Austin / Central Texas Real Estate News & Updates

Austin 2nd Healthiest Housing Markets for 2009

2009-03-31T15:19:00.002-05:00

#2: Austin, Texas - Healthiest Housing Markets for 2009

(2008 Total Building Permits: 14,250)

Nine years ago, during the tech bust, some builders felt that Austin was too crowded and left. The bloom is back on Austin’s yellow rose now; it moved up the leader board to become the sixth largest home building market last year. Job creation explains the move. While other markets lost employment, Austin added 17,400 jobs last year, 2.3 percent growth rate.

It helps that Austin is home to both a major university, The University of Texas, and the state capital. Existing homes cost a little bit more in Austin than other Texas markets, roughly $188,600, but that’s still below the national average.

Also, Austin is one of the few metro areas in the country where median prices actually rose in 2008--2.7 percent. Amazingly, Austin now generates more home building activity than Chicago, which has six times more people. Busiest Austin builders: D.R. Horton, Lennar, KB Home, Centex Homes, Meritage Homes.

#1 - Houston, TX
#2 - Austin, TX
#3 - Fort Worth, TX
#4 - San Antonio, TX
#5 - Dallas, TX
#6 - Raleigh, NC
#7 - Seattle, WA
#8 - Indianapolis, IN
#9 - Fayetteville, AR
#10 - Washington D.C.
#11 - Nashville, TN
#12 - Denver, CO
#13 - Charlotte, N.C.
#14 - Willmington, N.C.
#15 - Myrtle Beach, S.C.

Courtesy: Hanley Wood Market Intelligence By: Boyce Thompson

Austin 2nd Fastest Growing City in the Nation!

2009-03-28T23:11:00.000-05:00

Austin was the nation’s second-fastest-growing metropolitan area between 2007 and 2008, according to new data from the U.S. Census Bureau.

The population in the Austin-Round Rock area grew 3.8 percent to 1.65 million between July 2007 and July 2008. Among major U.S. metros, that growth rate was second only to Raleigh-Cary, N.C., which experienced a 4.3 percent population uptick during the 12-month period.

Large metro areas — those with 2008 populations of 1 million or more — were home to nine of the 10 fastest-growing counties. Texas had the largest number of counties on the 100 fastest-growing counties list with a total of 19. The Lone Star State was also home to 10 counties among the 25 with the highest numerical gains.

Four metro areas--including two in Texas--increased their populations by more than 100,000 people between 2007 to 2008: Dallas-Fort Worth (147,000), Houston (130,000), Phoenix (116,000) and Atlanta (115,000).

From Ausitn Business Journal 3/19/09

Forbes Ranks Austin #8 for Biz & Careers!

2009-03-27T16:32:00.001-05:00

Forbes.com ranks Austin the 8th best place for business and careers in its latest list.
Texas' Capital City rose significantly from 47th on last year's list. Austin was behind cities such as No. 1 Raleigh, N.C. and No. 4 Fayetteville, Ark. The list was ranked according to factors such as cost of doing business and projected employment growth.

Forbes.com cited Austin's projected annual job growth rate of 2.3 percent--the fifth fastest in the country, and its relatively low subprime mortgage exposure.
For its reporting on Austin, Forbes.com spoke with the Charles Schwab Corp., which expanded its Austin presence in 2007 when it purchased the 401(k) Co. "The city of Austin is extremely business-friendly. They have bent over backwards to accommodate us," Glenn Cooper, head of real estate at Schwab, told the news site.

The top 10 cities on the list were as follows:
1) Raleigh, N.C.
2) Fort Collins, Colo.
3) Durham, N.C.
4) Fayetteville, Ark.
5) Lincoln, Neb.
6) Asheville, N.C.
7) Des Moines, Iowa
8) Austin, Texas
9) Boise, Idaho
10) Colorado Springs, Colo.

From Austin Business Journal 4/3/09

Texas Counties Show BIG Growth Numbers!

2009-03-27T13:09:00.002-05:00

Ten of the top 25 fastest growing counties in the country between July 2007 and July 2008 are in Texas, according to a Capital Area Council of Governments analysis of the most-recent U.S. Census report.

That’s more than any other state, with California registering six of the top 25 and Arizona and North Carolina each capturing two.

Texas counties among the top 25 include:

Harris, No. 2
Tarrant, No. 5
Bexar, No. 10
Collin, No. 12
Dallas, No. 13
Travis, No. 14
Fort Bend, No. 18
Denton, No. 21
Williamson, No.23
Hidalgo, No. 24

Central Texas counties experienced considerable population increases over the period—emphasizing the need for a continued focus on managed growth, CAPCOG officials said.

