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Waco, Real Estate & More

Midway ISD to Build New Schools?

A couple of days ago Iwas browsing the Waco Trib’s website and came across a news story about Midway ISD‘s interest in two parcels of land. About 28 acres off of old Temple Rd and a 56 acre plat off of Ritchie Rd.

It appears Midway ISD is planning for future growth by securing land now. The superintendent said the land will be slated for an elementary or intermediate school and a middle school in the future.

Call me a geek, but I immediately pulled up the demographic and projection study that Midway ISD published in February, 2012 – here’s a link to it

If the growth projections for the Midway Independent School District hold up it looks like they’ll need to build, they won’t have a choice. Here’s a summary of capacity (problems) by the year 2022… just the next 7 years:

  • Castleman Creek Elementary student enrollment will be 122.34% of capacity
  • Spring Valley Elementary student enrollment will be 106.72% of capacity
  • South Bosque Elementary student enrollment will be145.17% of capacity
  • Midway Middle School will be at 104% of capacity
  • Midway High School will be at near capacity

The two biggest hit schools will be Castleman Creek Elementary and South Bosque Elementary. That’s not surprising with the past and current growth of residential developments along the “hwy 84 corridor”, the new Chapel Ridge subdivision and now the 320 acre neighborhood that DR Horton is developing on Ritchie Rd.

The new DR Horton subdivision is expected to add about 1,500 new homes. The Chapel Ridge neighborhood is expected to be about 350 homes. Wow! That’s over 1,800 new homes – just in the one pocket! Also, don’t forget about the new apartment complex that opened up at Woodgate and Panther Way.

I’m not a member of the school board. I just tend to be a numbers nerd and real estate market geek. I always feel like you can make decent predictions based on the “flow” of the real estate market. Right now, the flow is pretty strong in Midway ISD. Sales are up 23% from last year and up 59% from five years ago.

I would imagine that at the very least, Midway ISD will need to redraw some of the elementary school zone boundaries in the future, but it appears that (at least) one new school will need to be opened.

Just a couple of days ago I was having a conversation about this very thing with another Realtor who lives in Midway ISD too… their first response, “Well, the last thing I want is another bond.” Actually, the Midway ISD portion of our property taxes is one of the cheapest in the county, believe it or not. Here’s a quick breakdown of the school tax rate per $100 of valuation for various school districts:

It will be interesting to see the growth of areas that are served by the Midway school district over the next 7 or 8 years, for sure!

Is Cash King? The Low-Down on Cash Homes Sales in the Waco Area

Soooo, I came across an article that was written about cash home sales in different parts of the country and quickly realized that I have NEVER ran similar numbers for our own area! So I did – I can’t believe it took me this long to really dive into the “cash” arena of local home sales.

Hopefully some of these statistics, you’ll find interesting and worth remembering. These numbers are based on home sales data for the previous 12 months and between May 14, 2013 – May 14, 2014. All of these numbers reflect only cash sales (not overall sales) and only sales considered “residential” (no farm and ranches, multi-family homes, commercial, etc…). Okay, I’ll shut up now, onto the low-down on the cash segment of the Waco housing market:

22.23% of all sales were in cash

The average asking price: $126,748. The average sold price: $117,748.
I find this interesting. For the Waco area, the average sold price to asking price ratio is about 96%. Meaning, on average, homes sell for 96% of asking price – except in cash sales. The average sales price for a cash deal comes out to 92.9% of asking price! It appears that cash buyers, on average, are getting the home for lower than non cash buyers

Percentage of cash sales (and average price) by school district:
China Spring: 4.48% – average sold price: $180,277
Connally: 3.7% – average sold price: $131,927
Lorena: 2.34% – average sold price: $208,165
Midway: 16.18% – average sold price: $206,091
Robinson: 2.92% – average sold price: $135,434
Waco: 44.05% – average sold price: $87,476

The highest price paid in the last year in a residential cash deal: $1,487,000. There was a farm and ranch sale of $2,000,000 paid in cash too

1.36% were one bedroom homes. 24.37% were two bedroom homes. 52.83% were three bedroom homes. 19.49% were four bedroom homes

The average age of the home was 43 years

4.68% of the homes were less than 5 years old

So, who are these people buying in all cash? Well, that’s another question, but out of the cash transactions that I’ve been involvled with, the buyers have been typically retired (or close to retirement) and spent their lifetime saving money. Also, in a lot of cases, they recently sold a property (sometimes a home a they’ve been in for decades) and they’ve had a good amount of equity in the house that they sold (between the paying down the balance and the home’s value increasing over the years), so they used the cash from that sale to purchase the new home. Also, most of those buyers were down-sizing as well. You know, they kids off to college, it’s just the 2 of them now.

