Landlords, Rental Property owners, Property Managers and Property Management companies – Did you suffer financial losses with the 2010 storm or floods?

Here are ten things the you should know about deducting casualty or theft losses next year when you file your federal tax return.

1. You may not deduct casualty and theft losses covered by insurance unless you file a timely claim for reimbursement. You must reduce your loss by the amount of the reimbursement.

2. A casualty does not include normal wear and tear or progressive deterioration from age or termite damage.

3. The damage must be caused by a sudden, unexpected or unusual event like a car accident, fire, earthquake, flood or vandalism.

4. If your property is not completely destroyed or if it is personal-use property, the amount of your casualty or theft loss is the lesser of the adjusted basis of your property, or the decrease in fair market value of your property as a result of the casualty or theft, reduced by any insurance or other reimbursement you receive or expect to receive.

5. If business or income-producing property, such as rental property, is completely destroyed, the amount of your loss is your adjusted basis in the property minus any salvage value, and minus any insurance or other reimbursement you receive or expect to receive.

6. To claim a casualty or theft loss, you must complete Form 4684, Casualties and Thefts, and attach it to your return. Generally, you may claim casualty or theft loss of personal use property only if you itemize deductions on Form 1040, Schedule A. However, you can deduct a 2008 or 2009 net disaster loss from a federally-declared disaster even if you do not itemize your deductions.

7. If the property was held by you for personal use, you must further reduce your loss by $100. This $100 reduction for losses of personal-use property applies to each casualty or theft event that occurred during the year other than 2009. For 2009, individuals must reduce their casualty and theft losses for personal-use property by $500 instead of $100. This $500 reduction for losses of personal-use property applies to each casualty or theft event.

8. The total of all your casualty and theft losses of personal-use property usually must be further reduced by 10 percent of your adjusted gross income. The 10 percent AGI limitation does not apply to net disaster losses resulting from federally declared disasters in 2008 and 2009.

9. In figuring your loss, do not consider the loss of future profits or income due to the casualty.

10. Casualty losses are normally deductible only in the year the casualty occurred. But if you have a deductible loss from a federally declared disaster you can choose to deduct that loss on your tax return for the previous year. If you have already filed your return for the preceding year, you can claim the loss on the previous year tax return by filing an amended return.

Read below the tips  on casualty loss

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Are you a Landlord, Rental Property owner, Property Manager or run a  Property Management company? Did you suffer financial losses with the 2010 storms or floods? If you have damaged or lost property in a location declared by the President as a major disaster area, you may be able to get money back from IRS right now.

Check if your property falls in a major disaster area. To qualify for disaster loans and grants from other federal agencies, you must have filed all required tax return(s). If you have not filed and have been contacted by the IRS, inform the IRS about your property losses and that you would need mor etime to pay. Free tax assistance is also available at many Internal Revenue Service Offices and temporary  FEMA Disaster Recovery Centers in your area. For more information, contact the IRS.

Read below the tips  on casualty loss

Real estate accounting tax tips landlord guide to property damage casualty loss tax deductions

Landlords, property managers – casualty loss tax benfits for you

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Landlords, Rental Property owners, Property Managers and Property Management companies in Alabama, Mississippi, Kentucky and Tennessee – Did you suffer financial losses with the 2010 floods? If you have damaged or lost property in a location declared by the President as a major disaster area, you may be able to get money back from IRS right now.

IRS is postponing certain deadlines for taxpayers who reside or have a rental properties or property management businesses in the disaster area.

Alabama – If you have residential rental property or reside inDeKalb, Marshall and Walker, you may qualify for tax relief from the Internal Revenue Service. You have time till June 23 to file your Tax Returns.

Kentucky – If you have residential rental property or reside in Adair, Bath, Boyd, Carter, Casey, Franklin, Greenup, Lewis, Lincoln, Logan, Madison, Marion, Mercer, Metcalfe, Rockcastle, Rowan and Woodford, you may qualify for tax relief from the Internal Revenue Service. You have time till June 30 to file your Tax Returns.

Mississippi – If you have residential rental property or reside in Alcorn, Benton, Lafayette, Tippah and Tishomingo, you may qualify for tax relief from the Internal Revenue Service. You have time till June 30 to file your Tax Returns.

Mississippi – If you have residential rental property or reside in Attala, Choctaw, Holmes, Monroe, Oktibbeha, Union, Warren and Yazo, you may qualify for tax relief from the Internal Revenue Service. You have time till June 23 to file your Tax Returns.

