AUSTIN (Metrostudy) – Area builders continued reacting to slowing demand and restricted capital during first quarter 2008, with new home starts at the lowest level in five years.
According to data compiled by Metrostudy, 2,302 starts (single-family homes, townhomes and condominiums) were recorded during first quarter 2008, a 23 percent decline from the same period last year.
First-quarter closings declined 16 percent from last year to 2,978 units. For the 12 months ending in March 2008, the annual closings rate of 14,240 units was 15 percent (2,460 units) below the annual rate reported at the end of first quarter 2007.
According to Eldon Rude, director of Metrostudy’s Austin division, the majority of the decline in annual new-home starts occurred in price points below $200,000, but the annual rate of new-home starts priced between $200,000 and $750,000 also declined.
Single-family inventory, which consists of units under construction, finished vacant units and model homes, totaled 8,247 units at the end of first quarter 2008, a 6.9-month supply.
Monday, May 05, 2008
WASHINGTON (Associated Press) – The Federal Reserve cut its key interest rate by one-quarter percentage point to 2 percent Wednesday, bringing the rate to its lowest point in nearly four years.
In turn, the prime lending rate for millions of consumers and businesses fell by a corresponding amount, to 5 percent.
Following the Fed action, Wall Street investors drove the Dow Jones industrial average up more than 178 points, lifting it above 13,000 for the first time since early January. By the end of the day, though, the index was 11.81 points below where it started.
The Fed, which has been dropping rates since last fall, has not removed another reduction from the table. However, a growing number of economists believe the central bank is winding down its rate-cutting campaign.
"The Fed didn't completely shut the door on rate cuts, but they closed it part way," said Mark Zandi, chief economist at Moody's Economy.com. "I think the overall message was they've done a lot already to help the economy and think this will be enough. But they stand ready to do more if that is needed."
In turn, the prime lending rate for millions of consumers and businesses fell by a corresponding amount, to 5 percent.
Following the Fed action, Wall Street investors drove the Dow Jones industrial average up more than 178 points, lifting it above 13,000 for the first time since early January. By the end of the day, though, the index was 11.81 points below where it started.
The Fed, which has been dropping rates since last fall, has not removed another reduction from the table. However, a growing number of economists believe the central bank is winding down its rate-cutting campaign.
"The Fed didn't completely shut the door on rate cuts, but they closed it part way," said Mark Zandi, chief economist at Moody's Economy.com. "I think the overall message was they've done a lot already to help the economy and think this will be enough. But they stand ready to do more if that is needed."
Wednesday, April 30, 2008
COLLEGE STATION (Real Estate Center) – Texas nonfarm employment rose 2 percent from March 2007 to March 2008 compared with the nation’s 0.4 percent annual growth rate.
The state’s seasonally adjusted unemployment rate fell from 4.4 percent in March 2007 to 4.3 percent in March 2008.
Higher oil prices continued to create more jobs in the state’s oil and natural gas industry. The state’s mining industry ranked first in job creation, followed by the leisure and hospitality industry, professional and business services, and education and health services industry.
All Texas metro areas except Beaumont–Port Arthur experienced positive employment growth rates from March 2007 to March 2008. Odessa ranked first in job creation followed by Midland, Houston–Sugar Land–Baytown, Waco, and Austin–Round Rock. Another petroplex, Midland, had the lowest unemployment rate, followed by Odessa, Amarillo, College Station–Bryan and Lubbock.
For the Real Estate Center's full economic review, click here.
The state’s seasonally adjusted unemployment rate fell from 4.4 percent in March 2007 to 4.3 percent in March 2008.
Higher oil prices continued to create more jobs in the state’s oil and natural gas industry. The state’s mining industry ranked first in job creation, followed by the leisure and hospitality industry, professional and business services, and education and health services industry.
All Texas metro areas except Beaumont–Port Arthur experienced positive employment growth rates from March 2007 to March 2008. Odessa ranked first in job creation followed by Midland, Houston–Sugar Land–Baytown, Waco, and Austin–Round Rock. Another petroplex, Midland, had the lowest unemployment rate, followed by Odessa, Amarillo, College Station–Bryan and Lubbock.
For the Real Estate Center's full economic review, click here.
NEW YORK (bankrate.com) – Two factors have exacerbated the severity of the current housing cycle, said Real Estate Center Chief Economist Dr. Mark Dotzour in an article posted yesterday on Bankrate.com.
Lenders flooded the housing markets with subprime loans that enabled borrowers who had poor credit to purchase homes they otherwise could not have afforded, Dotzour said. These risky loans were then securitized and sold to investors. Demand outstripped supply, and prices rose too fast.
