Information provided by Ted C. Jones, PhD, Senior Vice
President—Chief Economist, Stewart Title Guaranty Company. --April
2009
Time to buy is RIGHT NOW!
U.S. home prices have declined across the nation in the past
year—albeit at varying levels. Latest national price declines range
from as little as 4.5 percent (Dallas, Texas) on a year-over-year
basis in February to as great as 35.2 percent (Phoenix, AZ) according
to S&P’s Case-Shiller Home Price Indices.
It is the anticipation by many prospective buyers for further home
price erosion that keeps them on the sidelines and from participating
in homeownership despite the lowest interest rates since Freddie Mac
commenced the statistical series in 1971.
While further price declines may be realized, the likelihood of
rising interest rates makes purchasing now a better option than
waiting for further potential value declines. Simply stated, there is
a greater possibility of interest rate increases than potential value
declines. Even with the price decline, the interest rate increase may
result in the buyer no longer being able to qualify for a loan on a
home they wish to purchase for which they qualify today. Despite
facing a potential in declining home values, now may be a better time
to buy.
To make the comparison simple, let’s assume a loan amount today of
$100,000 with a 30-year fixed-rate residential loan at 5 percent.
Nationwide at the time of this writing, the average 30-year rate was
4.85 percent per Freddie Mac.
A buyer today at 5 percent interest borrowing $100,000 has a monthly
principle and interest payment of $536.82. If prices decline 5
percent (and the loan amount does also) and interest rates rise just
½ of 1 percent, then the monthly payment remains the same ($539.40).
So if rates go up just 1 percent to 6 percent per year, then prices
must drop at least 10 percent for that same buyer to qualify for the
same monthly payment. A 1.5 percent increase in rates to 6.5 percent
requires a 15 percent price decline, and a 2 percent increase
necessitates a 20 percent price decline to qualify.
(Note: This 1 percent interest rate change to a 10 percent price
change is only true when interest rates are 5 percent as they are
today.)
Why will rates increase in the future more than prices decline?
Looking at the S&P’s Case-Shiller Home Price Indices, the aggregate
20-city prices have already declined 29.1 percent since peaking in
July 2006. For many cities, much of the price decline has already
taken place. And Austin has seen very little decline in the median
home price! And why will rates increase? Massive deficit spending has
a high potential to drive up inflation and hence interest rates.
Additionally, since these are the lowest rates since 1971, it’s not
hard to project the likelihood of rate increases.
So NOW may be the best time ever to buy a home and take advantage of
truly historic low interest rates!
Contact Craig Ellmaker at craig@austin-cashflow.com or at 512-784-1494
Filed under: Real Estate, Market Conditions, For Sale, For Rent/Lease, Announcements, Industry, Point2, Finances, Buyer Information, Seller Information, Austin, Texas Community Information
Tuesday, April 14, 2009, 1:28pm CDT
Austin ranks No. 1 for job growth potential
Texas dominates a new list on job growth potential among the nations
largest metropolitan areas.
Austin ranks No. 1 on the list of big cities for employment potential
from NewGeography.com. The Capital City posted modest job growth of
just 1 percent in 2008 but that was still better than a lot of other
big cities. That growth, coupled with Austins long-term potential to
continue creating new jobs, garnered it the top spot.
Texas major metros round out the top five spots on the big cities
list, with Houston coming in 2nd, San Antonio 3rd, Fort
Worth-Arlington 4th and Dallas 5th.
The list, based largely on job growth in regions across the nation
over the long, middle and short term, has changed over the years, but
the reports authors say the employment landscape has never looked
like this.
'In past iterations, we saw many fast-growing economies--some adding
jobs at annual rates of 3 percent to 5 percent,' said research Joel
Kotkin. 'Meanwhile, some grew more slowly, and others actually lost
jobs. This year, however, you can barely find a fast-growing economy
anywhere in this vast, diverse country. In 2008, 2 percent growth
made a city a veritable boom town.'
Consequently, Kotkin said, this year’s list might more aptly be
called the “'east worst.' Still, he said, those least worst economies
today largely mirror those that topped last years list, even if
those regions have recently experienced less growth than in prior
years.
In Austin for instance the 1 percent job growth in 2008 was less than
a third of its annual average since 2003.
Looking at the complete list of metro areas—including large, medium
and small cities Texas again does well in the top five. Odessa ranks
No. 1 on the overall list, followed by Grand Junction, Colo.;
Longview; Houma, La.; and Killeen-Temple.
Contact Craig Ellmaker, Broker for more details at craig@austin-cashflow.com or 512-784-1494
Filed under: Real Estate, Market Conditions, For Sale, For Rent/Lease, Announcements, Industry, Point2, Finances, Buyer Information, Seller Information, Austin, Texas Community Information
The First-Time Homebuyer Credit is definitely a hot topic in the marketplace. Since a lot of consumers are still confused on the details, I have provided you a link to the IRS website. You will find the IRS 5405 form with all of the details including eligibility, amount of the credit, repayment of the credit, etc.
http://www.irs.gov/pub/irs-pdf/f5405.pdf
Understanding Housing Tax Credits
There's upside to going green, doing short sale
By Ilyce Glink, Thursday, March 5, 2009.
inman News
Editor's note: The original article contained an error. Those homebuyers who are eligible for the $8,000 tax credit can claim that credit when filing their 2008 tax return.
As we move further into tax season, Treasury and IRS employees have been busy filling in the missing pieces on all of the new tax laws that were passed as part of the recent stimulus package.