CENTRAL TEXAS COUNTIES: The numerical and percentage growth break down among counties in CAPCOG’s service area is as follows:

Bastrop: 1,364, 1.9 percent
Blanco: 81, 0.9 percent
Burnet: 901, 2.1 percent
Caldwell: 299, 0.8 percent
Fayette: 241, 1.1 percent
Hays: 7,526, 5.3 percent
Lee: 115, 0.7 percent
Llano: 58, 0.3 percent
Travis: 28,651, 3 percent
Williamson: 22,172, 6.0 percent

“These latest figures from the Census Bureau underscore the fact that we can’t stop talking about how to manage growth effectively, even during a recession,” said Brian Kelsey, director of community and economic development for CAPCOG. “The number of people relocating to the Austin-Round Rock region has likely slowed as a result of the recession, but we need to appreciate that Hays, Travis, and Williamson alone added nearly 60,000 people between July 2007 and July 2008, according to these latest figures. For some perspective, that’s more people than the entire city of Cedar Park.”

From the Austin Business Journal 3/27/09

2009 Austin Area Market Update - Alamo Title

2009-03-24T17:28:00.003-05:00

While homeowners nationwide have watched their home values plummet, the Central Texas real estate market has fared much better in comparison. Economic forecasters now say a looming housing shortage will increase real estate prices within the next two years.

With the relatively healthy local economy encouraging continued population inflows to Austin, economic consultant Angelos Angelou forecasts demand to soon outstrip supply, a theory consistent with current real estate sales absorption rates (see attached).

Angelou estimates newcomers move to Austin at a rate of approximately 42,000 per year. New residents coupled with a decrease in the number of new home starts locally may lead to a shortage over the next few years, he said. Three years ago, we were building at the pace of 18,000 a year, but last year, only 8,100 were built; this year, only 6,000 new homes will be built.

Angelou said this is an ideal time to buy, and that current sellers may consider waiting for increased demand and prices in the upcoming housing shortage.
Like in January and last fall, the number of transactions per month are still down as many borrowers face difficulty securing financing and investors wait for signs of confidence in the markets. Austin-area prices remain stable and affordable, and properties are selling, on average, after just 83 days on market.

Austin Tops the Top 10 Lists in 2009

2009-03-18T13:36:00.004-05:00

Here are some stats for those of us that already love Austin!

Healthiest Housing Markets for 2009 - BuilderOnline.com
Austin #2

Fastest Growing Cities in the Nation - Austin Biz Journal
Austin #2

Top 10 Best Bang for the Buck Cities - Forbes Magazine

Austin #1

Top 10 Most Recession-proof Cities - Forbes.com

Austin #3

TOP 10 Best Cities to Work & Play - Kiplinger.com

Austin #6

Top 10 Greenest Cities in America - Popsci.com

Austin #10

Top 10 Best Cities to have a Baby - FitPregnacy.com

Austin #9

Top 10 Golf Cities in America - Golf Magazine

Austin #1

Top 10 Best Places to Live in America - CNN/Money Magazine

Round Rock #7

Top 10 Best Cities for Married Couples - Forbes.com

Austin #5

Best Cities for Dating - Sperlings

Austin #1

Most Educated Cities in the US - US Census Bureau

Austin #5 (41.5% have a college degree or higher!)

There are more on the attached link!

It's a good time to live in Austin!

JoAnne

My Core Values:

Continual Education, Targeted Excellence, Balanced Growth & First Class service!

JoAnne McKinney, Broker/Owner, GRI, CRS, ABR
Violet Crown Realty
943 East 51st Street Austin, TX 78751
512.628.0990 wk · 512.628.0992 fax · 801.9001 mb
JoAnne@VioletCrownRealty.com
http://www.VioletCrownRealty.com/

2008 Average Prices - Austin

2009-03-14T15:30:00.003-05:00

Attached is our annual Average Price map for the Austin MLS for the past year. The percentages show the change from 2007 to 2008 per MLS area.

Keep in mind that this is a bird's eye view of the city, not intended to estimate the price on a specific home or neighborhood.

For example, Area 3 now includeds the new Mueller Redevelopment Neighborhood(http://www.MuellerAustin.com/) as well as cute cottage communities from the 1930s & 40s like French Place (Dean Keeton to Cherrywood to 38 1/2 to I-35). There are other parts of Area 3 that include Windsor Park & University Hills where the homes are built in the 60s & 70s. Each of these smaller communities are are different price points and the only way to determine the market value of a specific home is to look at the houses most similar in that neighborhood. Sites like http://www.zillow.com/ average aggregated data and don't give a true representation of a specific home's market value.

Contact us if you have questions about a home, condo or neighborhood in the Austin or Central Texas area!

It's a good life...

JoAnne McKinney
Violet Crown Realty
943 East 51st Street
Austin, TX 78751
http://www.violetcrownrealty.com/

AverageSalesPrice09.pdf

First Time Home Buyer Tax Credit - explained

2009-02-20T07:21:00.005-06:00

Information about first time home buyer tax credits as amended by the American Recovery and Reinvestment Act of 2009 (HR 1).
Please consult your tax advisor / accountant to determine whether you are eligible for this tax credit before making any decisions or changes to your tax status. This website is for information only and should be verified by a tax professional.

The 3 changes to the first-time home buyers tax credit program include:

1) Tax credit has been increased to $8,000.
2) Homes have to be purchased between Jan. 1, 2009 & Dec. 31, 2009
3) No repayment/recapture clause for homes sold after 36 months of occupancy and ownership.

