January home sales show improvement...

The Austin area saw 884 homes sold during January, up 5 percent from January 2009, according to the Multiple Listing Service report by the Austin Board of Realtors. The median price for a home in the Austin area during January remained stable, up 1 percent to $179,250 compared with the same month last year.

“At this point, we can look back and see that January 2009 was the low point of this cycle,” said John Horton, chairman of the Austin Board of Realtors. “With steady improvement throughout 2009 that continued in January 2010, we can see that we’re one year into the recovery in Austin. … That it’s the kind of recovery we want — one that is steady, stable and consistent.”

The volume of single-family home sales in Austin improved steadily throughout 2009. During the first half of the year, the gap in year-over-year sales volume closed consistently, reaching levels similar to 2008 during the summer peak, with the exception of a dip in August, according to ABoR. During the fall 2009, sales volume began outperforming 2008 and surged in October and November, spurred by the original deadline for the first-time homebuyer tax credit. In December 2009, sales volume again achieved a modest increase of 5 percent compared with December 2008.

Horton said the area is already seeing positive signs in sales volume and price appreciation. “Those factors, combined with the population growth and additional jobs economists expect for our area in 2010, bode well for the long-term value of Austin real estate.”

Debunking Real Estate myths...

Are you aware that a lot of what you know about buying your first home might be wrong? According to a national housing survey conducted by Fannie Mae, there are widespread misconceptions and gaps in consumers’ knowledge of the home-buying process. Here are a few examples:

• Forty-four percent of all Texas adults believe they need a 20% downpayment to get into a house. That couldn’t be more wrong. There are programs out there that will allow you to put lower down-payments. The days of "0 down" are over, but there are still some screaming deals out there. Especially when you consider currently low interest rates.
• Nearly 40% of Texans believe they need at least five years on the job to qualify for a mortgage. Wrong again! There are many lenders out there willing to qualify consumers with less than two years of employment.
• More than 30% of all adults believe they need a perfect credit rating to get into a home. This is also a myth. Lenders today look at more than just your credit score. There are non-traditional methods of analyzing consumers’ credit, and some lenders will even compile a credit profile, varying weight of credit accounts by importance.

The fact is that myths abound in the real estate industry, particularly for consumers who have yet to get their feet wet. Talk to us about what you can do to get into your first home today.

The Economic Recovery Continues

Excerpt from Annual Economic Outlook 2010 from Economics Group, Wells Fargo Securities LLC

Economic forecasting, like sailing, requires constant adjustment to changing winds, currents and the occasional hazard. While the worst of the storm has passed, our ship is still struggling against fierce winds. We are far from an equilibrium point in the economy. We continue to anticipate subpar growth in 2010, with both the pace and composition of the expansion being very different than what we are used to or what we may wish. The pace of the expansion is characterized by real growth of 2.2 percent in 2010 with inflation at just 1.8 percent.

Positive contributions to growth will likely come from rising consumer spending, business investment—particularly equipment and software, housing and of course, federal spending. Improved consumer spending will reflect the upturn in real personal income due to eventual job creation, a longer work week and rising wages. We expect real incomes to benefit from continued low consumer inflation. Business investment should improve as financing costs remain low and business expectations of final sales improve. Corporate profits will likely grow, which would improve cash flow and provide liquidity for business investment. We expect housing to continue its recovery as income and consumer confidence improve demand and housing finance continues to be supported by low interest rates. Our forecast shows the federal spending stimulus will continue to be applied in the first half of next year and will only gradually begin to slow in the second half as election-year imperatives take over. As for trade, global growth and the weak dollar will stimulate exports but rising domestic consumption and increased energy prices will temper some of the positive effects.

Also putting a damper on hopes for a swift recovery are both the disappointing outlook for housing and the slow growth in consumer spending. For our society, the modest pace of expansion implies only slow improvement in the labor market with the unemployment rate remaining high. We expect sustained positive monthly payroll numbers will start to appear in the late spring of 2010.