Those are the numbers in a nutshell. If there’s a particular statistic you would like for me to look at it, just give me a call and I’ll be happy to run a few numbers for you!

Waco Real Estate Update for 2012 Sales

If you’re a numbers nerd (like me), then you’ll love this!
 
These stats are comprised of data found in our MLS system provided by the Waco Association of Realtors.
 
Wow, it’s been a crazy market the past several months (especially in Midway ISD). There seems to be a shortage of good listings. Great houses at good prices are jumping off the market right now, kind of reminiscent of 2007. With interest rates still holding low, buyers are coming out from the shadows to buy.
 
As for buyers, we’re getting a lot of calls from people who are “upgrading” their current homes. Heck, that’s what I’m doing myself! After 10 years in our current home (and interest rates low), my wife and I decided it’s time to go ahead and build the house we’ve been talking about building for the last 3 years. Soooo, if you happen to live in the Sunwest subdivision, I’ll be your new neighbor by Thanksgiving. You’re welcome for the warning 🙂
 
Anyway, back to the statistics. I think you’ll find these pretty interesting. I ran these numbers in January for the previous year (2012). It’s possible that a couple of homes didn’t get reported as sold by the time I ran these numbers, so the final tally may be just a little off (but not enough to make a real difference). These statistics are only based on RESIDENTIAL sales. They don’t include manufactured housing and only homes in McLennan County.
 
Total number of properties sold: 1,939
This represents a 14.4% increase in sales from the year before. As a matter of fact,  only looking at sales in Midway ISD, the market is up OVER 27%! That’s a pretty huge increase. As of this writing, sales in Midway ISD are almost 7% higher than last year too!
 
Average sold price: $146,258
The average sold price for homes in 2011 was $140,048. A 4.4% increase
 
Average days on market: 143
Average days on market for 2011 was 137. I find this kind of odd though, that homes are sitting on the market almost a week longer than the year, even with the increase of sales. Those days on market also include the “in escrow” period. I have spoken to several lenders that are telling me that’s taking them a little longer to close a loan than previously. This could add to the longer days on market.
 
Expired/Withdrawn/Terminated to list percentage: 23.1%
This means that out of 100 listings, roughly 23 of them expired or was terminated (for various reasons). When a listing expires (home doesn’t sell), it’s because they were asking too much for it. This is a hard obstacle for some Realtors, getting a seller to understand the market and pricing the house at the right value. Many sellers think their house is worth a lot more than it really is. When we take a listing, we constantly watch the market and rely that information to our seller so we can make price adjustments if necessary.
 
Price reduction percentage: 41%
This means that 41% of the listing that sold last year, 41% required a price reduction. This simply means that the seller (or the agent) priced the house to0 high to begin with. Ideally, you want to price your house at the right price from the beginning. When the days on market is shorter, you’ll usually net more money from the sale. The longer a house sits on the market, typically the lower the price and the lower you net (especially if you factor in interest, taxes, repairs, etc… while your house is on the market).
 
Average sold price to original price: 92.3%
This means that if someone was asking $100,000 for their, on average, they would sell it for $92,300. I caution you to take this statistic with a grain of salt. It doesn’t mean you need to price your house 8% higher! There are some pretty large homes that required price reduction amounts in excess of $100,000. This number is only looking sold to original price. We didn’t factor in current asking price! That’s the next stat.
 