1) The Tax Credit is for home buyers (either spouse if filing jointly) who have NOT owned a principle residence during the three-year period prior to the purchase. Ownership of vacation property or rental property does not disqualify home buyers from this program.

2) The maximum credit is $8,000 or 10% of the home purchase, whichever is less.

3) The credit is available for homes purchased on or after Jan. 1, 2009 and before Dec. 31, 2009.

4) To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $150,000 and single filers' MAGI should be less than $75,000. Partial tax credits may be available for married couples with MAGI incomes of over $150,000 but under $170,000 and single filers with incomes over $75,000 but under $95,000. If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns.

5) Home buyers who qualify for this program, but who do not intend to purchase a home till the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment. However, if the purchase of the home does not occur, the taxes must be repaid to the IRS.

6) There is no recapture or repayment clause IF the home is owned for at least 36 months.

7) The effective date of purchase for new construction (even if buyer owns title to the lot) is the date the owner first occupies the house. So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009. However, new construction bought from the builder is only eligible if the settlement date (closing) takes place between January 1, 2009 and December 31, 2009.

8) The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase so that they can receive the tax credit on their 2008 tax returns.

9) The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes.

National REALTOR® Statistics

2009-01-26T15:10:00.007-06:00

I thought this was interesting...

Hours worked by all REALTORS (nationwide): 40 per week

Gross personal income by hours worked: $63,000 (median for 40-59 hrs.)

Real estate experience of all REALTORS (median): 7 years

REALTORS by gender: Male 41%; Female 59%

Formal education of REALTORS: Some college: 34%; associate degree: 12%; Bachelor's degree: 26%; High school graduate: 8%; Graduate degree and above: 10%; Some graduate school: 8%

Affiliate membership of REALTORS: CCIM: 1%; CRE: 1%; CRB: 3%; CRS: 10%; IREM: 1%; REBAC: 10%; RLI: 1%; SIOR: less than 1%; WCR: 4%

Sides per agent: For all REALTORS in 2007, the typical brokerage specialist completed 10 transaction sides

Number of years with present firm (median): Agents - 3 years; Brokers - 7 years

REALTOR affiliation with firms: Independent contractor 83%; Employee 6%; Other 11%
Source: 2007 National Association of REALTORS® Member Profile

2008 Market in Review - Austin Title

2009-01-16T21:07:00.001-06:00

As most parts of the nation experience significant decline in housing starts, sales, and prices, the Central Texas market remains relatively strong in comparison. Although units sold and aggregate volume are down around 20%, prices remain stable and inventory remains low, suggesting that pent-up demand from 3rd and 4th quarters may soon re-enter market as the credit freeze continues to thaw. With just 5.3 months of inventory, Austin actually had less units for sale in November 2008 than in November 2007. As buyers take advantage of historically low interest rates, our local market should continue to benefit as prices here grew modestly throughout the bubble times elsewhere. Austin's projected equity accumulation in the years ahead is one of the nation's healthiest according to a recent study (See pdf article here, page 5 and page 15)

While the Austin housing market has realized some price increases over the past decade, we have been insulated from the steep price drops seen in coastal markets and places like Arizona and Florida. Although market conditions are tough nationwide, Austin remains stable in comparison due to a formidable economic base and a healthy job market with 4 of the nation's Top Ten cities for growth located here in Texas. These factors also account for the steady stream of new residents who come to Austin for the sunshine and good jobs. [For more statistical data: http://austintitle.com/statistics/map2.php]

Central Texas Real Estate In Perspective

2008-12-05T13:04:00.001-06:00

While headlines such as last week's about the latest monthly numbers for Austin home sales and prices can inspire debate about whether we are defying the national trends or following them, 2008 will see a volume of sales exceeding 24,000 homes. 2008 will represent the 4th highest total of homes sold in a year over the last 25+ years. This is lower than the last three years, however, home sales nationally are at their lowest level since 1999.

Year-to-date, 2008 is down 18% over the same period in 2007, however, the Real Estate Center's latest projection for 2008 only puts sales off 3,460 or 14% from last years total.There was an average of 4 months inventory remaining on the market in Austin during 2007 which increased to 6 months by September 2008. Nationally inventories currently represent a 10-month supply, while 4-5 months is considered typical.

Average home prices in Austin have held steady based on estimated 2008 data and median price has increased 3%. Nationally, the median has dropped 9% and in some areas of the United States, home values are down substantially more.More information on Central Texas economic indicators can be found at www.austinchamber.com.

by Beverly Kerr, Chamber Vice President of Research

Best Cities to Live, Work and Play (Austin is #6)

2008-12-04T13:25:00.001-06:00

Our approach this year to picking the ten best cities in which to live and work was simple: Look for places with strong economies and abundant jobs, then demand reasonable living costs and plenty of fun things to do. When we ran the numbers, some of the names that popped up made us do a double take at first. So we hit the road to meet movers, shakers and regular folks, experience the ambience and take in the sights.
We discovered that our numbers guru, Kevin Stolarick, hadn't steered us wrong. Stolarick, research director at the Martin Prosperity Institute, a think tank that studies economic prosperity, says: "Our formula highlights cities not just with strong past performance, but also with all the ingredients for future success."