When it comes to real estate, the rules are at best confusing. Let's shed a little compact fluorescent light on the subject:
2008 $7,500 tax credit vs. 2009 $8,000 tax credit
If you were a first-time buyer who purchased a home after April 8, 2008 through the end of the year, you might have realized that you could get a $7,500 tax credit on your 2008 tax return. This is a nonrefundable tax credit, which means that even if you don't pay $7,500 in taxes you'll still get that much in the way of a refund, provided you meet other qualifying details, according to Mark Luscombe, principal analyst for the tax and accounting group at CCH.
However, the 2008 $7,500 tax credit must be paid back in $500 equal installments over 15 years, which means that this tax credit effectively functions as a zero-interest loan. (Luscombe said the fine print in the new law says that if the taxpayer dies, the rest of the payback is forgiven. It's unclear whether both homeowners have to die if the property is owned jointly -- or just one of the homeowners.)
If you chose to close on Dec. 31, 2008, rather than Jan. 2, 2009 (perhaps to be able to itemize the interest and points on your 2008 tax return), you may be kicking yourself. The recently signed stimulus bill took the $7,500 tax credit and turned it into an $8,000 tax credit -- one that doesn't need to be repaid, Luscombe said.
But there are some wrinkles that require you to pay attention. To qualify for the $8,000 tax credit, you must earn less than $150,000 in adjusted gross income for couples filing jointly. Also, you must stay in the house (assuming it's your primary residence) for three years or there may be some payback requirement, according to Luscombe. (He's unclear how the IRS would be able to follow up, and some of the regulations and filing requirements aren't fully explained at the moment.) ... CONTINUED
The $8,000 first-time-buyer credit is good only for homes purchased by first-time buyers (or anyone who hasn't owned a home in the last three years) from Jan. 1, 2009 through Nov. 30, 2009 -- so don't wait to close in December or you'll miss out.
You can elect to take the credit on your 2008 taxes -- if you bought your house in 2009, you'll still qualify for the $8,000 tax credit on your 2008 tax return.
Going Green? Take a Tax Credit
The stimulus package eased requirements on energy tax credits. The $500 lifetime tax credit for building improvements has been increased to $1,500 for such improvements as the installation of energy-efficient windows, insulation, doors and mechanical systems.
In addition, you can take a 30 percent tax credit for every dollar you spend on things like solar heaters, fuel cells and heat pumps, Luscombe explained. The individual limits on particular expenditures have mostly been eliminated.
Foreclosure and Short-Sale Forgiveness
For those who are going through foreclosure or a short sale, where the house is selling for less than the amount owed on the mortgage, the forgiven debt will not be taxed as income through 2012.
"Up to $2 million of mortgage debt on the principal residence that has been forgiven can be excluded from income," Luscombe explained. "Taxpayers do not have to put it on their tax form," even if the lender has sent an IRS Form 1099.
For more info regarding the Austin Real Estate market contact Craig Ellmaker at 512-784-1494 or craig@ellmakerrealty.com
The number of active listings are up 1.6% over last year.
The number of new listings are down this week 12.50% (compared to 2/24/09 - 3/1/09).
Pendings are down this week 24.32%.
Sold residential units are down 26.32% compared to the same week last year.
How are we doing on sales prices? To get the full picture, check out the our web site for latest sold data.
For additional information on the current market, please contact Craig Ellmaker at 512-784-1494 or craig@ellmakerrealty.com
The Week in Review
Units for Sale:
Feb. 24 - Feb. 28, 2009
(compared to the same week in 2008)
New listings down this week 12.50%
Pendings are down 24.32%
Solds down 26.32%
As for Average Prices:
Feb. 24 - Feb. 28, 2009
Sold average sales prices increased 7.79% to $252,043. In 2008 it was $233,826 for the same week.
The Month In Review
February 2009
Units for Sale: (compared to February 2008)
New listings were down 22.35%.
Pendings were down 22.14%.
Solds decreased by 28.64%.
As for Average Prices:
The "New Listings" average list price is up 4.30% to 328,804. In February 2008 the average list price was $315,238.
Sold average sales prices increased 5.16% to $245,430. For February 2008 it was $233,390.
American Recovery and Reinvestment Act of 2009
H.R. 1, the American Recovery and Reinvestment Act of 2009, passed
the House on February 13, 2009, by a vote of 246 - 184. Later that
day, the Senate also passed the bill by a vote of 60 - 38. The
President signed the bill on February 17, 2009. The bill is a $780
billion package, with roughly 35% of the package devoted to tax cuts
(mostly for 2009) and the rest to spending intended to occur in 2009
and 2010. The mix of provisions of interest to REALTORS® changed
frequently throughout the legislative process, with changes
continuing to be made just hours before the measure was released
prior to the vote. In the end, the elements of NAR’s housing agenda
were included. Congress and the President have announced that a
finance and housing package (including tax provisions) will be the
next big initiative, so Congress has by no means finished its work
as it affects the housing industry and REALTORS®.
The bill includes the following provisions:
Homebuyer Tax Credit
FHA, Fannie Mae and Freddie Mac Loan Limits
Neighborhood Stabilization
Commercial Real Estate
Rural Housing Service
Low Income-Housing Grants
Tax Exempt Housing Bonds
Energy Efficient Housing Tax Credits & Grants
Transportation Investments
Broadband Deployment
Homebuyer Tax Credit – The bill provides for a $8,000 tax credit
that would be available to first-time home buyers for the purchase of
a principal residence on or after January 1, 2009 and before December
1, 2009. The credit does not require repayment. Most of the
mechanics of the credit will be the same as under the 2008 rules:
the credit will be claimed on a tax return to reduce the purchaser's
income tax liability. If any credit amount remains unused, then the
unused amount will be refunded as a check to the purchaser.
