This is the last big weekend before the Federal Tax Credit expires on next Friday, April 30 so we are now in what I consider Last Call for this years hottest real estate sales period. Undoubtedly we are pulling future demand forward as everyone looking to make a purchase this year will try and have something under contract by next Friday. As many folks work during the week , today and tomorrow will be the last chance to get out and find something. The question remains though, what will happen to the real estate market after this credit expires? San Antonio will be o.k. but I’m not sure about less stable markets.
Sellers should be extremely cautious accepting offers this week as many buyers out there are simply not qualified, even if they are waving a “pre-approval” letter, as I personally found out several weeks ago. To get the $8000 back you just have to purchase an $80,000 house so we arent talking about the strongest buyers out there anyway. Couple that with a buyer going FHA and asking the seller to contribute 6k in closing costs sends up a red flag to me that they don’t even have the 3% to put down. Buyers not having any skin in the game simply shouldn’t be allowed to purchase a house in my opinion. It’s been said that some buyers are even tying up several properties at a time to make sure they get one that sticks so they get their free government handout. In this case the other sellers will get left out to dry with their properties going back on the market after the tax credit expires and in what could be the slower summer months. How many of these tax credit sales will wind up being next years foreclosures?
Neighbor’s House is under contract again, we had a back up offer so when the last buyer couldn’t arrange financing we went to plan b. Maybe 3rd time will be a charm, someones eventually going to be the lucky homeowner with the Coolest house in Mahncke Park.
It’s a good thing I’m not superstitious because good things have been happening to us lately with the number 13. Recently we purchased our newest rehab the Target House on a Friday the 13th. Now, after 13 days on the market and 13 showings; we have accepted an offer for the Neighbor’s House, which bears the address of 319, all multiples of 1 and 3. The culmination of this project also ends a 13th month stint that I’ve spent on this block rehabbing two houses next door to each other. Weeeeeird! Right? Of course we never call it “sold” until it closes but this buyer is strong, so as long as we get past the inspection and appraisal we should be good to go. (knock on wood). The average market time for San Antonio is close to 100 days so we are pretty stoked. Inventories have been decreasing this year but still higher than 2009. There is currently 6 months of inventory on the market in San Antonio so it’s pretty balanced between a buyers and sellers market.
Let’s take a closer look at the real estate market in our little farm area of Mahncke Park. It has still higher inventory levels with 10 homes on the market currently whereas last year there were never more than 2 or 3. This sounds low but keep in mind the size of our farm is only roughly 6 square blocks. In the last year there were 13 homes sold (yes, I know, another 13) with an average market time of 80 days and price of $240,000. With our recent sales prices around $340,000 we are getting roughly 100k higher than the average and selling our houses in an eighth of the time. It’s purely speculation because removing our sales comps, nobody would even guess what we are doing is possible. In fact we’ve heard local realtors scoff at our asking prices then say that we are the talk of the town when they sell. How are we doing this you ask? Simply by buying low, doing the construction ourselves to control costs and offering a product that you can’t find otherwise nor replace for the same price. Sure, there are some “updated” houses we compete with but nothing that’s been totally gutted, added onto and all new from scratch. It’s also gratifying to know that we are doing a good thing for the area and actually creating organic inventory for buyers by turning these otherwise uninhabitable homes into great new places for new families to live. Here’s to Lucky 13.
Even though we were plagued with more rainout days this week, I still managed to get the exterior paint 95% complete. This is probably the most labor-intensive paint job I’ve done as it’s 6 colors and it entailed a lot of detail brushwork on the trims. So far I’ve put up over 60 gallons on the exterior! Keep in mind there’s a big 2-story guesthouse in the rear and I also sprayed 2 coats of everything including primer. As you read in my last post, I picked up a guy from Lowe’s parking lot to help me paint so it’s gone really fast. This guy is actually a great painter, he was making fun of me for using economy brushes so I broke down and bought a Purdy brush, man this thing practically paints by itself. Well worth the $14 bucks.
Because I was so happy with my historic craftsman style replica window screens on the last project, Hat Trick House, I decided to make them again for this house. I changed the design a bit so they wouldn’t look exactly the same, especially since the other house is right next door. I designed the center mullion placement to minimize the visability of the white vinyl and this new design came out great. I won’t stretch them with screen, although the future owner can if desired. My new double pane windows have screens already so these frames are basically just a cosmetic design feature that also plays an important part in the color blocking of our paint job. The historic replica screen hangers are also still available from Stanley. This extra little finishing touch really gives the house the historic look that I need for our neighborhood.
There was a new BusinessWeek article this week that ranked San Antonio #1 for the top National economy. The measurements used were job growth, economic growth, employment and home prices. Texas seems to be the clear winner with San Antonio in the lead and five other metros in the top 10. While we are still seeing signs of the recession here and I’m always quick to say we are late to the party, this study shows that we are still fairing extremely well compared to the rest of the country. We’ve seen the housing market here drastically slow down in the last 2 years, but homes are still selling and people are still moving here everyday from other states so we have to be thankful that when coming from California, we picked a winner with San Antonio.
Things finally started to dry out after all the rain we had, so I got the texture crew in last weekend and as luck would have it, pouring rain again all day. Geesh. It took 3 days for the texture to dry with 90% humidity. It finally dried and looks incredible so I proceeded with spraying a good primer coat and ceiling paint throughout. I was at Lowe’s buying the exterior primer and met this guy in the parking lot asking for work, I’ve had him helping me everyday to speed things up and he’s actually turning out to be a great helper. We spent 4 days just caulking, scraping and filling holes on the house in preparation for the paint job. The weather cooperated at weeks end so we made a huge impact with spraying the entire house in a day. We got 2 coats on the soffits and body of the house, accounting for 2 of the 6 colors planned. I still have all the time consuming trim brushwork to do, which is really going to be the important part of this color scheme. Our façade designer for this project Morgan Penix at DeWitt Architects really picked some unique colors, which I initially had a hard time grasping, but now I’m finally starting to see her vision and am loving how it’s looking. The dark rich columns with rust accents will make a bold statement against the soothing earth tones on the body of the house, all done in historically correct flavor.
The 9th Annual Mahncke Park Home Tour was today so my wife and I had the chance to mingle with some neighbors and enjoy a diverse mix of 6 inspirational and eclectic residences. We saw some great gardens, tons of personality and very cool historic craftsman bungalows. Adorned with unique features, incorporated artwork, bright colors and highly personalized, these homes offered something we never get to do in our designs with resale in mind. We saw green painted hardwood floors, claw foot tubs, blooming esperanzas, purple staircases, garden borders made from Skyy Vodka bottles and mosaic tile galore. Three of these unique homes belong to artists and included studios, fun workshops and galleries. The tour was a great success and Mahncke Park proved again why it’s THE coolest and most hip place to live in San Antonio for the artistic urbanite.
Interestingly though all of the homes on the tour this year are currently for sale where in past years it was not allowed for any of the participating homeowners to use the tour to promote the sale of their homes. Is this a sign of the times or what? Seems even in our small niche neighborhood we are not immune to the higher inventory levels and general real estate market slow down that finally caught up with San Antonio last year. At any given time last summer in Mahncke Park there were only 2-3 homes for sale and now there are currently 10 on the market.