Austin Real Estate Blog

With all the excitement and innovation in building environmentally friendly facilities, even the US Army is getting into the act. Fort Hood aims to be the first Army base to construct a building to comply with the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.

In order to meet LEED’s sustainable standards, buildings are required to use 30 percent less energy and 20 percent less water than a comparable but non-green building. The building must also meet standards set by the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) for improvements in indoor air quality.

Fort Hood has already instituted an Environmental Management System (EMS), which includes educating the installation’s solders, families, and other base personnel in reducing waste and energy use while improving the quality of life. In fact, Fort Hood has already introduced recycling and reuse strategies that have saved 3 million gallons of water and a million gallons of hazardous waste.

Everyone on base is expected to be responsible for complying with the standards enacted by the US Army Environmental Command (USAEC). The USAEC provides initiatives for Army installations’ efforts to “go green” through its Secretary of the Army Environmental Awards. The competition for this prestigious award is fierce and Fort Hood was among the 2007 winners for its improvements in the environmental quality on base.

The move toward environmentally friendly building is not only the result of global concerns about climate change and rising pollution levels, but a response to a directive from USAEC mandating all new vertical building construction to achieve at least a silver level LEED standard. The buildings must meet requirements set by LEED for sustainability, energy efficiency, and air quality. Fort Hood wants to be the first to build one.

As people become more aware of impending climate change and near-future energy crunches, land developers are finding innovative ways to create communities with more sustainability and less impact on the environment. An article in the magazine, Natural Home, highlights a new community in Austin, Texas, as one of these green-built innovations.Renovated from the old municipal airport, Mueller Airport Project mixed-use urban village utilizes the latest in environmentally friendly design. The community has its own power-generating plant, recreation, entertainment and shopping, as well as transit and employment.

Self-sustainability is just one aspect of this village. Recycling and reusing is prevalent: old runway materials are converted to street construction, old hangars are disassembled and reused in new building, historic buildings are converted into public spaces. Homes are built with non-toxic and recyclable materials, and plenty of open green spaces and waterways have been incorporated into the plan.

The residential buildings of the Mueller Project include a wide variety of living arrangements. From single-family dwellings to condominiums, the village offers an option for nearly every lifestyle. For-sale home prices range from $100K to the $600Ks for attached and detached homes. An apartment complex is scheduled for completion in the fall of 2008 and will feature 10-foot ceilings, two swimming pools and a fitness center.

Catellus, the developer of the Mueller project, has 20 years of land redevelopment experience and has transformed old airports, industrial complexes, and abandoned military bases into such communities - self-contained, sustainable, and environmentally friendly villages. Termed New Urbanism, the designs are actually based on traditional old European villages, where retail, living, and recreation space was located within walking distance.

Mueller Airport Project stands as a model for the urban development of the future and points toward one solution to increasing energy crises.

The last blog post was weeks ago and now that mom’s back on her feet from hip replacement, I’ll be writing more frequently. I read this today and had to post it. I’m glad that the state where big oil has dominated for decades now is dominating with wind power. I’ve never seen a wind generation field in person and it would be cool to see it. If you’ve been to a wind farm and seen it in west Texas drop me a line and let me know where you went. In the mean time check out this excerpt from the Neal Spelce Austin Letter.

When it comes to energy generation Texas, long the US oil field leader, is now the top wind farm state. As a result, oil derricks and water-pumping wind mills are now losing their dominance on the state’s horizon to giant, propeller-driven wind energy turbines.

Out west, Texans long-ago grew accustomed to a pumping sound, as oil was pulled out of the ground, and a clacking of windmills as water was pumped out of the ground. Now a new whirring sound has joined the cacophony and all these sounds mean money. The sights of structures piercing the sky and constant sounds from these machines are re-making Texas.

While still not as pervasive as oil rigs and wind mills, these wind turbines are growing in number and their size alone is amazing. Some of these wind machines are twice as tall as the Statue of Liberty and their blades have a span as wide as the wingspan of a jumbo jet. They are huge, and larger versions are on drawing boards. By and large, landowners - especially in hardscrabble West Texas — are welcoming them with open arms.