One key to a bright future is a healthy shot of people in the creative class. People in creative fields -- scientists, engineers, architects, educators, writers, artists and entertainers -- are catalysts of vitality and livability in a city.

The cities that made our list also represent larger surrounding areas. And because we understand that city living isn't for everyone, we've highlighted some great suburbs, too.
Pack a bag and join us on a tour of the Best Cities for 2008 and prepare for some surprises.
No. 1: Houston,Texas
No. 2: Raleigh, N.C.
No. 3: Omaha, Neb.
No. 4: Boise, Idaho
No. 5: Colorado Springs, Colo.
No. 6: Austin, Texas
No. 7: Fayetteville, Ark.
No. 8: Sacramento, Calif.
No. 9: Des Moines, Iowa
No. 10: Provo, Utah

From Kiplinger's Personal Finance magazine, July 2008

Austin job creation slower, but still outpacing rivals

2008-12-02T09:13:00.000-06:00

Employment in the Austin-Round Rock region increased 1.9 percent between October 2007 and October 2008, outpacing many of Austin’s economic development competitors, according to data released Tuesday by the U.S. Bureau of Labor Statistics.

The local region added about 14,700 jobs in the 12-month period, bringing its total employment figure to roughly 781,000, according to the report.

By comparison:
• San Jose, Calif. added 700 jobs for a 0.8 percent increase
• Raleigh, N.C. added 8,800 jobs for a 1.7 percent increase
• Nashville, Tenn. lost 2,200 jobs for a 0.3 percent decrease
• Seattle lost 1,900 jobs for a 0.1 percent decrease
• Phoenix lost nearly 50,000 jobs for a 2.3 percent decrease
• San Antonio added 17,900 jobs for a 2.9 percent increase
• Memphis, Tenn. lost 10,800 jobs for a 1.7 percent decrease
• Albany, NY remained stagnant.

Mortgage Market Explanations

2008-10-03T06:22:00.002-05:00

Hello All! I wanted everyone to have this information, so that you can share it with your buyer’s and seller’s to hopefully add understanding and to show them that you are their trusted advisor. Good luck! I will keep you posted.

The Chinese have a proverb: “May you live in interesting times.” And we are living through interesting times indeed.

Whatever the political posturing regarding the current rescue plan, a plan needs to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market". Each day lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and if your neighbor was under duress because they got very ill, divorced, lost their job and was forced to sell their home quickly they may have sold it super cheap. Now, does that mean your house is worth that super cheap price? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions.

But "mark to market" does not allow for this, which creates a vicious cycle. Why is this so bad? Because as lenders mark down their assets, the amount that they have loaned previously becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices. And this makes the vicious cycle continue.

And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together, it isn't just A paper or B paper etc….it's everything. It’s got some A paper, B paper, C paper…and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic “shorting” done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process. This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.Once this is done it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

As always – please keep in touch, especially during these volatile times. I am here to help you in any way that I can.

Wishing you Abundance!

Nan

Mortgage Broker #72387
Abundance Home Mortgage LLC
12885 Research Blvd., Suite 102
Austin, TX 78750
512-335-7800 Office
512-335-7805 Fax
512-970-8617 Cell
www.nankirkpatrick.com

Value of Austin Homes Remains Stable

2008-07-22T16:29:00.002-05:00

Value of Austin homes remains stable: Real estate market grows due to first-time buyers and young people in their early 20s

Despite home price depreciation around the rest of the country, Austin housing is holding its value. According to an Austin Board of Realtors study, the median price of single family homes is at $200,000, a 4 percent increase from last June. "Our homes are affordable in comparison. Less than $200,000 is amazing," said Socar Chatmon-Thomas, chairman of the board. "In most parts of the nation you can't buy anything as a first home for less than $350,000."Sales of single-family homes are coinciding more with national figures, as they have decreased by 20 percent since last June."

Austin is a vital and dynamic environment because of business growth," said Beverly Kerr, vice president of research at the Austin Chamber of Commerce. "We're a lot less expensive in terms of taxes and regulation than other tech industry centers and we're a great place for quality of life."

Forbes magazine ranked Austin as America's third-most "recession-proof city" in April. At 3.7 percent, Austin's unemployment levels are nearly 2 percent below the national average."Growth in Austin is really driven by the job market," said Chay Walker, senior agent manager at Austin's Uptown Realty.

