By Alan Zibel
ASSOCIATED PRESS
Wednesday, June 24, 2009
WASHINGTON - Nationwide home sales may have finally hit bottom, new data show, but a host of thorny problems are hindering a recovery.
Sales of previously occupied homes rose by 2.4 percent from April to May - the third monthly increase this year - but the results missed analysts' expectations.
Home sellers are still competing against a growing number of bargain-priced foreclosures, buyers are paying higher mortgage rates, and new rules for property appraisers are delaying or scuttling many deals.
"We have just been flooded with e-mails, telephone calls on the appraisal problems," said Lawrence Yun, the Realtors' chief economist.
The National Association of Realtors said Tuesday that home sales rose to a seasonally adjusted annual pace of 4.77 million, up from a downwardly revised rate of 4.66 million in April.
About one in three homes sold last month was a foreclosure or distress sale, dragging down the median price to $173,000 - 16.8 percent less than a year ago.
The size of the price drop, however, reflects a crush of first-time buyers and investors snapping up bargain-priced homes. A government home price index also released Tuesday showed home prices were flat between March and April.
That index, however, only measures the values of homes with government-backed loans, so it underestimates the weakness at the top end of the market and doesn't include many foreclosures.
But there's still a risk the housing bust could go linger.
Interest rates, for example, have climbed back from all-time lows this spring. The average rate on a 30-year fixed-rate mortgage was 5.38 percent last week, according to Freddie Mac.
Mindful of the negative trends, Patrick Newport, an economist with IHS Global insight, says home sales could fall another 9 percent from last month's levels.
"Things are going to get a little bit worse," he said.
Nevertheless, there are other signs the market is turning around. The number of unsold homes fell 3.5 percent in May. That means there's a 9.6-month supply at the current sales pace, compared with 6 months or fewer in a normal market.
The inventory figures, however, don't reflect the large number of houses being held off the market by owners who are reluctant to sell while prices are falling.
Another complication has emerged in recent months: New rules designed to tackle conflicts of interests in the property appraisal process have caused many transactions to fall apart or be delayed.
Responding to widespread complaints about inflated appraisals during the real estate boom, New York Attorney General Andrew Cuomo reached a pact last year with mortgage companies Fannie Mae and Freddie Mac on a new code of conduct for the industry.
Thursday, June 25, 2009
What: Westin Austin at the Domain, a 340-room hotel
Where: New phase of the Domain lifestyle center, at North MoPac Boulevard (Loop 1) and Braker Lane
Who: White Lodging Services Inc. is developing the hotel. White will co-own it with Simon Property Group, which developed the Domain shopping center.
Details: The eight-story hotel, which will have more than 13,000 square feet of meeting space, is scheduled to open in April. An event marking the topping off of the final floor is scheduled for next month.
The hotel will be the first Westin in Austin, though the chain also has plans to build in downtown's Warehouse District eventually.
A Starwood Aloft hotel also is construction in the eastern part of the Domain, a separate project being developed by Endeavor Real Estate Group.
By Lori Hawkins
AMERICAN-STATESMAN STAFF
Friday, June 26, 2009
Last year, Austin fitness instructor Matthew Willis faced a challenge familiar to many service providers: He wanted to market his services online but didn't want to go to the time or expense of creating and maintaining his own Web site.
Then he heard about HourVille, an Austin startup that runs an online community where people can advertise services that are priced by the hour.
The HourVille site lets listers create a home page where they can include information, photos and videos. Unlike some listing services such as Craigslist, HourVille allows users to schedule appointments without having to go to another Web site. In addition, HourVille users can pay for services using PayPal and post reviews.
"Instead of just a generic listing, you can actually show people who you are and what you do," said Willis, whose HourVille profile has become his chief marketing tool. "I steer people there by listing it on message boards and on my Facebook and LinkedIn pages. It's how I get the word out."
That was the idea behind the company, which four University of Texas business school classmates started a year ago. Co-founder Matt Trudeau said the group had worked on a number of academic projects, and the members wanted to start a business together after graduating in 2005.