When these risky borrowers were not able to pay back their loans, the lenders cut off the easy credit. Builders, who had expanded to meet the new demand, could not stop building new homes fast enough to match the sudden disappearance of buyers. Supply exceeded demand, and prices dropped too quickly.
"In this cycle, we had a real abrupt change in demand (because) a certain segment of the homebuying public, mainly subprime and Alt-A buyers, were just completely shut out of the market overnight,"
Dotzour said. "Then what happens is that you get too much inventory, and prices go soft."
For the complete article, click here.
Lenders flooded the housing markets with subprime loans that enabled borrowers who had poor credit to purchase homes they otherwise could not have afforded, Dotzour said. These risky loans were then securitized and sold to investors. Demand outstripped supply, and prices rose too fast.
When these risky borrowers were not able to pay back their loans, the lenders cut off the easy credit. Builders, who had expanded to meet the new demand, could not stop building new homes fast enough to match the sudden disappearance of buyers. Supply exceeded demand, and prices dropped too quickly.
"In this cycle, we had a real abrupt change in demand (because) a certain segment of the homebuying public, mainly subprime and Alt-A buyers, were just completely shut out of the market overnight,"
Dotzour said. "Then what happens is that you get too much inventory, and prices go soft."
For the complete article, click here.
Thursday, April 24, 2008
DALLAS (Associated Press) – Low taxes, affordable land and a large labor force have made Texas home to more Fortune 500 companies than any other state.
According to the latest list compiled by Fortune magazine, the Lone Star State boasts 58 headquarters. That is three more than New York, which previously held the number one spot, and six more than California.
Four of the largest six corporations in Texas last year were oil companies. Irving-based Exxon Mobil Corp. remained the biggest company with headquarters in Texas by 2007 revenue.
Other Texas companies on the magazine's list include technology, such as Dell Inc., three of the nation's biggest airlines, two of the biggest homebuilders, an insurer, a hospital company and the largest garbage hauler around.
According to the latest list compiled by Fortune magazine, the Lone Star State boasts 58 headquarters. That is three more than New York, which previously held the number one spot, and six more than California.
Four of the largest six corporations in Texas last year were oil companies. Irving-based Exxon Mobil Corp. remained the biggest company with headquarters in Texas by 2007 revenue.
Other Texas companies on the magazine's list include technology, such as Dell Inc., three of the nation's biggest airlines, two of the biggest homebuilders, an insurer, a hospital company and the largest garbage hauler around.
Friday, April 18, 2008
HOUSTON (Houston Chronicle) – Almost 800 buyers paid at least $1 million last year for houses in areas such as Stablewood, Memorial and River Oaks, according to the Houston Association of Realtors (HAR).
That was up 23 percent from the year before and 64 percent over the sales for 2005.
High-priced sales have given a boost to the overall market, though million-dollar sales represented only about 1 percent of the homes sold through the Multiple Listing Service last year, according to information provided by Crawford Realty Advisors.
Those willing to spend seven figures on houses are often doctors, lawyers or those employed by the energy business, the dominant industry in Houston's economy and one that's been fueling job growth and sales of expensive abodes.
The average time it took to sell a $1 million or pricier home in February was 111 days, according to the latest data from HAR. That's down from 164 days last year.
The inventory of such homes, however, is growing. It would take slightly more than a year to sell all the million-dollar homes that were on the market at the end of February, HAR estimates. That's up from 11.6 months a year earlier.
That was up 23 percent from the year before and 64 percent over the sales for 2005.
High-priced sales have given a boost to the overall market, though million-dollar sales represented only about 1 percent of the homes sold through the Multiple Listing Service last year, according to information provided by Crawford Realty Advisors.
Those willing to spend seven figures on houses are often doctors, lawyers or those employed by the energy business, the dominant industry in Houston's economy and one that's been fueling job growth and sales of expensive abodes.
The average time it took to sell a $1 million or pricier home in February was 111 days, according to the latest data from HAR. That's down from 164 days last year.
The inventory of such homes, however, is growing. It would take slightly more than a year to sell all the million-dollar homes that were on the market at the end of February, HAR estimates. That's up from 11.6 months a year earlier.
Monday, April 14, 2008
WASHINGTON (Washington Post, Real Estate Center) – The Bush administration received mixed reviews earlier this week when it introduced a plan that could rescue 100,000 homeowners who are at risk of foreclosure.
The plan — relax eligibility standards for government-backed loans and encourage lenders to forgive a portion of the homeowner’s debt — was embraced by key Democrats but criticized by consumer groups, who said it would do little to slow the current mortgage meltdown.