Chart Highlighting the Major Modifications to the First-Time
Homebuyer Tax Credit> (PDF: 309K)
NAR's Presentation: The 2009 First-Time Homebuyer Tax Credit (PDF:
319K)
FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last
year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans.
These limits were equal to the greater of 125% of the 2008 local area
median home price or $271,050 for FHA and $417,000 for Fannie and
Freddie, with an overall maximum cap of $729,750. For the few areas
where the 2009 limits were higher, the higher limits will apply. In
addition, the bill includes language providing the HUD Secretary with
the discretion, if warranted, to increase the loan limit for any
“sub-area”, i.e.an area smaller than a county. The Secretary's
discretion is again limited by the $729,750 cap. These 2009 limits
will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a
victory for homeowners, buyers and Realtors. While these new limits
were included in version of the original stimulus bill approved by
the House, the bill first approved by the Senate did not. NAR's Call
for Action to both the House and the Senate prior to the final vote
advocated strongly for the provisions which were then included in the
final bill approved by both Chambers.
Estimated 2009 FHA, Fannie Mae and Freddie Mac Loan Limits> (PDF:
1.3M)
Neighborhood Stabilization – Division A, Title XII of the bill
provides $2,000,000,000 in additional funding for the Neighborhood
Stabilization Program (NSP). The NSP was created by the Housing and
Economic Recovery Act of 2009 (Public Law 110–289) to provide grants
through the Community Development Block Grant program (CDBG) to
states and localities to address the problems that can be created
when whole neighborhoods are decimated by foreclosures. The funds can
be used to purchase, manage, repair and resell foreclosed and
abandoned properties. In addition, the funds can also be used by
states and localities to establish financing methods for the purchase
and redevelopment of foreclosed properties. After purchase the homes
must be used to assist individuals and families with incomes at or
below 120% of area median income. Twenty-five percent of funds must
be used for households with incomes at or below 50% of area median
income. By leveraging their expertise in partnership with others
from both the public and private sector, Realtors® in many
communities have been making important contributions to their local
communities’ neighborhood stabilization programs.
Commercial Real Estate - Commercial real estate is impacted primarily
through those provisions of the bill focused on green building and
energy efficiency as well as business tax incentives. H.R. 1 provides
significant funds for state energy programs, which could be used to
support commerical property owners' investment in energy efficiency
upgrades while commercial property owners seeking to invest in
alternative energy systems for onsite power generation would benefit
from the Department of Energy Renewable Energy Loan Guarantees
Program. Of particular benefit to small businesses would be certain
provisions of the bill that provide tax relief in the area of bonus
depreciation and capital expenditures, as well as the 5-Year
carryback of net operating losses for small businesses.
Rural Housing Service Rural Housing Service – The bill provides an
additional $500 million to existing USDA Rural Housing programs. The
RHS provides both a guaranteed loan program and a direct housing loan
program for those meeting the program’s eligibility criteria. The
direct loan program will receive $270 million while $230 million will
be allocated for unsubsidized guaranteed loans. It has been reported
that this level of funding would provide for an additional 192,000
homeowners.
Low Income Housing Grants - Allow states to trade in a portion of
their 2009 low-income housing tax credits for Treasury grants to
finance the construction or acquisition and rehabilitation of
low-income housing, including those with or without tax credit
allocations.
Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified
state and local bonds issued during 2009 and 2010 will not be subject
to the Alternative Minimum Tax (AMT). In addition, financial
institutions will have greater capacity to purchase tax-exempt state
and local bonds.
Energy Efficient Housing Tax Credits & Grants - To promote green jobs
and energy independence, ARRA invests significantly in efforts to
make homes and buildings more energy efficient. The bill provides
state and local governments with $6 billion in energy efficiency and
conservation grants for energy audits, retrofits and financial
incentives. Through 2010, homeowners will be able to claim a 30% tax
credit (up from 10%) for purchases of new furnaces, windows and
insulation. Another $5 billion will be available to modernize the
nation’s electricity grid and install smart meters on homes that help
to save consumers money. There is also $5 billion for weatherization
assistance for low income households and $2 billion for federally
assisted housing (section 8) efficiency efforts.
Transportation Investments - The bill provides $46.7 billion to
states and localities for capital investment for surface
transportation projects including highways, bridges, transit, and
rail projects. NAR policy supports increased spending on the types
of transportation infrastructure addressed in the bill with the
exception of Amtrak and high-speed inter-city rail where NAR has no
policy. These investments will tend to moderate traffic congestion
and support a variety of transportation alternatives which will
improve the quality of life of American communities and bolster the
value of real estate.
Broadband Deployment - The bill creates $7.2 billion in grants to
promote broadband deployment in unserved and underserved areas and
for mapping the availability of broadband service in the U.S. Any
entity is eligible to apply for a grant including municipalities,
public/private partnerships and private companies as long as they
comply with the grant conditions. The grants are subject to “network
neutrality” requirements to ensure that broadband networks be free of
restrictions on content, sites, or platforms, on the kinds of
equipment that may be attached, and on the modes of communication
allowed.
The bill also charges the FCC is with developing a national broadband
plan that shall seek to ensure that all Americans have access to
broadband capability and shall establish benchmarks for meeting that
goal.
These provisions are important victories for REALTORS because
increased broadband access promotes economic growth and expands
opportunities for home sales. A 2006 Commerce Department report
determined that property values are 6% higher in communities where
broadband is available.
For more info on the Austin market contact Craig Ellmaker at 512-784-1494 or at craig@ellmakerrealty.com
Best and Worst Bang for the Buck Cities
by Abha Bhattarai
Wednesday, October 15, 2008 provided by 
© Shutterstock
|
Your money will go farthest in Austin. |
The economic storm sweeping the country has left Americans with few places to hide.