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Even with Texas leading the nation in wind farms, it’s still early in the development of wind energy. The City of Austin is contracting for electricity generated by wind. But it is still a small fraction of electrical usage. However, Texas is ideal for wind-power development (no, not because we’re a bunch of blowhards!) due to the availability of land for wind farms. The Gulf of Mexico may also be the site of wind power, much like the oil derricks sited offshore. So, look for more of these 20-story structures with blades longer than a football field to pop up.

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.

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“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.”

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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.
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Austin Area Market Summary - From Coldwell Banker Austin

December 2007:

Compared to 2006, the number of single-family homes sold dropped by 8%. During the same time, the average sales price increased 6% to $250,552.

The total number of single-family listings is up 10% compared to this time last year.

The months of inventory in the Austin market has increased to just over 5 months, which is beginning to favor buyers.

The average days n the market for single-family homes remains steady at 62.

The Austin real estate market has experienced a decline in transactions through the MLS for the first time in many years. That said, Austin’s average and median prices continue to increase. The Austin area continues to be rated in multiple categories among the nation’s top cities to live.

Georgetown: (average price is up 7% from a year ago to $224,353) Sales of single-family homes for 2007 are down 5.5% compared to 2006. There is 5.5 months of inventory and the number of active listings has increased very slightly to 484.

Round Rock: (average price is up 6% from a year ago to $211,146) Single-family home sales are down 5.6% compared to 2006. There is a balanced 4 months of inventory of homes available. Compared to last month the number of active listings has remained steady at 911. This area is among the top 20 most active Austin MLS market areas.

Cedar Park/Leander: (average price is up 10% from last year to $199,855) Single family home sales decreased 9% for the year and the active inventory is balanced at 3.6 months. The number of active listings is steady from last month to 670. This area is among the top 25 most active Austin MLS market areas.

North/Northwest: (average price for 2007 compared to 2006 is up 8% to $309,136); single family home sales in this area are off 17.6% compared to last year. The number of active listings is down 11% compared to last December, and steady from last month at 273 units. This represents a healthy 2.6 months of inventory, which favors Sellers. This area is in the top 20 most active Austin MLS markets.

Westlake: (compared to 2006, the average sales price rose in 2007 by 10% to $790,436) Single-family home sales in this area are down 12% compared to this time last year. Currently, there are 219 active listings; this is down 10.6% compared to last December. There are 5.6 months of inventory, which slightly favors buyers.

Southwest: (the average sales price for 2007 compared to 2006 is up 12.8% to $228,546) Single-family home sales are down 10.7% compared to this time last year. There is a 2.3 month supply of homes, which favors Sellers. The number of active listings is up 2% to 433. The Southwest area is among the top 10 Austin MLS markets.

South: (the average sales price compared to last December is up 11% to $150,081) Single-family home sales are identical to 2006, and there are 3.3 months of inventory, which reflects a balanced market. Active listing inventory is steady at 177.

Lake (South shore): (the average sales price for 2007 is up 7.7% over 2006 to $477,681) the number of homes sold this year is 18% less than last year. The months of inventory has dropped slightly to 9.9 months, which favors Buyers. There are 732 homes for sale, which is slightly less than last month, and 34% more than this time last year. With the average sales price continuing to increase and inventories at high levels, this is an indicator that buyers are finding greater value in higher priced properties.

The real estate industry has long been susceptible to price inflation, fraud, and other unsavory practices. Making it illegal to coerce an appraiser would be a good thing, but I hope that most appraisers wouldn’t see that as a way out of talking and reviewing agent recommendations when there is an issue with an appraisal.

I’ve not had any problems with an appraiser doing that, but I’ve heard stories about appraisers not taking input. Lenders seem to be the culprit in most cases of coercion that I’ve heard of.

You can read the summary of the Federal Reserve Proposal below in the first quoted area.

Additionally, in the news recently, is an appraiser that is suing WaMu for breach of contract, unfair business practices, interference with her ability to earn a living, fraud, conspiracy and slander. The bank is accused of pulling business from an appraiser who refused to make the appraisals favorably to the bank. Man, o, man. That’s bad news for the bank. What do you think about inflated appraisal? Send us a comment and let us know.

