Austin most expensive rent in TX...

Austin is the most expensive city in Texas for paying rent and buying a home, according to a study released this week by Washington D.C.-based Center for Housing Policy.

The study “Paycheck to Paycheck" compares and ranks costs in more than 200 metro areas in the United States and ultimately concludes homeownership is still unaffordable for many workers despite low interest rates and steep drops in home prices.

Austin ranks as the 65th most expensive U.S. rental market and the 73rd most expensive homeownership market of all metro areas studied. The center studied data provided by the National Association of Home Builders, the National Association of Realtors and the U.S. Department of Housing and Urban Development.

Austin’s median home price is $176,000, unchanged from 2008, the study found. However, Austin’s ranking rose to No. 73 for 2009 compared with No. 84 in 2008.

The markets with the highest median home prices were in California: with San Francisco and San Jose leading the way, followed by Honolulu in third place, and then back to California in Santa Ana and Santa Cruz in fourth and fifth place respectively.

The typical rent for a two-bedroom home rose in 89 percent of the markets studied, with Austin’s price hitting $954 in 2009 from $912 in 2008, although Austin did fall in rankings down to 65 from 59. Once again, San Francisco was the most expensive city at $1,760.

Despite some perceptions it’s a renter’s market in the U.S., the study found that in the vast majority of metropolitan's fair market rents have held steady or increased, even occasionally surpassing monthly mortgage payments for a median-priced home.

The study also found that some occupations are more prone to being priced out of renting. Specifically, retail salespeople continue to be priced out of renting a two-bedroom apartment in every market studied. Janitors fare almost the same, being able to afford a two-bedroom apartment in only one of the 210 rental markets studied. Licensed practical nurses are unable to rent a two-bedroom apartment in 55, police officers in 12, and elementary school teachers in 11, of the markets studied.

“We must develop the common sense, cost-effective policy solutions at the state and local levels that will help ensure long-term affordability,” said Center for Housing Policy Chair John K. McIlwain, senior resident fellow and the J. Ronald Terwilliger chair for housing at the Urban Land Institute.

“Otherwise, our workforce will face longer commutes and higher transportation costs, leading to increased traffic congestion and adverse environmental impacts."

Courtesy of ABJ

Mortgage rates stay below 5 percent...

Long-term mortgage rates edged higher this week, but remained below 5 percent for the fourth consecutive week.

Freddie Mac says a 30-year fixed-rate mortgage averaged 4.99 percent in the week ending March 25, up from 4.96 percent last week. A year ago, 30 year mortgages averaged 4.85 percent.

A one year adjustable rate mortgage averaged 4.20 percent, up from 4.12 percent last week.

"Mortgage rates inched up slightly this week as bond yields rose even further," said Freddie Mac (NYSE: FRE) chief economist Frank Nothaft.

Low mortgage rates failed to help the housing market in February, as winter snowstorms dampened demand for both new and existing homes. The Commerce Department reported Wednesday new home sales last month fell 2.2 percent from January.

Existing home sales, which account for 90 percent of all sales transactions, continue to outperform the new home market. Sales of existing homes fell 0.6 percent in February, according to the National Association of Realtors, but were up 7 percent from a year earlier.

The Austin Board of Realtors earlier this week said home sales here increased 4 percent year-over-year in February and properties are spending less time on the market.

Courtesy of ABJ

How to Choose a Lot for a Custom Home...

This is a great article by Sterling Custom Homes' Angie McDowell about lot selection and the tangible and intangible cost associated with building. Enjoy.

"Prior to choosing a home site, a buyer should consider having a lot analysis performed; there is an art and science to lot selection. As a custom home builder in Austin, we physically walk the lot with the client in order to educate them on all the features and characteristics of the lot. Consideration is given for costs associated with tree clearing, sun orientation, topography, views and outdoor living environments. We help the client understand their custom home design and layout relating to all of the unique aspects of the lot.

More importantly, we provide the client a cost analysis comparing the tangible and intangible lot costs. Tangible costs include purchase price, utilities including well, septic, wastewater and permit fees, area property taxes, topography, site work and clearing based on lot grade. Other direct costs include architectural requirements such as type of windows (wood vs. vinyl), roofing (tile vs. traditional) and exterior finish. We also look at intangible lot costs such as the view, location, schools, community, amenities and lifestyle. By analyzing all costs associated with a lot we are able to create a more realistic idea of the building expenses for the specific lot.

Quite often a lot that appears less expensive can be significantly more due to septic requirements or additional slab costs caused by topography or view considerations. By performing our lot analysis we are often able to save our clients several thousand dollars and help them find the perfect site suited to their custom home design and lifestyle needs."