Tennessee – If you have residential rental property or reside in Benton, Cannon, Carroll, Cheatham, Chester, Clay, Crockett, Davidson, Decatur, DeKalb, Dickson, Dyer, Fayette, Gibson, Giles, Hardeman, Hardin, Haywood, Henderson, Hickman, Houston, Humphreys, Jackson, Lauderdale, Lawrence, Lewis, Macon, Madison, Marshall, Maury, McNairy, Montgomery, Obion, Perry, Robertson, Rutherford, Shelby, Smith, Stewart, Sumner, Tipton, Trousdale, Wayne, Williamson and Wilson, you may qualify for tax relief from the Internal Revenue Service. You have time till June 29 to file your Tax Returns.

Property losses not covered by either insurance or government reimbursement might qualify to claim them as casualty loss deductions. If you are an affected property owner in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. You may deduct personal property losses that are not covered by insurance or other reimbursements. For more information, you can contact the IRS.

Read below the tips  on casualty loss

Real estate accounting tax tips landlord guide to property damage casualty loss tax deductions

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Tax Tip Travel Expenses

Tax Tip for Deducting Trip Primarily for Business

You can deduct all of your travel expenses if your trip was entirely business related such as rental property management. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination.

Example to clarify Tax Tip for Deducting Travel Expenses

You work in Atlanta and take a business trip to New Orleans. On your way home, you stop in Mobile to visit your parents. You spend $2,012 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,712. You can deduct $1,712 for your trip, including the cost of round-trip transportation to and from New Orleans. The deduction for your meals is subject to the 50% limit on meals mentioned earlier.

This tip about deduction travel expenses applies to travel in the United States. For this purpose, the United States includes the 50 states and the District of Columbia. The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States.

Trip Primarily for Personal Reasons

If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. However, you can deduct any expenses you have while at your destination that are directly related to your business.

A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip.

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Top 10 Tax Tips for Rental Properties

Due to the recession, there has been a significant increase in the number of accidental landlords in the US – property owners who have turned properties that they wanted to sell into units that they must rent out. Many of these individuals will be including rental property income and expenses in their tax filing for the first time.

According to a study by the GAO (Government Accountability Office), about 25 percent of rental property owners over report their net income from rental real estate, by overstating rent received or understating expenses or losses. The estimated amount of net income overstated by misreporting rental property owners was $2.1 billion.

Download TODAY the Top 10 Tax Tips for Rental Property, and make sure you’re keeping money in your pockets!

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Short Sale or Foreclosure Tax Tips

If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012 due to short sale or foreclosure, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness due to short sale or foreclosure.

1. Normally, debt forgiveness due to short sale or foreclosure results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

2. The limit is $1 million for a married person filing a separate return.

3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

6. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.

7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.

9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

Homeowners who participated in short sale or had their real estate property foreclosed, take full advantage of the tax benefits available to you and pay no taxes on forgiven debt.

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Tax Deductions

Tax deductions are expenses that can be deducted before a real estate investor or landlord determines taxable income.  Tax deductions allow you to reduce your taxable income and also your tax bill. A tax deduction differs from a tax credit, which is applied directly to tax bill, reducing it dollar for dollar.

Tax Deductions – Where to Deduct

Real Estate investors and landlords can take additional tax deductions.  These are claimed directly on your Schedule E.  There are many rules and limitations pertaining to some of these tax deductions.  

For tapping into tax deductions available to real estate investors and landlords go to Rental Property Tax Deductions

This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Tax Planning

Tax Planning is critical to growing wealthy as reducing or postponing the payment of federal, state, and local income taxes results in more funds available for more real estate investments. Although income taxes may seem highly complex and challenging savvy real estate investors and landlords do effective tax planning either do-it-yourself or tap into tax professionals to take full advantage of tax benefits available to them.

Real Estate Investors and landlords are facing great financial challenges due to Great Recession and it is even more important that they maximize their cash flow by effective tax planning.