Federal Reserve Proposal Addresses Appraisal Coercion
Excerpt from Appraisal Institute’s Appraiser News Online Vol. 9, No. 1, January 15, 2008

The Federal Reserve Board recently proposed prohibiting creditors and mortgage brokers from coercing real estate appraisers to misstate a home’s value on all mortgages. The announcement was part of the Fed’s December 18 proposed changes to Regulation Z (Truth in Lending), which would restrict certain practices and require certain mortgage disclosures to be provided earlier in the transaction.

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In addition to prohibiting creditors and mortgage brokers from coercing appraisers, the Board also proposes to prohibit creditors from extending credit when creditors know or have reason to know, at or before loan consummation, that an appraiser has misstated a dwelling’s value. The regulation would apply to all consumer credit transactions secured by a consumer’s principal dwelling.

In its discussion on the topic, the Board said, “Pressuring an appraiser to overstate, or understate, the value of a consumer’s dwelling distorts the lending process and harms consumers… Inflated appraisals of homes concentrated in a neighborhood may affect other appraisals, since appraisers factor the value of comparable properties into their property valuation. For the same reason, understated appraisals may affect appraisals of neighboring properties. Thus, inflated or understated appraisals can harm consumers other than those who are party to the transaction with the inflated appraisal. Moreover, these consumers are not in a position to know of the practice or avoid it.”

The proposed regulation defines the term “appraiser” as a person who engages in the business of providing - or offering to provide - assessments of the value of dwellings.

The commentary to the proposed regulation gives examples of acts that would violate the regulation: implying to an appraiser that retention of the appraiser depends on the amount at which the appraiser values a consumer’s principal dwelling; failing to compensate an appraiser or to retain the appraiser in the future because the appraiser does not value a consumer’s principal dwelling at or above a certain amount; and conditioning an appraiser’s compensation on loan consummation.

The commentary also lists examples of acts that would not violate the regulation: requesting that an appraiser consider additional information for, provide additional information about, or correct factual errors in a valuation; obtaining multiple appraisals of a dwelling (provided that the creditor or mortgage broker selects appraisals based on reliability rather than on the value stated); withholding compensation from an appraiser for breach of contract or substandard performance of services or terminating a relationship for violation of legal or ethical standards; and taking action permitted or required by applicable federal or state statute, regulation, or agency guidance.

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The Nation’s Housing

Appraiser’s Lawsuit Puts Lenders on Notice

By Kenneth R. Harney
Saturday, January 26, 2008; Page F01

Real estate appraisers have complained for years about demands from loan officers that they fudge and inflate numbers to allow mortgage deals to close.

Now a California appraiser has sued the country’s largest thrift institution, Washington Mutual Bank, charging that she was blacklisted for refusing to provide favorable appraised values despite declining market conditions.

The lawsuit, by Jennifer Wertz, comes just two months after the state of New York sued an appraisal management company, First American eAppraiseIT, for allegedly giving in to pressure from Washington Mutual to inflate property values for loan applications — contributing to mortgage-market losses. EAppraiseIT and LSI, a unit of Fidelity National Information Services, were also cited in Wertz’s suit as contractors to Washington Mutual.

Wertz said in her complaint that she began performing appraisals for Washington Mutual in 2001 and earned “in excess of $100,000 a year” from her work for the bank. But last May, according to the suit, a Washington Mutual manager upbraided her for describing local property values in an appraisal as “declining.” The manager “insisted that [Wertz] change her report to indicate ’stable’ conditions so that the loan could be approved.”

All the relevant data suggested otherwise, however, and Wertz refused. The manager then allegedly told Wertz that she would be banned from all further assignments from Washington Mutual if she did not cooperate. Wertz declined to do so — citing federal, state and professional rules requiring her to provide objective and accurate reports free of outside influence. According to the lawsuit, Wertz was then cut off from Washington Mutual business through the appraisal management companies.

Wertz’s lawsuit, filed in California Superior Court in Sacramento, charges breach of contract, unfair business practices, interference with her ability to earn a living, fraud, conspiracy and slander, among other alleged violations.

