Ellmaker Realty Blog

Austin best economic recovery in U.S. Austin Business Journal

2010-03-09T18:04:00Z

Forbes: Austin best economic recovery in U.S. Austin Business Journal The Austin-Round Rock area tied for first on a list of large metros where the recession is easing. Central Texas tied Washington D.C. in the Forbes.com ranking that compiles job growth and real estate industry improvement, among other indicators. Washington has one of the lowest unemployment rates in the nation, 6.2 percent, and the city produced more goods and services than another other in 2008. Austin has also maintained relatively lower jobless rates, though the number increased to 7.6 percent last month from 7 percent, according to the Texas Workforce Commission. Statewide, the rate was unchanged at 8.2 percent from December to January, compared to 9.7 percent nationally. Austin and Washington D.C. also benefit from their high government job generation, according to Forbes. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research. Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list. Job growth projections were based on information from Moody's. The listing also considered median home sale price changes and Metropolitan Gross Domestic Product.

For more information please contact Craig Ellmaker at craig@ellmakerrealty.com

Facebook opening 200-person Austin office

2010-02-26T14:50:00Z

Thursday, February 25, 2010, 9:58am CST Facebook opening 200-person Austin office Austin Business Journal - by Jacob Dirr Staff Writer Facebook is creating 200 jobs in Austin, thanks to a $1.4 million incentive from the state of Texas. The move will be the first major U.S. expansion outside of Palo Alto, Calif., where the company is headquartered, according to officials. It is investing about $3.1 million to set up operations in Texas, according to Gov. Rick Perry's office. Facebook employs about 800 people. It reported about $50 million in revenue last year. 'Facebook continues to grow and Austin, with its deep talent pool, would allow us to hire the high-caliber employees we need to properly serve the people, advertisers and developers that rely on our service,' Facebook Chief Operating Officer Sheryl Sandberg said. Gov. Perry said the new jobs will enhance the Central Texas’ robust technology industry and strengthen the economy. All contents of this site © American City Business Journals Inc. All rights reserved. Link to Article: http://austin.bizjournals.com/austin/stories/2010/02/22/daily44.html

For more info about the Austin are please contact Craig at craig@ellmakerrealty.com

Forbes and Moody’s Economy.com projects Austin's economy will grow by 32%

2010-01-12T13:58:00Z

In the late 80’s and early 90’s in Austin, job growth stopped, real estate values dropped and people left town. Probably because of the severity of that recession, Austin has faired much better this time. Home prices did not increase more than could be supported by median family incomes. Thanks to Texas’s home equity laws, consumers could not borrow against their home appreciation nearly as easily as homeowners in other states – which helped keep home prices stable and consumer debt manageable. If you don’t have a bubble then you don’t have a bust. While most other major real estate markets have seen home prices drop by as much as 50% and experienced high unemployment, Austin’s median home price has been stable or seen only a small drop. Job losses have been slight.

Now, Forbes and Moody’s Economy.com projects Austin's economy will grow by 32% over the five year period from 2007 to 2012. Not only is Austin’s economy growing, but it's growth rate is nearly 50% higher than #2 ranked Fort Myers, Florida. Equally important to Austin’s economic growth is Austin's population growth which is expected to grow by an amazing 15%.

“To compile our list, we looked at all of the country's 363 metropolitan areas, defined by the U.S. Census Bureau as a geographic region with a "core urban area" of at least 50,000 people. Because many small metro areas are high growth--and because we wanted to show growth in large cities as well--we split the group into two classes: the largest 100 metro areas (with at least 528,000 people) and everyone else. We use projections run for us by Moody's Economy.com to show growth in GMP between 2007-2012.

Of course, if one looks at economic growth in the country's largest 100 metros, the usual suspects jump to the top of the list. With an estimated 32% GMP growth from 2007-2012, Austin, Texas, is the winner for big metros. Atlanta, Seattle, Orlando, Houston and San Jose, Calif., also appear high on the list. What do they all have in common? They're tech hubs with proximity to universities and a healthy increase in population. Austin's population, for example, is expected to increase by nearly 15% by 2012, according to Moody's Economy.com forecasts.”

