Austin Real Estate Blog

According to the Forbes Business Journal, Austin is tied for first place as the metropolitan area showing the most signs of economic recovery; Washington, D.C. was the other first-place contender.  This is in line with 2009 estimates by Forbes that Austin was positioned for a swift rebound; financial analysts predicted at that time that Austin’s economy would grow by $5 billion before 2011.  Austin’s speedy recovery was attributed to its strong government sector; as the capital of Texas, Austin benefits significantly from stable government employment in the area.

Aggressive moves to attract new companies by both the city of Austin and the state of Texas have also provided additional employment opportunities.  The Austin area has attracted several new employers in recent years including the Hanger Orthopedic Group; Austin is currently in negotiations with Facebook to open an office, as well.  Austin’s historically strong education, healthcare, and green technology sectors have ensured that unemployment rates in the metropolitan area remain lower than the state and national average.

Recent figures indicate that Austin’s employment picture continues to improve.  Job growth in Austin over the past two years approached one percent, the best in the nation; while this growth rate may seem small, it’s worth noting that over the same period the United States as a whole lost jobs and saw unemployment rates skyrocket.  In fact, Austin’s employment picture is expected to improve even more over the next three years, with jobs in the area increasing by approximately eight percent overall.

One major factor in the stability of the Austin economy is the housing market.  While other regions experienced serious declines in property values and increases in foreclosures and unsold homes, homes in Texas retained almost all of their initial value and demand for these homes remained high throughout most of the industry crisis.  Most analysts credit reasonable real estate pricing and lack of overbuilding for Austin’s relative stability and economic performance; because Texas real estate prices were never overinflated due to real estate speculation, the collapse of the housing bubble had little effect on the area.

These recent figures and predictions spell good news for the Austin real estate and business community.  Increased growth and employment is expected to bolster the commercial and residential real estate market and boost new construction, creating still more jobs and growth in the area.  This synergy will maintain Austin’s position as one of the best cities in the nation in which to live and work.

Recent figures from the Mortgage Bankers Association suggest that the worst of the housing industry downturn may be over.  For the first time in three years, fewer homeowners are falling behind on their mortgage payments; this spells good news for mortgage lenders as well as borrowers.  While economists hesitate to say that the worst is over, the reduction in new delinquencies is generally regarded as a positive sign by housing industry experts and real estate agents throughout the country.  Even in Austin, where housing prices remained surprisingly resilient throughout the nationwide woes, these figures offer fresh hope that an economic upturn is on the way.

Current national figures estimate that fifteen percent of all mortgages are at least thirty days delinquent; this includes homes currently in foreclosure as well as seriously delinquent loans.  The worst figures are seen in the subprime mortgage field, where twenty-five percent of loans were thirty days or more delinquent.  The state of Texas has fared somewhat better as a whole than the nation, but fifteen percent of the Texas subprime mortgage market loans are seriously delinquent by sixty or more days, and many of these are currently facing or undergoing foreclosure proceedings.  Only two percent of all mortgage loans in Texas are currently in foreclosure, which represents a markedly better performance than the national rate of approximately five percent.  Texas is one of only seven states currently showing foreclosure rates of two percent of less.

Austin foreclosure rates have remained lower than both the national and state averages, with one percent of loans in foreclosure in December 2009.  These low figures will likely shield Austin from the brunt of the foreclosure crisis expected when banks finally begin unloading already foreclosed homes on the housing market.  Certain hard-hit regions are expected to see plummeting home prices due to the depreciation caused by this expected glut of homes on the market; as many as six million foreclosed homes may be sold by banks over the next three years, according to economic analysts at Barclays Capital.

The strong housing market and stable home values in Austin make it one of the most desirable places to live in the U.S.  Austin’s vibrant computing, healthcare and green tech sectors provide outstanding employment opportunities and have cushioned the Austin metropolitan area against the worst effects of the recession.  With mortgage delinquencies on the decline and the national economy showing signs of recovery, there’s never been a better time to consider moving in or moving up in the Austin community.

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.

South by Southwest tix are highly coverted from coast to coast and from Film geek to music geek to computer geek!

The 24th annual South by Southwest Conferences and Festivals at the Austin Convention Center will showcase the finest in film, music, and interactive media from March 12th through the 21st. In keeping with Austin’s tradition of originality, the conferences and festivals focus on independent artists and films and offer a valuable first venue for aspiring musical artists and young filmmakers. Sponsors for this year’s festivities include the Independent Film Channel, Monster Energy, Chevy, Pepsi/Mountain Dew, and the Austin Chronicle.