However, Walker said, Austin's 6 percent unemployment rates in 2001 and 2002 prevented the city's housing market from growing at 45 percent, the highest appreciation rate seen in some parts of the country, Walker said."Austin's real estate market stayed flat," Walker said. "When the rest of the country started having problems, our markets were just coming around." Austin builders responded to the crisis by scaling back production of new homes, Chatmon-Thomas said. Austin housing appreciation continues to hold steady at around 5 percent.Chatmon-Thomas said some of Austin's real estate growth stems from an influx of Asian-American and Hispanic first-time home buyers and younger buyers. "A lot more young people are buying homes in their early 20s," Chatmon-Thomas said. "I think it's that younger people realize the value of a home and realize that 'If I purchase this home now, I can use it as an investment property when I get married or change lifestyles or whatever.'"

By Mohini Madgavkar
The Daily Texas

Top 25 Markets Shake-Up

2008-07-16T10:22:00.003-05:00

Top 25 Markets Shake-Up

The once top-rated housing market Yakima, Washington is beginning to run out of gas, and falls from the number #1 forecast position in Housing Predictor's Top 25 markets for 2008.

After years of strong sales and appreciation, the Yakima market is slowing and is forecast to slide over the rest of the year. A ripple effect of tighter mortgage lending standards and increasing inventory is beginning to impact the marketplace.

Biloxi, Mississippi all but destroyed by Hurricane Katrina, is in the number one position. A government sponsored program is helping the area rebuild what was once the second largest casino business in the country to Las Vegas.

The Top 25 with the highest forecast appreciation have the greatest probability of reaching their forecast of the more than 250 local housing markets Housing Predictor forecasts.

Conservative North Dakota with one of the strongest statewide economies nationally, and the lowest subprime mortgage activity in the country, placed three cities on the list. Four states each placed three communities on the list.

Interestingly, the top markets for 2008 are scattered throughout all parts of the U.S. from the west to the east and into the southern states. No particular region of the country was more dominate than another as more and smaller communities based on population made the Top 25, which have less appreciation forecast than earlier in the year.

Rank Real Estate Market 2008 Forecast

1. Biloxi, MS 4.9%
2. Salem, OR 4.7%
3. Bismarck, ND 4.6%
4. Spokane, WA 4.4%
5. Yakima, WA 4.1%
6. Austin, TX 4.0%
7. Grand Junction, CO 4.0%
8. Fargo, ND 4.0%
9. Mobile, AL 3.9%
10. Idaho Falls, ID 3.8%
11. New York, NY 3.8%
12. Glen Falls,NY 3.8%
13. Salt Lake City, UT 3.8%
14. Grand Forks,ND 3.8%
15. Pascagoula, MS 3.8%
16. Hattiesburg, MS 3.7%
17. Albuquerque, NM 3.5%
18. Kellogg, ID 3.5%
19. Boise, ID 3.5%
20. Provo, UT 3.1%
21. Ogden, UT 2.7%
22. Edmond, OK 2.6%
23. Oklahoma City, OK 2.5%
24. Amarillo, TX 2.4%
25. Lubbock, TX 2.3%

Austin Home Sales Gaining Strength

2008-06-20T11:27:00.000-05:00

It's showing signs of a possible rebound, but the Austin home market remains sluggish.
Single-family home sales in the metro area totaled 2,154 in May, down 20 percent compared with May 2007, according to data from the Austin Board of Realtors. However, the May figure is the highest number of total sales the area has experienced in eight months.

Austin is not seeing the drastic price drops that many other markets around the country have experienced. The average price for a single-family home stood at $263,151 in May, up 5 percent from a year ago.

"Despite economic conditions across the nation, Austin continues to have a relatively low unemployment rate and cost-of-living index," says ABoR Chairman Socar Chatmon-Thomas. "While we're not enjoying the booming real estate markets of 2006 and 2007, we have seen steady increases in sales volume since January 2008."
Pending single-family home sales totaled 1,418 in May, down 55 percent from May 2007. New listings for the month were down 7 percent from a year ago.
Townhome and condo sales are also on the downswing. A total of 239 units were sold in May, a 24 percent decline from a year ago.

from: Austin Business Journal

50 Reasons to Love the USA: Austin Music!

2008-06-19T19:00:00.002-05:00

Texas:

Because you don’t have to be 22 to get excited about Austin’s music scene. Known as a mecca for the indie–music set (thanks to the annual South by Southwest festival in March), Austin now has a venue for Bach, Mozart, and Stravinsky as well. On the edge of Lady Bird Lake, the Long Center for the Performing Arts (701 W. Riverside Dr.; 512/474-5664; thelongcenter.org) houses the city’s ballet company and symphony orchestra. The performance hall, designed by Nelsen Partners and Zeidler Partnership Architects, is in tune with Austin’s unconventional spirit—70 percent of the structure was made from recycled materials, including the gigantic concrete ring that encircles the central building like a halo. On the lineup this summer: Austin’s Chamber Music Festival, the Austin Shakespeare Festival, and free weekend symphony performances on the public terrace.

Travel & Leisure's state-by-state guide to fun summer travel.
updated 8:43 a.m. CT, Thurs., June. 19, 2008

Best Cities to Live, Work and Play

2008-06-04T13:32:00.001-05:00

These ten great places will only get better.

