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Builders Oppose Commission's Proposal Regarding New Housing Developments in Austin

Austin Realtor — Thu, 18 Feb 2010 00:36:36 +0000

New rules proposed by the Community Development Commission could spell big changes for builders seeking variances for new developments in Austin. The proposal is modeled on a similar law already in effect in Massachusetts and would require that builders who receive special permission to build larger-than-allowed residential buildings must devote a portion of their development to affordable housing for low to moderate income families. The Community Development Commission is comprised of thirteen political appointees who are tasked with the development and implementation of programs intended to serve low income families and households in the Austin area. Recent developments have also led to the appointment of a new Downtown Density Task Force, a result of stalemate on the part of the previous task force which could not come to an agreement at a meeting last month. Many builders have noted that a proposed “pay-to-play” system that would require payments to a community development fund may also constitute a deterrent to new construction in the area during a time of economic uncertainty; most economic experts believe such requirements are unwise given the current housing market downturn. Some experts have noted that the proposal as it currently stands is in direct conflict with Texas state law, which prohibits requiring builders to include affordable housing in their planned developments. Supporters of the proposal, however, note that the rules do not force builders to include such housing, but simply withhold the required legal variances from builders who do not make such accommodations a part of their development plan. The timing of the proposal is unfortunate, given the recent prediction in the 2010 Texas Construction Outlook that Austin construction projects are expected to increase by approximately 30% in the coming year. Federal stimulus funds and projects are credited with a portion of this growth, and new housing starts are expected to make up much of the rest of the increase. Many builders feel that adding new layers of expense and paperwork will put a damper on these expected gains and stifle much of the economic benefit Austin could derive from this infusion of cash and projects to the local building industry. While the public works and utilities projects are not expected to be affected by the proposed rule changes, some new housing developments may be delayed or even canceled if these rules are put into effect at this crucial time. Given the fragile nature of the housing market recovery, most builders believe that these rules should not be implemented or should be delayed until the housing industry is more robust and the recovery is well underway.

Home Builders Express Optimism for New Year

Austin Realtor — Wed, 16 Dec 2009 13:21:16 +0000

Home builders are cautiously optimistic heading into the new year, according to a recent survey by John Burns Real Estate Consulting. The survey indicates that 57% of builders expect 2010 to be an improvement in terms of sales and revenues over 2009 figures. The extension and expansion of the First-Time Homebuyer’s Credit is anticipated to create increased demand for new home construction, while recent changes to the tax code have been advantageous to home builders as well. The tax changes mainly affect net operating loss carrybacks; these tax mechanisms allow companies to offset profits in one year with losses in another, reducing their overall tax liability and allowing them to receive refunds for taxes paid in past years. These carrybacks usually are only allowed for two years, but the length of time has been sharply increased, allowing many firms to offset current losses against profits going back as far as 2003. This will provide more cash in hand for many financially-strapped builders and offer real help at a time when many home builders need it most.

Builders may get money back from taxes paid!

The survey follows on the heels of a recent prediction from Fitch Ratings that new construction and existing home sales will improve more than previously expected in 2010, due in part to the expansion of the tax credit and efforts by the government to stem the tide of foreclosures in recent years. Incentives and tax credits appear to be having a beneficial effect on the market, but many analysts worry that sales will slump as soon as the incentives are removed or phased out. Austin builders are expected to benefit from the change in the tax code and the extension of the First-Time Homebuyer’s Credit. Austin’s real estate market has survived the recent housing crisis remarkably well; this is credited to Austin’s thriving economy and overall desirability as a center for culture and a great place to raise a family. While new building projects have slowed in recent years, the demand for new construction is still strong. Ironically, some Austin builders will benefit less from the tax code changes due to the fact they have fewer losses to offset against previous gains, and thus will not qualify for the full level of tax relief.

Gorgeous Views and Green Living

J Cline — Thu, 05 Feb 2009 06:35:28 +0000

Austin has been at the forefront of the green movement since it began. Many local builders have taken the time to learn green building techniques and guidelines. Some even offer green remodeling now to older homes. A green home is one that uses less energy and water, but that doesn’t mean the homeowner is missing out on anything. Just take a look at the 4,080 square foot home that is currently on the market sitting near Dripping Springs. The home offers majestic Texas hillside views, and is completely eco-friendly. There is an open floor design inside, a pool, hot tub, and over four acres to play on. What is really extraordinary is what the house is made of.

The house was designed by Gayle Borst and Elliot Johnson. As executive director of Design/Build/Live, Borst consistently strives for green living. The first floor of this beautiful home is no different; it is made of a naturally sustainable material: straw. Bales are placed within a framework of red iron steel for strength. Since the home sits atop a hill, it can be quite windy, and red iron steel is used in the construction of high rises. The interior walls are made of adobe plaster, and the exterior is concrete stucco. A huge benefit of the straw-bale construction is the material’s ability to hold temperatures. When the house is cooled on a hot day, it stays cool. This lowers not only the energy usage of the home, but the heating and cooling costs as well. The home also includes a 21,500 gallon rainwater collection system that provides all the drinking, bathing, and cooking water. Windows and doors are placed in such a way to optimize both the natural air flow and sunlight the location has. This home proves that living green can be lavish and environmentally friendly.