Average sold price to current asking price: 95.9%
This means that we’re NOT looking at the original price at all. JUST the current asking price. So, on average, a $100,000 asking price will sell for $95,900. Once again, I caution to use this stat to price your house too high. You’d be surprised at how many homes (when priced right) sell for full asking price or real close to asking price. The key is to get the price right from the start (well, that’s one “key”… other is appearance, marketing, photography, etc…)
 
Also, you’ll find it interesting that the average days on market for homes that required a price reduction was 211. The average days on market for homes that did NOT require a price reduction was only 90! That’s a HUGE difference.
 
Average sold price by school district:

 
Market share by school district:

  • Midway: 34%
  • Waco: 32.4%
  • China Spring: 9.4%
  • Connally: 3.6%
  • Lorena: 2.7%
  • Robinson: 5.1%

 
I find the market share by school district interesting! Waco has the largest school district, but yet Midway ISD in 2012 had the biggest share of the market! You’ll notice that the #3 spot is held by China Spring ISD, but it’s a “distance third”. You can see where the buying frenzy is happening.
 
So is it a seller’s market or a buyer’s market?
First we have to define what a buyer’s and seller’s market actually is! Conventional wisdom in the real estate industry states that it’s a seller’s market when there is less than 5 or less months of inventory on the market. A “balanced” market is between 5 and 7 months worth of inventory and a buyer’s market is when there is more than 7 months of inventory for sale.
 
You may find this interesting; as of this writing, for McLennan County, we have a 6.39 month supply of inventory on the market. This would mean it’s a “balanced” market. If you break it down a further and just look at Midway ISD, we have a 4.36 month supply of inventor on the market, which would indicate a seller’s market!
 
So is it a seller’s market or buyer’s market? I hate to say it, but it’s both! It just depends on where you’re looking to buy.
 
If you’d like specific statistics regarding the Waco real estate market, feel free to send me an email or give me a call! I’ll be glad to run any numbers you’d like! Days on market for 3 bedrooms vs. 4 bedrooms, homes with swimming pools, by age, square footage range or whatever!

Should You Trust the Zestimate?

As a licensed Realtor (and a tech head), I like to keep up with new gadgets, websites, and technologies (especially new tech that will help me and my clients).
 
Now, first let me say, I’m not a huge fan of all these different website that provide a list of homes for sale. Often, I find completely out of date information (homes currently for sale than in fact were sold months ago), wrong pricing, etc….
 
A few days ago I was surfing different websites that provide a list of homes for sale (listing farms): Realtor.com, Zillow, Trulia, etc…. I was shocked at what I discovered on Zillow.com!
 
Before I get to why I wasn’t pleased (for my client), I will say that in the past I’ve had to deal with people who received bad information obtained from these “listing farms”. It’s no fun when you have to break the news to folks. For instance, I had a buyer who was moving to Waco from out of state. He was a very nice guy, but sadly was fed wrong information. The first day I met with him he had this HUGE smile on his face! He thought he would be able to buy a $350K house for $250K. I asked my buyer why he thought he would be able to buy a house at such a low price. He then pulled out these sheets of paper he had printed off from some website of “recently sold properties” (in our area). Wow! It showed that a $500,000 house sold for $300K and a $350K house that sold for $230K!
 
WRONG, WRONG, WRONG!!!
 
I can’t remember the name of the site now, but, WOW! How on Earth did this website come up with these “sold” figures? You see, Texas is a “non-disclosure” state; meaning that when a property is sold, the actual sold price is not made available for public record. If you want to know what a house actually sold for, you need to call a Realtor. As a Realtor, I can look up that information for you in our MLS system. When we input a home into the MLS and that house sells, we’re REQUIRED to report accurate sold information.
 
Anyway, back to my happy buyer (who wasn’t so happy by now). I asked him to give me the printouts so we could look and see what those houses sold for. Case number 1) The $350K house the website said sold for $230K, actually sold for $335K. Case number 2) The $500K house sold for full asking price (it was only the market for a week before going under contract). Actually, that $500K was a great price for that particular home. Fortunately, my buyer was a smart guy and he immediately “got it”. I didn’t have to spend to much time convincing him that a lot of the “home listing farm” sites don’t have accurate information.
 