The South by Southwest Conferences offer participants an outstanding opportunity to network with those in their chosen fields and to learn valuable skills through discussion panels and celebrity interviews in a casual, relaxed atmosphere. The keynote speaker for the Music Conference will be the great Smokey Robinson, one of the most influential musicians of all time. The Interactive Conference focuses on the best in website design, video games and internet start-ups, making it a must-see for would-be Web millionaires. Ben Huh, the innovator behind sites like I Can Haz Cheezburger and LOLcats, will be on hand to discuss techniques and methods for achieving internet success as the featured speaker for the “How to Rawk SXSW” panel.

The film festival usually gets most of the attention for its diverse selection of films, ranging from headliner events like “Get Low” with Robert Duvall and Bill Murray and “Cyrus” with John C. Reilly and Marisa Tomei to documentaries like “Rejoice and Shout,” a moving exploration of gospel music. International films from Belgium, Israel, Ireland, Denmark, and many other countries will also be showcased at the South by Southwest Film Festival. One highlight is sure to be the presentation of “Hubble 3D,” a breathtaking look at the spectacular galaxies as viewed through the Hubble Telescope and narrated by Leonardo DiCaprio. “The Lost World,” a silent science-fiction film from 1925, and Tod Browning’s “The Unknown” will also be shown during the festival. Short film categories will include animated shorts, documentaries, experimental short films and high school shorts created by Texas teenagers for presentation at this elite venue. Music videos will also be presented, showcasing a full range of musical stylings and artistic visions.

Attendees will participate in a wide range of panels, discussion groups, and meet-and-greet opportunities with some of the biggest names in film, music, and interactive technologies. When the day’s work is done, guests of the conferences can drink and dance the night away at numerous parties with many of the same celebrities they worked with during the day; the South by Southwest Conferences and Festivals offer the best of Austin nightlife to guests at this exclusive event. For more information or to sign up for one or all of the conferences, visit http://sxsw.com/.

Austin leads the nation in economic growth due to the diversity of local and statewide businesses, the University of Texas, and overall good business climate.

A recent Brookings Institution report shows that Austin’s economy continued to grow in 2009 while other cities experienced slumps and downturns in their economies. The report finds that Austin grew more from 2008 through 2009 than any other major metropolitan area in the United States. While that growth was a mere two percent increase, it far outstripped the country’s overall metropolitan performance, which decreased by an average of 2.4 percent nationwide.

Austin’s economic growth was spurred mostly by consumer spending and professional and technical services, according to the report. While manufacturing and durable goods decreased, technology-based industries continued to thrive in the area. Austin’s economy has grown approximately 35 percent in the last decade, and the last census showed a 48 percent increase in population in this highly desirable metropolitan region. Austin’s location in Texas has helped it to maintain a healthy economy, but the Brookings Institution report indicates that Austin easily outperformed other major cities in Texas including San Antonio and Dallas.

One major area of growth that has kept Austin’s economy strong is the health care field. Major health care insurers, service providers, and manufacturing concerns have flocked to Austin in recent years, drawn in part by the highly-trained workforce and the business-friendly attitude of Austin’s city leadership. The increasing population of Austin requires large-scale health care service providers, and in recent years more than $1 billion in health care construction and investment has taken place in the Austin area. This provides jobs for area residents; in fact, in 2009 health care employment increased 5.5% overall in the Austin metropolitan area in contrast to a two percent increase nationwide.

Austin’s diverse employment base is also cited as a reason for its economic success. In addition to health care employers, the state government, educational institutions, and many other corporate interests provide jobs for residents. The resilient housing market in Austin is due in part to the stability of these employers, along with consistent population growth creating constant demand for properties in the Austin area. Austin consistently ranks in the top tier of American cities for quality of life and economic opportunity, which attracts many businesses and individuals to the area.

The Brookings Institution report ranked three Texas cities in the top five cities in terms of economic growth. The top five in order are: Austin; Washington, D.C.; McAllen, Texas; Virginia Beach, Virginia, and San Antonio, Texas.

You can view the interactive map on the Brookings Institution website. Below is a snap-shot of the overall economic growth situation.

