Austin Home Sales Surge in November, Luxury Homes Sluggish...

According to the MLS report by ABOR, the volume of Austin-area home sales continues to surge, increasing 58 percent in November 2009 compared to November of the previous year. This large jump in year-over-year in home sales is the largest of its kind in more than ten years. In November, there were a total of 1,576 homes sales, contributing $377,603,296 to the local economy. Again the median home price was lower than 2008 levels, the median home price in November 2009 was $179,000, a two percent decrease from the same November 2008. In the face of increasing volume, the Austin real estate market is seeing a decrease in home inventory. The Real Estate Center at Texas A&M University cites 6.5 months of inventory as a balanced market, meaning demand for homes is evenly balanced with inventory of homes for sale. At approximately 5.4 months of inventory for November 2009, demand for homes in the Austin real estate market is slightly outpacing inventory. We continue to see information showing inventory levels dropping. As we have discussed in previous blog entries the reduction in inventory and lots will cause a shortage of product and, we anticipate, a rise in prices. I would also like to mention the reduction in median sale price and its functional relation to the market. Every month in 2009 has shown a reduction in the median sales price in the Austin area. Generally speaking the price of Austin homes have remained stable and steady and property values have held firm. The foreclosure problems that have plagued much of the United States has really been a non-issue for the Austin area. Certainly there are areas in Austin that have been affected by foreclosures more than others. One such such segment, the upper price ranges, have had great difficulty this past year. In 2009 the ability to secure financing, on any level, was difficult. The banking industry recoiled as a result of the economic turmoil in 2008 and 2009. During this period of time it became excruciatingly difficult to secure jumbo financing and many banking institutions suspended these programs altogether. The unavailability of financing coupled with cautious/fearful consumers and less opulent lifestyles drastically reduced the activity in the upper price ranges. At the same time new tax credits and generous (and artificially low) interest rates caused a surge in the first-time home buyer price ranges. These buyers, often young, were not as concerned about a lag in the market or burdened with selling a home of their own. Many chose to buy in or near the bottom of the market. Because of their actions they not only bought well priced homes, but they took advantage of low interest rates and tax credits. The surge in the number of sales in the entry level price ranges coupled with a sharp reduction in the luxury market caused a reduction in average and median home prices in Austin . There are still screaming deals out there, (many of these in the upper price ranges or distressed assets) but take solace in the fact the Austin real estate market has been and continues to be very stable.

Austin New Home Listings Continue To Fall

More news shows available new home inventory continues to drop. This is a healthy trend at this point in time. It allows the market to clear excess inventory from years past. But, as I have discussed in this blog and economists at the ABOR/HBA Housing Forecast mentioned this reduction in inventory coupled with a sharp decrease inbuilding permits could drastically reduce new home and lot availability as the market comes back. New home and lot shortages will cause a jump in prices. Additionally, construction costs are anticipated to rise demand increases.

Austin residential properties for sale dropped 17.6 percent in December compared with the same month in 2008, according to a ZipRealty Inc. (NASDAQ: ZIPR) report today.

The document that compares listings in 27 U.S. metros found on average the homes for sale sloped 26.3 percent year over year and 4.3 percent between November and December. The final month of last year was the largest month-to-month drop in home listings of 2009.

“Seasonality and the heavy activity by first-time home buyers in October and November, who were rushing to take advantage of the tax credit, impacted housing inventory in December,” ZipRealty President and CEO Patrick Lashinsky said.

Austin reported 6.7 percent fewer homes on the market in December than the previous month, which was more than the change in Houston and Dallas. San Antonio numbers were not available.

Dallas listed 9.1 percent fewer homes on the market year over year and 3.8 percent fewer between November and December. Houston posted 5 percent less from November to December and 11.7 percent less in December than 12 months before.

Courtesy of Austin Business Journal

Port Aransas Debuts Long Awaited Nature Preserve...

PORT ARANSAS — This island community is home to winged, four legged and tourist wildlife 12 months out of the year. The debut of 1,217-acre Port Aransas Nature Preserve at Charlie’s Pasture is a chance for all of them to get closer to each other.

“It’s a chance for people to walk into nature,” said Joan Holt, the University of Texas Marine Science Institute’s director of fisheries and mariculture who helped develop the birding sites in the preserve. “People of any age and ability can get a view of an area not a lot of people could get to before. I think it will be used a lot for enjoying nature and sunsets and, of course, bird watching.”

Port Aransas started the process in 2002 of developing the property, leased from the Texas General Land Office, to provide the sort of amenities visitors and residents were asking for including birding sites, kayak access, fishing and hiking, said Charlie Zahn, Port Aransas park and recreation board chairman.