Full Article: http://www.forbes.com/2008/01/30/economy-cities-alabama-biz-cx_bw_0130econcities.html

For more info contact Craig Ellmaker at craig@austin-cashflow.com

Area home sales jump, fueled by tax credit

2009-10-22T17:56:00Z

AUSTIN HOME SALES
Area home sales jump, fueled by tax credit
By Shonda Novak
AMERICAN-STATESMAN STAFF
Wednesday, October 21, 2009

Existing home sales in Central Texas rose 6.4 percent in September, the first year-over-year increase in more than two years, and the median sales price also was up, rising 2 percent to $185,250, the Austin Board of Realtors reported Tuesday.

Sales were buoyed by factors including a federal tax credit of up to $8,000 for eligible first-time homebuyers and mortgage interest rates that are hovering around 5 percent.

The 1,780 sales last month were up from 1,748 in August and up from 1,673 in September 2008. The number of sales due to close in October was up 24 percent from a year ago, an indication that the tax credit is continuing to spur sales, real estate agents and experts say.

With pending sales up and prices stabilizing, it seems "to indicate a market that is beginning to recover," said Charles Heimsath, an Austin real estate consultant, although he predicts "a slow ascent into recovery over the next 12 to 18 months."

Heimsath and other experts have cautioned that the housing market, locally and nationally, could lose steam if the tax credit is not renewed, although there are proposals in Congress to extend or broaden it.

"Still, it does appear the worst of the housing downturn is behind us, although it may be some time before we see a marked turn upward," said D'Ann Petersen, an economist with the Federal Reserve Bank of Dallas, adding that she expects "a slow, prolonged recovery."

Nearly half the sales in September were for homes costing between $100,000 and $199,999 — a typical price range for a first-time home.

Nick Teplitz moved to Austin from Los Angeles in late May, drawn by the city's reputation as a "hip, fun city" and lower housing costs than in California.

He said the tax credit was a factor in his purchase of a unit at 2020 Congress, an apartment building that was converted to condominiums on South Congress Avenue.

Teplitz, a writer, closed on his condo June 30, paying under $100,000 for a one-bedroom unit.

Instead of "flushing $2,000 a month down the toilet" on rent in Los Angeles, Teplitz, 32, found he could own his home in Austin for one-third that much.

He said he thinks the tax credit should be extended, because it's "definitely going to keep the market afloat right now ... and keep people buying."

Jay Gohil, chairman of the real estate board, said the tax credit is likely to feed sales into November as buyers scramble to make the deadline.

The credit was passed earlier this year as part of the federal stimulus package. It provides a 10 percent credit, up to $8,000, for first-time buyers and those who have not owned a home in the previous three years. It is available to single buyers who make less than $75,000 a year and couples who make $150,000 or less.
Through September, the 14,286 home sales were down 14 percent from the same nine months of 2008, and the median price was unchanged, at $190,000.

But home sales have been slowly improving this year along with the economy, spurred by the tax credit and low mortgage rates.

Nell Hanson, a real estate agent with JB Goodwin Co., said the company "has had a huge influx of buyers who want to use the tax credit." Although an extension of the credit would be beneficial, "the low interest rates and the potential rise in the median price in Austin for 2010 will keep sales going up," Hanson said.

Greg Cooper, CEO of Goldwasser Real Estate in Austin, said "it would be suicide for the (housing) market" if the tax credit isn't renewed.

"I can't see them (Congress) taking it away right now," Cooper said, at least not until job growth comes back and unemployment eases.

Cooper said sales at his firm were up 51 percent in September over a year earlier, and "if we close what we have pending," October's sales will be triple that of last October's.

"Obviously, the stimulus is clearly helping," Cooper said.

Steve Cochrane, managing director at Moody's Economy.com, an economic forecasting and consulting firm, said he thinks that there is "a better than even chance" the credit will be renewed. He noted that there are positive ripple effects, as owners sell their entry-level homes to first-time buyers and are able to move to another home.