Brooking Insitution Map of Economic Growth

Offices and other commercial space in Austin are bucking the national trend of falling rents and difficult financing.

A recent Grubb & Ellis Company forecast lists Austin, Texas as the number one city in the nation for commercial real estate investment. Long considered one of the top ten markets in the U.S. for retail, industrial, multi-housing, and office real estate ventures, Austin tops the list for office real estate, beating out cities like Washington, D.C., Los Angeles, Houston, San Diego and Denver. Austin ranked seventh in the nation for retail investment opportunities; Los Angeles held onto the top spot in that category. Austin’s overall strong showing in the commercial market is the result of a number of synergistic factors that have allowed the area to weather recent downturns while remaining relatively unscathed.

Grubb & Ellis credited a strong local economy including government and educational sectors for much of Austin’s strong showing. Federal, state and local government agencies provide over 150,000 jobs in the Austin area, offering a stable employment base that has shielded Austin against the unemployment woes that have plagued other areas in recent years. During 2009, a year when many other major metropolitan areas saw severe job losses and worsening recession, Austin escaped the brunt of the economic downturn with an overall job loss rate of 0.7 percent.

Green technologies are bridging much of the employment gap. Solarbridge and Heliovolt have recently opened offices in the area, and Gemini Solar has begun construction on what will be the largest solar power plant in the country. The plant will be part of AustinEnergy’s overall plan to provide clean electrical energy to the region; located in eastern Travis County, it is expected to generate 30 megawatts of electrical power upon completion in 2010. These new expansions and construction projects will provide additional employment for Austin area residents, and are expected to stimulate growth in the local economy.

Austin’s real estate industry got another boost in a report by Oxford Commercial Inc., which showed that commercial office space leasing stabilized in the fourth quarter of 2009 after three straight quarters of steep declines. Prices for office space have increased in some areas, notably in the downtown area where demand is typically highest. The improvement in leasing figures is believed by most analysts to mark the beginning of an economic rebound in the Austin area. While Austin has experienced fewer difficulties than other areas, it has still felt some of the effects of the nationwide economic woes; this news along with the high ranking by Grubb & Ellis is expected to cement Austin’s position as one of the most desirable commercial markets in the nation.

Leander Commercial Listing by RE/MAX 1

After a year of sluggish sales, Austin saw a large jump in November '09.

A last-minute scramble to take advantage of tax credits and low interest rates is credited with a 58% increase in Austin home sales in November 2009 over the same period last year. The increase in sales is the largest in over a decade, and offers hope for recovery in the beleaguered residential real estate market. While overall home prices in Austin continue to fall, the decrease has begun to level off and seems to be reaching a state of equilibrium, allowing anxious sellers a well-deserved sigh of relief.

Analysts point to the recently extended First-Time Homebuyer Credit and interest rates that have dipped below five percent as the primary causes for this significant increase in sales. Additionally, while median home prices in Austin have not fallen as sharply as some experts had predicted, appreciable reductions in the asking prices of many homes have led to a surge in bargain-hunting by home buyers who might otherwise be priced out of the market. The median price of a single-family residence in Austin has decreased only two percent over the past year, demonstrating the resiliency and stability of the housing market in the metropolitan area.

Most real estate experts are cautiously optimistic about Austin’s residential real estate market going into 2010. Sales are expected to continue to grow more slowly, with no repeat of November’s record-setting figures. The expansion of the federal tax credit for first-time home buyers and continued low interest rates will likely continue to attract buyers to the market, especially in entry-level communities. However, as the economy begins to rebound, interest rates are expected to return to over five percent, and home sales will slow as a result.

As consumer confidence improves, economic conditions in Austin and throughout Texas are expected to continue to rebound, providing employment opportunities and spurring additional sales of new and existing homes. Home prices are expected to increase as well in correlation with the anticipated growth in demand. With ultra-low interest rates, federal incentives, and the current undervaluing of homes on the market, most real estate advisors believe that now is the time to invest in residential real estate, before interest rates and values return to higher levels later in 2010.

Hamilton Pool Preserve just outside of Austin.

Current economic conditions may have put a damper on vacation plans for the foreseeable future; that trip to Paris or Hawaii may have to wait for another year. Here in Austin, however, we have a number of outstanding vacation opportunities with little or no travel involved. These luxurious retreats can provide all the amenities of a world-class hotel, allowing you to get away from it all while staying close to home. Here are some ideas to help you start planning your next vacation to the sunny climes and picturesque attractions of Austin, Texas.