Two miles of crushed granite trails and boardwalk now wind through the terrain providing visitors with a bird’s-eye view of habitat that is home to a variety of species including alligators, birds, opossums, raccoons, squirrels, jack rabbits, feral hogs and endangered sea turtles. The boardwalk ends on Salt Island.

“Salt Island was an area identified as a really neat habitat,” said Port Aransas parks and recreation director Gary Mysorski. “It’s an upland land mass out in wetlands. A lot of this area is tidal flats. So we have a two story observation tower on Salt Island.”

There also are picnic areas and covered seating sites. And the preserve’s shoreline is a prime fishing spot and recreational area.

A concrete bike path runs from Port Aransas Community Park, where the city owned pool is located, to the preserve’s pavilion which is at the end of Port Street. No vehicles are allowed into the preserve and recently installed low fencing prevents such traffic.

The second phase of the project will add another 1.25 miles to the existing trail system branching off State Highway 361 and providing a link to the city’s Leonabelle Turnbull Birding Center.

The second phase still is in the planning stage, but is expected to be complete late next year, Zahn said.

“Port Aransas is a tourist community and today in Texas nature tourism is the fastest growing segment,” Zahn said. “The opening of the nature preserve in conjunction with our other parks will make Port Aransas one of the premier birding locations in the whole state.”

Nature Preserve

THE LAND: The city leased 1,086 acres of the property from the Texas General Land Office for $5,500 a year, for 30 years. There are lease extensions built into the contract. The city has since acquired another 127 acres.

THE FUNDING: Money for design and construction came from $2.2 million in certificates of obligation issued in 2007, which are being paid back with a half-cent sales tax. About $340,000 in federal grants also was used.

Source: City of Port Aransas

Courtesy of The Corpus Christi Caller-Times

Newport Dunes Top 10 Public Course in the US- Golf Digest

The January 2010 issue of Golf Digest includes the annual review of the 10 Best Public Golf Courses in the United States. This year Port Aransas' own, Newport Dunes Golf Club was ranked 8th in the country! Newport Dunes is a phenomenal course and it is one of my personal favorites. I have included the article below.

By Ron Whitten
Photo By Stephen SzurlejJanuary 2010

To hear Pete Dye tell it, French Lick was a job he tried to turn down but couldn't.

Seated in the clubhouse overlooking his dramatic new course, Dye rattles off a one-minute history of the place. A hundred years ago, the French Lick Resort was the Las Vegas of Indiana, but by the start of this century, it was more like Flint, Mich.: run-down, boarded up, with little industry and lots of unemployment.

That's when William Cook, who made a fortune manufacturing stents for heart patients, bought the resort and spent an estimated $500 million refurbishing the French Lick Springs and West Baden Springs hotels, the latter with its domed lobby once billed the eighth wonder of the world. Cook spruced up the resort's fabled Donald Ross course (where Dye won the 1957 Midwest Amateur) but gobbled up half the resort's original Tom Bendelow 18 for a new casino. So Cook brought in Dye from his summer home in Indianapolis and instructed him to create a new course that would help put more heads into beds.

Cook took Dye up to Mount Airie, a hilltop mansion built by the resort's original owner, Tom Taggart, surrounded by ridgelines of pastureland. Dye took one look at the place and figured there was no way to fit in a golf course. He turned Cook down.

But then Dye came back for a second look, with a topographic map in hand. Turns out there were 312 acres, plenty of room, and it was the second-highest point in the state. Dye noticed fantastic views in every direction, vistas as far as 30 miles across the rolling Hoosier National Forest. Realizing he had something special, he took the job and made 140 visits during construction.

From the Taggart mansion, which now serves as the clubhouse of the $350-green-fee resort course, one can view nearly all of Dye's finished product 50 feet below, routed like a four-pointed star, with squiggly fairways dotted by typical Pete Dye pot bunkers. The bunkers look like giant gopher holes, except for those atop mounds on the par-4 second. The resort calls them volcano bunkers, but they look more like the creepy egg-pods from the movie "Alien."

Once on the course, it becomes apparent that the bent-grass fairways are much narrower than the massive 60-yard-wide things seen on most new courses. These are just 30 yards wide, squeezed to 25 yards at the 300-yard mark.

"You've got to give the average golfer wide corridors, but it's too expensive to do wide fairways in bent grass -- too much water, too many chemicals," Dye says. "So we've got these fairways, and on each side of them we put in 30 yards of low-mow bluegrass rough, cut at two inches at the most. So every hole is really 90 yards wide, understand? That way, the average golfer can hit it all over the place but will still be able to get a club on the ball and hit it again."

