closing costs paid by the seller. Basically, understand the other party's situation so that you can try to come up with something that might benefit them as well as who you are representing. That way, you can hopefully turn the negotiations into a win-win situation.
3. Offering packages. As a buyer, don't negotiate one thing at a time. When you present items to be resolved, for example repairs, always do this as a list. That way, you can trade-off one thing for another. For one, negotiating one thing at a time is a waste of time when everything can be discussed at once. Everyone is busy with their lives, and no one wants to be pestered multiple times about one more repair item. This just makes the seller progressively more irritated and less agreeable to the next thing you ask for. Also, the list format forces the issues to be prioritized, and you can set your boundary of what can be left out and what absolutely must get resolved.
4. Dealing with threats. This does not happen often, but some people will threaten termination as a bargaining technique. I would not advise using this technique, but it is good to know how to deal with it because the typical natural reaction is to tell them to buzz off. One solution is to ignore it and just talk about the strong points of your property or client. You can also re-frame threats to show that it is not in their best interest.
5. Knowing when bargaining zones do not overlap. Sometimes the negotiations are just not going to happen. A buyer and seller are at opposite ends. In this case, rather than continue to make ridiculous demands (or at least seen as ridiculous by the other side) and creating a volatile situation, it is time to end the transaction and move on.
At Escapeso, our real estate agents know the Austin homes and Austin condos market. Contact us with any of your Austin Texas Real Estate needs.
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Nov. 15, 2007 - Austin By Numbers
Austin is one of America's hot list cities. The housing is affordable. The landscape is pretty with rolling hills to the west and fields to the east. The weather is pleasant in the spring, fall, and winter, with summer being bearable, even welcomed by heat-lovers. The music, art, and film scenes are thriving and growing with new festivals like Austin City Limits and those established like the worldwide conference South By Southwest, otherwise known as SXSW. There's something for everyone from rockabilly to folk music and cycling clubs to marathon teams. So, in short, it's a cool place to hang your hat. But what are the facts? Let's talk about some of Austin's numbers regarding education, jobs, and other random numbers. 39.1 have graduate degrees. A large part of this is that one of the largest universities (if not the largest now) is located in the heart of the city, just north of downtown. With almost 50,000 students, the University of Texas at Austin supplies the city with all kinds of top talent, being a top school for many of its divisions like computer science, business, nursing, pharmacy, architecture, and engineering. Also due to the large university, Austin has a high number of research and development firms. There 4.9 R&D employees per capita, which is 120, and of the 100 largest economic cities in the nation, Austin came in at 39 for the number of total jobs. The unemployment rate is 4 of the total Texas GDP and 0.5 renewable energy. Austin is known for its green incentives. They pay for over half of your solar panels, if you are willing and your home qualifies for enough sun. Free low-flow toilets are available. And rebates are given out to those who get higher energy efficient A/Cs and washers / dryers. There are 2.5 airplane boardings per capita. Austin's new international airport provides the city with more than enough services with room to grow. There is 79.8 miles of public transit per capita, which is quite less than half the national average. Austin does have a bit of traffic woes at 8am and 5pm, but nothing like 5 hour commutes. The city aims to absorb growth vertically rather than sprawl to help relieve the traffic issues. 75.2% of the population lives in high-broadband areas. This fact is probably roots from UT being part of the pre-cursor to the internet, attracting high-tech businesses and starting Austin on its tech track. There is no doubt that Austin has become one of the most livable and attractive cities to move to over the past couple years. The secret is out. Not only is Austin a great place to live because of the hills, lake, and pretty sunsets, but there are numbers to back it up. Ki Gray is a real estate agent for Austin real estate properties. His site has a search for the Austin MLS and blogging about Austin realty.
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Nov. 9, 2007 - Why in Real Estate Big Lots are Good
When I am looking for real estate what makes my mouth water. Huge cathedral ceilings? Updated kitchens? Recessed lighting? Nope. I love big lots. The bigger the lot the more I get excited. Why do I love big lots. Over time large lots tend to appreciate faster. In real estate one of the cardinal rules is that generally land increases in value and general structures decrease in value. Why does a structure tend to decrease in value? As a structure gets older it tends to get farther away from safety codes. But generally properties tend to increase in value because the rate at which the land appreciates outpaces the rate at which the structure is decreasing in value. When you are hoping to sell your property for more in a few years its best to look at the dirt and not the house. Because land tends to appreciate I usually prefer properties that have more of the current value in the land than in the structure. This means that a property in a new subdivision where the structure account for 70% of the value and the land is 10% of the value is not appealing. For instance properties close to a city center can have 65 to 70 percent of the value is in the land. Of course what is even more appealing is a centrally located 5 acre lot with say a 500 square foot house. I saw one a few months ago in the Austin MLS that was pretty appealing. Lets run the numbers on a few scenarios to see what I am talking about. Lets assume that land appreciates at 7 percent a year and structures depreciate at 2 percent a year. First let us look at a property where 70% of the value is in the structure.