Although they all moved on to different jobs, "over the course of time, we kept kicking around different ideas," Trudeau said. "Each of us would contribute an idea to the pool and then take turns shooting holes it in."
Co-founder Fadi Gabra floated the idea that became HourVille.
"We wanted to do something with mass appeal, but we also wanted to create something that would have a social impact on a local level," Gabra said. "The idea of providing a platform to connect people to share knowledge and skills fit our goals exactly."
The founders self-financed the startup, using free open-source software to build the site, which debuted last year.
So far, the site has signed on 3,500 registered users, and its creators hope to hit 10,000 by the end of the year. Services offered range from housekeeping to translation services to photography. The company monitors posts for inappropriate content and deletes listings that don't meet its standards, Gabra said.
For now, the service is free, but the company plans to eventually charge a commission to service providers.
Experts divided on whether Austin can handle bigger upscale market
By Shonda Novak
AMERICAN-STATESMAN STAFF
Sunday, June 28, 2009
When the 36-story Ashton opens next month, the $110 million tower at Colorado and West Cesar Chavez streets will raise the bar for luxury apartment living in downtown Austin.
With such amenities as marble-tiled bathrooms, two-story penthouses, a wine cellar and private movie theater, the Ashton also will have rents averaging about $2,500 a month. That will rise to about $3,000 once incentives of two months of free rent ends.
The Ashton is opening during a year when a record 980 apartments will be added in and around downtown, even as the economy has stagnated and job growth has slowed, raising questions about whether there will be enough tenants to fill the new spaces.
On that issue, real estate experts differ. Some say that the apartment market is healthy, with units leasing well and at high rents.
Others say that although the market is faring better than expected, downtown still has too many apartments.
Between the new competition and the softer economy, landlords at some of the projects say leasing has been a challenge, prompting them to offer from one to three months of free rent to entice tenants.
The list of projects offering some free rent includes 5th Street Commons, Gables Residential's new project on West Fifth Street, Legacy on the Lake, a 31-story apartment tower on Rainey Street at the eastern edge of downtown, and many others.
The Ashton's developers, the Hanover Co. and MetLife Inc., don't typically offer concessions on new projects, which include luxury high-rises in many major cities. "It's strictly because of the economy," said Ed Hamilton, a development partner with Hanover. "We don't know when the economy is going to turn around, but when it does, we'll see the rents go back up and we'll get rid of the concessions."
Twenty units are leased, and Hamilton said Hanover expects to average 20 leases a month once the Ashton opens in mid-July.
The project "is in a class by itself," he said. "We feel like there's that many people in Austin who want that lifestyle."
Greg Willett, vice president of research for MPF Research , a consulting and research firm, said that though there appears to be "significant demand" for luxury rentals downtown, "we have delivered too many units all at once."
"There are always going to be some people who can afford it and pay whatever it costs, but it's a pretty shallow pool," Willett said.
He added that although the downtown market's performance isn't fantastic, it is surpassing MPF's low expectations.
But local real estate consultant Charles Heimsath said the downtown market is strong.
"Not only are the units leasing rapidly, but they're leasing at very high rates," said Heimsath, president of Capitol Market Research, which has consulted on many downtown projects.
Of the 13 newest apartment projects in and around downtown, nine have occupancies of 90 percent or more. Heimsath said 900 of the 1,200 units added last year were leased, and "that shows a lot of strength in the market."
Heimsath builds his case by the numbers.
More units rented, at lower prices
In June 2008, downtown's 1,493 apartment units were 72.2 percent occupied. By December, 354 more units were added, bringing the total to 1,847. The occupancy rate rose to 80.4 percent.
Since then, another 296 units have been completed, and occupancy has risen to 85.3 percent.
Another 684 units will open between now and the end of the year, which will include the first 128 units in the 294-unit Gables Park Plaza west of the Seaholm Power Plant, along with the Ashton and Gables' Pressler project on West Fifth Street.