Already, we sense that the convergence process to a new economic equilibrium has been more difficult than policymakers estimate. Job growth has been non-existent. Credit growth has been restrained and the recovery in housing far less significant than expected. Still, inflation remains subdued as unemployment limits the acceleration in wages and unit labor costs. Our central tendency for inflation, as measured by the Consumer Price Index (CPI), is 1.5 to 2.0 percent. Slow real growth will run into political pressures in the year ahead as economic realities fall short of political rhetoric. Finally, concerns remain about the long-run pace of growth in the economy as well as the ability of the recovery to sustain itself at a pace that meets the expectations of consumers and workers especially as an election nears. It is not clear how much of the recent economic upturn can be sustained without government support. Recent improvements in business surveys and capital goods orders may have peaked, at least near term. The remaining downside risks reflect weakness in the labor market, with implications for income growth and consumer confidence.

Austin’s affordable homes fund almost depleted...

About $42M spent in 3 years; $13M left

The Austin Neighborhood Housing and Community Development office has expended almost 75 percent of its $55 million bond fund, three years into the seven-year program.
The office plans to ask City Council on Feb. 25 what it should do with the remaining $13 million, which it received when more than 60 percent of voters approved affordable housing funds in 2006 as one of seven propositions on a $567.4 million bond program.
The funds are used to supplement other sources of revenue to build or maintain housing for low- to moderate-income households. Proponents said the funds are a boon to the economy, creating short-term and long-term jobs in addition to spurring more public and private sector investment.
Of the $41.7 million the office has expended or obligated, it induced other private and public sources to spend $158.6 million on development, said David Potter, housing development manager for the Neighborhood Housing and Community Development Office.

Courtesy of ABJ

Don’t outsmart yourself...

Are you one of the people who is trying to “time the market” and wait for home prices to go down before you make a purchase? Doing so may not be as wise as you think.

Investment experts in different fields acknowledge that attempting to guess when the best conditions are present is an inexact science at best, even for industry specialists. The real estate market is no exception. In your attempt to find the most favorable balance between interest rates and sales price, you may just outsmart yourself and cost yourself a tidy sum of money.

Market upswings and downturns are rarely evident until after the fact. Consider the following: If you’re ready to buy today but decide to wait one more year and the price of the home goes down a few thousand dollars but interest rates are half a point higher, what have you saved? Nothing—in fact, had you purchased, you’d have a year’s worth of mortgage-interest tax deductions and a 12-month head start on building equity. Furthermore, current interest rates are still near historical lows. All indicators show that as the economy continues to recover interest rates will rise as soon as this summer. Everyone acknowledges that interest rates are crucial in home affordability. But, often times the impact of these figures is over-looked. This simple example will illustrate the magnitude of the effect: For the purchase of a $200,000 home a rate increase of 1% equates to $20,000 (a 1% change in interest rates equates to $10,000 per every $100,000 borrowed). Therefore a buyer who purchases while rates are low could purchase a $220,000 home for the same cost. Conversely, a buyer who waits until after rates rise would have their buying power reduced.

You don’t have a crystal ball—no one does. Any real estate expert can tell you that trying to time the market is risky and short-sighted. Over medium- to long-term periods, real estate appreciates steadily and is a solid investment. Any potential savings you might see from price reductions will be offset by rising interest rates. The point? If you’re ready to be a homeowner, it’s a good time to buy a home and acting now makes sense and will pay off in the long-term.

Click here for more information on buying a home

Covered Bridge, Austin Real Estate Market Update...

Covered Bridge is an elegant community just minutes from the “Y” in Oak Hill and the Texas Hill Country. Covered Bridge offers sweeping views, spacious homes, nature trails and amenities such as a splash pad, community pool, play ground and playing field. The optimal location makes commutes downtown and to major employers like: Freescale, AMD and Samsung a breeze. Residents also enjoy easy access to area attractions like shopping and entertainment in Sunset Valley, Barton Creek and the Hill Country Galleria.

Covered Bridge Village, “The Village,” is slated for the community. The Village is the first mixed-use neighborhood center located in the Texas Hill Country to be registered and on track to achieve Leadership in Energy and Environmental Design (LEED) certification from the United States Green Building Council (USGBC). Catering to the surrounding Southwest Austin neighborhoods, this mini-lifestyle center is situated on 15 acres along SH 71 between SH 290 and the City of Bee Cave, offering 35,000 square feet of space for retail, personal services and restaurants, in addition to three pad sites and over 50,000 square feet of office space.