Asked whether the credit is artificially propping up the market, Cochrane said: "One can argue that any kind of government stimulus is artificial. But if it acts as the spark to get the market going, that can be fine. The government doesn't have to stay in the business of providing the spark forever."

For more info contact Craig Ellmaker at craig@ellmakerrealty.com or at 512-784-1494

Austin-area real estate market shows improvement over last year

2009-10-22T17:53:00Z

Austin-area real estate market shows improvement over last year
Austin Board of REALTORS® releases September 2009 real estate statistics

AUSTIN, Texas – Oct. 20, 2009 – According to the September 2009 Multiple Listing Service report by the Austin Board of REALTORS®, activity in the Austin-area real estate market has shown signs of improvement from September 2008.

In September 2009, 1,780 homes were sold, a six percent increase from 1,673 homes sold in September 2008. The median home price for Austin in September 2009 was $185,250, up two percent from the same month the prior year.

“This spur in activity compared to last year is a good sign,” said Jay Gohil, chairman of the Austin Board of REALTORS®. “It shows the Austin-area real estate market is healthy and has remained stable.”

According to the report, the average median home price in the third quarter of 2009 is statistically similar to that of the third quarter of 2008. In addition, the third quarter of 2009 represented the highest quarterly average for home sales this year. There was an average of 1,857 homes sold during the third quarter of 2009, a 3 percent decrease compared to the third quarter of 2008 which averaged approximately 1,912 homes sold.

Gohil continued, “As the deadline for the first-time homebuyer tax credit approaches on Nov. 30, we may continue to see increases in home sales into October and November.” On Nov. 30, the tax credit for first-time homebuyers of up to $8,000 expires. To qualify, first-time homebuyers must close their real estate transaction by that date, a process that requires anywhere from 14 to 60 days or more.

For more info contact Craig Ellmaker at craig@ellmakerrealty.com or at 512-784-1494

It's a great long term trend for Austin, Tx!

2009-10-13T13:13:00Z

It's a great long term trend for Austin. Knowledge workers will increasingly play a strong role in the economic health of a community. Startups and company growth depend on having a well educated work force and Austin is well positioned with 120,000 students enrolled in some type of upper education program. That number grows to 300,000 when you look at a 200 mile radius – all of whom would probably choose to live in Austin given the opportunity!

Remember, I'm never too busy for your referrals of contracts!
Allison

Wednesday, September 30, 2009, 1:33pm CDT
Austin cited as one of the next youth-magnet cities
Austin Business Journal

What do Washington D.C., Seattle, New York, Portland and Austin all have in common? They are the five cities that top a new Wall Street Journal poll on where young people are likely to flock once economic recovery takes hold.

The Journal polled a panel of experts, from demographers to economists, on where young college graduates are likely to congregate in coming years. Austin ranked fifth on the list with the lowest unemployment rate of the five cities and a relatively high median household income. The Capital of Texas didn't fare quite so well as the others on the education front, with 41.8 percent of 25-35 year olds holding a bachelors degree or higher compared with 61.3 percent in Washington and 64.2 percent in Seattle.

According to the Journal, 'Austin has become a gathering place for tech- and arts-conscious young adults.' The paper also lauded Austin for its cultural attractions like the Austin City Limits Music Festival and South by Southwest. But some of those polled by the Journal expressed concern over how strongly Austin will bounce back from the recession.

The top 10 post-recession boom towns for the young and ambitious:

1. (tie) Washington D.C.

1. Seattle

3. New York

4. Portland

5. Austin

6. San Jose, Calif.

7. Denver

8. Raleigh-Durham, N.C.

9. Dallas

10. Chicago

For more info contact Craig Ellmaker at craig@ellmakerrealty.com or 512-784-1494

www.ellmakerrealty.com

Report: Austin among best performing U.S. metros

2009-10-13T13:10:00Z

Austin Business Journal
Tuesday, September 15, 2009, 11:52am CDT
Report: Austin among best performing U.S. metros

Austin and San Antonio will be the first two U.S. cities to recover from the recession, according to a new national forecast from IHS Global Insight.