Energy Efficient Cooling

J Cline — Mon, 15 Dec 2008 13:36:19 +0000

Austin is a city that has done well throughout the mortgage crisis. Builders here are still in demand, and many have chosen green methods to build a home. One of the highest energy uses after a home is complete is the air conditioning unit. Since Austin has mild temperatures year round, some residents use their cooling systems often. It is important to make sure the unit fits the property and is maintained well. Another way to reduce usage is to build the home with the idea of cross ventilation in mind.

By using cross ventilation, humid air can be removed by the placement of widows throughout the house. First, determine which way the house can be built so that less heat will enter. Keep the attic cool by using lighter color shingles and reflective heat barriers. Place windows in such a way that the natural wind will come through on one side of the building. Since heat rises and looks for cooler air, it will naturally go across to another open window and back outside. Ceiling fans can also help to move the air along, using much less energy than running an AC unit. With cross ventilation, it is possible to remove the humidity from the air, making it more comfortable.

The main goal for any green home is to reduce the amount of energy used for everyday activities. The less usage there is the more money will be saved. Of course, the hottest days will still require the help of an air conditioner, but imagine how many days in Austin when a little breeze can make all the difference.

Incentives for the Reluctant Home Buyer

J Cline — Wed, 21 May 2008 14:51:05 +0000

Home builders are searching for ways to lure the potential new home buyer off the fence and into a sale so they’re piling on incentives to sweeten the deal.

In the San Francisco area, like any good car salesmen, builders are offering to guarantee the price of their homes are the lowest in the neighborhood. If another home sells for less in the same neighborhood, they will lower their price to match. In Pleasanton, California, another home builder offers a two year guarantee on their prices. If the buyer sells their new home within two years for less than it cost them to purchase, the builder will pay them the difference.

Builders are offering to throw in appliances, window treatments, landscaping, built-in sound systems, even in-ground pools to lure in the reluctant buyer. Typically, the builder will offer upgrades on flooring and appliances, will agree to pay the closing costs, or will reduce the price drastically in order to move inventory off their books.

In the Dallas-Fort Worth area, builders are reducing the price of inventory by as much as 20 percent and throwing the swimming pool in for free. Some neighborhood residents aren’t happy with these drastic reductions in price, arguing – and rightly so – that it reduces the property value of the whole neighborhood.

For the most part, incentives like these are unnecessary in Austin, where home sales remain steady and inventory is still low. New homes in the Austin area typically attracting multiple offers; often homes are selling for the asking price and above, sometimes for cash. In the rest of the nation, however, home buyers are desperate to move inventory and avoid bankruptcy as the supply far exceeds demand in this buyer’s market.

Is Now The Right Time to Buy in Austin?

Joe Cline — Wed, 20 Feb 2008 20:51:15 +0000

Right now the real estate market in places across the country is pretty shaky. In places that experienced unsustainable appreciation, prices have tumbled and combined with the mortgage crisis, prices have been depressed. Understandably, many buyers are afraid to make a move due to the uncertainty being spread by the media and folks who sell stocks. Consumers need to remember that commodity brokers want to sell you commodities, stock brokers want to sell you stocks and so on and so forth. That said, take an example such as Enron. When Enron collapsed, many people lost their entire retirement, pension, or and/or savings. The company was a sham. Does this ever happen in real estate? I personally can’t imagine anyone buying a property and then having it evaporate overnight. I suppose if you bought a property with a nuclear waste dump on it, then it’s possible, but aside from that, real estate is a much safer investment. Additionally, real estate needs to be managed. In that respect, if you buy a property in Austin or Las Vegas and are a good owner you might want to take a trip there to make sure your property is being managed properly. This is called a tax deduction. You get the picture. Of course, that is just one perk of owning real estate. You get additional benefits such as tax write-offs, depreciation, and leverage. With prices down, rates cheap, and lots of inventory, it may be counter intuitive, but it could be the perfect time to buy.

Builders remain cautious although more buyers visit model homes
Paul Lopez National Association of Home Builders WASHINGTON, D.C. – - Builder confidence in the market for new single-family homes edged marginally higher in February as traffic of prospective buyers through model homes improved considerably, according to the latest National Association of Home Builders//Wells Fargo Housing Market Index , released Tuesday. The index rose a single point to 20 this month, still close to its recent historic low reading of 18 (the series began in January of 1985). “While builders remain very cautious about the outlook for new-home sales, given today’s economic environment, the fact that more consumers appear to be checking out their options is a good sign,” said Sandy Dunn, a home builder from Point Pleasant, W.Va. and the newly elected 2008 president of the National Association of Home Builders. … “Some potential buyers who have been sitting on the sidelines are starting to at least research a new home purchase given improving affordability factors and the large selection of units on the market,” said the builders’ chief economist David Seiders. “That said, builders know there’s a difference between people looking and people buying, and their current outlook remains quite subdued. Additional stimulative measures on the legislative and policy side are definitely needed to bolster consumer confidence and help bring about a housing and economic recovery.” … In February, the index gaging current sales conditions for single-family homes rose one point to 20, while the index gaging sales expectations for the next six months declined one point to 27. Meanwhile, the index gaging traffic of prospective buyers rose five points to 19, its highest level since July of 2007. …