Fredericksburg Real Estate

After just over a year of finally arriving into the 1980’s and instituting a key lockbox system for use by Fredericksburg, TX realtors, this grand experiment appears on the verge of failure. Readers may be surprise, shocked, humored or indifferent to learn that real estate practitioners in our fine community stubbornly adhere to an antiquated, inefficient and (borderline) reckless method of storing and distributing the keys necessary to facilitate the showing of real property listed for sale in Fredericksburg, TX.

To avoid the potential liability of revealing too much on how keys of listed property are stored, logged, tagged, distributed and/or collected, suffice to say that the stubborn reluctance to recognize the liability inherent with the various haphazard systems of key management employed by local offices would send any risk manager worth his salt into a major tailspin.

Having failed to make any progress with the “liability argument” much has been debated about the “efficiency argument” that holds in wonder a group of professionals who fail to place a value on the time it takes them to wander from office to office picking up and dropping off keys (not to mention the cost of the gas to do so), looking for keys that someone failed to turn in, etc.  Isn’t your time, effort and frustration worth anything to you? What is this saying to your clients?

Failure on the liability and efficiency fronts turns us to the “leadership argument”.  Agents dropping the system cite spotty usage as one reason they are opting out of efficiency (in favor, as it were, of liability and inefficiency).  Our Board of Directors and Officers have within their power the ability to mandate usage of this system. They apparently prefer to build “consensus” and play politics rather than actually lead and make decisions that will protect the entire membership (despite themselves).

The failure to recognize liability, efficiency and/or leadership leaves us nothing left to play except, perhaps, for the “cost argument”.  Agents opting out of the system cite “cost” as a concern (along with the aforementioned lack of universal implementation).  We’re talking about $180/year per agent.  That works out to about $0.50 per day per agent.  Are they really saying they can’t see the wisdom in spending $0.50 per day to make themselves more efficient and to protect themselves and their loved ones from unspeakable liability?  Really?

When times are tough, people have a tendency to cut back on what they may deem to be “luxuries”.  Is a system that boosts efficiency and reduces liability a luxury?  Hardly.  Is $180/year going to break your bank?  Do the math folks.  Add up your time and the cost of your gas and multiply it by the number of times you show property in Fredericksburg, TX.  $0.50 per day…really??!!

Be on the lookout for a curious phenomenon to occur as 2009 progresses in Fredericksburg, TX.  As the economy stalls and leaders in Washington (and elsewhere) look for ways to stimulate both the housing markets and the overall economy, jobs will continue to be shed in the industries we’ve been hearing so much about.  What will become of the workers unfortunate enough to have been put out on the street as a result of these difficult times?

If history is any guide (and it usually is) a significant number of these folks will opt in try their hand at real estate.  The scandalously low barriers to entry in our profession make it all too easy for those scrambling to make ends meet (or those simply looking for a change) pick real estate as a target.  After all, how hard can it be?

Everyone knows a realtor (or 20) and most are easily seduced by the seemingly easy way we are all perceived to make the big bucks.  My hope is that those considering following this “easy money” will do a little homework before they get into a business that is a lot harder than it looks. They will be surprised and will perhaps have missed an opportunity to pursue something that may have been more to their liking.

The lure of being “self-employed” has its obvious temptations but it also carries the sobering reality of complete and total self-reliance. Not everyone’s personality and family/financial situation can bear the strains of no steady paycheck, no employer funded retirement, no paid vacations or sick days, etc.

For a myriad of reasons, folks seem to think that if all else fails, they’ll try real estate.  Again, how hard can it be?  I would ask any buyer or seller of property, however, if that is the attitude they want representing their (likely) most valuable asset.

Do you call the plumber fresh out of plumbers school out to diagnose and fix your pipes?  Do you want to be your surgeons very first quadruple bypass?  People look to experience in all things and should logically do so with real estate, but do they?  In many, many case the answer is (illogically) no.

The recent “boom” years in Fredericksburg, TX real estate saw the membership roles of our local board of realtors swell to a number that was roughly equal to having one realtor in membership for every one deal that was consummated.  With those numbers, who is getting rich?  Granted, as in most businesses, the top 20% of agents did 80% of the deals but how do you, the consumer, the buyer or the seller, identify the experienced and qualified agents?

Given that the growth in the heady times could have resulted from the lure of “easy money”, could my prediction of the growth in the number of rookie agents swarming to town in the “tough times” make any sense?  If you believe the media that economic recovery will have to begin with the housing markets and that any “stimulus packages” will be throwing vast amounts of money in that direction and for that result, then you can see why those looking for “change” may opt to find it in real estate. So, do you go with the rookie or with the pro?

Despite the plethora of bad economic news, 2008 saw real estate in Fredericksburg TX hold its own pretty well, proof that real estate markets are “local”.  This means that “national economic trends”  “U.S. Housing Statistics”, the “Case/Schiller Index”, etc. are composites of what may be happening in other parts of the country but they do not account for the specifics of actual activity in our little corner of the world.

That said, the following is a recap of the Fredericksburg Texas and Gillespie County Texas real estate market as evidenced by sales and listing data provided by the Gillespie County Board of Realtors Multiple Listing Service for the year ending December 31, 2008 as compared to the same period for 2007:

·      Residential-City - The total number of units sold in 2008 declined by 16.88% from 2007 and the total dollars sold declined by 18.72% ($37,211,150 in 2007 vs. $30,243,391 in 2008).  The average days on market increased from 146 in 2007 to 163 in 2008 (+11.64%) and the average sold price declined from $232,570 in 2007 to $227,394 in 2008 (-2.22%).  Hardest hit were sales in the range of $250-$500,000 where the number of units sold decreased by nearly 19%.

·      Residential-County- The total number of units sold in 2008 declined by 9.47% from 2007 and the total dollars sold declined by 4.32% ($35,583,104 in 2007 vs. $34,046,128 in 2008).  The average days on market increased from 181 in 2007 to 199 in 2008 (+9.94%) but the average sold price actually increased from $374,560 in 2007 to $395,885 in 2008 (+5.41%).  This increased average can be attributed to a small spike in sales in the $750,000 to $3,000,00 ranges.

·      Residential-All- Combining the figures above to view the state of the residential market for all of Gillespie County (including figures for Fredericksburg) and the total number of units sold in 2008 declined by 14.83% from 2007 and the total dollars sold declined by 16.16% ($90,715,107 in 2007 vs. $76,052,419 in 2008).  The average days on market increased from 162 in 2007 to 183 in 2008 (+12.96%) and the average sold price declined from $263,707 in 2007 to $259,565 in 2008 (-1.57%).

·      Lots-City- Mirroring last years’ sales, 38 units were sold.  The average priced increased from $67,639 to $73,745 but the average days on market more than doubled from 164 in 2007 to 335 in 2008.  This is an accurate reflection of the fact that builders dramatically reduced their “spec” building efforts throughout 2008.

·      Land & Farm-All- Total unit volume decreased by 19.35% from 155 units sold in 2007 to 125 units sold in 2008 but the total dollars sold in this wide-ranging category only decreased by 3.40% (from $48,398,974 in 2007 to $46,754,249 in 2008).

All-in-all, not too bad!  My belief is that efforts made by the new administration in Washington combined with historically low interest rates will work to further insulate the Texas Hill Country (in general) and Fredericksburg Texas (in particular) from the woes being experienced in other troubled markets.