I was recently asked for market analysis of Covered Bridge and this is what I found:

In Covered Bridge we can see in the last 3.5 months 6 homes have sold (This excludes the condos by the front entrance as they are not technically comps. Potential buyers might look at them, but generally they attract a different buyer.) Based on these numbers homes in Covered Bridge have been finding 1.7 real buyers a month. I would typically try to keep the math a bit cleaner, but the majority of the activity in the area occurred in the early weeks in November so we need to include those dates as part of out data. At 1.7 real buyers a month the current inventory of homes (7 active, the contingent home will be far less attractive) will be depleted in just over 4 months. This is less than equilibrium which indicates a technical shortage of homes and thus a seller’s market. This is solid and a good situation for potential sellers.

On the downside the activity in the area has been generally slow. Currently only one home is pending and only one home has closed in 2010. This is not ideal, but based on inventory levels and season trends I am not concerned. On the bright side we have seen an early increase in activity this year, as people are overcoming their economic fears. Typically this occurs closer to the selling season. This should bode well for the community because I anticipate more activity as the season progresses.

Average sell time is 91 days which is a bit long. This is a great example of why initial price is so vital. The homes on the market for more than 100 days have had price reductions. Buyer activity and offer prices are always much stronger for homes that have priced the market. The average sold dollar/ft price is $108.38 with the average sale price of $377,500. This makes sense because the average sized home is almost 3,500 sq.ft. Typically smaller homes command high dollar-per-foot figures.

Click here more information on Covered Bridge or Real Estate in South West Austin

Another downtown Austin building boom? (Part 2)

Back from the dead: Architects for Aquaterra, 7 Rio back at drawing board

Two left-for-dead downtown condominium towers are being resurrected: Aquaterra and 7 Rio.
Although no construction dates are set, the lead architect on both buildings has been ordered to pick up the pencils again, said Brett Rhode, principal at Rhode Partners architects.
But even though the projects are active, experts said the lending market is still a big obstacle before any construction will start.


Courtsey of ABJ

Another downtown Austin building boom?

At least two office towers in the works; some doubt near-term financing...

This article shows that Austin Real Estate continues to strengthen. Developers from across the country are choosing Austin because of the strong economy and the growing educated population.

"At least two new office buildings are being planned for downtown Austin and would be among several buildings competing to land a 200-employee law firm. Signing a tenant like that would entice banks to finance such a project.
Austin-based Cypress Real Estate Advisors plans a 120,000-square-foot, six-story, Class A office building at 800 W. Sixth St., said David Cox, Cypress vice president of development.
Also, the stalled Ovation development, originally reported to be a 37-story condo tower on Block 51 by Atlanta-based Novare Group Inc. and Austin-based Andrews Urban LLC, is being revamped. It now involves a partnership with International Bank of Commerce and more office space than originally planned, Andrews Urban principal Taylor Andrews said in an e-mailed statement.
The plan revisions are in the beginning stages, and specifics will be available in mid-2010, he said."

Courtsey of ABJ

Unemployment at 3%? It all depends on how you slice it...

There is an interesting post on the Matrix blog that looks at the rate of unemployment across income levels.



As you might expect, unemployment is highest among the lowest earners. What might be surprising is how low the level of unemployment is at the upper income levels.

As Jonathan observes in his post, it is easy to think of measures like the unemployment rate as a single measure, an "across the board phenomenon." As usual though, things tend to get more interesting and useful when you drill-down to the details.

We hear the overall unemployment number tossed around all the time in the media. There are so many ways that one can slice and dice it, but as a luxury agent income is a useful measure and it is probably interesting to know that unemployment is so low at the upper income levels.

Also, with talks of impending levels of high inflation and an increase in the capitol gains tax we could see quite a surge in real estate investment from wealthy investors. This could range from your typical income producing properties to a luxury home or second home. We also anticipate a jump in commercial property and raw land.

