US Home Sales Fall Big - Texas is the exception!!!

WASHINGTON (Associated Press, Real Estate Center) – The nation's housing market cooled last year after a five-year boom, with sales of previously owned homes falling by the largest amount in 17 years.

The National Association of Realtors (NAR) said sales of existing homes totaled almost 6.5 million units for 2006, down 8.4 percent from 2005. The five-year boom that ended in 2005 drove prices up at double-digit rates and caused a stampede of investors who purchased houses hoping to quickly sell them for big profits.

Texas was an exception, experiencing a record year. According to Real Estate Center figures, almost 290,000 homes were sold in 2006.

David Lereah, NAR’s chief economist, said 40 percent of national home sales in 2005 — the peak of the housing boom — were to investors and second-home buyers.
December sales were down almost 1 percent from November to an annual rate of 6.22 million units.

Even with the sales decline in 2006, the median price of a new home rose slightly last year to $222,000, compared with $219,600 in 2005.

Although the worst may be over, analysts say a rebound could be slow in coming because of a huge backlog of unsold homes that will keep downward pressure on prices, particularly in former boom areas.

2007 - Robust year for Central Texas Real Estate

Thursday, January 25, 2007
Austin-American Statesman

Since it emerged from its high-tech slump three years ago, Austin has steadily added jobs, people and stores, and economist Angelos Angelou expects all those factors will keep growing over the next two years.

Job growth will remain strong — averaging 3.3 percent — and it will fuel population growth, which will spur continued strong demand for housing and retail space.

"Austin is going to become one of the hottest real estate markets in the United States," Angelou told business people at the Austin Convention Center for his 21st annual economic forecast.
Angelou is a leading economic development consultant and former head of economic development for the Greater Austin Chamber of Commerce. "In my view, this is going to remain a seller's market for some time to come.

We will continue to defy what is happening at the national level," where sales have dropped and home prices have slumped in formerly booming areas along the East and West coasts.

It all starts with new jobs. Angelou forecasts that the five-county Austin metropolitan area will add 24,400 jobs in 2007 and 26,100 in 2008, compared with job growth of 22,400 last year.

Last year's job growth rate of 3.2 percent was tied with Dallas for the highest among the state's major urban areas and was slightly ahead of the statewide average of 2.9 percent.

The metro area edged above 1.5 million residents for the first time in late 2006, Angelou said, and by the end of 2008, it will be close to 1.6 million. That compares with a metro area population of 565,000 people in the mid-1980s, when Angelou began making local forecasts.

How is the drought affecting Austin?

The already-depleted Lake Buchanan has not risen during the recent rains, while Lake Travis rose only about two feet from mid-December to mid-January. That’s not much of an increase considering Lake Travis is at 646.8 feet above mean sea level, about 23 feet below its January average and about 34 feet below 681 feet, the level at which it is considered full.

• During 2005 and 2006 Texas received its lowest rainfall totals for any two-year period since 1963-1964.
• Austin, for example, received 27.23 inches of rain in 2006 – 7.49 inches below average. That’s only one year after the city received 13 inches less than average in 2005. Two-year shortfall: 20.76 inches. Upstream of Austin, Mason is a typical Hill Country town. It received 17.42 inches in 2006 — 10.53 inches less than average – and 21.9 inches in 2005. Two-year total: 16.58 inches less than average.
• Because of the lack of rainfall, the amount of water flowing into the Highland Lakes during 2006 was the lowest of any year since lakes Buchanan and Travis began operating in 1942.
• With lakes Travis and Buchanan just over half full now it will take widespread, above-average rainfall in the Hill Country to raise the lake levels.
  Current lake levels are the sixth lowest ever for the month of January. The other years are 1948, 1949, 1951, 1952 and 1964 — four of these were during the drought of record.
• Some good news: lakes Travis and Buchanan still contain more than 1 million acre-feet of water. (One acre-foot of water is equal to almost 326,000 gallons.) This is about a seven-year supply for Austin, and about a five-year supply for all LCRA's “firm water” customers. These are water users that LCRA is required to provide water to even during the most severe drought, namely cities, industries, power plants and aquatic life.
• Moreover, LCRA studies show that for 2007, based on historical hydrology, the lakes will also provide sufficient water to supply most the needs of its “interruptible” customers, chiefly agricultural users in the irrigation districts.