Our approach this year to picking the ten best cities in which to live and work was simple: Look for places with strong economies and abundant jobs, then demand reasonable living costs and plenty of fun things to do. When we ran the numbers, some of the names that popped up made us do a double take at first. So we hit the road to meet movers, shakers and regular folks, experience the ambience and take in the sights.

We discovered that our numbers guru, Kevin Stolarick, hadn't steered us wrong. Stolarick, research director at the Martin Prosperity Institute, a think tank that studies economic prosperity, says: "Our formula highlights cities not just with strong past performance, but also with all the ingredients for future success." One key to a bright future is a healthy shot of people in the creative class. People in creative fields -- scientists, engineers, architects, educators, writers, artists and entertainers -- are catalysts of vitality and livability in a city.

The cities that made our list also represent larger surrounding areas. And because we understand that city living isn't for everyone, we've highlighted some great suburbs, too.

Pack a bag and join us on a tour of the Best Cities for 2008 and prepare for some surprises.

1. Houston
Population: 5,542,048
Population Growth Since 2000: 14.9%
Percentage of Workforce in Creative Class: 31.3%
Cost-of-Living Index: 88.1 (100 being national average)
Median Household Income: $50,250
Income Growth Since 2000: 13.1%

2. Raleigh
Population: 995,662
Population Growth Since 2000: 19.9%
Percentage of Workforce in Creative Class: 36.1%
Cost-of-Living Index: 99 (100 being national average)
Median Household Income: $56,150
Income Growth Since 2000: 10.3%

3. Omaha
Population: 821,356
Population Growth Since 2000: 6.6%
Percentage of Workforce in Creative Class: 30%
Cost-of-Living Index: 89.4 (100 being national average)
Median Household Income: $51,627
Income Growth Since 2000: 15.1%

4. Boise
Population: 568,086
Population Growth Since 2000: 18.2%
Percentage of Workforce in Creative Class: 33.2%
Cost-of-Living Index: 95.5 (100 being national average)
Median Household Income: $49,833
Income Growth Since 2000: 16.6%

5. Colorado Springs
Population: 600,444
Population Growth Since 2000: 10.5%
Percentage of Workforce in Creative Class: 34.1%
Cost-of-Living Index: 95.3 (100 being national average)
Median Household Income Since 2000: 53,486
Income Growth Since 2000: 16.1%

6. Austin
Population: 1,506,425
Population Growth Since 2000: 17%
Percentage of Workforce in Creative Class: 36.5%
Cost-of-Living Index: 92.8 (100 being national average)
Median Household Income: $52,882
Income Growth Since 2000: 12.2%

7. Fayetteville
Population: 419,455
Population Growth Since 2000: 17.3%
Percentage of Workforce in Creative Class: 31.4%
Cost-of-Living Index: 90.4 (100 being national average)
Median Household Income: $42,267
Income Growth Since 2000: 17.6%

8. Sacramento
Population: 2,067,117
Population Growth Since 2000: 13.1%
Percentage of Workforce in Creative Class: 34%
Cost-of-Living Index: 121.7 (100 being national average)
Median Household Income: $56,953
Income Growth Since 2000: 19.1%

9. Des Moines
Population: 532,425
Population Growth Since 2000: 9.6%
Percentage of Workforce in Creative Class: 32.1%
Cost-of-Living Index: 90.6 (100 being national average)
Median Household Income: $53,384
Income Growth Since 2000: 16.3%

10. Provo
Population: 474,351
Population Growth Since 2000: 20.6%
Percentage of Workforce in Creative Class: 32%
Cost-of-Living Index: 97.7 (100 being national average)
Median Household Income: $50,583
Income Growth Since 2000: 12.2%

Wednesday, June 4, 2008, provided by www.kiplinger.com

31 Places to Go This Summer

2008-06-01T11:00:00.001-05:00

1. TEXAS HILL COUNTRY
“Who needs Europe? The Texas Hill Country, west of Austin and north of San Antonio, might be the next best thing to crossing the Atlantic. The region is lush, colorful and, unlike much of the pancake-flat state, dotted with beautiful green hills that are evocative of Tuscany or the south of France. Moreover, the region is speckled with 22 wineries (http://www.texaswinetrail.com/) that buzz with food and music festivals year round. And towns like Fredericksburg offer a taste of the Old World, with German-style biergartens and schnitzelhäuser.”

New York Times: 6/1/2008

Austin keeps truckin' on job creation

2008-05-16T23:38:00.000-05:00

Providing more evidence of Austin's economic resilience, the region added 4,100 jobs last month with big gains in sectors such as hospitality and professional and business services.
The April additions included 900 new positions each in the government and leisure/hospitality sectors. Professional/business services added 500 jobs as did retail trade, according to the latest figures from the Texas Workforce Commission.

In the last year, Austin has gained 20,100 jobs for an annual growth rate of 2.7 percent. Retail trade added 2,900 jobs since April 2007; professional/business services added 5,700 positions, leisure and hospitality grew by 2,900 and government increased by 3,700 jobs. The largest job declines came in the manufacturing sector, which saw a year-over-year drop of 2,100 positions.