Vacation homes aren’t just fun, they’re a good investment...

This is a great article by David Jones with the Texas Real Estate Center...enjoy!

Our getaway home at Camp Creek Lake in Robertson County is one of our family’s joys. The deer eat out of our hand, bald eagles circle overhead and river otter romp in the clear water.

Of course, a vacation home means work, too. There is always something that could be repaired if I have the inclination. Rarely do I have the inclination when the fish are biting.

Although I did not buy the Camp Creek property with an investment in mind, it certainly is that. As I cruise the lake in search of the elusive black bass, I can’t help but mentally pat myself on the back for investing in something that’s so much fun.

The stock market goes up and down, but real estate continues to be a bright spot in the U.S. and Texas economies. Nationally recognized second-home expert and EscapeHomes CEO Clark Thompson says the current climate represents a unique opportunity to purchase a vacation home. "Interest rates are low, and there are still a number of undiscovered places where the housing prices are a steal," Thompson says.

Here are Thompson’s top 10 reasons why vacation home ownership is a smart investment:

1. Buying a vacation home today is like buying California property in the 1970s. Vacation home prices now are low relative to where they are expected to be once the baby boom generation begins to retire in force.

2. Families who own vacation homes take more family vacations. 3. The 1997 tax law changes allow couples to avoid paying capital gains taxes on profits of as much as $500,000 on the sale of a primary residence. Equity in your primary residence can help purchase a retirement home. 4. It’s a good idea to get a head start on retirement living. Your favorite location might be a lot more expensive in 10 to 15 years when 73 million baby boomers begin retiring. 5. Owning a second home allows another mortgage interest write-off. 6. Vacation homes are a great way to alleviate stress. It’s good for the soul, says Thompson. 7. A second home is a great way to spend your inheritance. Trillions of dollars are trickling down from the "saving generation" to the "spending generation." 8. Vacation living equals more exercise. More and more people are buying locations close to ski slopes and golf courses. 9. The stability of real estate value makes it a good choice to diversify the nonaggressive portion of your portfolio. 10. Finally, a vacation home is more fun to use than a stock certificate. See you at the beach! For more information: Go Texas Coast

Texas top moving-to state fifth straight year...

More people chose to settle deep in the heart of Texas than anywhere in the United States in 2009, according to Allied Van Lines’ 42nd Annual Magnet States Report. For the fifth year in a row, Texas was the No. 1 destination state based on Allied’s report, which tracks U.S. migration patterns and tabulates net relocation gains for each state on an annual basis. “Texas seems to be the cheap seats but with a great view,” says Bill Jones, chairman of the Texas Association of REALTORS®. “Just 20 years ago, our wonderful state wasn’t the first choice for many people. But now folks from all over are noticing we have everything you could possibly want – from reasonably priced housing, to plenty of land for business and housing development, to a wide variety of fine arts and recreational opportunities.”

Arizona was the second most moved-to state in 2009, followed closely by North Carolina. Colorado and Florida placed fourth and fifth for states with the largest net relocation gains last year.

Source: Allied Van Lines

Texas still most affordable state for homeownership...

Texas continues to beat the rest of the U.S. in housing affordability, according to first-quarter statistics from the Real Estate Center at Texas A&M. The Center uses a Texas Housing Affordability Index (HAI) to compare the ability of a Texas median-income family to purchase a median-priced existing home in their area vs. consumers in other states. Where higher numbers are better, Texas had a ratio of 1.95 in first quarter 2009 compared with 1.55 nationwide. “Texas continues to maintain its place as the most affordable high-growth state in the country,” says Jim Gaines, Ph.D., research economist.

Source: Real Estate Center at Texas A&M

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Royal Palms Provides Tremendous Value in Port Aransas...

Royal Palms provides amazing value for vacation property in Port A. These well designed cottage designs feature pine and stained concrete floors, pine ceilings & walls, Hardi exterior and Iocene insulation. Single family residences zoned at condominiums, all units are detached and give the owner freedom of choice and personalization of each unit. No common walls and several configurations to choose from. Royal Palms offers 26 lots, 6 floor plans and 3 elevations give you the opportunity to personalize your Port A vacation home.