So why not have 90 yards of bluegrass, from which a 30-yard-wide fairway could be mowed at a shorter cut? "Because I want a PGA Championship here," Dye says. "The pros won't play bluegrass fairways. They want bent grass."

There you have it. Pete Dye, turning 84 at the end of 2009, 50 years into the course-design business, is still chasing major championships. He's not satisfied that three of the next six PGAs will be played on his designs, at Whistling Straits (twice) and the Ocean Course at Kiawah, or that his Crooked Stick was the site of the 2009 U.S. Senior Open or that his Blackwolf Run will host the 2012 Women's Open. He wants more.

The Dye course at French Lick measures a whopping 8,102 yards, par 72, from the gold tees. It's not meant to ever play that long; the extra yardage on most holes exists only to provide flexibility when the wind kicks up, or when it doesn't.

It's a surprisingly easy course to walk, especially from the regular tees of 6,115 yards, each next to the preceding green. From there, Dye and I played the course, with caddies, in less than three hours. And thanks to Pete's wife, Alice (their 60th anniversary will be on Groundhog Day), the forward tees are just 5,151 yards.

There was a calendar produced by the resort featuring photos of its new Dye course. The last photo, taken during construction, shows Pete and the entire construction crew, including project supervisor Chris Lutzke (a fine architect), superintendent Russ Apple and nearly 50 others.

"That's why I'm still digging at my age," Dye says of the photo. "To keep a bunch of good kids in the business."

BEST NEW PUBLIC

1. The Pete Dye Course at French Lick (Ind.) Resort • Yards: 8,102 • Par: 72 • Fee: $350 • Designer: Pete Dye • 888-936-9360 • frenchlick.com

2. Palouse Ridge G.C. at Washington State University • Pullman, Wash. • Yards: 7,308 • Par: 72 • Fee: $89 • John Harbottle • 509-335-4342 • palouseridge.com

3. Tetherow G.C. • Bend, Ore. • Yards: 7,298 Par: 72 • Fee: $175 • David McLay Kidd • 866-948-2582 • tetherow.com

4. Pound Ridge (N.Y.) G.C. • Yards: 7,171 • Par: 72 • Fee: $235 • Perry Dye and Pete Dye • 914-764-5771 •poundridgegolf.com

5. Blue Top Ridge at Riverside (Iowa) • Yards: 7,505 • Par: 72 • Fee: $80 • Rees Jones 877-677-3456 •riversidecasinoandresort.com

6. Wild Rock G.C. • Wisconsin Dells, Wis. • Yards: 7,414 • Par: 72 • Fee: $99 • Michael Hurdzan and Dana Fry • 608-253-4653 •wildrockgolf.com

7. Sand Hollow Resort (Championship) • Hurricane, Utah • Yards: 7,316 • Par: 72 • Fee: $125 • John Fought and Andrew Staples • 435-656-4653 • sandhollowresort.com

8. Newport Dunes G.C. • Port Aransas, Tex. • Yards: 6,821 • Par: 71 • Fee: $95 • Arnold Palmer, Erik Larsen and Eric Wiltse • 361-749-4653 • newportdunesgolf.com

9. Sweetgrass G.C. • Harris, Mich. • Yards: 7,275 • Par: 72 • Fee: $75 • Paul Albanese • 800-682-6040 •islandresortandcasino.com

10. The Preserve on Rathbun Lake • Moravia, Iowa • Yards: 6,988 • Par: 72 • Fee: $59 • Kevin Norby • 641-724-1400 •honeycreekresort.com

Austin Housing Forecast- Slow Growth in 2010, Improvements Later this Year an in 2011

I attended the 2010 Austin Housing Forecast yesterday morning. It was a very interesting event and several notable individuals spoke. The economic forecast was given by John Hockenyos and Eldon Rude.

The general consensus is the stock market and equity markets have come back to some degree but that could be largely due to the absence of alternative investments. (commercial property continues to languish, etc.) Mr. Hockenyos does not anticipate an increase in interest rates in the near future, but he did say when they rise we could very well see dip in the stock market as investors move money from stocks into other investments. He addressed inflationary concerns and said inflation has not affected the market yet, but it could happen as early as this year.

Both Mr. Hockenyos seemed to agree with my prediction that the reduction in new building permits and subsequently new home construction starts will cause a shortage of lots and new homes in the following years. (TPI January 6th post "Q4 Home Construction Down Slightly...") He pointed to the fact that building permits have been decreasing since 2006. More than 16,000 building permits were filed in 2006 compared with roughly 6,500 in 2009. Demand for new construction is down as well (less than levels seen in 2005 and 2006) but the current levels of demand have been decreasing inventory levels more every year.