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As Texas is a non-disclosure state, I’ve never liked Zillow. People who think Realtors do nothing, but schmooze and collect paychecks love Zillow, because they feel it empowers them to do their own home sale. In reality, since non-disclosure states do not disclose all sales prices, Zillow often gives poor data because (1) it only has sparse data to give and (2) a computer program is never going to be able to select comparable sales as well as a human who can go and physically view the property and adjust subjectively. So basically, Zillow, while it may be fun, is completely unreliable here in Texas.

But what about Zilpy? It’s a terrible name, but I thought I’d check it out. I compared the data provided by Zilpy for three apartments and condos that I know the rental rate and occupancy for in Austin to gauge the usefulness and accuracy. It was remarkably accurate for all the places that I checked. Granted, the site doesn’t appear to delineate by class of dwelling, but the ranges it gives help make it seem more accurate.

If you have a rental, check it out and let me know what you think. I’d love to hear from you.

Excerpt from Inman News.

Zilpy, the new ‘Z’ site in online real estate

Web site offers rental price estimates

Thursday, February 07, 2008

Inman News

Zilpy is like Zillow for rental properties, with rental price estimates, demographic data and heat maps based on median rental rates.

The new Web site, which launched last week and lists Zillow as a partner company, offers competition to Rentometer.com, another site that allows users to gauge rental prices in a selected area.

Zilpy.com is not a rental listings site. It is a rental research site that allows users to grab automated rental price estimates by address, city or ZIP code, and to refine searches based on type of rental property, a desired rental range, number of bedrooms and a range of square feet. One of the founders referred to the site as “the Trulia for the rental market.”

The heat maps show areas with higher and lower rental prices — red zones feature the highest median rental prices, while dark green shading indicates the lowest rental pricing.

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Screen shots from Zilpy.com

Even though 2007 was a record breaking year and the national economy appears to have taken a hit, Austin is going gangbusters. You’ve got to know things are going well when the mainstream media says the “Austin economy spanks the competition”. Here’s to a great 2008! If you’re thinking about moving to Austin, give us a call. It would be our pleasure to help!

bizjournals.com
Austin economy spanks the competition
Thursday January 31, 3:41 pm ET
High-tech, a booming film industry and the University of Texas all helped propel Austin to the top of Forbes’ 2008 list of America’s Fastest Growing Metros.The magazine ranked Austin No. 1 among the nation’s 100 largest metropolitan areas. The list sorted cities by their anticipated gross domestic product growth between 2007 and 2012. Austin’s GMP, or the value of goods and services produced in the area, is expected to climb 32 percent over the five-year period.
Forbes credits the local boom to high-tech employers like Dell Inc. (NASDAQ: DELL - News) and IBM (NYSE: IBM - News) as well as the University of Texas, which is producing ample engineering talent. …

Forbes used GMP forecasts provided by Moody’s Economy.com. …

Published January 31, 2008 by the Austin Business Journal

While I’ve never sold a McCrary home, I’m sure several of the agents in my office who have been around for 20+ years have. I’ll check with them and post some update material, but for now, check out the news release and the McCrary website. They seem to build some pretty impressive homes.

Luxury Home Builders McCrary Homes Announce Return to Austin, Texas Area Building After a twenty year absence, McCrary Homes announces a return to Austin, Texas area home building. These new high-end homes feature the latest designs and innovative technology, classic luxury homes for the future.

(PRWEB) January 30, 2008 — McCrary Homes, a family-owned company specializing in the building of luxury new homes, announces a return to construction in the Austin, Texas area after a twenty year absence. The luxury new homes are being built in Georgetown, Texas, minutes from Austin, in the much-desired Williamson County North West Corridor, cited as one of the fastest growing counties in the United States.

Business owners Jerry and Linda McCrary spent their twenty year absence from Austin area home building watching trends and publishing home-related magazines. When they decided to return to their home, and with the help of their son Jeff recapture where they left off in the eighties, the time away spent trend-watching was able to give the company an edge in the highly competitive Georgetown market, selling their first spec in the framing stage. The spec was a combination of the top features of various award-winning luxury new homes featured in their magazines.