The unemployment rate in the Austin-Round Rock area stood at 3.3 percent in April, down from 3.2 percent a year earlier. That remains better than the Texas unemployment rate at 3.9 percent and the national rate at 4.8 percent.
Texas employers added a total of 15,400 jobs in April for a 12-month job increase of 262,000 positions since April 2007.

Austin Business Journal

Austin: Top 10 "Recession-Proof Cities"

2008-04-29T20:48:00.000-05:00

Austin was named third on the Forbes.com list of the top 10 "Recession-Proof Cities" in the United States.
To create the list, the magazine looked at the 50 largest U.S. metros, examining key measures, such as unemployment data, non-farm related job growth, median home prices and data from a 2007 report, "U.S. Metro Economies: The Mortgage Crisis" by the U.S. Conference of Mayors.

At number three, Austin was right behind San Antonio, which grabbed the second spot thanks to solid employment figures and affordable home prices that continue to rise.
Oklahoma City took the No. 1 spot because of its strong housing market and solid growth in agriculture, energy and manufacturing. For its part, Austin was lauded for being a hip town with one of the lowest unemployment rates in the country.

Forbes magazine's list of recession-proof cities also included: Houston, Dallas, Charlotte, N.C., Raleigh, N.C., Salt Lake City, San Jose, Calif. and Seattle.

Forbes says that Texas cities such as San Antonio, Austin, Houston and Dallas-Fort Worth have benefitted from historically lower home prices, land availability and 'little zoning'. All four Texas cities boast falling unemployment rates, according to Forbes, with Austin dropping from 3.8 percent to 3.6 percent.

Why Mortgage Rates Aren't Lower

2008-03-31T21:33:00.002-05:00

With storm clouds hanging over the U.S. economy, Federal Reserve Chairman Ben Bernanke has gone on the offensive, slashing the federal funds target rate by 3 full percentage points—to 2.25 percent—since September. But despite the central bank's aggressive action, prospective homebuyers are left scratching their heads. After all, the average interest rate on a 30-year, fixed-rate mortgage has fallen by only about half a percentage point, to 5.85 percent, since mid-September. So what gives?
Here's a look at the factors influencing today's mortgage rates and a peek at where rates might be headed.

Does the Fed set mortgage rates? No. The Fed is responsible for setting the federal funds target rate, which is the interest rate that banks charge each other for overnight loans. "A bank's balance sheet needs to balance every day," says Ken Mayland, president of ClearView Economics. "If a bank needs funds, it will borrow. If it has a surplus, it will lend—at the federal funds rate." Interest rates on short-term certificates of deposit and commercial paper are closely linked to the federal funds rate, Mayland says, but its influence on fixed-rate mortgages is less direct.

Does the federal funds rate affect mortgage rates? Only indirectly. The fed funds rate affects a lender's borrowing costs. When the federal funds rate is cut, lenders pay less for the funding they need to finance loans. As such, they can reduce the interest rates they charge on mortgages without hurting their profit margins. "You're not looking at any kind of direct relationship," says Christopher Thornberg of Beacon Economics. "When you think about a fixed-rate mortgage, you're talking functionally about a 30-year bet of which the short- run costs of capital are but a minute part."

So what are the key factors that determine mortgage interest rates? Fixed mortgage rates typically track the yield on the 10-year treasury note. "The 30-year mortgage tends to have roughly the same [sensitivity to interest-rate changes] as a 10-year treasury," says T.J. Marta, a fixed-income strategist at RBC Capital Markets. "On average, people pay off their mortgage roughly every 10 years." The outlook for inflation plays a key role in determining the yield on the 10-year treasury, Marta says.
In order to compensate lenders and investors for the risk that home loans will not be repaid, mortgage interest rates are set higher than the yields on 10-year treasuries, which are essentially risk free. Historically, the typical difference between mortgage rates and the 10-year treasury yield—known as the spread—has been roughly 1½ percentage points. In the mortgage industry, the difference between these two rates is often referred to as a "risk premium."

How have those factors influenced mortgage rates lately? Although 10-year Treasury yields have declined in recent months, risk premiums have widened dramatically. The spread between the average 30-year fixed mortgage rate and the 10-year Treasury yield has ballooned nearly 60 percent over the past year, to about 2½ percentage points, according to HSHAssociates.com, which tracks mortgage rates. "That spread—the normal 1.5 percentage points—has gone haywire," says Orawin Velz of the Mortgage Bankers Association.

What is driving up those risk premiums? Before the housing crisis, mortgages were considered safe investments, so risk premiums were slim. During the housing boom, huge swaths of home loans were pooled together and sold to investors in the form of mortgage-backed securities. But rising delinquencies on subprime home loans led to large-scale losses for investors holding such products.
With demand for mortgage-backed securities evaporating, higher returns were required to attract new buyers, who were fleeing to safer investments like treasury securities. Meanwhile, banks—which have absorbed billions of dollars in losses since the onset of the crisis—have been requiring tougher underwriting standards and wider spreads on new mortgages.
"The spreads [between the 10-year treasury yield and mortgage rates] are wide because of a pickup in defaults and delinquencies and an expectation of more to come," says Michael Darda, chief economist at MKM Partners. (As a result, the recent declines in the yield of the 10-year treasury have been more than offset by the escalating risk premiums. That has prevented mortgage rates from falling as much as they otherwise might.