The forecast touched on the job market in Austin and things are steady. Last year Austin did not see a loss in total jobs. This year Austin job growth is expected to be weak but in the black. Mr. Hockenyos anticipates an increase in job in 2011.

Mr. Rude cited a study that ranked the top 20 real estate markets in the United States. Of the 20 cities mentioned, 9 are in Texas.

On the whole the news was good. Austin and Texas continue to rank among the best in the nation. However, the majority of the findings stated that 2010 would be a slow growth/transition year with 2011 holding the majority of the opportunity.

Austin Business Journal's Comments are below:

Austin housing market OK,

will improve later this year

The spiraling home market has neared stabilization and could see a slight rebound in Austin this year, according to local real estate experts during a 2010 housing forecast Wednesday.

Speakers during the Austin Board of Realtors and theHome Builders Association of Greater Austin event pointed to the relatively better job market as one sign improvement is on the way.

The Texas Workforce Commission reported the area lost about 4,300 jobs in the 12 months ending November 2009, which is better when compared with cities like Houston and Dallas, which lost 88,900 and 50,700 jobs respectively.

The program was presented and moderated by Eldon Rude, who directed a residential real estate market study comparing Austin with 30 other U.S. metros. He said Austin builders cut new home production by about 19 percent last year, breaking ground on 6,490 new homes.

“Starts have stabilized in recent quarters, builders have closed more homes than they have started for the last three years. This strategy has resulted in far fewer inventory issues in the Austin new home market compared to the more challenged markets across the U.S.,” said Rude.

The study anticipates new home starts maintaining 2009 levels, primarily due to slow job growth through at least the first half of 2010.

Though home pricing and buying has improved, experts said the true test will come when interests rates begin to climb and the stimulus-fueled tax credits run out.

The Boardwalk at St. Charles Bay

The Boardwalk at St. Charles Bay (formerly known as the Reserve at St. Charles Bay) is an great new development on the shores of St. Charles Bay just north of Rockport, Texas on the Lamar Peninsula. Nestled among 161 acres, The Boardwalk is next to Goose Island State Park in an area famous for world class fishing, hunting and birding. The Boardwalk at St. Charles Bay features 63 lots with wetland and bayfront access, communal piers and an fabulous boardwalk to promenade on the waterfront. Phase one has been completed and is composed of 28 lots (ranging from 9,000 to over 20,000 sq.ft.). Several lots have been sold and one home us currently under construction. Mike Bridges Homes is building the home.

Common amenities will include a lodge and private club, swim center, fire pits and other common area conveniences. You will be sure to enjoy the Boardwalk and it's close proximity to Rockport's restaurants, shopping and entertainment.

The Boardwalk
Begin and end your days with a carefree stroll along the Boardwalk that winds along the coast of St. Charles Bay. Observe colorful wildlife among the wetlands, drop a line off one of the piers or just enjoy the gorgeous landscaping and the cool coastal breeze as you take pleasure in the timeless charm of the pedestrian-only walkway that borders the property.

The Cypress Club
The Boardwalk offers a members-only lodge featuring delicious grill dining with a full bar, a resort style swimming pool and abundant seating areas complete with fire pits for gatherings with friends. A convenient dock with numerous slips offers easy access by boat making it easy to stop in for lunch before heading out again for an afternoon of fishing. Members of the Cypress Club will also be able to enjoy access to The Cypress' sister club at The Reserve at Lake Travis in Austin.

The Reserve at St. Charles Bay

When Building a Custom Home...To Upgrade of Not To Upgrade?

When building a custom home, should you upgrade?

Every builder had a different definition of "standard." Builder "A" may claim that they have a "premium appliance group" or an "upgraded carpet package" for the same price that was quoted to you by builder "B" for his standard specifications- no upgrades. But, before you get to excited, compare builder A's package to builder B's packages. Sometimes you will find builder "B" has the same appliances or the same carpet as builder "A", but he doesn't refer to it as an upgrade.

In some cases, it is not uncommon to see builders offer bonuses and discounts that substantially affect the price (upwards of $12,000) of your new home. It is important to look into these numbers to see if they are real or not. make sure the "upgrades" or "discounts" really add up and be sure to compare these features and numbers in relation to other builders and their quotes.

Builders will sometimes often boast that they offer large discounts, huge incentive packages or a certain amount of free upgrades. There are literally hundreds of issues that must be accounted for. It is important to see through the vague descriptions and enticing slogans and get to the details.

Be sure to try and price the specific upgrades and see if they are worth the cost. Sometimes the upgrades are a great idea and will save you money in the long term, other times the upgrades are nothing more than a profit center for the builder.

For More Information on New Homes