Wonderful location close to the Newport Dunes Golf Course, Mustang Island Airport and Downtown Port Aransas. These quaint beach cottages are only two blocks from the beach. Plan start around $200,000 for a 3/2 and the deluxe, 4 BR plan with master suite downstairs is available in the $220's.

Amenities:

• Pine and colored concrete floors
• Pine ceilings and walls
• Hardi exterior and Iocene insulation
• Swimming pool with cabana and arbor, landscaped common area with living fences
• Lots, 37’ x 70’ nominal: homes 1,200 to 1470 sq ft

Austin Board of Realtors Foundation seeks scholarship applicants Austin Board of Realtors Foundation seeks scholarship applicants...

High school seniors who plan to attend school in Texas are encouraged to apply for one of 10 scholarships offered by the Austin Board of Realtors Foundation.

The $1,000 grant will offset the cost of tuition at any college, university or trade school in the state. Applicants must live in Travis, Williamson, Lee, Bastrop, Caldwell, Hays, Blanco or Burnet counties to be eligible for the scholarship.

Applications are available online at www.abor.com/scholarship or can be picked up from the Education Department of the ABoR offices, which is located at 10900 Stonelake Blvd., Suite A-100, Austin.

The deadline to apply is 5 p.m. March 12. All applications must be received by the deadline to be considered. Applications can be hand delivered or mailed to the ABoR offices.

For details, call 454-7636 ext. 1603 or e-mail hbrawley@abor.com

Congress sends Positive reinforcement With Extension and Expansion of Homebuyer Tax credits

On November 6, the first-time homebuyer tax

credit was extended. In addition, the tax credit was

expanded to include current homeowners. This is

good news for the REALTOR® community, as well as

potential homebuyers. Below you will find the basic

facts you need to know about the newest version of

the tax credit:

• Up to an $8,000 tax credit is available for first-

time homebuyers—these individuals cannot have

owned a residence in the past three years;

• Up to a $6,500 tax credit is available for indi-

viduals who have lived in their home for five con-

secutive years out of the last eight;

• Income limit for single buyers is $125,000;

• Income limit for married buyers who file jointly is

$225,000;

• Buyers must live in the home purchased for a

minimum of three years in order to avoid having

to pay back the tax credit;

• The deadline has been extended to April 30,

2010—a written, binding contract must be in

place by April 30 to qualify, and buyers must

close on the home they are purchasing on or

before June 30, 2010.

Austin construction activity to climb 30%...

Texas' construction activity is expected to improve this year with Austin fairing the best, according to a McGraw-Hill Construction report Thursday.

The 2010 Texas Construction Outlook shows construction starts value increasing 16 percent this year to $52.5 billion statewide. Austin is expected to experience the largest growth, rising 30 percent in value, followed by Houston, growing 17 percent. Dallas is projected to increase 16 percent and El Paso should add 8 percent value this year. San Antonio is expected to see 6 percent growth.

The report said housing starts are expected to grow 31 percent to $21.8 billion, while commercial construction starts will slip 1 percent to $17.6 billion. Federal stimulus funding will boost public works and utilities construction, according to the report.

McGraw-Hill has compiled project and product information, plans and specifications and industry news and forecasts for more than a century. The publication is owned by The McGraw-Hill Cos. (NYSE: MHP) in New York.

Courtesy of ABJ

Waller Creek envisioned as premier destination...

This is a very interesting article about the Waller Creek District Master Plan in downtown Austin. I has really been fun watching the Austin Urban Core thrive over the past few years. Mary Tuma wrote the article in the most recent issue of Community Impact News.

The Waller Creek District Master Plan, an idea that has persisted for decades, is finally progressing toward reality through an ongoing collaboration among citizens, city staff, elected officials and an urban design group.

Planners envision morning bike rides down Sabine Street, lunches at locally owned cafés on Sixth and Red River streets, and evenings spent browsing art studios against a scenic waterway backdrop.