Sterling Homes

Commercial Real Estate Update for Bee Cave...

Here is an interesting update reagarding the City of Bee Cave, from City Administrator Frank Salvato:

Updates on the Galleria:
· 2-3 new restaurants are coming,
· New St. David’s Emergency Clinic,
· Big push to fill office space in the Galleria,
· Occupancy of Alexan Apartments is 90%; these apartments are currently on the market.

Updates on 620/Hamilton Pool construction:
· The intersection at 620 and Hamilton Pool Rd is currently in process of completing Phase 2, but has been delayed due to some communication lines that were found in the area. Phase 3 of the project has been slowed due to the economy and the lack of bond funding for the moment,
· The park is mostly complete, except for grass and plants that suffered through the drought and need to be replanted,
· Pad site has been sold to build a CVS on the corner.

Updates on the Shops at the Galleria:
· The USPS has agreed to open a Postal Unit in the New Flower Market. The Postal Unit will be run by New Flower employees and is a big step in a time where a lot of postal offices are closing,
· Maudie’s is scheduled to open this summer and Gumbo’s has just signed a lease.

Other Topics:
· The Backyard is scheduled to open May 1st,
· LTISD has purchased land for the schools Transportation Warehouse; will also be the future site of the new high school,
· IBC bank will be going in on the corner of 620 and 71 where Springhill is located,
· The city is taking bids on a Barton Creek Bridge project, that will involve cutting into the hill to increase the site line and allow them to put in a turn lane and light outside Spanish Oaks.

Austin Best Economic Recovery in U.S.

Forbes: Austin best economic recovery in U.S.

The Austin-Round Rock area tied for first on a list of large metros where the recession is easing.
Central Texas tied Washington D.C. in the Forbes ranking that compiles job growth and real estate industry improvement, among other indicators. Washington has one of the lowest unemployment rates in the nation, 6.2 percent, and the city produced more goods and services than another other in 2008.

Austin has also maintained relatively lower jobless rates, though the number increased to 7.6 percent last month from 7 percent, according to the Texas Workforce Commision. Statewide, the rate was unchanged at 8.2 percent from December to January, compared to 9.7 percent nationally.

Austin and Washington D.C. also benefit from their high government job generation, according to Forbes. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research.

Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list.

Job growth projections were based on information from Moody's. The listing also considered median home sale price changes and Metropolitan Gross Domestic Product.

Spanish Oaks developers seeking new terms from lender...

More information on Spanish Oaks.

"Owners of Spanish Oaks, a 911-acre luxury residential and golf course development in Bee Cave, are in talks with their lenders to revise the terms of a $32 million loan and avert foreclosure.

Daniel Porter, Spanish Oaks' original developer, said that the problem arose when a recent appraisal valued the project at less than the amount required under the terms of the loan from Comerica Bank.

Porter said he couldn't disclose the appraisal amount.

Spanish Oaks, south of Texas 71 and Bee Cave Road, is among the high-end residential projects in Central Texas to run into financial headwinds from the economic downturn. Several others ended up in foreclosure, but Porter said Comerica has indicated its willingness to work with the owners to forestall that outcome.

Under the original vision, the project was to have been completed by 2012 with 436 homes — an estimated $600 million worth of real estate, Porter said.

To date, 270 lots have been sold and 125 homes have been built, with an average price of $1.5 million. Golf Digest has ranked Spanish Oaks Country Club as one of the top private golf courses in the country.

The project is owned by Spanish Oaks LP, a partnership consisting of Ross Perot Jr.'s Hillwood Development Co. LLC, which owns 65 percent; Discovery Land Co. LLC, with 15 percent; and Porter's CCNG Realty Inc., with 20 percent.

Hillwood and Discovery, the project's managing partner, were brought in as investors in 2005, pumping in $20 million along with CCNG, Porter said.

Sales began in April 2002, with the first 25 lots selling that year at an average price of $130,000, Porter said.

In 2004, CCNG sold 65 lots at an average of $160,000. Lot prices peaked in 2008 when they averaged $500,000.

But just 12 lots were sold in 2008, and only six were sold last year, averaging $424,000, Porter said.

"It was like a rock falling out of the sky," Porter said of the sales.

"A lot of people are wanting to do something to try to keep this project from falling into a bad way financially, " Porter said. "It's too good a project."

The loan negotiations involve the golf course, unsold lots and undeveloped land. Porter said the partners have invested $70 million, including the golf course, roads and utilities.