“With over two million people expected to lose their homes over the next year and a half, helping 100,000 will not stem the foreclosure crisis,” said Jim Carr, chief operating officer of the National Community Reinvestment Coalition.
Dr. Mark Dotzour, chief economist with the Real Estate Center at Texas A&M University, agrees.
“It’s a good idea, but it’s just a drop in the bucket compared with what will ultimately need to be done to fix the housing situation,” said Dotzour, who recommended that the government fix problems in the jumbo loan market.
Under the White House’s proposal, subprime borrowers with adjustable loans who have missed two payments in the past 12 months would be eligible to refinance through an FHA-insured loan if they have at least 3 percent equity in their homes. Borrowers who missed three payments would be eligible if they have 10 percent equity.
Meanwhile, lenders would be encouraged to forgive a portion of those loans for some of the most troubled borrowers so that they can refinance.
The plan — relax eligibility standards for government-backed loans and encourage lenders to forgive a portion of the homeowner’s debt — was embraced by key Democrats but criticized by consumer groups, who said it would do little to slow the current mortgage meltdown.
“With over two million people expected to lose their homes over the next year and a half, helping 100,000 will not stem the foreclosure crisis,” said Jim Carr, chief operating officer of the National Community Reinvestment Coalition.
Dr. Mark Dotzour, chief economist with the Real Estate Center at Texas A&M University, agrees.
“It’s a good idea, but it’s just a drop in the bucket compared with what will ultimately need to be done to fix the housing situation,” said Dotzour, who recommended that the government fix problems in the jumbo loan market.
Under the White House’s proposal, subprime borrowers with adjustable loans who have missed two payments in the past 12 months would be eligible to refinance through an FHA-insured loan if they have at least 3 percent equity in their homes. Borrowers who missed three payments would be eligible if they have 10 percent equity.
Meanwhile, lenders would be encouraged to forgive a portion of those loans for some of the most troubled borrowers so that they can refinance.
Thursday, April 03, 2008
WASHINGTON, D.C. (Associated Press) — Nationwide home building activity fell 0.3 in February, according to Commerce Department figures released today. Only government projects showed a gain for the month.
Residential construction was down 0.9 percent in February, continuing a downward trend that began in March 2006. Experts say the decline will continue until the excess inventory of unsold homes is reduced.
Residential construction was down 0.9 percent in February, continuing a downward trend that began in March 2006. Experts say the decline will continue until the excess inventory of unsold homes is reduced.
(Washington, D.C. — To further protect children from exposure to lead-based paint, EPA is issuing new rules for contractors who renovate or repair housing, child-care facilities or schools built before 1978. Under the new rules, workers must follow lead-safe work practice standards to reduce potential exposure to dangerous levels of lead during renovation and repair activities.
The "Lead: Renovation, Repair and Painting Program" rule, which will take effect in April 2010, prohibits work practices creating lead hazards. Requirements under the rule include implementing lead-safe work practices and certification and training for paid contractors and maintenance professionals working in pre-1978 housing, child-care facilities and schools. To foster adoption of the new measures, EPA will also conduct an extensive education and outreach campaign to promote awareness of these new requirements.
The rule covers all rental housing and non-rental homes where children under six and pregnant mothers reside. The new requirements apply to renovation, repair or painting activities where more than six square feet of lead-based paint is disturbed in a room or where 20 square feet of lead-based paint is disturbed on the exterior. The affected contractors include builders, painters, plumbers and electricians. Trained contractors must post warning signs, restrict occupants from work areas, contain work areas to prevent dust and debris from spreading, conduct a thorough cleanup, and verify that cleanup was effective.
More information: EPA's lead program (http://www.epa.gov/lead)
The "Lead: Renovation, Repair and Painting Program" rule, which will take effect in April 2010, prohibits work practices creating lead hazards. Requirements under the rule include implementing lead-safe work practices and certification and training for paid contractors and maintenance professionals working in pre-1978 housing, child-care facilities and schools. To foster adoption of the new measures, EPA will also conduct an extensive education and outreach campaign to promote awareness of these new requirements.
The rule covers all rental housing and non-rental homes where children under six and pregnant mothers reside. The new requirements apply to renovation, repair or painting activities where more than six square feet of lead-based paint is disturbed in a room or where 20 square feet of lead-based paint is disturbed on the exterior. The affected contractors include builders, painters, plumbers and electricians. Trained contractors must post warning signs, restrict occupants from work areas, contain work areas to prevent dust and debris from spreading, conduct a thorough cleanup, and verify that cleanup was effective.
