Phil Hutson

My high school football coach used to have a favorite saying, "When the going gets tough, the tough get going!" I always thought that sounded pretty cool (at least it did in '67!), so I've used that on my four boys over the years coaching them in various sports, and they always say, "Dad, that's sooooooo old fashioned!!" Well, I had a Division President for an Austin New Home Builder that I won't mention by name say that to me when I asked him how his company sales were so far this year, and I said,"______, that's a football cliche, what do you REALLY mean?" He told me that sales had been relatively flat, even with the many concessions/incentives they had been offering, until one of his marketing gurus came up with a different idea - sex appeal. He said he was going to "take the tough approach" to make it happen. It seems "tough times" is bringing out the "football mentalty" in some of these Builders - nothing old fashioned about that!

Now before anyone gets the WRONG idea, let me explain HIS version of "sex appeal!" It's absolutely nothing new, but in a down market it is the opposite approach that most Builders here have taken - instead of cutting prices, they cut a little square footage, and added "sex" appeal - in the form of granite countertops, outdoor patios w/BBQ grills, outdoor fireplaces, recessed lighting (on the OUTSIDE of the house!), soaker tubs, larger open master showers, etc. One Builder I talked to said he "couldn't build 'em fast enough!" The Builders that are reforming the Austin downtown landscape with the new lofts and condos took this approach about last year, and it seemed to work for them - of course, they had no choice - downtown lots are mega-bucks per sq. foot!!

But the underlying principle is the same - when faced with higher costs, the Builders had to come up with a different approach to make the bottom line work, and this seems to be working. There are still plenty of buyers looking for "the big box for little money", but for those tired of "plain vanilla" homes, this "sexy" idea is a breath of fresh air! Overall, Austin home sales, although lagging behind last year, are also a "breath of fresh air" to the local REALTORS!

Commissioned by the Austin City Council, and with the blessing of Mayor Will Winn, Austin's Energy Efficiency Upgrades Task Force is finishing discussions for the basis of a possible ordinance with the ability to adversely affect the city's real estate market, and increase housing prices. The ordinance concerns energy audits to ALL homes, apartments, and commercial businesses. Initially, the audits would be voluntary with a "target percentage" of homeowner participation. If this "target" percentage was not met, the audit would become mandatory. Simply stated:

"For single-family properties, owners would be required to have energy audits before selling their home. These would probably be conducted by a third-party contractor, who would disclose efficiency information to prospective home buyers. How much the audits will cost is not known, but estimates have run between $150 and $350. In theory, the audit would take place at the time of the state-required home inspection. It will likely include both a visual and an air conditioning's duct system test."

Energy upgrade - For single-family homes

• The city of Austin's Energy Efficiency Upgrades Task Force has written draft recommendations that could become a city ordinance, which would affect the local real estate market. The final recommendation is expected by the end of the summer before going to board and commissions and then city council this fall.
• Mandatory
  • What: A home seller must get an energy audit and disclose the results to buyers.
  • When: Before the home is sold.
  • Cost: Estimates range between $150-$350.
• Voluntary
  • What: Following an energy audit and disclosure, home sellers or home buyers can participate in the Energy Savings program by installing energy efficiency upgrades recommended in the audit. Austin Energy is expected to continue its existing energy efficiency financial incentives, including cash rebates or low-interest loans.
  • When: To count in the Energy Savings program, upgrades must be completed before or within one year of the home being sold. The completion will be valid for as long as the current owner owns the home or 10 years, whichever is a longer period.
  • Cost: Homeowners would make upgrades that pay for themselves in five years in energy savings or cost no more than 1 percent of the home's sale value. For a home valued at $190,000, that would be $1,900.
• Possibly mandatory
  • What: If targets to get homeowners to participate in the Energy Savings program are not met, the voluntary element would become mandatory. Following an energy audit and disclosure, home buyers would be required to participate in the Energy Savings program by installing energy efficiency upgrades recommended in the audit. Some homes would be exempt.
  • When: Upgrades must be completed before or within one year of the home being sold. The completion will be valid for as long as the current owner owns the home or 10 years, whichever is a longer period.
  • Cost: Homeowners would make upgrades that pay for themselves in five years in energy savings or cost no more than 1 percent of the home's sale value. For a home valued at $190,000, that would be $1,900

This ordinance would also affect the multi-family and commercial properties, impacting them even more than residential properties! And what's this mostly about? At the beginning of the year, the task force started meeting to develop the next steps in the Austin Climate Protection Plan, which promotes the policy of making the city a leader in reducing global warming.

First, it was the economic downturn, then $4/gallon gas, then higher property taxes, then the mortgage crisis, and now the local government wants to add global warming and an energy audit to help home sales in Austin????????

Again I'm reminded why I will never go into politics................

Austin, Texas, is known for among other things as "The Live Music Capital of the World." I'm sure there are a few other cities that might want to argue the point, but the Austin Chamber of Commerce and myself, having lived here for 25 years and attended a number of the places/events where live music venues are featured, would tend to agree with the hype.

Austin's "6th Street" has been compared with Bourbon Street in New Orleans for it's variety of clubs/bars where one can go and listen to live artists perform close-up, but it's the live music festivals each year that draw thousands to Austin for entertainment from not only renowned musicians, but for those on the verge of becoming such!