1. Understanding Passive Activity Loss Limit

2. Maximizing depreciation expense by taking advantage of accelerated depreciation and improving their cash flow

3. Avoiding capital gains tax on rental property through 1031 tax exchange

4. Minimizing capital gains through accurate calculation of residential rental property basis

5. Taking full tax deductions available to real estate investors and landlords

6. Understanding real estate professional rules

For tapping into every single tax tip available to real estate investors and landlords resulting in effective tax planning, go to Rental Property Tax Deductions

This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Tax Tips

2. Be on the lookout W-2s and 1099s are already here from your employer; you’ll need these to file your tax return.

3. Try e-file When you file electronically, the software will handle the math calculations for you. If you use direct deposit, you will get your refund in about half the time it takes when you file a paper return. E-file is now the way the majority of returns are filed. In fact, last year, 2 out of 3 taxpayers used e-file.

4. Check out Free File If your income is $57,000 or less you may be eligible for free tax preparation software and free electronic filing. The IRS partners with 20 tax software companies to create this free service. Free File is for the cost conscious taxpayer who wants reliable question-and-answer software to help them prepare a return. Visit IRS.gov to learn more.

5. Consider other filing options There are many different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at an IRS office or volunteer site. Give yourself time to weigh all the different options and find the one that best suits your needs.

6. Consider Direct Deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a paper check.

7. Visit IRS.gov again and again The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, answers to frequently asked questions and updates on tax law changes.

8. Remember these numbers: 17 and 527 Check out Publication 17, Your Federal Income Tax and Publication 527, Residential Rental Property on IRS.gov. It’s a comprehensive collection of information for real estate investors, landlords highlighting everything you’ll need to know when filing your return.

9. Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all the Social Security Numbers and math calculations on your return as these are the most common errors made by taxpayers.

10.  Don’t panic! If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.

This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Austin, Round Rock Texas Real Estate Market Analysis

US Department of Housing and Urban completed a comprehensive housing market analysis.   The economy of the Austin-Round Rock HMA has slowed dramatically during the past year. Although the rate of job growth, at 1.2 percent, is the lowest since 2004, job gains of more than 2 percent each were recorded in four employment sectors: professional and business services, education and health services, other services, and government. During the 3-year fore-cast period, growth in the professional and business services and the education and health services sectors is expected to contribute to a 1.4-percent annual increase in the number of jobs in the HMA. Employment data for the HMA appear in Table DP-1 at the end of this report.

Sales Market

The sales housing market in the HMA is balanced but softening, with a current overall vacancy rate of 1.7 percent. According to the Real Estate Center at Texas A&M University, for the 12 months ending June 2009, the average sales price of new and existing homes in the HMA was $240,100, a decrease of nearly 3 percent compared with the average price of $246,700 for the 12 months ending June 2008. Dur­ing the forecast period, employment and population gains are expected to support demand for 35,800 new market-rate sales housing units; the 2,000 sales housing units currently under construction will satisfy a small portion of that demand (see Table 1).

Rental Market

The rental housing market in the HMA is currently soft, with an estimated overall vacancy rate of 12 percent, up from 8 percent a year ago. Rental occupancy and average apartment rents have decreased due to diminishing job growth and a large number of apart­ments entering the market. During the forecast period, the 5,200 rental units currently under construction will more than satisfy the estimated demand for 3,350 market-rate rental housing units (see Table 1).

Housing Market Area

The Austin-Round Rock, Texas Hous­ing Market Area (HMA) comprises five counties in central Texas. The principal city of Austin, the state capital, is located in Travis County approximately 200 miles south of Dallas-Fort Worth. The HMA is home to three Fortune 500 companies and the University of Texas (UT), the sixth largest university in the country by enrollment.

Table 1. Housing Demand in the Austin-Round Rock HMA, 3-Year Forecast, July 1, 2009 to July 1, 2012

Economic Conditions

The economy of the Austin-Round Rock HMA has slowed dramatically during the past 12 months, when the area recorded its lowest growth rate in nearly 5 years. During the 12 months ending June 2009, total nonfarm employment increased by 9,000 jobs, or 1.2 percent, to 778,700 jobs. In comparison, annual gains from 2005 through 2008 aver­aged 28,400 jobs, or an increase of 3.9 percent. Although the economy of the HMA has slowed, Austin-Round Rock remains the only major market in Texas to record a year-over-year increase in employment during the past 4 consecutive months. The slower employment growth that occurred during the past 12 months, coupled with large corporate downsizing, contributed to an increase in the unemployment rate, which averaged 5.5 percent for the 12 months ending June 2009. Before 2009 and since July 2004, the unemployment rate has remained at or below 5.1 percent. During the past 5 years, the unemploy-ment rate has averaged 4.4 percent. Figure 1 illustrates trends in the labor force, resident employment, and unemployment rate in the HMA from 1990 through 2008. A R K E T A N A LY S I S 3