But those looking to hunker down might want to head to Texas, where they can get the best value for their dollar.
That's because Austin and San Antonio lead our list of places where your money goes farthest. Residents of both enjoy affordable housing and promising prospects for job growth in coming years. Houston and Dallas also land in the top 10, at Nos. 4 and 7, respectively.
"Texas, as a whole, is one of the few economies that's performing extremely well because of the energy and technology sectors," says Andrew Gledhill, an economist at Moody's Economy.com. Plus, he added, military bases in San Antonio have continued to draw a steady steam of personnel and federal employees to the city, spurring widespread job growth.
The state's manufacturing sector has also grown in recent years, and a reputation for affordable housing continues to lure people to the South. When accounting for median household income, a house in Dallas, for example--with a median price of about $150,000--is four times more affordable than a house in Los Angeles, the worst-ranked city on our list.
A house in New York is three times less affordable than in Charlotte, N.C., and four times less than in Denver, two cities where your money goes far and where the median house costs $245,000, according to the National Association of Realtors.
Housing has remained affordable in the South and Midwest, thanks to growing populations, relatively lax building regulations and "lots and lots of land," said Daniel McCue, a research analyst at Harvard's Joint Center for Housing Studies.
Plus, he added, housing in cities like Houston "grew at a more controlled pace and didn't go overboard like in Phoenix or Las Vegas," which means houses won't lose much value in coming months.
Three Midwestern cities round out the top 10: Indianapolis; Columbus, Ohio; and Minneapolis. The worst-ranked cities, after Los Angeles, were Providence, R.I.; New Orleans; Philadelphia; and Cleveland.
Behind the Numbers
To ensure that our list reflected future value instead of past bargains, we began by looking at projected job growth through 2012 in the 40 largest U.S.-Census-defined metropolitan areas of the country with data from Moody's Economy.com.
Texan cities were a clear winner, with economists predicting job growth of at least 2% by 2012 in Austin, San Antonio, Dallas and Houston. By comparison, job growth in cities at the bottom of our list, including Los Angeles, Philadelphia and Cleveland, is expected to be about 0.2%.
© iStockphoto
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Los Angeles was the worst-ranked city. |
We then calculated the ratios between each city's median house price and median household income, using 2000 U.S. Census figures, the latest available, and 2007 data from the National Association of Realtors. Next, we compared median income to Moody's cost of living index.
Final factors included the average gas price in each city on a given day in October as collected by AAA, and year-over-year inflation growth as calculated by Moody's and Forbes.com.
Top Spots
The factors that make the cities on our list valuable--affordable housing, relatively low gas prices, sluggish inflation, a job market that's more vibrant than most--are more than an indication of cheap deals. Instead, they give us a glimpse of the cities that are likely to offer value. Cities like Detroit (which didn't make it to our list) are cheap, but low-income figures and a fading job market won't do much for sustaining worth.
The cities where you'll get the least value include areas like Los Angeles, New York and Washington, D.C., where median house prices are more than $400,000 and relatively few people can afford them. Cities like Providence, R.I., and Philadelphia are suffering from large waves of out-migration as more and more residents decide to pick up and leave. As a result, local economies stagnate, and prospects for job growth seem bleak--economists predict the number of jobs in Philadelphia will grow by 0.2% by 2012 and by 0.1% in Providence.
But, economists say, no state has been as hard hit as California.
"California is being faced with a combination of a zillion things--the state's been in a prolonged recession, and at the same time, you have some of the least affordable housing in the country,” says Gledhill. "We'll probably start seeing a bottom in the housing market late next year, but it'll be a while until we see a real recovery."
Los Angeles' misfortunes, however, have helped boost the economy in cities like Portland, Ore. It and Seattle have become attractive alternatives for those looking to leave California in search of affordable housing and lower costs of living.
The value of a dollar in different cities is also closely linked to local inflation rates. In Austin, for example, year-over-year inflation rates rose by 5%, while in Portland, that figure was nearly 5.7%. Local inflation rates ranged from 3.2% in St. Louis (No. 8 on the worst list) to 5.82% in Dallas (No. 7 on the best list).
But keep in mind, even cities that ranked well on our list aren't immune from the forces of today's downturn. Gledhill says economic growth in Portland, which has already begun to slow, will be compounded further by California's slowdown.
Things won't be much better in Columbus, according to Bodhi Ganguli, an economist at Moody's. So far, the city has weathered the storm better than its local counterparts. But he said, "an extremely high foreclosure rate" and bleak expectations for job growth will begin to take their toll on the city's economy.
Things may turn for those in Charlotte, which has fared relatively well so far. That's because housing prices never reached exorbitant highs, which shielded the city from a major housing bust.
But as the Charlotte-based Wachovia get swallowed by Wells Fargo, Gledhill says, "a more measured deterioration is on its way."
For more info on the Austin market contact Craig Ellmaker at 512-784-1494 o craig@ellmakerrealty.com
Filed under: Real Estate, Market Conditions, For Sale, Open Houses, Announcements, Events, Technology, Industry, Point2, Finances, Buyer Information, Seller Information, Austin, Texas Community Information
Hot job markets in a cooling economy
Texas has three of the hottest jobs markets, former leaders Phoenix, Las Vegas, others slip
bizjournals - September 8, 2008
The past year has been a rocky one for the U.S. economy.
The nation has seen 394,000 private-sector jobs slip away since mid-2007, equaling a loss of 7,570 jobs each week. The unemployment rate has shot up a full point during the same span -- from 4.7 percent at the halfway point of 2007 to 5.7 percent this year.
