October 20, 2007: The national housing slump seems to have finally reached Austin. According to the article, "Area housing slump settles in" (by Shonda Novak of the Austin American-Statesman), the number of sales fell (in comparison to last year) and the number of homes on the market has hit a four-year high. But the median price in Central Texas has risen to $182,500, which is nine percent higher than last year. Austin's market is not as bad as some markets across the country, due in part to a fairly healthy economy and a positive population growth.

September 24, 2007: According to the Austin Business Journal, "home sales dip 10 percent." This figure is in comparison with the prior year. Despite the downturn on the number of sales, the median home price rose to $192,000.

January/February 2007: High foreclosure rates are due to aggressive mortgage underwriting rather than a weak economy, according to Mark Dotzour, PhD, and Jim Gaines, PhD, economists at the Real Estate Center at Texas A&M University. While the national economy is experiencing a real estate slowdown, Texas real estate markets were stronger in 2006 than in 2005. Expect a busy year for Texas real estate both in the commercial and residential markets.

December 28, 2006: With a national median home price of $221,300, Austin's median home price of around $175,000 makes our market a very affordable one, relatively speaking. Our regional economy is strong, and Angelou Economics predicts the Austin area will add about 20,000 jobs and about 40,000 residents over the coming year, according to Kate Miller Morton and M. B. Taboada of the Austin American-Statesman.

November 23, 2006: According to data provided by the Austin Board of REALTORS, the median sales price for the Austin area has risen to $175,000. The average days-on-market is 66 days, making it a sellers' market. Economists expect the region to hold on to its strong sales and growth for 2007, according to Claudia Grisales of the Austin American-Statesman.

AUSTIN's real estate market heats up:
Lilly Rockwell of the Austin American-Statesman wrote on June 22, 2006 that home sales are up and average of 15% in Austin, compared to the prior year. While there may be a national slowdown, it really has not affected the real estate market in the Austin metro area.

AUSTIN IS A HOT JOB-GROWTH CITY:
Paul Kaihla of "Business 2.0" magazine, wrote of "10 Hot Cities" in the May 2006 issue. Austin was listed as the fourth hottest city for job growth, behind Las Vegas (1), Orlando (2), and Riverside, ca (3). Kaihla wrote, "Austin's tech rebound means IT hiring is back, and Toyota's new nearby plant is creating thousands of jobs." Austin's job market should expand 24.7 percent through 2015. Following Austin to round out the top 10 job-growth cities were Phoenix (5), Jacksonville (6), Tampa (7), Dallas-Fort Worth (8), Charlotte (9) and Atlanta (10).

AREA HOME SALES PRICES ARE UP:
Central Texas home prices have risen to a median value of approximately $166,500. The median price for Austin-only homes is even higher. This is from the article, Area home sales gain momentum, dated April 20, 2006, by Kate Miller Morton of the Austin American-Statesman.

GROWTH IN AUSTIN-AREA JOBS AND REAL ESTATE PREDICTED:
According to an article in the Austin American-Statesman by Kate Miller Morton on 8-11-2005, Austin is expected to see a growth in population of approximately 34,000 people over the coming year. This population growth will stimulate the development of new retail shopping centers, and raise the occupancy and rental rates of apartments, warehouses and offices.

CANCELING PRIVATE MORTGAGE INSURANCE:
If your loan originated on or after July 29, 1999, your lender must cancel private mortgage insurance at your written request once your mortgage balance is 80 percent of the original value of the house. However, the lender must be satisfied that the property value has not declined. Private mortgage insurance should be automatically canceled when the mortgage balance is 78 percent of the original value of the house. For more information, visit www.PrivateMI.com.

INTEREST RATES are lower than they have been in many years. If you have considered purchasing a property or refinancing a loan, now is a good time. If you don't yet have a loan officer, you can call me at (512) 336-1155, send e-mail to me at RobertUnderwood@austin.rr.com, or you can see several loan officers listed on this Web site at the Vendors link.

Loan limits raised for Freddie Mac & Fannie Mae:
Effective January 1, 2005, Freddie Mac and Fannie Mae raised their single-family mortgage loan limit to $359,650. Loan limits have also been raised to $460,400 for duplexes, $556,500 for triplexes, and $691,600 for quadruplexes.

Austin Ecomony:
According to the article, "Boomtowns," from the March 2004 issue of Business 2.0 magazine, Austin ranked fourth in the nation for cities that have the capacity to generate high-wage jobs. Also mentioned in the article was that job growth should improve 12 percent by the year 2008.

FHA loan limits raised in 2005:
Federal Housing Authority loan limits have been raised as of January 1, 2005. The base loan for a single-family unit (e.g., condo, townhome, house) is $177,650. Loan limits have also been raised to $220,992 for duplexes, $267,120 for triplexes, and $331968,840 for quadruplexes.

TAX BRACKETS CHANGING:
The 28%, 31%, 36%, and 39.6% tax brackets are being lowered over a phase-in period from 2001-2006. The final rates by 2006 will be 10%, 25%, 28%, 33%, and 35%.

FHA MIP changed
On line 12-B of one-to-four family contracts (for FHA deals), a value for Mortgage Insurance Premium (MIP) is required. The former amount of up-front MIP was 2.25 percent of the loan amount. On January 1, 2001, the MIP amount changed to 1.5% of the loan amount, and this new amount should be written into FHA contracts.

CAPITAL GAINS and TAXES
Remember that a long-term capital gain is one year or longer. The tax rate is 20 %. If you are in the 15% tax bracket, the tax rate is 15%. Short-term capital gains are taxed at your regular tax rate (which is up to 39.6%). For tax purposes, it is important to know exactly when you bought and sold an asset, as well as your cost basis.

COLLEGE FUNDING MADE EASIER
If your adjusted gross income is less than $95,000 for singles or $150,000 for married couples filing jointly, you qualify for the education IRA. The contribution is limited to $500 per year for each child under 18 but the money can be withdrawn tax-free if it is used for "qualified" education expenses such as tuition, textbooks, etc.

Another way to go is for your child to open up a Roth IRA. Whether the child or the parents funds it, you can shelter up to $2000 per year in a tax-free account. It can be tapped later without penalty if the money is used for college. This won't affect a financial aid program since retirement accounts aren't counted in evaluating aid eligibility

INTEREST RATES
The accurate forecasting of interest rates is not always possible. It's smart to keep an eye on two items that affect rates: (a) Federal Reserve policies, and (b) demand for loans .

CREDIT ANALYSIS
Mortgage credit analysis is no longer done solely by experienced human underwriters. Today, the process is mechanized and less forgiving. A clerk uses a formula to analyze a consumer's mortgage credit and gets a computerized loan approval. The mortgage lender hires a local credit agency to collect data from the three giant credit repositories and consolidates the data into one report. Each of the three giant credit repositories assign a three-digit credit score for each consumer. This score is calculated to reflect consumers' overall reliability as borrowers.

Each consumer gets three scores, one from each repository. Scores vary because the credit records and risk-evaluating models vary from repository to repository. Mortgage lenders do not average out the scores; they use the median score. Although this computerized system gives better loans to people with better histories, it is extremely unforgiving to those who don't have great credit history.

  Austin American-Statesman. Demand is especially high in the central, older neighborhoods. In the same edition of the paper, Kate Miller Morton wrote another article, Travis home appraisals balloon 16%, describing how the average market value of a home in Travis County has jumped 16 percent since last year's value to $236,559. Austin American-Statesman. Morton also wrote another article in the same issue of the paper, Travis home appraisals balloon 16%, in which she describes the rise in average value of a Travis County home to $236,559.