Rents, however, have been dropping.
They fell from an average of $1,876 a month in June 2008, to $1,792 in December and $1,578 by May, Heimsath said.
Part of the reason, Heimsath said, is that new mid-rise projects, such as Red River Flats on Red River Street, the Crescent on East Riverside Drive and the 300 N. Lamar complex have rents that are generally lower than those in a high-rise.
The other reason is obvious, he said.
"In the competition for market share of tenants, one way to attract interest in leasing is to offer concessions," Heimsath said.
Willett said MPF's research shows "pretty significant rent cuts everywhere," including downtown.
Citywide, Austin apartments were 89.5 percent occupied in June, down from 93.4 percent a year ago, according to MPF Research. The average rent was $823 a month, down from $839 a year ago.
On his downtown outlook, Willett noted that his perspective differs somewhat from Heimsath's because MPF looks at the big picture of how Austin compares to all the markets it tracks.
Spencer Stuart doesn't mince words when he talks about leasing efforts for the Legacy on the Lake, which opened in October.
"Leasing has been a challenge because of the economy, and our concession levels are higher than we would have liked," said Stuart. He is a senior managing partner with Legacy Partners Residential Development Inc., a Foster City, Calif., firm with luxury apartment projects in Texas, California, Arizona, Colorado and Washington.
Cody Duty photos AMERICAN-STATESMAN
The soon-to-open 36-story Ashton apartment building at Colorado and West Cesar Chavez streets downtown, with rents averaging about $2,500 a month, will have such amenities as marble-tiled bathrooms, two-story penthouses, a wine cellar and private movie theater.
Deborah Cannon
AMERICAN-STATESMAN
Austin Community College student Johnathan Sims works with a solar panel Thursday at the Riverside campus as students demonstrated renewable energy projects.
Deborah Cannon
AMERICAN-STATESMAN
In a demonstration of renewable energy projects, wind-power students William McKeehan, left, and Fred Boncy work on a wind turbine Thursday at the Riverside campus on Grove Boulevard. The turbine, below, was raised near a light pole at the campus. Courses that focus on solar technology and renewable energy, including wind turbines, are in high demand, said Alberto Quinonez, a professor in the electronics department at Austin Community College.
By Juana Summers
AMERICAN-STATESMAN STAFF
Friday, June 26, 2009
Partly in hopes of attracting millions in federal stimulus dollars, leaders from the Austin Community College District and four other regional college districts and systems formalized a partnership Thursday to support a sustainable energy work-force training program.
Under the Green Corridor Collaborative agreement signed at a Texas Association of Community Colleges meeting in Austin, ACC, the Dallas County Community College District, the Alamo Colleges, Temple College and the Texas State Technical College System will share curricula and training models.
ACC President Stephen Kinslow said state officials have "declared an interest in further positioning Texas as a national leader in green energy and sustainable energy as we try to transition the economy into green programs."
Community and technical colleges are a fundamental part of that process, and the colleges in the collaborative will share in any available federal stimulus dollars, Kinslow said.
The American Recovery and Reinvestment Act, the $787 billion stimulus package signed into law in February, has allotted more than $42 billion toward energy-related investments. The package also includes $20 billion for green jobs.
The collaborative aims to tap into that federal stimulus money by applying directly to federal organizations, as well as to the state energy conservation office, ACC officials said.
Courses that focus on solar technology and renewable energy, including wind turbines, are in high demand, said Alberto Quinonez, a professor in ACC's electronics department.
Since 2006, more than 200 students have taken ACC's solar energy courses, college officials said.
Traditional students and professionals across the country come to ACC to take these classes, Quinonez said.
"There's a lot of initiative and interest in growing renewable energy and creating green jobs, at the local level, state level and federal level," he said.
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Being a member of the Austin community since 1989, I have fulfilled my passion to serve the public in many ways. Recently I decided to go into business for myself and joined RE/MAX's winning team!
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