During the 12 months ending June 2009, hiring was strong in the profes­sional and business services sector, which added 3,500 jobs, an increase of 3.2 percent. Much of the growth in this sector is attributed to job creation in high technology, in particular the entertainment software and digital media industries. According to a 2006 study conducted by TXP, the expanding gaming and digital media industry accounts for just 1,100 jobs but has a $200 million annual economic impact on the HMA. Job gains were significant in the education and health services sector as well, which increased by 2,500 jobs, or 3.2 percent, during the past 12 months compared with the number of jobs reported during the previous 12-month period (see Table 3). Hiring primarily occurred in the medical services, research, and other healthcare-related industries. Seton Healthcare Network is the third-leading private-sector employer in the area, with 6,700 employees, and has expanded rapidly throughout the HMA during the past 24 months. Opened in February 2009, Seton Medical Center Williamson, a 181-bed, $175 million facility located in Round Rock, is expected to have an initial economic impact of $190 million annually on the HMA. Seton Medical Center Hays, a 112-bed medical facility located in Kyle, is scheduled to open in October 2009. When it is completed, the new $143 million facility will be the largest medical center in Hays County.

Large job increases in the HMA were also recorded in the other services sector. During the 12 months ending June 2009, the sector added 2,900 jobs, an increase of 10.1 percent. Much of the increase in this sector is due to the hiring of automotive service technicians and maintenance and repair workers. As economic condi­tions have weakened, repairing has become a more economical solution than replacing. During the 12 months ending June 2009, the number of jobs in the manufacturing sector decreased by 3,400, or 5.8 percent, led by a slow-down in the microchip industry. Dell Inc. closed its North Austin plant

Economic Conditions

Table 2. Major Employers in the Austin-Round Rock HMA

Sources: Austin Chamber of Commerce; Round Rock Chamber of Commerce

Table 3. 12-Month Average Employment in the Austin-Round Rock HMA, by Sector

Notes: Based on 12-month averages through June 2008 and June 2009. Numbers may not add to totals because of rounding.

Source: U.S. Bureau of Labor Statistics

in 2008, cutting 900 jobs. Freescale Semiconductor, Inc., cut 230 jobs in March 2009 and has laid off 460 employees since November 2008. Job losses have also occurred in the homebuilding industry, in which recent cutbacks have resulted in a loss of 3,000 construction jobs.

The government sector accounts for more than 20 percent of all nonfarm jobs in the HMA (see Figure 3). Multiple universities in the HMA continue to be a stabilizing force in the economy, especially public institu­tions such as UT and Texas State University (TSU). UT, with a student enrollment of approximately 50,000, has an overall economic impact of more than $3 billion annually, accord-ing to a recent economic impact study completed by the university. TSU, located south of Austin in San Marcos in Hays County, had a 2008 fall enroll-ment of approximately 28,000 students. According to the TSU website, the university has an annual economic impact of nearly $550 million.

New jobs in the education and health services sector, professional and busi­ness services sector, and government sector are expected to lead job growth during the forecast period. The retail trade subsector, other services sector, and leisure and hospitality sector will likely account for the bulk of the remaining job growth in the HMA. The rate of job growth is estimated to be 1 percent during the next 12 months, accelerating to 1.5 percent by the end of the forecast period.

Economic Conditions

Figure 3. Current Employment in the Austin-Round Rock HMA, by Sector

Mining, Logging, &

Construction 5.9%

Government 21.4%

Manufacturing 7.2%

Other Services 4.1%

Wholesale &

Retail Trade 16.0%

Leisure & Hospitality 10.3%

Transportation &

Utilities 1.7%

Education &

Health Services 10.5%

Information 2.6%

Professional &

Business Services 14.5%

Financial Activities 5.8%

Note: Based on 12-month averages through June 2009.

Source: U.S. Bureau of Labor Statistics

Population and Households

According to the Census Bureau, from July 2007 to July 2008 (the most recent data available), the city of Austin was the ninth fastest growing city in the nation in terms of numerical population growth, adding 18,461 people during the 12-month period. During the same period, the city of Round Rock had the second highest growth rate, at 8.2 percent, of any city in the nation with a population of more than 100,000. As of July 1, 2009, the population of the Austin-Round Rock HMA is estimated at slightly more than 1,692,000, reflect-ing an increase of 2.4 percent com­pared with the population during the previous 12 months. In comparison, population growth averaged 4.1 percent annually from 2005 through 2007. The significantly slower population growth is attributed to high housing prices in the HMA compared with other metropolitan areas in the state coupled with a flattening economy.