Will these risk premiums decrease anytime soon? As portfolios begin to heal from the housing market's wrath, risk premiums should begin to decrease, says Keith Gumbinger, vice president of HSHAssociates.com. "We'll start to get to a point where lenders will feel more comfortable passing along more of those declines in interest rates [to customers] and certainly expanding—nibbling at the fringes—of lending they used to embrace wholeheartedly," Gumbinger says. "So you should see some of those risk premiums start to decline, especially for the best credit quality borrowers."
Indeed, the risk premiums have decreased recently—although they remain well above historical norms. Gumbinger credits the narrowing in part to recent changes allowing government-sponsored mortgage finance giants Fannie Mae and Freddie Mac to increase their holdings of mortgage-backed securities. "Lots of liquidity is becoming available to good credit quality borrowers," he says.

What's the outlook for the 10-year treasury? While risk premiums may decline, the 10-year treasury yield is expected to increase. Marta of RBC Capital Markets expects the yield to be about 3.9 percent by the end of the year, up from its current yield of about 3.5 percent. "Back in January, on the [Société Géneralé] meltdown, we made our second-lowest yield in [modern] history," Marta says. "I don't really see that yields are going to get a whole lot lower than this."
So where will mortgage rates be at the end of the year? Velz of the Mortgage Bankers Association expects the rate on the 30-year fixed mortgage to be just over 6 percent at the end of the year. Rates could go lower, she says, should the economy slip into a protracted recession—which she does not expect.

How attractive are current mortgage rates? Although higher risk premiums may be preventing rates from falling as low as they otherwise might, today's mortgage interest rates are still pretty darn compelling. After all, the lowest average 30-year fixed rate ever recorded by Freddie Mac's weekly mortgage survey was 5.21 percent in June 2003. By that standard, the current weekly average mortgage rate of 5.85 percent is "very attractive," says Lincoln Anderson, chief investment officer and chief economist at LPL Financial Services.

By Luke Mullins
Posted March 28, 2008
US News & World Report

Austin Fifth Fastest-growing Metro area in Nation

2008-03-28T08:42:00.003-05:00

Austin hasn't lost its allure.
The city was the only one in Texas to make the list of the 10 fastest-growing U.S. metro areas, ranking fifth, with a population increase of 4.3 percent in 2007, according to the U.S. Census Bureau.

The Austin-Round Rock area had the eighth highest numeric population gain, with 65,880 new residents moving into the region in 2007.
Overall, four Texas metropolitan areas saw big numerical population increases last year.
The Dallas-Fort Worth region ranked No. 1 in the list of top 10 U.S. metro areas by overall numeric population growth with an additional 162,250 people from 2006 to 2007.
The Houston metro area ranked fourth on that list, with an additional 120,544 people, trailing Atlanta, with 151,000 people, and Phoenix, with 132,000.
Neighboring San Antonio came in tenth with an increase of 53,925.
The Census Bureau also reports that eight of the fastest-growing metro areas were located in the southern part of the country.

-As reported in Austin Business Journal 3/27/08

Study Ranks Austin as One of the Least Stressful U.S. Cities

2008-02-29T20:35:00.004-06:00

We live in stressful times. Consider the evidence:

Forty percent of Americans say they are frequently subjected to stress, and another 36 percent sometimes feel that way, according to a January survey by the Gallup Poll.
Nearly half of U.S. adults believe the stress in their lives has escalated during the past five years, as reported in an October study by the American Psychological Association.
Three of every 10 Americans say they experience persistent stress or have panic attacks, as documented in a November survey by the Anxiety Disorders Association of America.

These numbers reflect the dimensions of a "national pressure cooker," to use the American Psychological Association's term, and it's causing untold damage to physical and emotional well-being and relationships. Several factors contribute to the daily pressure felt by millions of Americans, ranging from finances and unemployment to traffic, crime and pollution. The intensity of this toxic mixture varies from market to market across the country, as does the level of stress.

BizJournals Rankings of 10 Least Stressful Metros:

Virginia Beach-Norfolk, VA
Salt Lake City, UT
Phoenix, AZ
Oklahoma City, OK
Austin, TX
Las Vegas, NV
Denver, CO
San Diego, CA
Jacksonville, FL
Providence, RI

The worst (Most Stressful Metros - full article)
Nowhere is the situation worse than in Detroit, which ranks as the most stressful metropolitan area in America, according to a new Bizjournals study.
Detroit is saddled with the highest unemployment rate, 7.2 percent, in any of the nation's 50 largest markets. It also has the group's worst murder rate. And it's among the 10 places with the most robberies, the slowest rates of income growth, the most heart attacks and the fewest sunny days.

Austin Business Journal - by G. Scott Thomas Contributing writer
and www.BizJournals.com