But a few sections of the country have managed to dodge this economic carnage. The most prominent exception is Texas, which is home to America's three hottest labor markets, according to a new bizjournals study.
Houston, Austin and Dallas-Fort Worth are 1-2-3 in the latest employment rankings of the nation's 100 largest metropolitan areas. The three Texas markets have added a total of 107,200 private-sector jobs since mid-2007, while keeping their unemployment rates below 5 percent.
Texas' impressive performance, ironically enough, is partially the result of higher energy costs, the same factor that has bedeviled much of the rest of the nation.
"The state's natural resources and mining industry, helped by higher oil prices, posted an annual employment growth rate of 6.4 percent from June 2007 to June 2008 and ranked first among Texas industries in employment-growth rate," said a midyear report from the Real Estate Center at Texas A&M University.
Texas also has been able to avoid the mortgage bubble that burst with devastating impact in other high-growth states such as California and Florida. A bizjournals study in March identified Houston as one of the nation's 10 most-affordable housing markets, with Dallas-Fort Worth and Austin close behind in 15th and 22nd place, respectively.
Bizjournals used a nine-part formula to analyze employment trends in the nation’s 100 largest labor markets. The formula was fueled by midyear data complied since 2003 by the U.S. Bureau of Labor Statistics.
The 100 markets, taken collectively, contained 69 percent of the nation's 116.2 million private-sector jobs as of June 2008.
The top-rated labor market outside of Texas -- fourth in the overall standings -- is Raleigh. Its job base has ballooned by 22.1 percent since 2003, dwarfing the national five-year growth rate of 6.3 percent.
Seattle ranks fifth, largely because of its addition of 20,500 private-sector jobs since mid-2007. Only Houston and Dallas-Fort Worth have posted bigger gains during the past year. For employment profiles on these cities and the rest of the 10 hottest job markets, click here.
The recent volatility in the U.S. economy has shuffled the standings dramatically since they were last compiled a year ago. Phoenix, which was No. 1 in bizjournals' 2007 employment rankings, has dropped all the way to 28th place this year. Six of last year's 10 hottest markets have fallen out of the top 10 this year.
The bottom of the list is considerably more stable, though it does include a few surprises.
Last place belongs once again to Detroit, which has ranked as the coldest job market in America the past two years. The biggest problem remains Detroit's heavy reliance on domestic automakers, resulting in a loss of 30,800 jobs since mid-2007.
"Obviously, the Michigan economy has been dreadful this decade," said a recent report from Michigan Future Inc., a nonprofit group that aims to rejuvenate the state's economy. "An unprecedented seven consecutive years of job losses. At the bottom of the national rankings in both employment and per capita income. This is largely because the engine that still drives the Michigan economy is the troubled domestic auto industry."
The second-coldest labor market has suffered a dramatic decline the past couple of years. Sarasota-Bradenton, Fla., which was fourth-best in bizjournals' 2006 employment rankings, now sits in 99th place, a victim of Florida's real-estate woes. It has lost 11,400 jobs since mid-2007.
Other industrial markets among the coldest job markets include: Providence, Toledo, Lansing, Mich., and Dayton. All but Providence were also in the bottom 10 last year.
Study says Texas still top state for business
Austin Business Journal
The business climate in Texas is the best in the nation, according to a study by marketing company Development Counsellors International. In the poll of 281 corporate executives across the country, 40.8 percent of participants say Texas had the most favorable business climate -- an accolade the Lone Star State has held since 1999. Executives cited a strong labor market, low operating costs and a pro-business climate as factors in their decision. North Carolina ranked second, while Georgia was third, followed by Tennessee and Florida, which tied for fourth place. For the third consecutive year, California was viewed as the state with the least favorable business climate. New York, Michigan, New Jersey and Massachusetts rounded out the bottom five. "With the battle for business more intense than ever, states and their economic development organizations need to pay close attention to the results of this survey," DCI President Andrew Levine says in a statement. "Whether accurate or misguided, perceptions about a location's business climate often play a crucial role in site selection decisions and where companies invest money and create jobs." DCI says its survey was sent to a random selection of 3,591 U.S. companies with annual revenue of at least $25 million. The study is conducted every three years.
Wednesday, May 7, 2008 - 11:35 AM CDT
Austin recession-proof?
Austin Business Journal
Austin was named third on the Forbes.com list of the top 10 "Recession-Proof Cities" in the United States.
To create the list, the magazine looked at the 50 largest U.S. metros, examining key measures, such as unemployment data, non-farm related job growth, median home prices and data from a 2007 report, "U.S. Metro Economies: The Mortgage Crisis" by the U.S. Conference of Mayors.
At number three, Austin was right behind San Antonio, which grabbed the second spot thanks to solid employment figures and affordable home prices that continue to rise.
Oklahoma City took the No. 1 spot because of its strong housing market and solid growth in agriculture, energy and manufacturing.
For its part, Austin was lauded for being a hip town with one of the lowest unemployment rates in the country.
Forbes magazine's list of recession-proof cities also included: Houston, Dallas, Charlotte, N.C., Raleigh, N.C., Salt Lake City, San Jose, Calif. and Seattle.
Forbes says that Texas cities such as San Antonio, Austin, Houston and Dallas-Fort Worth have benefitted from historically lower home prices, land availability and 'little zoning'.
All four Texas cities boast falling unemployment rates, according to Forbes, with Austin dropping from 3.8 percent to 3.6 percent.