East Austin’s Lady Bird Lake is the setting for the spacious Architect’s House and the smaller Architect’s Guest House rental properties; these luxurious properties offer lodgings for four at affordable rates, with the use of kayaks included in the nightly rental charge. A deluxe high-definition projection television is available in the Architect’s House for stay-at-home types, and pets are considered on a case-by-case basis.

To truly experience all that Austin has to offer, book a night at the Hotel Irons, which features Austin music, books, and art and serves up some of the best Austin originals including honey and barbecue sauce in its well-stocked pantry. Dogs and kids are welcome in this chic two-story house, and the heated swimming pool makes this a family favorite all year round.

The ultimate fairytale vacation is available at Bouldin Castle with its dungeon, moat, and stone ramparts surrounding a tower. The castle is a new addition to the Austin scene; originally built in 1940 as a Roman Catholic church, it was reimagined in 2007 as a classic European castle. Of course, the moat is really a lap pool, and the vast medieval hall area was once a place of worship, but guests at this elaborate establishment enjoy the illusion created by the medieval décor and atmosphere in this 4,200 square foot Austin castle.

By vacationing in one of the deluxe accommodations available in Austin, residents can enjoy the benefits of well-deserved rest and relaxation while exploring the many attractions that are available in this diverse cosmopolitan city. Take a tour of Austin’s many art galleries, go for thrills and chills on the Austin Ghost Tour, chill out at one of the many live music venues in the “Live Music Capital of the World”, spelunk through the Inner Space Cavern, or book a ride on the antique Austin Steam Train; whatever you choose, you’ll save money and enjoy the best of Austin culture right here at home.

In keeping with the goal of becoming a green state, Texas has strived forward, establishing itself as a leader in green energy. Recently there have been several alternative energy resources that people are watching closely, among them is wind energy. To some the results are astonishing; however to Texans it is nothing new.

When a person thinks about wind-generated electricity, he sees those huge windmills, the long blades whirling in the breeze. And the state that leads the way in wind-generated power is Texas. The increase of 436 megawatts in the 3rd quarter brings her total wind-power capacity to nearly 8800 Megawatts, or approximately 28% of the total U.S. wind-generated power. California, by Comparison, generates less than 3000 megawatts by wind.

The Texas wind generation plants produce enough to power 2.5 million homes. Compare that to the total U.S. of 9 million. Texas is a true leader in this field.

The production of wind turbines is down because of the recession, but Texas still pushes ahead. And it has nearly three times the turbine-power megawatts of Iowa. Taking the steps to move forward with clean energy it will not be long before the country turns to Texas once again to see what to do correctly.

The American Wind Energy Association credits the stimulus bill for helping complete energy projects and for starting new ones.

Downtown Austin thrives with incredible growth and opportunity. With the growth and development there comes constant conflict. The downtown historical locations are being lost by all of the development. At this time, not one building in downtown Austin has been submitted for historical protection or landmark status. Also perplexing, none of the local or national historic registers has listed the area, in whole or in part, as a place of value. One example of a future development that should concern local Austin historians is the recent permit obtained by what will become the Gables Republic Park, a 16 story apartment community. The demolition permit is intended to partially tear down the 1913 Nabisco warehouse. For the last fifteen years the location housed the Ginger Man company.

The local Preserve District Council has put forward some ideas and proposals to save at least part of Downtown Austin. The tools of the proposal made by the ROMA Design Group and HR & A advisers have created a significant and active debate among property owners and local groups like the Heritage Society of Austin and the Downtown Austin New Alliance. Also chiming in actively is the Central Texas Chapter of the Congress for the New Urbanism, the Downtown Austin Neighborhood Association and the city of Austin’s design and planning commissions. ROMA’s recommendations were then presented in public on July 23. Until now, this issue is in hot debate, as many of the supporters of the concept do not support the specific idea’s laid out here: www.cityofaustin.org/downtown It will be debated and discussed in council again on the 24th. Members will provide policy direction and a vote may occur to direct a draft of the density bonus and applicable ordinances with specific warehouse district rules.

There will be much debate on how to balance historic preservation while still allowing for development to progress as needed. Before the council votes on the measure, and before they determine exactly what tools will be used, the community will need to voice their opinion. The public meeting will be held Sept 24th