The area surrounding the creek, extending from Lady Bird Lake to Waterloo Park, is set for revitalization into a linear greenway, equipped with bicycle and pedestrian trails, businesses and public parks.

“I believe this will be the signature creation for the City of Austin,” said Councilwoman Sheryl Cole, who is a key proponent of the Waller Creek District Master Plan. “And in 20 years just like you think San Antonio–Riverwalk, or Chicago–Millennium Park, you will think Austin–Waller Creek.”

Inspired by her runs along the creek, Cole formed a vision of the area’s potential to serve all sectors of the city, including environmentalists, cyclists, businesspeople and family-oriented community members. In 2007, she catalyzed the idea by presenting her plan to fellow council members, who passed the proposal unanimously.

Today, she continues to see the image to fruition, coordinating participation with the University of Texas and other stakeholders, crafting financing strategies with federal, state and private funds and visiting with city residents to create an inclusive project.

Master plan players

Rendering of inlet structure and pond at the 10-acre Waterloo Park. Courtesy City of Austin

Nearly a year ago, Austin commissioned the ROMA Design Group to lead downtown’s growth plan. Through a series of public meetings the firm devised three guiding design principles for Waller Creek: enhancement of open space and environmental quality, pedestrian and bicycle linkages, and promotion of development.

“We wanted to make sure this public project promotes private investment and activity within the area,” ROMA principal Jim Adams said.

Adams, echoing the general sentiment of others involved, emphasized the project will not mirror San Antonio’s famed Riverwalk attraction. He said Waller Creek would possess unique characteristics, such as local businesseses, a bustling arts and culture scene, an abundance of parkland and natural features to set it apart from the Alamo City landmark.

“I think a lot of people are saying this is going to be like the Riverwalk,” Adams said. “Though certain parts can emulate it, the community’s overall vision is very different.”

ROMA principal Jana McCann envisions part of the area as a premier cultural district, a mecca for creative businesses and a way to strengthen connectivity to East Austin, pointing to improvements to Palm Park as an example.

Though still in early stages, the first major project, by 21c developer Poe Companies, would bring a $350 million museum-themed hotel, apartment and possible office or condo project along Red River Street. Steve Poe, president and CEO of the Kentucky-based firm, said the proximity to the lake, parks and convention center attracted the company to invest.

Tunnel vision

Before the district plan can fully take shape, a sizable and separate project must take place to ensure the area is ripe for new construction.

Known for excessive flooding, vagrancy and pollution, Waller Creek has a notorious history of deterring development from a prime stretch of downtown land. The Waller Creek Tunnel Project,a plan separate from the Waller Creek District Master Plan, is meant to reduce the risk of severe flooding and erosion, improve overall water quality and create a more favorable landscape for new and existing business investment.

“Businesses have been reluctant to invest and build, fearing they could get washed away anytime,” said Carolyn Perez,outreach coordinator for the public works department. “They’ve thought, ‘Why bother?’ But once the tunnel is installed they will have peace of mind knowing their property is protected.”

The $127 million tunnel project, composed of 12 sub projects, is expected to be complete in July 2014. The project is funded by a 2007 city council–approved 20-year Tax Increment Financing Zone. Contributions will come from both the city and Travis County.

The first sub project involves improvements to the Lady Bird Lake trail bridge. That will begin this summer or early fall. Team leaders are in the process of finalizing design and obtaining the necessary local, state and federal permits for all 12 projects.

Waller Creek Tunnel Project

A budget for the comprehensive Waller Creek District Plan is expected to be released in February.

Waterloo Park improvements

During tunnel construction, Waterloo Park will undergo renovations. The park, which makes up more than half of Waller Creek’s open space, will be closed for two-and-a-half years, starting in mid-2011.

“It’s given us a great opportunity to re-envision Waterloo Park,” said Patrick Corona, parks and recreation department division manager. “Right now, I see it as a diamond in the rough that has the potential to really get polished and be a destination point.”

The department hired consultant group Project for Public Spaces to help gather input from stakeholders. A final report and conceptual drawing is expected to be presented this month. Corona said possible ideas for Waterloo include a children’s playscape and splash pads, and concert and dancing venues atop the two-story inlet structure.