Now back to Zillow.com; I pulled a list of homes for sale in a zip code and when I looked at the search results, I was surprised (and disappointed) by what I saw! Here’s a screenshot:
 
You’ll notice that RIGHT Below the asking price, Zillow.com has something called “Zestimate”. In most of these cases, the Zestimate appears to be considerably lower than the asking price! When I saw this, I immediately looked at comps for those areas and noted that the “Zestimate” was considerably lower than what actual comps showed. With Texas being a non-disclosure state, I don’t know how Zillow came up with these numbers. I don’t know the algorithms they use to arrive at an estimated property value, but I can tell you those values they have “estimated” are on the (very) low side.
 
So I went to one of my listings that I had supplied to Zillow.com (via syndication) and found this:
 
Once again, there’s the “Zestimate” with a far lower estimate of property value with respect to the asking price. Is this property that much over-priced? NO! When I met with the seller to list this home, we went over the comps to arrive at an asking price. I pulled up all the sold homes in the past year (for his area), current active properties, houses that were under contract, etc… I ran statistics for the school district, current market conditions ( I tend to be a numbers freak), and more. Also, I need to mention that this house has other amenities not found in comparable homes in this neighborhood – HUGE yard, water softener system, extra large driveway, located at the end of a cul-de-sac, etc…
 
I feel that the “Zestimate” gives the wrong impression of my listing – the impression of being over-priced. I know from experience that buyers tend not to look at properties they feel are grossly over-priced. Why would I want to give a potential buyer the impression that my seller is asking WAY too much for his house? I wouldn’t want to do that! That’s why I’ve decided NOT to provide Zillow with any of my listings, anymore.
 
Do I feel that I’m losing that much extra exposure for my listings (for my clients)? No, not really. My experience tells me that when buyers (especially first time home buyers) are in the market to buy a home, they typically don’t visit just one website to see what’s for sale. A typical home buyer will surf many websites looking for homes that are on the market. They want to see EVERYTHING! Heck, before I got into real estate almost 9 years ago, I surfed EVERY available website that had home listings. I wanted to see pictures, listings, prices… When I ran out of websites, I got in my car and drove around neighborhoods looking for houses! Buying a house can be exciting, it’s hard not to surf every website on the internet looking at house to call home! If they go to Zillow.com, I bet those home buyers also going to Realtor.com, Trulia.com, Frontdoor.com, Texasrealestate.com, etc…
 
It’s sad that I’m forced to “boycott” a listing resource, but I don’t want to run the risk of a buyer seeing this listing on Zillow.com and then seeing it again on Realtor.com and think… “Oh yeah, this is only worth $253,200. They’re way over-priced.” Part of my job, as a Realtor, is to market my client’s home in an honest and positive way. I just don’t see how potentially giving a buyer the wrong impression that this home is worth a lot less, is a plus for my client.
 
Now, in Zillow’s defense, they don’t claim that this is the actual property value (based on recently sold properties). Zillow does say it’s an ESTIMATED value, but I tend to think if someone saw this “low value” they would have a hard time getting that (low) value out of their head.
 
My duty is to my client. It’s not my duty to just generate leads for myself. Is it possible that I may lose buyer leads from Zillow.com? Sure, but I’d rather look after my client’s interests than my just my own. If I do have a seller that insists on having their home displayed on Zillow.com, then I’ll point them to this article. If after reading it they still want to be on Zillow.com, then so be it. At least I’d feel better knowing I explained why I’m not such a fan.
 
If you’re looking for a home to buy and come across these listing farms, just beware that some of the information may be wrong, out of date, etc… If you want up to date and accurate info, your best bet is to call a Realtor!

It’s Not About the MLS in Waco (or Anywhere Else for that Matter)

I’m ashamed. I’m ashamed of myself and I’m ashamed of my fellow Realtors. You see, I was at a listing appointment a few days ago and the seller asked, “Hey, when is my house going to on the market?” I told him, “FAST! I’ll have in the MLS TONIGHT!”
 
“So what’s wrong with that?”, you may ask. Plenty! I just put the MLS on top of the marketing mountain. I just gave that seller the wrong impression. I basically told him the only thing that really matters is me putting his house into the MLS. Nothing could be further from the truth. I’ll explain.
 