Forbes.com
When your ready to buy, sell or invest in the Austin area please contact Craig Ellmaker, e-Pro Broker at 512-784-1494 or craig@austin-cashflow.com
Tourism takes off in Cedar Park
Written by Mark Collins Thursday, 17 April 2008
With big projects on the horizon, Cedar Park and Leander are beginning to explore tourism for the first time.
"We want a city of destination, and we are getting closer to that with the entertainment center," Cedar Park city council member Mitch Fuller said.
A city of destination uses a tourist feature to draw people from outside of the region and encourage them to stay in the city overnight.
"The primary goal for building an event center is the city council's desire to make Cedar Park a self-sustaining city where people can live, work and play," Cedar Park Communications Manager Melanie Carr said. "The event center will definitely offer our residents an entertainment option. Bringing in tourists will be a big perk."
The proposed water park would also be a large draw for tourists.
"The implications of a water park would be a tremendous boost for tourism," Carr said. "That would be something that would set us apart from most communities and would be a real reason why people would travel to, and spend the night, in Cedar Park."
Branding
The Cedar Park Tourism Advisory Board, a seven member team appointed by city council and charged with promoting tourism in the city, recently extended its contract with marketing firm Marketing Edge Ventures to continue its marketing strategy and branding campaign to advertise Cedar Park as a tourist destination.
"Our initial strategy was realizing that even though we didn't have a lot of typical tourist attractions, we have a whole lot coming that are very geared towards families," said Marketing Edge Ventures co-owner Amy Stevens. "Our strategy has been built around the slogan 'Cedar Park - where families come for fun.'"
That strategy included the launching of a new website, www.cedarparkfun.com. The site includes a listing of local events and downloadable trip itineraries with events in and around Cedar Park. The site is intended for travelers, but has proven to be a good resource for locals looking for activities as well.Branding, or making the Cedar Park name recognizable, is also an important part of what Marketing Edge Ventures does.
"I want to be really careful that we don't become 'that place northwest of Austin,'" Stevens said. "I want people to know it's called Cedar Park."
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Stevens used the city of Grapevine as an example of successful branding. Grapevine is nestled in the shadow of Ft. Worth and is lower in population than Cedar Park, yet the city is well known across the state for its water parks and hotels.
As part of the branding effort, the event center will bear Cedar Park's name. Hicks Cedar Park, the firm behind the event center, can sell the naming rights to the building, but the final name must include the words: Cedar Park.
"Tourism and marketing have been an area that hasn't had much attention in the past due to the lack of attractions, but both our Council and Tourism Advisory Board realize that this area will soon be of utmost importance," said Carr. "It's critical that we have a marketing strategy in place in order to handle the tourists we expect to start flooding our way when new attractions open."
Tourism in Leander
Leander has gotten its first taste of tourism in recent years by hosting the kite festival in March, car show in July and bluegrass festival in September. In only its third year, the bluegrass festival has garnered interest from out-of-state bands looking to participate. The kite festival, in its second year, had more than 600 citizens partake in the festivities.
"We're starting small and it's growing," Leander Parks and Recreation Director Steve Bosak said. "We try an event and if it is well received and we get good feedback, then we will continue it."
"When we first started <talking about> tourism, people laughed," Leander Chamber of Commerce President Mary Bradshaw said. "But we need to start thinking about this now because it's coming, and when it comes it will hit fast. We really need to start thinking about tourism and be prepared for it."
"There have been some hotel people nudging around for a while," Clennan said. "Lately <the developers> have been a little more serious. You can tell they are starting to have a lot more interest in the area."
Hotels are typically built in a city when it reaches a population of 30,000 to 32,000. Leander's current population is estimated to be a little more than 24,000.
"It would be nice to have something come in with a conference space," Clennan said. "It doesn't have to be huge, just enough room to host some events and get some people to stay the night."
Bradshaw is hoping Leander gets a place for tourists to stay. Money collected from the hotel occupancy tax would give the city it's first ever tourism budget.
"If we got a hotel, even if it was a 35-room Days Inn, we would start collecting some hotel tax money," Bradshaw said. "We could put together a brochure, have it distributed locally and eventually start shipping them in small quantities to all of the 12 welcome centers all over the state and that becomes huge."
Hotel Occupancy Tax
Tourism is funded primarily through the hotel occupancy tax, a tax levied on any traveler who pays for a room or space with a cost of $2 or more per day. The hotel tax rate is decided on by the city council and must pass before it can be charged.
In Cedar Park, the current hotel occupancy tax is seven percent.
Funds collected from the hotel occupancy tax are required by law to pass a two-part test before they are spent.
Marketing Edge Ventures is funded entirely by money from the hotel occupancy tax. Cedar Park also uses the money to fund advertisements, posters and banners to promote city events, and gives money to local organizations
How tourism is funded
Step 1: City council votes on a hotel occupancy tax rate. In Cedar Park that rate is seven percent. Leander does not have any hotels so it does not have a rate.
Step 2: Travelers who stay in a space costing $2 or more per night must pay the hotel occupancy tax.
Step 3: Hotels submit the hotel occupancy tax directly to the city once a month. The money goes into a seperate tourism account.
Step 4: The city spends money on flyers, promotions etc. to generate more tourism. Expenditures must, by law, pass a two-part test to be valid.
Two-part test for tourism spending
1: Every expenditure must directly enhance and promote tourism and the convention and hotel industry.
2: Every expenditure must clearly fit into one of six statutorily provided categories for expenditure of local hotel occupancy tax revenues.
Fund the establishment, improvement or maintenance of a convention center or visitor information center.
Paying the administrative costs for facilitating convention registration.
Paying for advertising, solicitations and promotions that attract tourists and convention delegates to the city or its vicinity.
Expenditures that promote the arts.
Funding historical restoration or preservation programs.