City of Austin outreach coordinator Carolyn Perez, who has been involved with the Waller Creek project for two years, said an aggressive citizen outreach program—from presentations to town hall meetings—has helped educate the public and quellconcerns from residents and business owners alike. Additionally, to ensure the plan is reflective of citizen needs and not solely of developers, city council and county commissioners appointed a 16-member representative advisory committee to shape and oversee the vision of the Waller Creek plan.

The people’s creek

“Essentially, we are the eyes and ears of the project,” said Jeb Boyt, vice chair of the Waller Creek Citizen Advisory Committee. “The really nice thing about this project is that I’m not hearing a lot of controversy. It might be because it’s still too early, or it might be because the basic premise is to create opportunities, and everyone is on board with that. Not that there aren’t matters of concern, but it seems everyone is going to get something.”

Accessible bike lanes and maintaining the live-music scene were among the few concerns Boyt has heard from residents. The project’s most daunting challenge is financing; unlike the tunnel, the master plan is currently unfunded. Boyt said the above-ground improvements will likely appear on the November 2010 transportation bond election. Federal, state and private funding are also options.

Courtesy of Impact News...

AAS Article- Chase Tower downtown sold to Dallas firm

New owner likes stability of Austin market, plans to buy more properties

Spire Realty Group is the new owner of the 35-year-old Chase Tower in downtown Austin, the first major office acquisition in Central Texas in more than a year. Dallas-based Spire said it is planning more large office acquisitions, including in Austin, over the next two years.

Spire closed on the sale of the 21-story Chase building Monday, said Jon Ruff, senior vice president for Spire.

Ruff said Spire likes the stability of the Austin market, particularly downtown, where it will look for other buying opportunities.

"We like Austin. We want to be in Austin, and we plan on being there a while," he said.

The Chase Tower, built in 1974, sits on a full city block at 221 W. Sixth St., has nearly 390,000 rentable square feet and is 96 percent leased. Spire intends to hold Chase for the long term, Ruff said.

The sellers were several limited partnerships that include Austin-based Endeavor Real Estate Group and Grubb & Ellis Realty Investors LLC (formerly Triple Net Properties LLC). Endeavor and Triple Net bought the building in 2006, paying $72 million.

Endeavor's headquarters are in the building, which is home to the private Headliners Club on the top floor.

Several experts said the acquisition is good news for Austin — an omen of an improving office market and solid growth prospects for its economy.

"It's a great sign, a big major office building selling downtown," said Jessica Ruderman, a senior analyst with Real Capital Analytics Inc., a New York-based consulting firm.

Ruderman said the bottom was reached last month for office sales nationally and locally, and "it's only going to increase from here."

Ruff declined to disclose the purchase price. However, the initial purchase agreement signed in November listed the price as nearly $73.7 million, or about $189 a square foot. A source knowledgeable with the sales confirmed that the sale closed at that price.

By comparison, Equity Office Properties Trust paid $188 million — $354 a square foot — for the Frost Bank Tower downtown in 2006. Thomas Properties Group Inc., Frost Bank's current owner, paid $1.2 billion for Frost and nine other Austin office buildings in 2007 but did not disclose the price of each building.

Ruff said Spire also plans to make purchases in Dallas and Houston, the other markets it which it owns office buildings.

"We think it's a good time to be active. We're in a position to move quickly now, and are trying to do so," Ruff said.

Spire also owns 611 E. Sixth St. in Austin, which includes the Texas Lottery Commission headquarters.

Holliday Fenoglio Fowler in Dallas represented the seller in the Chase sale and represented Spire in arranging financing.

"Spire's acquisition of Chase Tower is a significant transaction for Austin, and the Southwest in general, as it evidences that both debt and equity capital is flowing once again into our markets," said Andrew Levy, senior managing director of Holliday Fenoglio Fowler.

Downtown Austin has maintained the lowest office vacancy rate among the Austin area's three largest office submarkets and the highest asking rents citywide throughout the recession, according to Oxford Commercial, which tracks the market.