“What’s weird about our region is the rainfall pattern has not been uniform,” said Bob Rose, LCRA meteorologist. “From the Austin area to the coast, the drought has definitely eased. … But 30 miles to the west and a severe and severe-extreme drought continues.”

From: LCRA - click here -

Austin - down to the teens next week!!!

Austin-American Statesman
Thursday, January 25, 2007

AUSTIN — The real cold comes next week

A series of Arctic blasts next week could plunge temperatures in Central Texas to the lowest in a decade, forecasters said Wednesday.

Lows could dip into the teens, with highs in the upper 20s and lower 30s, said Bob Rose, a meteorologist with the Lower Colorado River Authority.

"If this forecast works out, this will be pipe-busting-type cold," he said.

The chance of ice or precipitation is slight, KVUE meteorologist Mark Murray said.

"The big deal is going to be the cold," he said.

The fronts are expected to begin arriving Thursday and continue into the weekend.
Austin last dipped into the teens in 1996, when the temperature at the former Mueller airport dropped to 19. In December 1990, temperatures dipped to 15.

Proposed 55-story luxury condo tower downtown

AMERICAN-STATESMAN STAFF

Wednesday, January 24, 2007

Austin's skyline is about to undergo its biggest change in history.

Soaring 22 stories higher than downtown's tallest existing building, a $200 million luxury condominium tower planned for Congress Avenue and Second Street will set a new bar for height and unit prices amid downtown's residential building boom.

Although the design isn't final, the Austonian could rise up to 700 feet, dwarfing the 33-story, 515-foot Frost Bank Tower at Congress and Fourth Street once it's finished in 2009. Construction is set to start late this year at 200 Congress Ave., which is now a parking lot.

The 55-story Austonian would eclipse the tallest residential tower under construction downtown, a 563-foot condominium tower with 44 stories that Atlanta-based Novare Group Holdings LLC and its local partner, Andrews Urban LLC, are building at Third and Nueces streets.

The Austonian's upscale units could set a new benchmark for luxury living in the city's urban core. Though prices haven't been set for the 195 units, they are expected to start at about $500,000 for the smallest units with about 1,200 square feet, said David Mahn, vice president of Benchmark. Prices for the penthouse units would top $1 million.

Mahn said the Austonian's prices would be "very competitive" on a per-square-foot basis with other new downtown condominium projects. Prices also are expected to start at about $500,000 in a mixed-use condominium tower that local developer Tom Stacy plans for Fifth Street and Congress Avenue. Stacy's building, which has no timetable for breaking ground, is expected to rival Benchmark's in height.

The Austonian will have 500,000 square feet of space, roughly half the amount of a regional shopping center. A variance from the city will allow the developer to build a project with about double the square feet that existing zoning would have allowed.

With units in most of the downtown condo projects priced high, some developers have been shooting for more moderate starting prices. Prices for Novare's condo project, for example, will range from $190,000 for a 785-square-foot unit to $550,000 for a 1,638-square-foot unit.

Developers report healthy sales at their projects. At the Shore, a 23-story condo project under construction at Red River and Davis streets, only 10 of the 192 units are left, with prices ranging from $350,000 to $765,000, said Ian Stonington, the project's sales manager.

Another luxury condo project, the 20-story AquaTerra next to the Hyatt Regency on Town Lake, will break ground once buyers are lined up for half of the 173 units. The developers have said they expect to reach that goal early this year. The units are priced from $350,000 to $1.2 million.

Spring, a condominium tower at Third and Bowie streets, has 780 reservation holders for its 240 units, said Larry Warshaw, a partner in the 41-story project.