Three of the BEST music festivals each year are: Austin City Limits Music Festival, Old Settler's Music Festival, and South by Southwest (SXSW).These venues are arguably some of the BEST in the country, and have established themselves as one of the Best places for new artists/musicians to get recognized and heard. There are numerous other (smaller) festivals throughout the year in Austin, and can be found on Yahoo.com (one of my favorites is Carnaval Austin- a mini version of Mardi Gras).

Whether your favorite music is reggae, country, rhythm and blues, jazz, Christian, hip-hop, Irish Celtic, rock, folk, Indie, Americana, Brazilian-style, bluegrass, or whatever, you can probably hear it at one of the Austin Music Festival events!

Come see us y'all!!

If I sound like a broken record it's because I am one! Thanks to the folks at Zillow.com, I can add another reason why Austin real estate CONTINUES to be the one of best places to "place your bet" if you're looking for long-term investment. Anyone that has bought/sold real estate knows that any return on investment (ROI) strategy is not only "buy low and sell high", but also includes the "appreciation factor", especially if you're in it for the long term.

I tried playing the stock market years ago and lost a lot of money because I never could figure out what "long term" meant (and because I had NO clue what I was doing......!) If I had just put all that money into a slow-growth mutual fund or something similar (i.e., Austin real estate), I could have just left it alone because "long-term" I was pretty much guaranteed a good ROI, instead of rolling the dice on every hot stock option that popped up (i.e., Las Vegas real estate, San Francisco real estate, etc.) The following charts are a few examples of why I continue to believe the Austin real estate market continues to be a very good investment, is still very viable, and will bounce back quicker than most areas of the country:

The Austin New Home Builders continue to discount their inventory, so production homes are a very good buy. The Custom Home Builders have cut the asking prices for their luxury homes as much as $400,000 in some cases, so $1,000,000+ homes right now are great investments! And resales in MLS are near an all-time high - so take your pick! None of this bodes especially well for sellers, but it is a "buyer's market" right now, and the time to pick up the bargains! Visit my web site to preview all the Austin homes @ www.showcaseofhomes.com.

The entire article from Zillow.com can be read here: http://view.email.zillow.com/?j=fe9c12707066067e74&m=fef81274706503&ls=fdf116797064057f711c7872&jb=ffcf14

Below is a recent article in the Austin Business Journal, a well respected newspaper in Austin, Texas.

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Monday, August 18, 2008

Economist: Austin will recover faster than the rest of the U.S. - by Jean KwonABJ Staff

"In the coming year Austin will outperform the rest of the country in job growth and in the health of its housing market, according to Mark Dotzour, chief economist at Texas A&M University's Real Estate Center.

Austin will add 8,500 new jobs between now and August 2009, despite a negative job growth across the country, he says. The local housing market will turn around faster than the rest of the country by next summer, Dotzour predicts."

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I have been a REALTOR in Austin since 1984, and own two real estate companies - SW Prime Investments (commercial) , and Showcase of Homes (residential). I not only agree with Mr. Dotzaur in the article, I have been shouting this to my clients (buyers AND sellers!) for the past several months, and have been blogging this "theory" to the WORLD since February. I have also been beat up, criticized, chastised, laughed at, and generally scoffed by a number of folks on and off the airwaves for my enthusiasm, with most summing up my views with something to the effect - "Hell, he's an Austin REALTOR! What'd you EXPECT him to say!!!"

First, let me say to those naysayers - having done this for over 24 years, and having been through 3 other "downturns" during that time, I feel more than qualified to voice a "well qualified" opinion on this subject.

Second, unlike a lot of my REALTOR brethren, "for-better-or-worse, if it ain't gospel, I don't preach it!" No offense to my profession, but "we" are accused too many times of being a little too much like "used car salesmen" - you know, stretching the truth just a litttttttttttttttttttle tooooooooooooooo far?! Point taken and accepted. I've fired eight Brokers that used to work for me for "unprofessional etiquette", but that's not me.

Third, one has to be reminded - Austin, Texas, is a rare exception in the real estate world. It has other internal economies beside it's main "cash flow" - high tech. It has the University of Texas as an economy; it has state legislature/government as a local economy; it has the Lakes/Hill Country as a local economy; and it has tourism as a local economy - and in spite of the "cash flow" economy's up-or-downs, none of the above are going away!

Fourth, to add just a taste of credibility to my and Mr. Dotzour's "theories", I went back 15 years starting in July/1993, then 1998, 2003, and finally July 2008 - and found a few numbers I would like to share. They pretty much speak for themselves, but I will have a closing remark:

Do we have a few too many homes on the market right now? Yes

Is Austin immune to a weak national economic trend? No

Are overall sales down from 2007? Yes (-21%)

Have overall sales almost tripled and overall volume multiplied OVER 5 times in the last 15 years? YES!

Is this trend going away? Back to my opening statement, No - for all the reasons aforementioned. The market dynamics are much too positive to indicate otherwise.

"Austin, Texas, real estate will continue to follow the roller-coaster curve it always has, but will always be ahead of the national trend, barring any cataclysmic events." Phil Hutson/Broker/Owner/Showcase of Homes

That's my story and I'm stickin' to it!