More information: EPA's lead program (http://www.epa.gov/lead)
NEW YORK CITY (paradigmshiftpr.com) — Luxury housing is not what it used to be. A plasma television, for example, was once luxury. Now every room has one.
Leonard Steinberg, a contributing editor to JustLuxe and executive vice president Prudential Douglas Elliman, a high-end Realtor in New York City, recently outlined what he is seeing in the luxury real estate market.
The term "luxury" in real estate is changing, he said. Two types of luxuries co-exist and are equally important: cosmetic and intrinsic. Luxury in real estate is shifting more towards the intrinsic. A whole new luxury vocabulary has emerged and it extends well beyond the words "Sub Zero."
With the significant growth in wealth over the past decade, "sameness" has become the enemy of the luxury market. A high price does not necessarily guarantee luxury. Until recently, an Italian Boffi or Varena kitchen with Viking or Miele appliances, a spa bathroom or lavish swimming pool, set the tone: Nowadays, he said, these are prerequisites.
Real luxury lies in customization and uniqueness, the quality of materials and the skills required to produce them, often the most difficult things to find or create. New luxury is found in the convenience, ease of use, quality of engineering, reliability and efficiency of design. Intrinsic luxury focuses on room proportions, ceiling heights, flow of space, light, views, privacy, security and so forth. On the cosmetic front, a unique light fixture, artwork, or custom designed, hand-crafted cabinetry can make the "new luxury" new.
Leonard Steinberg, a contributing editor to JustLuxe and executive vice president Prudential Douglas Elliman, a high-end Realtor in New York City, recently outlined what he is seeing in the luxury real estate market.
The term "luxury" in real estate is changing, he said. Two types of luxuries co-exist and are equally important: cosmetic and intrinsic. Luxury in real estate is shifting more towards the intrinsic. A whole new luxury vocabulary has emerged and it extends well beyond the words "Sub Zero."
With the significant growth in wealth over the past decade, "sameness" has become the enemy of the luxury market. A high price does not necessarily guarantee luxury. Until recently, an Italian Boffi or Varena kitchen with Viking or Miele appliances, a spa bathroom or lavish swimming pool, set the tone: Nowadays, he said, these are prerequisites.
Real luxury lies in customization and uniqueness, the quality of materials and the skills required to produce them, often the most difficult things to find or create. New luxury is found in the convenience, ease of use, quality of engineering, reliability and efficiency of design. Intrinsic luxury focuses on room proportions, ceiling heights, flow of space, light, views, privacy, security and so forth. On the cosmetic front, a unique light fixture, artwork, or custom designed, hand-crafted cabinetry can make the "new luxury" new.
Georgetown (statesman.com) — Fortune Small Business magazine says this Texas community of more than 40,000 is the second best place to live in America.
The April issue ranks Georgetown behind Bellevue, Wash., and ahead of Buford, Ga.; Marina del Rey, Calif.; Bethesda, Md.; Portland, Ore.; Denver, Colo.; Charlotte, N.C.; Fort Worth; and Franklin, Mass.
Cities were scored on job and population growth, new business startups, health-care facilities and other lifestyle factors.
The April issue ranks Georgetown behind Bellevue, Wash., and ahead of Buford, Ga.; Marina del Rey, Calif.; Bethesda, Md.; Portland, Ore.; Denver, Colo.; Charlotte, N.C.; Fort Worth; and Franklin, Mass.
Cities were scored on job and population growth, new business startups, health-care facilities and other lifestyle factors.
2. Georgetown, Texas
• A Victorian enclave in Texas: Read our full profile of Georgetown
• Talk back: What do you think of Georgetown?
Population: 37,963
Pros: Business friendly tax structure, entrepreneurial camaraderie, scenic suburb of Austin
Con: Higher housing costs
Austin's entrepreneurial community may be among the strongest in the country, but its heavy traffic and urbanization have driven some experienced business folks to look elsewhere. Enter Georgetown. This suburb of Austin has transformed from a sleepy bedroom community into a city with its own identity and a rapidly growing business climate.
Located 26 miles north of the state's capital, Georgetown has welcomed 270 new businesses over the past two years. The state's lack of individual and corporate income taxes is just one reason Texas is considered business-friendly. On a local level, Georgetown charges relatively low water and electricity rates, and its property taxes are among the lowest in the region. As part of the Greater Austin area, Georgetown entrepreneurs in the city's growth industries - healthcare, life sciences, and technology - can seek out additional support from the region's business-development efforts. A convention center slated to open next year should help further build Georgetown's up-and-coming business scene.