For now, the golf course remains open to members and their guests, although the clubhouse has reduced hours and laid off some employees.

Porter said CCNG has made an offer to the partnership to buy the golf course. A letter of intent was signed, but no binding agreement was reached.

"It's a great project and a great golf course, " Porter said. "The members love it. We just have to work through this."

Discovery oversees Spanish Oaks' golf club, development and sales operations.

In a statement Friday, Michael Meldman, chairman and CEO of Discovery, said the company is working with "the membership and our majority partners to address long-term plans" for the club's operation.

Todd Platt, CEO of Hillwood Investments, said the partners are hoping to find a way to transfer the course to its members.

An attorney for Comerica did not return messages seeking comment.

David Armbrust, Porter's attorney, said that Spanish Oaks has suffered from the slowing economy.

"I think Spanish Oaks is kind of a poster child for the effect the economy has had on western Travis County from the standpoint of a drop in property values that has affected raw land, developed land and individual homes," Armbrust said. "The problem is, there are no transactions, really."

Appraisers can use such market activity to set property values.

Other area projects also have been hit by the lingering economic slump.

Last year, the 468-acre Rocky Creek Ranch off Hamilton Pool Road, where 396 upscale homes were envisioned, became one of the region's biggest residential foreclosures. CB Richard Ellis began marketing the property in November for $17.5 million.

Other foreclosure actions included Vizcaya, a luxury residential development planned on the south shore of Lake Travis; MDR Hollows LP, developer of the Hollows resort on the north shore of Lake Travis; and Avaña, a proposed 1,000-acre residential development at Texas 45 and Escarpment Boulevard.

Spanish Oaks originally encompassed 1,211 acres, but 120 acres were sold to Cypress Realty Inc., which later sold 88 of those to developers of the nearby Shops at the Galleria.

CCNG owns another 77 acres at Spanish Oaks that allow for mixed-use commercial development, Porter said.

Armbrust thinks the region is at the tail end of the major foreclosures and "things are looking up," with more buyers kicking the tires for deals.

Despite its financial distress, Armbrust said Spanish Oaks is "a great project," and "with an improving economy, the future is bright."

"They need some consideration from the bank at this point to get from here to there," Armbrust said."

Information Courtesy of the Austin American Statesman.

New information on Spanish Oaks Golf Club...

This is the most recent update for Spanish Oaks in Austin.

MESSAGE FROM SOGC BOARD OF DIRECTORS March 2, 2010

On behalf of the SOGC, Inc Board of Directors, thank you for this opportunity to provide current information on the affairs of Spanish Oaks Golf Club.

We last wrote on February 5, 2010 to inform you negotiations were underway to restructure Spanish Oaks’ loan with Comerica Bank and obtain a release of collateral secured by Club assets. Since that time, Spanish Oaks, LP (the ownership group) held conversations with the Board of Governors and continued negotiations with Comerica.

Regretfully, ongoing discussions with the Bank have yet to be resolved.

The limited funds available to operate the Club require a suspension of all services with the exception of golf operations. The course and practice facility will remain open. In addition, a limited lunch menu will be served from 11:00am – 2:00pm. We apologize for any inconvenience this may cause you and your family and commit to notify you promptly of any further changes.

Thank you for your patience and understanding during this difficult time.

Very Truly Yours,

The Board of Directors

Russian billionaire backs out of deal, loses $50 millon deposit

Wow, this is amazing! I guess this would count as one of the worst cases of buyer's remorse in the history of real estate.

Back in August of 2008 Russian billionaire Mikhail Prokhorov put the French mansion Villa Leopold under contract for a record $750 million. In March of last year he tried to back out of the deal and wanted his $50 million (€40 million) deposit back.
Yesterday the courts ruled in favor of the owner Lilly Safra, who can not only keep the €40 million but was also awarded damages of €1.5 million. Ms. Safra indicated that she would be donating the money to charities.

The Times Online has more details here

Builders announced for 2010 Parade of Homes Event at Rough Hollow

Plans are well underway for The Home Builders Associateion of Freater Austin 3020 Parade of Homes, which will take place this October at The Bluffs neighborhood in Rough Hollow.

One of the newest announcements involves the line-up of exceptional homebuilders that have been hand-selected to showcase their designs for the thousands of homebuyers, Realtors and guests from across Central Texas planning to attend.

Those set to participate in the Parade of Homes include:
-VII Custom Homes
-Jenkins Custom Homes
-Rostrata Builders
-Triton Custom Homes
-Zbranek Custom Homes
-Stonewood Custom Homes

The Parade of Homes event will offer prospective homebuyers and Realtors the opportunity to gain a first-hand look at the very highest caliber of home designs in the industry today, while also experiencing the lakefront lifestyle available at Rough Hollow.