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Year
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Structure Value
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Land Value
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Total Value
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0
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70
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30
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100
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1
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67.2
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32.4
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99.6
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2
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64.512
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34.992
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99.504
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3
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61.931
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37.791
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99.722
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4
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59.454
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40.815
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100.269
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5
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57.076
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44.080
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101.156
| What we see is that the total value actually decreases for the first few years until the land value increases enough that it starts to play a bigger role in the equation. Lets compare that to where the property accounts for 90% of the value
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Year
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Structure Value
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Land Value
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Total Value
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0
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10
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90
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100
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1
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9.6
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97.2
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106.8
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2
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9.216
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104.976
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114.192
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3
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8.847
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113.374
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122.22
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4
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8.493
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122.444
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130.938
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5
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8.154
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132.240
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140.393
| In the end the differences between these two properties is pretty significant. What I find surprising is that alot of buyers that are concerned about appreciation will buy a house on a small lot on the far outskirts of the city. They look at the upgraded countertops and other amenities as a sign that they will see significant appreciation. What they don't realize is that alot of these features that are currently in vogue might not be popular in a few years. I want to be clear I am not saying everyone should buy a property where land value accounts for most of a properties value. In many cases people enjoy nice amenities that come with a house and the idea of living in an older home holds little to no appeal. But if your primary concern is investment when you are evaluating a potential property you should pay more attention to the lot than the house. Ki is a realtor working in the Austin Texas Real Estate market. If you are looking for properties in Austin they provide information on their Austin Real Estate Blog along with offering visitors a free Austin MLS search.
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Nov. 5, 2007 - Cashflow is King (Sometimes)
A common mistake of investors is the way they evaluate a potential investment properties. The process I have seen first time investors use is Step One : Look at Cashflow What is step two? Their is no step two. Basically if the property has good cashflow they move forward. What are some issues with this approach? 1) The property is over rented. MLS Listings will frequently say that a property is under rented. They rarely if ever say a property is under rented. What would cause a property to be under rented? The previous owners could have offered one or two months free in an effort to get rents unnaturally high. They could also be renting to family members and other incentives could be known to only the owner and the renter. Lastly, and don't underestimate this, sometimes an owner just gets lucky. This is one of the benefits of using a realtor. Out of town investors are the most likely to unknowingly purchase over rented properties. 2) The property is going to be negatively affected by future developments in the near future The real estate landscape is always changing. And while future developments can have a positive impact on a property they can also have a negative impact. For instance a new halfway house next to a potential rental property is not exactly going to help the future appreciation of a property. 3) The property will be difficult to Rent Out Additionally subdivisions that are built farther out away from jobs and conveniences of a town can have low purchase prices but can be very difficult to rent out and are unlikely to appreciate in the near future. I have heard of a subdivision in Dallas where 90% of the homes were purchased by out of town investors. As local investors called it "Stink Bait for California Investors". I am sure the numbers looked good for a out of town investor that didn't investigate to realize that while people in California accept spending an hour in a car to commute to work people in Texas are not currently willing to accept such commute times. 3) The property has low potential for future appreciation This is similar to point 3. Developments in far flung areas have a difficult time appreciating. The problem is that in 5 years when you are trying to sell your house a new subdivision is being built down the road. People that are buying in the suburbs often place a premium on "new" houses. This makes it difficult to sell your investment property. Additionally appreciation is limited when there is a large amount of available land close to your property. The reason for this is that as demand increases the available vacant land next to your property is developed. When demand increases but supply increases proportionately appreciation is limited. 4) The property has serious structural or other defects Houses with structural defects often have good price to rent ratios. The reason for this is that renters usually are not bothered by a foundation crack that will cost 30k to fix in a few years. As long as the house is currently livable they are going to be ok with the current living situation. But a structural problem can be expensive and time consuming for a property owner to deal with. In the worst case scenario a property can be unrepairable and will need to be demolished. For buyers interested in Austin Texas Real Estate Ki can help in your search. His website provides a search for Austin Homes along with information on the Austin market in his Austin Real Estate Blog.
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Nov. 2, 2007 - Is the Superfund Capable of Restoring Confidence?
The M-LEC, as it is called, has been created in order to restore investor confidence in some areas of the economy that are neccesary for credit to maintain its liquidity, or ease of transference from one entity (a bank) to another. This loss of liquidity comes in the wake of the discovery of high-risk, sickly subprime mortages that have been sold off in pieces, often in the form of supposedly secure money market funds to thousands of investors. Over the past several years, those funds have changed hands so many times that their spread is difficult to chart for the average investor, who therefore loses confidence investing in a potentially tainted company or financial institution, which, over time, results in a credit crunch, which is a surefire recipe for recession.
In order to avoid such an outcome, this superfund aims to selectively buy large number of securites from what is called Structured Investment Vehicles- or SIV's, which sell so-called "commercial paper" to finance themselves. Commercial paper is sold at most of what it is worth and matures quickly (over a period of months rather than years) which, although a risky investment (because it has a smaller percentage of the investment reserved in case of a drop in value), means it can quickly be converted into a more stable form, most often in a money market fund. Bond rating institutions rated the money market funds as being much safer than they actually were, because SIV's transfer the securities through commercial paper before they make their way to the stable funds.
Since it became more apparent that these small conduits only appeared to be trustworthy investments, they have lost popularity and have few potential buyers. Although this is not inherently bad, it reflects two scenarios. The first possibility is that the market is functioning improperly due mostly to a loss of investment confidence, which depends on the perception of the average investor that the economy is stable and therefore worth investing in. The other possibility is that the economy is unstable due to real underlying debts that cannot be avoided, and therefore this new conduit is just a smokescreen for the big banks to pay lip service for making so many bad loans in the first place.
The second scenario is unfortunately the more likely one, which means a recession could be unavoidable. The reason the conduit functions ineffectively is twofold: because it depends on the bank's promises that they will buy the SIV's assets even if no one else will, thus placing an artificial incentive in place for investors, and because the bank's guarantee is also dependent on their securities maintaining a certain amount of their value. This means that the financial institutions can take fees from the securities in exchange for an incomplete guarantee, thus justifying their purchase. The fund could theoretically have a positive impact, if willful suspension of disbelief takes hold of the globe, or if you view a slowdown in the US economy as a positive outcome.
Living in Austin, Texas Ki works to help clients interested in the Austin real estate market. If you are looking for a home in Austin his site provides a search of the Austin MLS along with more general information on his Austin Real Estate Blog.
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