Georgetown is considered one of the prettiest cities in Williamson County, especially during the spring and summer months when poppies and wild flowers are in full bloom. Housing costs tend to be higher than in many of Austin's other suburbs, but residents who settle into one of the city's restored Victorian homes or new Tuscan villas can enjoy a walk along the bank of the San Gabriel River or play a round of golf on one of the five local courses. Mountain biking trails around Lake Georgetown lead riders to the edge of Texas Hill Country. As the self-proclaimed "Live Music Capital of the World," Austin still offers the best selection of performing arts in the region. However, Georgetown's annual food and arts festivals, independently-owned restaurants, rodeo, and nearby wineries are enough to keep residents close to home most of the time. -Brandi Stewart
SAN ANTONIO (USAA Real Estate Company) – USAA Real Estate Company announced plans today to develop a 178-acre mixed-use development bounded by The Shops at La Cantera, I-10 and Loop 1604.
The Town Center at La Cantera will include about one million square feet of office space, a high-end boutique hotel with spa, upscale retail, and approximately 500 residential units. Several mid-rise Class-A office buildings are in the planning stages for the development’s first phase.
“We are concentrating a large development volume in a relatively small area both to conserve open space and create a critical mass of employment, shopping and residential unlike anything existing outside the heart of downtown San Antonio,” said USAA President and CEO T. Patrick Duncan.
The Town Center at La Cantera will include about one million square feet of office space, a high-end boutique hotel with spa, upscale retail, and approximately 500 residential units. Several mid-rise Class-A office buildings are in the planning stages for the development’s first phase.
“We are concentrating a large development volume in a relatively small area both to conserve open space and create a critical mass of employment, shopping and residential unlike anything existing outside the heart of downtown San Antonio,” said USAA President and CEO T. Patrick Duncan.
WASHINGTON (U.S. Census Bureau) – Dallas–Fort Worth–Arlington had the largest numeric gain of any metro area in the United States between 2006 and 2007, according to estimates released yesterday by the U.S. Census Bureau. Three other Texas cities also made the top ten.
The population in the DFW metro area increased by 162,250. Number two was Atlanta–Sandy Springs–Marietta, Ga. (151,063), followed by Phoenix-Mesa-Scottsdale, Ariz. (132,513).
Houston–Sugar Land–Baytown (120,544) ranked fourth, Austin–Round Rock (65,880) eighth and San Antonio (53,925) tenth.
Austin–Round Rock, with its 4.3 percent growth rate, also ranked fifth on the bureau’s list of ten fastest-growing U.S. metro areas by rate of growth. In fact, eight of the areas on the list are in the South. Landing at number one was Palm Coast, Fla., at 7.2 percent.
For more information, visit the Census Bureau online. Also, read "Looming Boom" in the January 2008 issue of Tierra Grande, the Real Estate Center's quarterly magazine.
The population in the DFW metro area increased by 162,250. Number two was Atlanta–Sandy Springs–Marietta, Ga. (151,063), followed by Phoenix-Mesa-Scottsdale, Ariz. (132,513).
Houston–Sugar Land–Baytown (120,544) ranked fourth, Austin–Round Rock (65,880) eighth and San Antonio (53,925) tenth.
Austin–Round Rock, with its 4.3 percent growth rate, also ranked fifth on the bureau’s list of ten fastest-growing U.S. metro areas by rate of growth. In fact, eight of the areas on the list are in the South. Landing at number one was Palm Coast, Fla., at 7.2 percent.
For more information, visit the Census Bureau online. Also, read "Looming Boom" in the January 2008 issue of Tierra Grande, the Real Estate Center's quarterly magazine.
Thursday, March 27, 2008
WASHINGTON (Associated Press) – Sales of existing homes posted an unexpected increase last month after six straight months of decline, according to the National Association of Realtors (NAR).
NAR reported that sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million units, the biggest increase in a year.
The median existing sales price last month fell to $195,900. That was the largest year-over-year drop on records that go back to 1999.
Sales surged by 11.3 percent in the Northeast and were up 2.5 percent in the Midwest and 2.1 percent in the South. The only region that had a decline was the West, where sales dropped by 1.1 percent.
NAR reported that sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million units, the biggest increase in a year.
The median existing sales price last month fell to $195,900. That was the largest year-over-year drop on records that go back to 1999.
Sales surged by 11.3 percent in the Northeast and were up 2.5 percent in the Midwest and 2.1 percent in the South. The only region that had a decline was the West, where sales dropped by 1.1 percent.