The forecast from the Lexington, Mass. economic research firm suggests the two Texas cities will bounce back to their pre-recession job levels sometime next year.

Eight other metropolitan areas are predicted to recover by 2011, a group that includes Texas’ two largest markets, Dallas-Fort Worth and Houston, along with Washington, D.C.

IHS Global Insight said most metros will start adding employment next year, but the increases are likely to be tepid. “Solid gains will not return for the majority of the country until 2011,” the report said.

Austin is also named one of the 20 best performing metropolitan areas in the second quarter of 2009, according to a study by the Brookings Institution.

The second quarter MetroMonitor report tracked nine metrics in 100 U.S. metro areas, and found Austin was a leader in many of those, from percent change in gross metropolitan product to percent change in housing prices.

Employment in Austin fell 0.5 percent from its pre-recession peak, that was the second-narrowest gap in the nation. The Texas Capital was also one of only three metro areas that surpassed their pre-recession peak output by the second quarter of 2009. Along with the other two cities, McAllen and Washington D.C., Austin was one of those least affected by the downturn.

The report’s authors said the figures reveal some stark differences in economic performance among metro areas.

“Signs at the national level that job and income losses are slowing continue to mask the highly variable performance of individual metropolitan economies,” said Alan Berube, co-author of the report. “While several metro areas may have reached a turning point, there are many others that still have not touched bottom, as well as a few that have almost fully recovered.”

Texas had the strongest showing, with six cities among the 20 strongest metro areas: Austin, Dallas, El Paso, Houston, McAllen and San Antonio. Florida dominated the list of the 20 weakest metro areas with eight, including Bradenton, Cape Coral, Lakeland, Miami, Orlando, Palm Bay and Tampa.

For more info please contact Craig Ellmaker at craig@ellmakerrealty.com or 512-784-1494

www.austin-cashflow.com

Memo to working moms: Austin's your kind of town

2009-08-07T15:13:00Z

Wednesday, August 5, 2009, 11:47am CDT
Austin Business Journal

Memo to working moms: Austin's your kind of town

Working moms trying to balance family and the workplace may be better off in Austin than a lot of other cities around the country.

That according to ForbesWoman's first ever list of the "Best Cities for Working Mothers," which ranks Austin second, just behind No. 1 New York City.

“There are numerous considerations for what working moms want in their choice of a city,” said ForbesWoman writer Heidi Brown, who edited the list. “We based our rankings on the premise that different mothers have different needs. Beyond good healthcare and safety, mothers who work want a city which offers plentiful jobs, high salaries and abundant daycare options.”

To create the list, ForbesWoman ranked 50 of the largest continental U.S. metropolitan statistical areas by different categories, from earnings and unemployment to number of daycare and preschools and per-capita expenditure per pupil.

Rounding out the top 10 cities on the list, in order, are Minneapolis-St. Paul, Milwaukee, Portland, Cincinnati, San Jose, Pittsburgh, Seattle-Tacoma and Denver.

For more info about the Austin area please contact Craig Ellmaker at 512-784-1494 or at craig@ellmakerrealty.com

BUYERS! TIME TO BUY!`

2009-05-09T02:54:00Z

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

Austin ranks No. 1 for job growth potential

2009-04-16T20:53:00Z

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

Understanding Housing Tax Credits

2009-03-10T15:35:00Z

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

Austin's Week and Month Sales Review

2009-03-07T20:12:00Z

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

2009-03-07T20:08:00Z

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

Austin, Tx ranks #1 in Forbes!

2008-10-16T19:41:00Z

Best and Worst Bang for the Buck Cities

by Abha Bhattarai
Wednesday, October 15, 2008 provided by

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%.

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.

Visit the Real Estate Center

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

Texas has three of the hottest jobs markets!

2008-09-17T16:18:00Z

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
by G. Scott Thomas

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.

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bizjournals - September 8, 2008by G. Scott Thomas

bizjournals - September 8, 2008
by G. Scott Thomas