In this issue:
- Another Adventure in Mexico
- What I’m reading right now
- Why I’m not worried about Zillow
- The Market
- Buyer Needs
- Recent Closings
- New Listings
Another Adventure in Mexico
I wrote a few newsletters back about when Chris and I lost a hubcap in Baja California and almost missed our flight because I navigated us to the wrong airport in Cabo, and then he had to bribe a toll booth attendant on a dessert highway with a $5 pair of sunglasses because we were out of pesos.
This is the kind of trouble we apparently love getting into, because we keep doing it.
In May, we took a few days and went to Tulum and Isla Mujeres. It coincided perfectly with the launch of the 30 Under 30 Realtor Magazine Cover. I was glad to be out of town because I’m pretty sure I would have gotten exactly nothing done that week.
So instead we laid around on the beach and fried in the sun.
Let me tell you something. In Tulum, they tell you to buy the hippy eco sunscreen to protect the reef. I love reefs and I’m kind of a hippy, so I’d love to tell you that water and Mayan plant extracts are just as good as Banana Boat. But I’m not a liar.
That eco sunscreen DOES NOT WORK. I had on 30SPF. Yeah right, more like SPF zero. Except worse because it lulled me into a false sense of security and I laid my body out in the blazing sun for an hour. I’m still peeling. You can read my full rant on this topic here.
As an aside, Tulum is cool. It’s also expensive, which is why we stayed for two nights, then moved on to Isla Mujeres.
In Isla, we had made the mistake of going snorkeling. We’ve been to Isla countless times, and we’ve never snorkeled or seen the underwater museum. We thought, why not? It might be fun!
I’d rather not belabor the details, so let’s just say this. Chris and I looked at each other 4 hours into our 2 hour snorkeling trip and said “I should have never gone zip-lining.” A reference to a Southpark episode which everyone should go watch.
At least we weren’t as sunburned as our snorkeling compatriot, Maji, who was fried from head to toe, peeling and blistering. He also looked like Bane from the Batman movies and was adamant that we should go home and order a snorkel and mask just like his.
The addition of this snorkel did not help his already Bane-like appearance.
What I’m Reading Right Now
Two books. Don’t get me started talking about either of these unless you’ve got a few hours because this is the kind of thing that really gets me talking.
First, I’m reading Comanches: The History of A People by T. R. Fehrenbach. This is my second time reading this fascinating book. In order to tell the story of the Comanches, he tells the story of the settlement of the Americas. It starts all the way back at the beginning, the migration of people by foot over the land bridge between Asia and America thousands of years ago. At least, that’s what we believe to be the most likely explanation for how what we now call native peoples or first peoples arrived in the Americas. The Comanches had a huge influence on why the Spanish failed to conquer the southwestern United States, and also on the history of Texas. It’s a great read if you’re a history nerd like me.
Secondly, I just picked up Michael Pollan’s latest book How to Change Your Mind: What the New Science of Psychedelics Teaches Us About Consciousness, Dying, Addiction, Depression and Transcendence. I’ve been a Michael Pollan fan for at least a decade, starting when I read Omnivore’s Dilemma. So I was delighted to hear he was speaking in Austin last week. I attended, and got a signed copy of this book. This latest book is the story of psychedelics, particularly LSD and mushrooms, in medicine and science in America, a field that is apparently gaining a lot of tracking at the moment. I can’t put it down.
Why I’m not worried about Zillow
So Zillow is planning to start flipping homes. And agents are flipping out.
The worry is that Zillow is making moves to make real estate agents obsolete. This is, at their core, their business plan as I understand it. They see big commissions in my industry (they’re not wrong), they see inefficiencies in real estate sales (they aren’t wrong there either) and they think they can radically change the industry and collect a piece of that pie for themselves, because you don’t really need real estate agents. That’s where I disagree.
One of the challenges we have in the information age is understanding what humans are good for, and what computers are good for. We have very different skill sets, and we can work together, humans and computers, to do things better. Companies get into trouble when they think they can replace humans entirely with computers.