Downtown Austin's first-class buildings were 83.2 percent occupied at the end of 2009, with rental rates averaging $36.72 a square foot per year.

Ford Alexander, a partner with Oxford Commercial, said the Chase purchase is "the first significant office transaction in our market in over a year."

"Asking prices and bidding prices have been out of equilibrium for some time, so this should portend more sales in the coming year," Alexander said.

At Chase, Ruff said, Spire plans to make improvements, including to its building systems, common corridors and other areas, on top of renovations the previous owners made to the lobby and other areas.

"We plan to be active in the market and the community, and I hope that presence only grows over time," Ruff said.

Article Courtesy of Austin American Statesman

Islands of Rockport- New Waterfront Community in Rockport...

Live the good life at the Islands of Rockport - a brand new gated community along the Texas coast in Rockport. With 136 waterfront, build-ready lots available for development, your possibilities are endless. Whether it's your new home or your private beach getaway, the Islands of Rockport will impress you with the features it provides. Both the secluded community on the clear blue waters of the Intracoastal Canal and the vibrant Rockport district will overwhelm you with endless opportunities to shop, dine, fish, or simply relax.

Explore the natural beauty of the community and take advantage of this unbelievable Gulf Coast location. Enjoy local activities such as bird-watching, world-class bay fishing, restaurants, festivals, and museums. The coastal Texas atmosphere is contagious, and your new gated community complements it with a lush tropical landscaping and wide canals to provide easy navigation directly to the area's best bay.

Once you're happily situated, you can indulge in the premium Islands of Rockport amenity services. Enjoy the best in Texas locale and find what you've been missing at the Islands of Rockport.

The waterfront estate lots at Islands of Rockport provide privacy, tranquility and features such as:
-Home sites from 8,000 to 15,000 square feet
-Resort-style infinity pool- accessible by land or boat
-Grand, fully-equipped community clubhouse
-Easily navigable, spacious 100-foot canals
-Private boat launch
-10 miles from the Aransas County Airport
-Only 30 minutes from Corpus Christi

For more information click here

Texas adds 50,000 jobs in fourth quarter...

Texas leads among the 10 largest states with the lowest unemployment rate as it added 50,000 new jobs last quarter, according to a new study by SigmaBleyzer.

The positive quarterly job numbers come despite the state losing 24,000 jobs in the construction, trade, transportation and hospitality sectors in December. The state's seasonally adjusted unemployment rate was 8.3 percent in December. Austin's was 6.9 percent.

The study also focused on the broader economy of Texas, which remains under a downturn, but holds a positive outlook for the coming year.

Among residential housing, some signs of recovery are beginning to emerge, according to the report. Texas has one of the fastest population growth rates in the country, which the report says should sustain long-term demand for housing. According to the U.S. Census Bureau, about 27 percent of all new privately owned housing units in the nation’s 20 largest cities were located in Dallas or Houston.

The state’s export activity continues to recover as high oil prices and improving foreign demand for high-tech manufacturing increase. Texas remains the largest exporter for the eighth consecutive year. In the first 11 months of 2009, Texas exports only fell by 18 percent, compared to the 21 percent decline nationally.

“This resilience of Texas exporters should help keep the state’s economy on more sustainable footing as the U.S. economic recovery becomes increasingly dependent on the strength of foreign demand,” the report by Houston-based private equity firm stated.

Courtesy of ABJ

Almost 10% of jumbo mortgages 'seriously delinquent'...

According to a new report by Fitch Ratings, "serious delinquencies" on prime jumbo mortgages rose again last month, nearing 10%. "Serious delinquencies" are payments at least 60 days late.

"The trend line for delinquencies indicates the 10% level could be reached as early as next month," according to a Fitch statement. The rate last month reached 9.6%, nearly triple that of last year. Jumbo mortgages are loans larger than Fannie Mae or Freddie Mac will finance.

I am curious to know what percentage of these loans in arrears are strategic defaults. We have seen homeowners in many parts of the country walkaway from there home becaue they are so "upside-down". The homeowners would rather take the hit of a foreclosure rather than throw good money after bad. Are luxury homeowners choosing to stop paying their loans even though they might be able to afford them?