We have moved offices! Our new address is:
14050 Summit Drive #113B
Austin, Texas 78728
Details of the new location can be found here.
Austin Labor Shortages
On top of the supply chain issues, labor shortages in Austin are exacerbating the availability of maintenance and other services due to the steep incline of housing prices. Many people throughout all labor demographics are having a hard time affording Austin’s high prices, which results in them moving to the outskirts, nearby cities, or leaving the region altogether. This is making maintenance extremely difficult in some situations and is ultimately costing our clients more as you likely already know. Here is a recent article in the context of home builders being unable to complete projects.
Home Warranty Woes
The labor and material shortages have had a profound impact on the Home Warranty industry in Austin, and likely other markets as well. The vendors that are available to take various types of work are opting out of working with Home Warranties for several reasons, and it is severely impacting anyone who has one of these contracts.
Recently we’ve seen these companies being unable to provide AC vendors among other trades. When we call to make a claim they tell us they have no vendors available, and then ask us to use our vendors to go through their warranty process for repairs that should be covered. The vendors refuse to participate in this scheme because it is very time-consuming, the vendors are flush with work considering the time of year and general condition of the local market, the home warranty companies have fixed pricing that may be well under market and they are working through labor/materials issues that increase the likelihood of a large disparity between retail cost and home warranty reimbursement.
This is causing serious issues with repairs across the board. It leaves tenants unhappy because the delays home warranties cause has increased exponentially, which leads to an increased possibility of a tenant not renewing their lease. This is a very costly consequence of trying to save a little money on a repair when the turnover is a much larger hit on the financial viability of a rental property.
A lot of these home warranty repairs end up going through our trusted vendors and the home warranty gets away with doing nothing or a long fight to get reimbursement from the home warranty begins with no guarantee it will be successful. The home warranty contracts dictate that the work has to go through their vendors, but if they don’t have any vendors available then it gets messy very quickly.
Ultimately, we strongly recommend all clients to decline home warranty contracts on any property you own.. Here is a link to our blog post from early 2021 about home warranties, and a link to a Washington Post article about them as well.
The discussion about Home Warranties also raises another matter, which is third-party vendors. By that we simply mean vendors that we have not vetted, and have no relationship with. With home warranties it is quite challenging to manage their vendors as discussed in our post linked above. While home warranties have their own requirements for vendors, we do not allow owners, tenants, or anyone else to permit unvetted vendors to visit or work at a property we manage. Further, we unfortunately cannot allow clients to hire or become directly involved with a vendor on a managed property as it always results in miscommunication or other issues since they are hearing two voices overseeing a job rather than one.
Among our many responsibilities in property maintenance is to properly vet vendors that are tasked to work at your property on your behalf. We only want vendors working on your investment that will do the job right the first time, that we can hold accountable, and will do this at a competitive price. Our goal is never to find the cheapest price, rather it is to find the best work done right the first time with accountability.
As we are all aware we live in a litigious society so it is critical that our vendors be properly qualified and provide a Certificate of Insurance before they are ever allowed on your property. This is for your, ours, and the resident’s protection.
If you have a preferred vendor, we will be glad to invite them to register with us as a vendor and provide the necessary documents Please know that many times vendors will balk when asked to provide insurance documentation, as many tradesmen do not carry the proper insurance. At times this may result in you having to pay a little more for an insured contractor, but it is money well spent to avoid any issues in the future. Ultimately, something that may cost less and seem harmless today, could be viewed as extreme negligence in a legal dispute down the road.
Additionally, the vendors we work with are held accountable for the work they do for us. If there is a problem with their work we want to have the type of relationship with them that allows us to call them back out at no cost to you when we determine it is on them to make it right. Sometimes this isn’t completely clear cut, and again our relationship with them usually results in a compromise of them covering some portion in an effort to make it right and show their appreciation for the business. These are requirements we can not impose on vendors we don’t have a history with, or who do the job as cheaply as possible nor strive to do the work correctly the first time.
We recommend owners use a licensed and insured contractor instead of doing any repairs themselves; mostly to keep the rental property as a business. If you visit your property and meet the tenants, it can drag you into the day-to-day which is what you have a manager for! Also, all of our vendors are properly insured to protect your property, the tenants, and yourself.
Thank you for understanding and allowing us to protect your investment in the best possible way!
Austin, Texas Real Estate Market Trends
The big news in the media these days is the “about face” in the real estate market. We’re feeling it here in Austin. In our experience the turn in the market didn’t go unnoticed. We help our clients buy and sell properties at our firm as well as our brokerage, Central Metro Realty. We were seeing multiple offers well over asking within days of listing, but this has shifted significantly in one weekend of June to relatively little activity on listings. This has sellers starting to reduce prices or pull homes off the market if they are in no hurry to sell. The previous trend of parabolic rise in housing prices wasn’t sustainable, but if you’re planning on holding your managed properties for the long term we believe this is just part of the long-term real estate cycle.
We anticipate this being the start of the shift from a seller’s to a buyer’s market. In the coming months we will have a better understanding of the market trend and when it may be time to start buying again.
Below are links to a couple of recent articles about the rapid growth of real estate inventory in Austin, and there are plenty more to be found as the economy turns.
Please don't hesitate to contact your property manager with any questions you may have!
Thank you for being a client of Stone Oak Property Management.