This is especially true in an industry as complex, emotional, and human as a residential real estate transaction. One of my greatest struggles in the business is trying to improve and get more efficient. I’ve spent the last few months diving more into systems and processes than any other agent I know. And what I’ve learned is systems have their limit.
Systems have their limits because every transaction is different. The timeline is different. The home is different. The way the other side responds to requests is different. The financials are different. The emotions and hangups and worries that each person brings to the table are different. That’s the funny thing about humans. They stubbornly refuse to be put into neat little boxes. We’re messy. We’re unpredictable. Which is why economists are so often wrong.
An analogy. Imagine that someone said “Hey, I have great news. We can now deliver babies without a midwife or doctor! You don’t need them anymore, because we have an app!” That’s so ridiculous we would never propose that. It’s the wrong use of computers. It’s using a computer when you need a human. You can make lots of useful pregnancy and delivery apps. You can make an app that helps mothers track their nutrition during pregnancy, for example. You can have an app that helps mothers track what to expect during each trimester. And all those things might be really helpful. But at the end of the day, you still need the doctor or midwife.
It’s the same with real estate agents. The industry can change in all kinds of ways. A million apps can hit the market that offer property info and mortgage calculators and property value estimates. But at the end of the day, the majority of home buyers and sellers will still need and want a well-trained and experienced real estate agent to guide them to the closing table.
That’s why I’m not losing any sleep. Or investing in Zillow stock.
Median price and average price are up over last spring. About 5%, which is what I predicted would happen in 2018. I love being right.
You can check out the latest data here.
Austin is humming. It’s old news, but it’s still awesome, especially if you own a home. It’s still reasonable, if your home is priced aggressively, to expect multiple offer situations. I’ve been in several of them myself recently.
The biggest buzz in the market place right now is interest rates. They are going up. It won’t be long before we’re in the 5% range. We’re bouncing around in the high 4% range right now.
I won’t bore you with the numbers, but here’s what this means. When interest rates go up, your buying power goes down. You can afford less home. For sellers, your potential buyers can afford less home, which might mean that it’s not quite so fast and easy to get your price.
I think Austin’s inventory is tight enough that interest rates won’t radically change prices. I think prices will continue to rise. But buyers will have to stomach paying more interest, and sellers might not get offers in week one.
So if you’re thinking of buying or selling, I would do it now.
We had a couple of fun closings this month with some delightful buyers.
Elliott and Ali closed on a home in Round Rock.
And congrats to Stephen and Deveri on their condo in 78704!
Some buyers I’m working with went under contract on a home in our neighborhood, 78741, over Memorial Day weekend. I love writing contracts from the lake.
We’re currently working with several buyers who are looking for the following.
$400K range, central Austin. 1 bed+. Would consider condos, townhomes and single family. Newer, move-in ready. 78704, 78741, 78702. Timing flexible between now and January 2019.
$600K range. Maybe as much as $800K. Downtown condos. Would also consider small bungalows 78704 and east side, but we’re probably talking downtown condos on the lake, like Milago. 2 bedrooms. Natural light a priority. Have a coming soon in Milago? Let me know. We already know that building could be a fit. Timing flexible.
Lots and tear downs in 78704. Chris is on the hunt, and he’s looking for one more buildable lot in 78704 this month, before he’s at capacity and needs to take a breather from acquisitions for a while. Have a lot in 78704 or a tear-down home? Let us know. He just might buy it.
Both condos, both central.
2020 S Congress, 78704-Coming Soon
1 bed/studio, 1 bath
Walking-distance to everything South Congress
Approx. 500 SF
2305 Coronado Street, 78702-On MLS
Free-standing condo with attached garage
1 bed, 1.5 bath, 1200+ SF
Throw a rock to Gourmands, Hi Hat, Cuvee Coffee and tons of other fun East Austin spots. Enjoy some jazzy tunes from the recording studio across the street.
Asking approx. $399,900.
Click here for more info.
Have something you want to talk to me about? You can schedule that here.