To successfully sell a house, you can boil it down to 3 main components:
 
1) Price
2) Appearance
3) Exposure
 
Just sticking a house in the MLS doesn’t guarantee a sale. Attention needs to be paid to the other 2 main components too. That’s part of my job as an agent, to pay attention for you! To strategize, advise, and counsel my clients. Unfortunately, many times, the other 2 components are completely ignored by sellers – and by other real estate agents.
 
Anyway, back to why the MLS in Waco (or anywhere for that matter) isn’t the “be all to end all”. If you’ve read some of my blog articles, you know I tend to be a numbers freak, so here goes…
 
Out of ALL the homes listed last year in the MLS only 37.4% actually sold in 2011. That’s LESS THAN HALF! If the MLS was at the top of the marketing mountain, that number (37.4%) would be a lot higher. Shocked yet? I was when I looked at the data. Wow, for every 100 houses put into the MLS, only 37 will actually sell within that year.
 
Part of a successful sale MUST include the pricing and appearance components. That’s one area where we come in: 1) To help get the pricing right 2) To inform the client about the current market 3) What’s sold, what’s the competition, etc… 4) To analyze all the data in front of me and to strategize a plan of action. The list actually goes on and on, but I won’t bore you too bad.
 
There are plenty of websites that promise to put your house in the MLS for a flat fee. Those website operators try to make it sound like the MLS is the answer to all your problems, they couldn’t be more wrong or in my opinion, more deceitful. Of course, as an industry, Realtors have done a horrible job of educating the public about what we actually do (and in many cases, sad to say, some agents do nothing more than throw your listing in the MLS and walk away, hoping that your house is one of the lucky 37).
 
Here’s a true story:
 
In January, I got a call from a person wanting to sell their home (they got my name from a past client). I told Eddie (real name), “sure, I can come by your house and go over all the data for the current market.” We set the appointment and I showed up on time (for the first time! haha). Anyway, before the appointment, I did my homework and I was kind of dismayed by what I found:
 
1) In his neighborhood and immediate area, there were 34 active homes on the market. That is some pretty tough competition.

2) The house next door had been on the market for 4 months when it expired. It was relisted with another agent who had it on the market for another 3 months and 3 weeks before it went under contract. A total of 7 months and 3 weeks!

3) There were brand new homes going for a just a little more per square foot than what he was wanting to ask. It’s really tough to compete with a brand new house that’s only $5K more!
 
Anyway, I met with the seller and went over all the data and numbers. I strategized with him to come up with the best plan of action. I made sure the appearance (both in person and on the internet) was top notch, plus I had a couple of other tricks up my sleeve. 🙂
 
The result? We got the house under contract in 12 days and almost got into a competing offer situation. Sure, he could’ve just went with one of those websites that will throw his house up on the MLS for several hundred dollars, but the odds of a successful sale probably would’ve been dramatically reduced, especially since there were 34 other homes on the market in his neighborhood and the adjoining neighborhood!
 
Oh, I forgot to mention, not only did he get it under contract and sold quickly, but he also sold his house for $12,250 MORE than the house next door (the house next door was only smaller by 32 SQFT. So adjusted for per square foot variance, that would be $9,033.20 MORE). Not to mention the money he saved in taxes and insurance too, buy selling quickly.
 
I’ve met several people that tried the “only MLS” route without success, only to find themselves listing their house with an agent when it didn’t work out. Not only did they waste hundreds of dollars with those website operators, but it cost them time, interest, insurance, etc…
 
You see, the MLS is only one part of one component. Before you decide to shell out hard earned money on something that only gives you a 37% chance of success, call us. I’ll be glad to go over the numbers and data with you. We even have a program where you can list your home with us and still have the possibility of not paying any Realtor fees.
 
If you need to sell your house, get representation and get the deck stacked in your favor. Talk to a Realtor.

The Truth About the Waco Real Estate Market

I won’t lie, I’m a numbers freak. I love numbers, they tell me everything I need to know (and things I don’t EVER want to know). I’m asked all the time: “How’s the market?”, “Should I sell now or wait?”, “I’m I going to lose money on my house?”, etc….
 