The population of the HMA increased by an average of 40,350, or 4 percent, a year from 1990 to 2000. During the 1990s, net in-migration accounted for more than 70 percent of the population gain; the remainder of the growth came from net natural change (resident births minus resident deaths). Since 2000, net in-migration has remained relatively stable, at an average of 30,900 people annually, and has accounted for 65 percent of the annual population growth of 47,850, largely as a result of the economic growth in the HMA. Net in-migration is expected to increase at a rate of 35,200 people a year throughout the 3-year forecast period, a continuation of the gradual increase that began in 2000. The population of the HMA is forecast to grow by 3.0 percent a year during the next 3 years and total approximately 1,850,000 by June 1, 2012. See Figure 4 for the components of population change in the HMA from 1990 to the forecast date.

Largely due to the decline in popula­tion growth, the rate of household growth in the HMA has also been slower since 2000 than during the previous decade. Since 2000, the number of households has increased by 14,250, or 2.7 percent, a year compared with an increase of 14,600, or 3.8 percent, during the 1990s. Currently, the HMA has 603,700 households. Figure 5 illustrates the number of households by tenure in the HMA for 1990, 2000, and the current date.

During the forecast period, the number of households is expected to increase by 14,200, or 2.3 percent, annually and total approximately 646,300 by June 1, 2012. Figure 6 shows popula­tion and household growth in the HMA from 1990 to the forecast date.

Housing Market Trends

Sales Market

The sales housing market in the Austin-Round Rock HMA is balanced, although it is softening as a result of decreased demand resulting from tighter credit standards and a slower economy. According to the Real Estate Center at Texas A&M Univer-sity, during the 12 months ending June 2009, 19,750 existing homes were sold, a decrease of 22 percent compared with the number sold during the previous 12 months. Between 2006 and 2008, the number of existing home sales averaged 26,900 annually. For the 12 months ending June 2009, the average sales price decreased to $240,100, down nearly 3 percent compared with the average price for the previous 12 months. During the 12 months ending June 2009, the HMA averaged more than 6 months’ worth of available inventory on the market, an increase of more than 30 percent compared with the inven­tory during the 12 months ending June 2008 and up nearly 80 percent compared with the inventory during the 12 months ending June 2007.

New home construction activity, as measured by the number of single-family building permits issued, has slowed in response to declining demand. During the 12 months ending June 2009, the number of single-family homes permitted was down nearly 34 percent to 6,275 compared with the 9,475 homes permitted during the 12-month period ending June 2008. Since 2008, single-family construction activity has been well below the decade-high average of nearly 17,150 homes permitted annually from 2005 through 2007. Currently, new home construction is concentrated in areas east of Austin throughout Bastrop County and also south of Austin in Hays County in the cities of Buda, Kyle, and San Marcos. Figure 7 shows the number of single-family building permits issued in the HMA from 1990 to 2009. According to data from the 2007 American Community Survey, median home prices in Bastrop and Hays Counties were $111,000 and $174,600, respec-tively. In contrast, the median home price in Travis County, which includes the city of Austin, was $195,000. Prices for newly constructed starter homes in the HMA typically range from $125,000 to $175,000, with the lower prices generally available only in the outlying counties.

Condominiums and townhomes currently represent about 6 percent of all existing home sales in the HMA, unchanged from a year ago. Although slowing, condominium development is currently ongoing in downtown Austin. The reduced level of down­town construction activity, which fell from 540 units built during 2008 to 190 units built through June 2009, reflects builders’ response to declining sales and increased inventory of unsold units. Although condominium development has slowed, approxi­mately 460 downtown condominium units are in the planning stages. Nearly 300 of the planned units are in one development—21c Austin, which is also expected to include a museum and hotel. Completion of the proposed development is expected in 2011, but prices had not been set as of the current date. According to the Austin Board of REALTORS^®, prices for new and existing condominiums and townhomes in the area averaged $258,800 in 2008, a 14-percent decrease compared with average prices recorded in 2007.

