August 2023 Newsletter

homebldr Product Updates

We’ve updated homebldr.ai! The following changes were made in August:

• After-Repair Value (ARV) Model accuracy was improved

• The Value-Add Potential is now based on the Current List Price for Active and Pending properties, while the Value-Add Potential is based on the Current Value for off-market properties

• homebldr.ai’s coverage of properties in the Austin, TX MSA has increased (you will find more properties in homebldr.ai going forward)

Head to www.homebldrai.com or www.homebldr.ai (they take you to the same place) to sign up for a free trial with no payment information required. When you sign up, you will automatically gain access to the free trial. After searching for 10 properties, you will be instructed to sign up for a monthly/annual subscription to gain full access.

If you are interested in a demo of homebldr.ai or any of our other solutions, please reach out to [email protected]!

Top Active Deals in Austin, TX for Under $500K

The following properties present three of the best single family fix & flip investment opportunities with a list price of $500K or less that were listed in Austin, TX in August 2023:

1) 3005 Cedarlawn CIR, Austin TX 78723

Current List Price: $399,000

After-Repair Value (ARV): $707,000

Value-Add Potential: $308,000

Gross ROI: 77.2%

Investment Score Score (Out of 100): 95.4

Analyze this property on homebldr.ai: https://app.homebldrai.com/properties/9328836/mls_show

2) 8404 Maine DR, Austin TX 78758

Current List Price: $355,000

After-Repair Value (ARV): $532,000

Value-Add Potential: $177,000

Gross ROI: 50.0%

Investment Score Score (Out of 100): 75.0

Analyze this property on homebldr.ai: https://app.homebldrai.com/properties/1534576/mls_show

3) 4800 Lansing DR, Austin TX 78745

Current List Price: $419,000

After-Repair Value (ARV): $649,000

Value-Add Potential: $230,000

Gross ROI: 54.9%

Investment Score Score (Out of 100): 78.7

Analyze this property on homebldr.ai: https://app.homebldrai.com/properties/8878514/mls_show

National Housing Market

Inventory:

• Inventory is consistently increasing (and expected to continue increasing), but still lower than August 2022.

• Persistently high mortgage rates are having a negative affect on buyer demand which is resulting is less purchases and more inventory.

• If mortgage rates dropped below 7%, we would likely see buyer demand increase and inventory would actually decrease.

Home Sales:

• Home sales, which were previously expected to rise higher than last year’s levels by the end of 2023, are still lower than 2022 and are decreasing.

Median List & Sale Prices:

• The median price of listings is higher than it was at this time last year.

• Sale prices are decreasing (which is expected at this point in the year due to seasonality), but not as fast as they were decreasing at this time last year.

Price Reductions:

• Price reductions are higher than all of they were at this time during all of the past 5 years except for 2022.

• Austin, TX has the highest level of price reductions on all major markets in the US.

Things To Watch For:

• If mortgage rates continue to increase (to 8%+), we could see a big drop in buyer demand which would result in a significantly increase in inventory that could push house prices down substantially.

• Sale prices are basically flat year-over-year, but price reductions are increasing which indicates more supply than demand in the market. If price cuts remain high or continue to increase, we will likely see sale prices decline.

Austin, TX Single Family Housing Market

• Home prices are declining near the seasonal average pace, however, over 50% of listings are reducing their price. This is indicative of low buyer demand and could lead to a steeper decline in sale prices.

• Austin has the highest level of price reductions of all major markets in the US. This indicates that the current levels of inventory are in excess of the current demand in the market. If this trend holds, Austin could see substantial home price declines over the next 6 - 12 months.

• Sales volume and the median sale price are at the same levels that they were at last year at this time, however, both metrics are not declining as significantly as they were last year. This could result in year-over-year gains depending on what mortgage rates do over the next couple of months and the effect that they have on the supply-demand dynamics of the market.