Funding costs in certain counties to hold sporting events that substantially increase hotel activity.
Contact Ellmaker Realty for more info at info@austin-cashflow or at 512-258-9899
By Ben Wear | Tuesday, April 22, 2008, 09:57 AM A consultant hired by the city is recommending a 14-mile light rail or "ultra-light rail" system for Central Austin, not streetcars as proposed earlier by Capital Metro, according to Austin City Council Member Brewster McCracken. The system would run from the airport to downtown, through the University of Texas and then east to the emerging Mueller development.The route is essentially the same one that McCracken and Austin Mayor Will Wynn have been talking about over the past six months or so. The proposal comes as a "transit task force" formed by Wynn and state Sen. Kirk Watson moves into the final stages of creating a "decision tree" to analyze rail proposals.
That group would almost surely analyze this proposal. But it is not clear if such an examination could occur quickly enough for the light rail proposal -- assuming it passes muster with the Wynn-Watson group and then the Capital Area Metropolitan Planning Organization -- to be put before voters in November. Wynn has said he would like to have a rail election this year.
McCracken, at least, believes that the proposal can quickly make it through that gauntlet to a public vote in November.
"Yes, I think that's likely," he said.
The recommendation, to be released this evening at a community forum, will not include a specific cost estimate, McCracken said. However, McCracken said that the cost would be somewhere in the broad range between $5 million a mile and $30 million a mile, depending mostly on how many underground utility lines would have to be relocated for such a project. That would put it between $70 million and $420 million.
Those figures, he said, likely do not include the cost of the cars.
The diesel-powered cars Capital Metro has purchased for its "red line" commuter service from Leander to downtown, set to open in a few months, cost about $6 million apiece and the agency bought six of them to start with. But light rail cars typically cost less than that.
According to McCracken, the recommendation from the ROMA Design Group will propose putting double tracks (allowing travel in both directions simultaneously) from Austin-Bergstrom International Airport and then heading west on Riverside Drive. The route would turn north at Congress Avenue (although there could be a spur to the parking-poor Long Center, McCracken said), cross the Ann Richards Bridge and then go through downtown either on Congress or San Jacinto Street.
Then it would pass through UT, turning east at Dean Keeton Street and going along Manor Road to the Mueller development.
A major criticism of the light rail plan that voters rejected in 2000 was that it would take street lanes away from car traffic. Not so, in this case, McCracken said, although the tracks would be in "dedicated lanes" segregated from cars. The space for the tracks, McCracken said, would come from available right of way on Riverside east of Interstate 35. Then, downtown, the tracks would run on pavement currently occupied by parked cars, he said.
The tracks, McCracken said, might take two lanes from the bridge over Lady Bird Lake, he said, although alternatively it could use the bridge space now taken up by sidewalks. In that case, a sidewalk alternative bridge, such as was added to the South First Street bridge, would continue pedestrian and bicycle access across the lake on Congress.
Light rail, as opposed to the commuter rail opening late this year or early next year, is generally powered by electricity and has a system or overhead wires that connect to devices on the top of the cars called "catenaries." Light rail cars run faster than streetcars, but at speeds comparable to the car traffic around them.
Although having dedicated lanes would spare the light rail cars from delay associated with car traffic, they would still have to stop for red lights on city streets.
Capital Metro officials have said they have no money left in the kitty to pay for more rail. So where would the money come from to build this?
McCracken said that ROMA will outline a funding scenario that includes taking about a quarter of Capital Metro's 1 percent sales tax (although the agency has indicated it needs it all for current bus and rail expenses), contributions from the city and other local government, from property taxes likely to be generated by new development along the line and potentially from airport bonds.
"We think it is possible to build this with no new taxes," McCracken said.
Austin gives preliminary OK to new zoning near rail stopsAustin Business Journal
The Austin City Council on April 10 gave preliminary approval for new zoning plans at future stops on the commuter rail, due to begin service this fall.
The plans, which must be voted on a second time before they are final, are for half-mile radius areas around future rail stations at Lamar Boulevard and Justin Lane (also known as Crestview Station), Martin Luther King Jr. Boulevard, and at Plaza Saltillo in East Austin. Council members are expected to cast their final vote for the zoning in the coming weeks.
The station area plans were approved for transit-oriented development zoning creating denser, pedestrian-friendly zoning in those areas, many of them are currently zoned for commercial or industrial uses.
Several developers are signed up for TOD districts. Trammell Crow and Stratus Properties Inc. are partnering on a mixed-use development that will bring 1,000 homes and apartments to a 73-acre tract near the Crestview Station at North Lamar and Airport boulevards.
Former Dell Inc. executive Tom Meredith has signed on to develop a mixed-use project on 30 acres referred to as the Featherlite tract, between MLK Boulevard and 12th Street near the MLK rail station at Clifford Ave.
Other developers have expressed interest but held off commitments pending approval of the final TOD plans, says Sonya Lopez, a city senior planner.
Contact Ellmaker Realty at 512-258-9899 or info@ellmakerrealty.com for more info about whats going on in the Austin area.
Austin Business Journal
3/27/2008
Employment in the Austin area increased by 3.2 percent in the last year, according to the latest labor market figures.
The Austin-Round Rock metropolitan area had about 767,600 jobs as of February, that's 6,400 more than January and 24,100 more than in February 2007.
The local employment sectors showing the biggest increase in new jobs in the last 12 months were construction (5.1 percent), professional and business services (5.2 percent) and leisure and hospitality (5.3 percent).
The local unemployment rate stands at 3.6 percent, down from 3.8 percent a year ago.