If you’ve been thinking about buying or selling a home, hopefully these facts and figures will paint a clearer picture for you! Or at least will make you completely confused! 🙂
 
These stats are derived from information that was obtained from the Waco MLS system. These statistics are for properties that are only classified as “residential” and do NOT include manufactured housing.
 
Hopefully, you can get an idea of where the real estate market in the Waco area has been, is, and where it’s headed.
 
In 2010:

– 1,941 homes were sold
– 3,551 homes were listed
 
Analysis:
This means that roughly 54% of homes that are listed are sold. Wow! Alot of agents, when doing their budgets for a new year, will account for 65% of their listings going to closing. This is an 11% drop from what some agents consider a “base” sold ratio.
 
Now, some of these homes may have actually been listed in 2009, but sold in 2010. There are two figures that I’m working with here… solds and new listings. I was curious as to how many homes sold in a year (without regard to their listed date) compared to how many were listed in a year.
 
Now, if we ONLY look at those 3,551 homes that were listed in 2010:
 
– 1,325 were sold the same year:
This represents at 37.31% sold ratio. By contrast, in 2007, the sold ratio (for homes listed AND sold in the same year) was 66.97%!! (with that being said, about 1,100 MORE homes were listed in 2010 than 2007. Don’t know why yet, I’ll have to do some research).
The average days on market for these sold listings was 88 (keep in mind though, that these days are market also include the time needed for escrow).
35.6% needed a price reduction
The average sold price is $132,838
– 856 are still active:
Out of these 856 homes, the average days on market is 188 (these days on market do NOT include time needed for escrow, as they are still active).
47.9% of these active listings have had at least one price reduction
The average current asking price for these active listings is $176,884
 
Analysis:
there a couple of ways you can read these numbers, really.
First, you can see that there’s a big difference between what people are currently asking for their homes and what people are buying. This does NOT mean that a house that’s on the market right now at $176,884 will sell for $132,838! What this means… is that buyers (right now) are NOT shopping for the more expensive homes. If you do happen to have a more expensive home, you may need to price it more aggressively than a few years ago, Simply because the “buyer pool” (according to the numbers) is smaller for higher priced homes than homes priced in the $130s.
 
The smaller buyer pool for homes above $170K doesn’t surprise me. With the tightening of banks, the new regulations, increased credit score requirements, etc… It’s harder for buyers to get a loan today than it was 4 years ago.
 
Another way to look at these numbers… make sure you get the price right from the start! The homes that were listed in 2010 and sold in 2010 had very short days on market compared to the homes that haven’t sold. A smaller number of those homes had to have a price reduction too!
 
Alot of people think (and it’s a myth), that they need to price a home higher so they have wiggle room for negotiations. this causes your home to sit on the market longer (and ultimately get a lower price for it). The first 30 days of a new listing is CRUCIAL – That’s the “hot time” for a home fresh on the market. The last thing you want to do is price it too high and knockout any potential buyers that might otherwise be interested in looking at your house. The higher the price (above true market value) means that more buyers WON’T see it. If you price your home right – at the beginning of your listing period, you’ll appeal to a greater range of buyers – which is your goal, to get as many people into your home to look and hopefully put an offer on it!
 
This does NOT mean price your home “cheap”, it just means price it at it’s true market value – from the start.
 
-Over 1,000 homes listed in 2010, were classified as “expired” or “withdrawn”!
This means they sat on the market and didn’t sell! Now, it’s possible that some of those listings have been relisted by another agent (probably at a lower price too).
 
In the grand scheme of things, in 2010, 450 less homes were sold than in 2007. Although, this represents a drop in sales, buyers are still “out there”. They’re price sensitive right now and they have a lot of choices, but with correct pricing and successful marketing, you can get your home sold (and in a timely manner)!
 
If you need specific statistics compiled for your home, neighborhood, or situation, give us a call and we’ll be glad to get you what you need!

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Russell Realty Group
Bentwood Realty, Broker
601 Lake Air Dr.
Waco, TX 76710

Main: (254) 307-9700
Office: (254) 300-4800
Fax: (254) 307-9701
Gary Russell: (254) 498-4276

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