Interesting News at Spanish Oaks...

Some very interesting news from one of Austin's premier luxury community: This week Spanish Oaks has restructured and made some changes. The sales office at the front has been closed and moved to the management office location. The golf course and club are on limited access. I have heard speculation that the developers are having issues with their debt, but this has not been confirmed.

Sabine on Fifth units sell for $7.3M at auction...

Beverly Hills-based Kennedy Wilson Auction Group raked in $7.3 million selling off 31 units in the troubled Sabine on Fifth residential complex.

More than 500 people attended the auction held at the Hilton Austin Downtown Feb. 28, which was scheduled after the project's owner faced foreclosure threats and lawsuit. Last month, Kennedy said 27 of the available 44 units would be sold at auction, but today it said 31 were purchased.

Individual selling prices were not disclosed, but the company previously said it would take bids as low as $85,000 and $195,000 for one to two bedroom units; a significant price reduction from its original listings ranging from $204,900 to $550,000.

CWS Capital Partners converted the 10-story former office building in 2007 with floor plans ranging from one-bedroom, 682-square-foot units to two-bedrooms with 1,419 square feet. The company was forced to make significant improvements after complaints from several residents resulted in a lawsuit, which was later dismissed.

The company narrowly escaped foreclosure on the Sabine after lenders Compass Bank and GE Capital agreed to extend a defaulted construction loan.

Still, auction officials claimed the sale a success in resurrecting the complex. One perk for auction winners included a one-year Tower Health Club and Spa membership and up to $1,500 in closing costs paid by the seller.

“It was a win-win for the seller and for buyers,” Kennedy Wilson President Rhett Winchell said. “Buyers found newly developed condos in the heart of Austin’s entertainment district at great prices, and the seller was pleased that all homes offered sold in just one day while exceeding price expectations.”

Courtesy of ABJ

Rough Hollow Opens First Road Connecting Lakeway to the Texas Hill Country

This will be a great new addition! Highlands Blvd, connects the Texas Hill Country to Lakeway. Communities like Bee Creek Estates and the Reserve at Lake Travis will now have a much shorter commute into Lakeway for shopping, entertainment, dining and medical treatment.

Since its inception in the early 1960’s as a small resort village along the shores of Lake Travis, the city of Lakeway has experienced significant growth while effortlessly maintaining its appeal among young families and retirees alike as a top residential destination with incomparable outdoor recreational offerings.
This week, Lakeway recognizes one of its most significant milestones to date with the opening of Highlands Boulevard in the new Rough Hollow master-planned community, which for the first time provides a direct and convenient connection from the community to state highway 71 and the majestic Texas Hill Country. The event will be commemorated with a celebratory ribbon cutting ceremony featuring the mayors of Lakeway and Bee Cave, joined by other city officials and the developer of Rough Hollow, Haythem Dawlett.
Highlands Boulevard was made possible with the development of Rough Hollow, the last new lakefront community in Lakeway. Located amid the scenic terrain of the Texas Hill Country, the 1,787-acre community is comprised of seven distinct neighborhoods – The Bluffs, The Enclave, Yacht Club Villas, Water’s Edge, East Rim, The Woodlands and The Overlook. There is literally something for everyone, from growing families to empty nesters, thanks to Rough Hollow’s diverse selection of ownership opportunities for custom home sites, villas, custom homes and semi-custom homes ranging in price from the low $300,000’s to over $3 million.
While this new thoroughfare will benefit Hill Country and Lakeway residents alike daily with easy access to Lake Travis and numerous business, shopping and entertainment throughout the region, it will especially come in handy this October when Rough Hollow hosts the Home Builders Association of Greater Austin 2010 Parade of Homes™. This will mark the second time in three years that Rough
Hollow has had the honor of hosting the Central Texas region’s largest home showcase, with this year’s event highlighting the Tuscan and Hill Country contemporary custom home designs of The Bluffs.
“We are thrilled to open up Highlands Boulevard as a gateway for residents in the Hill Country and Lakeway, which represents yet another benefit of life at Rough Hollow,” said Dawlett, principal of Legend Communities, which is also the developer of the new Tuscan Village age-qualified, resort-style retirement community in Lakeway. “Given the nearby access to Lake Travis, world-class golf and tennis facilities, award winning schools and the wide array of custom and semi-custom homes with exceptional amenities, we feel that Rough Hollow is setting the standard for master-planned residential living in Central Texas.