“Our homes are built as if we were going to live in them ourselves,” said company co-owner Linda McCrary. Linda’s specific role within the company is to design and select the interior colors, flooring, cabinets, and other features which turn the inside of each home into a true work of art. Her husband Jerry and son Jeff take care of the construction, with years of expertise in the field.

As luxury home builders moving deeper into the twenty-first century, the principals of McCrary Homes have used the time off also to research other innovations besides those of aesthetic design.

Linda McCrary added, “We are on the cutting edge of new technology to make life easier and more energy efficient.” The new homes from the luxury home builders company feature items that include tankless water heaters, high efficiency appliances and plumbing fixtures. McCrary Homes works with landscapes that are drought tolerant and deer resistant.

For more information about these Georgetown, Texas luxury home plans, visit the company online at McCraryHomes.com (http://www.mccraryhomes.com/).

About McCrary Homes:

With a motto of “Only the best will do,” McCrary Homes is a company offering new homes in the Austin, Texas area, in the $600,000 price range and above. A family-owned business with great attention to detail, McCrary Homes was started by husband and wife team Jerry and Linda McCrary, along with their son Jeff, after a twenty year absence from the home-building business, spent doing research and publishing magazines for the industry. Now, each house they create is a work of art and personal passion, designed for the most discriminating home buyer.

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I just got the below letter on the fax and all I can say is wow! I hadn’t heard anything about this since last year before the holidays.

You can read about it in the Austin Business Journal. Here is the TOUSA website where you’ll hear the Newmark Homes President talk about the reorganization and see a link for the reorganization press release in the lower left side of the screen.

I have one client under contract with Frederick Harris Estate Homes. I need to investigate any possible implications to this. If you have any info on this please shoot me an email.

January 29, 2008

Dear Realtor:

We are writing to bring you up to date on recent actions that Newmark Homes’ corporate parent, TOUSA, Inc,, has taken to ensure the Company has a long and prosperous future.

Today, TOUSA, Inc. and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. TOUSA Homes’ brands - Engle Homes, Newmark Homes, Trophy Homes and Fredrick, Harris Estate Homes are included in this filing. The filing will allow us to restructure our balance sheet, preserve the Company’s value, and position it to navigate the challenging homebuilding market successfully.

Unlike other homebuilders that have recently landed in unplanned Chapter 11 cases as a result of industry conditions, we have taken steps to minimize the impact of the filing on our operations and to expedite our stay in bankruptcy. In connection with the filing, TOUSA also announced that we have reached a pre-negotiated deal with our senior noteholders to implement a restructuring plan.

As one of our active Realtors, you are a valuable part of our company and critical to our success. We want to assure you that TOUSA is not going out of business and that you can continue marketing and selling new homes from Newmark Homes with confidence because its corporate parent has taken the steps necessary to assure its long-term financial strength and stability.

Chapter 11 is a tool that allows companies to fix their financial problems so that they can stay in business and build upon their core strengths to serve the needs of their customers, It is important that you understand that this is a financial issue and not a reflection of our operations, We have been building high-quality homes at outstanding values from many years and will continue to do so.

All closings are expected to remain on schedule and our community building projects should continue uninterrupted. We’ve ensured that all Realtor commission(s) will be paid from escrow as per our normal course of business.

In short, the actions TOUSA has taken today will result in a stronger Newmark Homes that will be better able to cope with today’s challenging housing market and prosper once conditions return to normal.

It is also important to note that TOUSA’s affiliates that provide financial services are not included in the filing and will not be affected by it. This includes Universal Land Title, Inc., Preferred Home Mortgage Company and Alliance Insurance and Information Services. This means that customers who have obtained mortgages, title insurance and other financial services products from these businesses will not be impacted by the filing.

If you have any questions or concerns about recent developments, please do not hesitate to call your local contact or our toll-free information hotline at (8E36) 588-9290. Also please feel free to visit www.tousa.com for updates on our restructuring.

We appreciate your support and look forward to continuing our relationship with you.

Sincerely,
Brian Shields