Employers added about 235,000 new jobs across Texas in the last year, dropping the state's unemployment rate from 4.5 percent to 4.1 percent. That's a 2.3 percent increase in total Texas jobs over the 12-month period.
"Texas has once again reached a prominent benchmark - a more than 30-year record low for unemployment," says newly appointed Texas Workforce Commission Chairman Tom Pauken. "Our falling unemployment, coupled with this month's significant job gains, indicates the sustained health and vitality of the Texas economy."
Take Control: Where are the hot jobs?
Once again Austin, Texas proves to be untouchable compared to the rest of the nation!
ABC NEWS
March 12, 2008
Top 5 Cities to Find a Job:
1. Salt Lake City, Utah, tops the list in job growth with opportunities in nursing, education and banking.
2. Witchita, Kan., where aircraft and petroleum industries have bounced back and looking to hire for their production lines. There are also plenty of opportunities for health care workers.
3. Austin, Texas, is a vibrant and young city with an entrepreneurial spirit, so a good place to think about opening a small business. Also a wide range of career choices in technology.
4. Atlanta, Ga., is a hub for the financial and technology industries with positions in accounting, civil and electiral engineering and jobs at Fortune 500 companies like Coca Cola, UPS and Home Depot.
5. Fort Worth, Texas, with job opportunities in teaching, construction, even vision care products and air craft equipment.
Whether your ready to move to Austin or just want to invest, contact Ellmaker Realty!
http://www.austin-cashflow.com
Filed under: Real Estate, Market Conditions, Announcements, Events, Technology, Industry, Point2, Buyer Information, Seller Information, Austin, Texas Community Information
Entrepreneur.com
"Best and Worst Places to Buy a House"
23 January 2008
Best and Worst Places to Buy a House
Whether you're looking for an investment property or a place to live, here's a look at the cities you should seek out and avoid in 2008.
By Danielle Babb | January 23, 2008
The housing crunch and the excessive inventory--exceeding 10 months on resale homes--continues to take its toll on housing prices. But over the long term, housing is still a good investment. In fact, it's more than an investment; it's a home. Plus, you're not really saving anything by renting, as the costs of renting and owning are about equal (well, owning may be a little more). The tax benefits of home ownership far outweigh renting, too. With good housing prices in many great areas, this may indeed be the time to buy.
So now that I've convinced you this is a good time to buy a home, the next question is, Where do you buy one? No matter where you look, you should check out some basic economic fundamentals before buying. Is job growth stable in the area? Is income keeping up with inflation? Is crime above the national average? Is there a higher-than-average rate of foreclosures? These issues and others play a factor when deciding where to buy a house.
As a real estate investor and analyst, it's my job to provide buyers with qualified information on where to buy--and where to stay away from. Here are my thoughts for 2008 based on the indicators noted above.
Whether you're an investor like me or you're looking to purchase that next move up, here are my picks for the best areas to buy a home:
Killeen, Round Rock, Austin, Texas: (Leander is in the middle of all this activity, 26 miles NNW of Austin, 8 miles NNW of Round Rock and 50 miles SSW of Killeen) Killeen has the lowest average home price in any market in the nation while still maintaining quality. Round Rock and Austin have seen incredible job growth and very stable home prices despite the downturn nationwide. Jobs continue to grow here--a factor for keeping inventory low and prices stable.
Mission Viejo, California: Mission Viejo has the lowest crime statistics in the nation. With no murders in 2007 and a low rate of violent crime, this is a good place to raise a family. Prices are relatively stable, and the job market in the nearby cities of Irvine and San Diego means there is consistent demand from job seekers.
Palm Beach, Florida: I'm taking a risk here because this area has been pummeled by foreclosures in 2007. But there are also a lot of boomers retiring, and Palm Beach is looking mighty attractive. If you don't like this high of a risk (which translates to great prices), check out Tampa or Clearwater in the same state.
Las Vegas, Nevada: Yes, Las Vegas has been hit hard by incoming investors, who watched their home values disappear and then left those homes empty. Las Vegas comes in quite high on the national foreclosure list, almost always within the top three metro areas. But there's an upside--a very strong job market. In 2007, Las Vegas experienced a 12 percent increase in population, partly driven by retirees looking for Sunbelt states to move to. Coupled with low prices, we could see inventories reduced here, which would also stabilize prices. Be careful what you buy, but I like it.
Places to Avoid
And now for the places you definitely want to avoid:
Detroit, Michigan: The job market is in chaos. People are getting laid off left and right. National statistics seem to point to a significant problem with job loss and job income not keeping up with inflation. As a result, many nice neighborhoods are now abandoned due to people leaving their homes. Inventories exceed one year (under six months is what we want to see), and the foreclosure problem hit Detroit hard. With fewer jobs to support home purchases, I don't see Detroit turning around anytime soon.
Miami, Florida: Palm Beach is different than Miami, which sits in its gorgeous aqua water with half-built and abandoned condos, a shrinking job market, a tough time getting insurance against hurricanes and a job problem. Yes, you can get a good deal, but do this only if you don't need the appreciation from the home in the next decade.
Riverside/San Bernardino, California: Even those lucky homeowners that bought before the boom are feeling it now. Riverside and San Bernardino counties in Southern California consistently lead California in foreclosures and rank in the top three metro areas nationally. The prices have plummeted, and jobs in the area are scarce. People moved there due to lack of affordability in Orange and Los Angeles counties (where their jobs were), so it's a commuter's area. Now that prices in the two counties have dropped, people can live close to their jobs. Although I grew up in Riverside County, I could never recommend it to anyone looking to buy a home.
Contact Ellmaker Realty at 512-258-9899 or email at info@austin-cashflow.com for more info.