During the 3-year forecast period, demand is estimated for 35,800 new market-rate sales units in the HMA. A portion of this demand will be met by the 2,000 homes currently under construction (see Table 1). Table 4 illustrates estimated demand for new market-rate sales housing in the HMA by price range. Demand is expected to be stronger during the later part of the forecast period. In addition, demand is estimated for 2,700 mobile homes during the next 3 years. Mobile homes currently make up an estimated 7 percent of the total housing inventory in the HMA.

Housing Market Trends

Sales Market

Table 4. Estimated Demand for New Market-Rate Sales Housing in the Austin-Round Rock HMA, July 1, 2009 to July 1, 2012

Source: Estimates by analyst

Rental Market

The rental housing market in the HMA has softened dramatically during the past year. The current rental vacancy rate is estimated at 12 percent, up from 8 percent a year ago and more than triple the 3.8-percent rate recorded in 2000 (see Figure 8). According to ALN Systems, Inc., as of June 2009, effective market-rate rents in the area average $710 for a one-bedroom unit, $920 for a two-bedroom unit, and $1,100 for a three-bedroom unit. According to Austin Investor Interests, LLC, aver­age apartment rents have decreased approximately 6 percent from rents recorded during the second quarter of 2008. According to the same source, nearly 80 percent of area apartments are offering some kind of concession, ranging from a $99 move-in special to several months of free rent. Apart­ments account for nearly 80 percent of all rental units in the HMA. The remainder of the rental stock consists primarily of single-family homes and mobile homes.

Multifamily construction, as measured by the number of units permitted, totaled 3,200 units permitted during the 12 months ending June 2009, a  63-percent decrease compared with the 8,500 units permitted during the 12-month period ending June 2008. According to the McGraw-Hill Con­struction Pipeline database, during the past 12 months, approximately 13 percent of all multifamily permits have been for condominiums, down from 20 percent during the previous 12 months. Currently, 5,200 multi­family units are under construction; 500 of those units are condominiums. Figure 9 illustrates the number of multifamily building permits issued in the HMA from 1990 to 2009.

Significant multifamily rental housing development has been occurring in the city of Kyle, located in Hays County. During the past year, approximately 650 apartments have been built in Kyle, representing 75 percent of the multifamily units permitted in the county and 20 percent of the units permitted in the HMA. In the city of Austin, apartments have been devel-oped for both the high and low ends of the market. Ashton, a 259-unit luxury apartment building in down­town Austin, was completed in July 2009. The new development offers amenities such as a wine cellar and private movie theater; rents average approximately $1,600 a month. Skyline Terrace Apartments, a new community for low-income adults facing homelessness, opened in 2008. The converted former hotel provides permanent housing for 100 adults living alone and who have incomes of less than $25,000 a year.

Approximately 10 percent, or 2,500, of the multifamily units built since 2005 have been financed through low-income housing tax credits, according to data from the Texas Department of Housing and Community Affairs. According to ALN Systems, Inc., 10,850 income-restricted units are available in the HMA; these units are leased to tenants with incomes at or below 80 percent of the Area Median Income. Effective rents for income-restricted units average $580 for a one-bedroom unit, $700 for a two-bedroom unit, and $790 for a three-bedroom unit.

Students at UT and TSU occupy a large portion of the local rental stock. Estimates indicate that more than 60,000 students combined at both universities live in housing in the private rental market. UT currently offers 6,750 on-campus dormitory units, although it is estimated that more than 85 percent of UT students, or 43,000 students, live off campus. TSU offers 5,575 on-campus dormi­tory units as well as four off-campus apartment communities. Off-campus apartments at TSU have rents that range from $410 to $670 a month per student. Apartments located near the university, but not owned by the university, typically command much higher rents due to their location compared with units farther out in Travis and Hays Counties.

Housing Market Trends

During the forecast period, the estimated demand for 3,350 market-rate rental housing units in the HMA will be met by the 5,200 rental units currently under construction (see Table 1). Table 5 shows estimated demand for new market-rate rental housing in the HMA categorized by rent level and number of bedrooms.

Housing Market Trends

Rental Market

Table 5. Estimated Demand for New Market-Rate Rental Housing in the Austin-Round Rock HMA, July 1, 2009 to July 1, 2012

Notes: Distribution above is noncumulative. Demand shown at any rent represents demand at that level and higher.

Source: Estimates by analyst

Download the pdf version of the Austin-Round Rock, Texas Real Estate Housing Market Analysis by CLICKING HERE (734 Kb)

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