Retrieved from: Austin American Statesman - click here -

Rate News

Rate News: Treasury yields have fallen today a little bit. Most experts quoted in the trade press say they expect interest rates and bond yields to stay steady this week because there aren't many economic reports of note coming out.

Next week is another matter, with the Federal Reserve's rate-setting committee meeting Jan. 30 and 31. Early this afternoon, the yield on the 10-year Treasury is 4.75 percent, down from Friday's close at 4.78 percent. The five-year Treasury yields 4.76 percent this afternoon, down from 4.78 percent.

Source: Bankrate.com

Austin Office Market Update

AUSTIN (Austin American-Statesman) – Rents and occupancies for premium office space in Central Texas’ office market reached their highest levels in more than five years, according to figures released by local Oxford Commercial earlier this week.

Occupancy rates for all types of office space also reached their highest levels since early 2001. The rate was 88 percent, up from about 84 percent at the end of 2005. By the end of 2006, tenants occupied nearly 90 percent of the area’s Class-A office buildings, compared with about 85 percent the previous year.

Average rents were more than $22 per square foot, up 10 percent from 2005. The highest average rents — more than $26 per square foot, up 15 percent from late 2005 — were found downtown, but rents for Class-A space downtown rose to more than $29, another five-year high.

In 2006, 17 office buildings of more than 50,000 square feet changed hands in the Austin area. The highest-profile sale came in August, when Chicago-based Equity Office Properties Trust paid $188 million for Austin's tallest office building, the Frost Bank Tower. At $354 a square foot, the sale set a Texas record.

Complete Article in the Austin American Statesman - click here -

Sterling University WestCamp sold for $24M

(Austin - GlobeSt.com) - A Houston-based merchant builder has sold the just-completed 76-unit Sterling University WestCamp to JPI. The 98 percent-leased complex has traded hands for close to the $24 million asking price.

Sterling University WestCamp, situated on a little more than one acre at 2704 Rio Grande St., was one of the first projects to break ground in 2005 following the City of Austin's University Neighborhood Overlay ordinance, which lifted restrictions on building heights. "Nothing was built there for 30 years before that, but after the ordinance passed, developers came in and started buying sites," says Patton K. Jones, sales director with Apartment Realty Advisors' office for Austin and San Antonio.

Sterling University WestCamp has a mix of two-, three- and four-bedroom units, which range from 894 square feet to 1,698 square feet. Monthly rents go from $1,600 to $2,900 per apartment.

New home building in '06 sets Central Texas record

(AMERICAN-STATESMAN) -

Builders started 16,743 homes last year, a 10 percent increase from 2005, according to Residential Strategies Inc., a Dallas-based market research firm. There also were a record number of closings, which jumped almost 23 percent from 2005 to 16,073.

The median sales price of a new home in Central Texas rose 8 percent to $196,443. But the supply of new, unsold homes also climbed to a record level, prompting builders to start 10 percent fewer homes in the last three months of 2006 than the year-earlier period.

The supply of new, unsold homes also climbed to a record level, prompting builders to start 10 percent fewer homes in the last three months of 2006 than the year-earlier period.

Nationally, the cancellation rate climbed from 25 percent to 35 percent during the past year, Wilson said, and the Austin area experienced a similar increase.

Buyers are canceling contracts for various reasons. Weak credit is to blame for some cancellations for entry-level homes, and some contracts for higher-priced homes are being canceled by relocation buyers having difficulty selling their homes in slower markets elsewhere.
About 2,900 new homes sat on the market in Central Texas in December, just over a two-month supply.

Unlike other markets in the nation where prices and sales are cooling, Central Texas has bucked the trend with healthy job growth, a steady stream of newcomers and relatively affordable prices.

For the 12 months that ended in November, 24,800 jobs were created in the Austin area, according to the Texas Workforce Commission. Austin-based Angelou Economics predicts that the Austin area will add about 20,000 jobs and 40,000 residents next year, about as many as were added in 2006.

The steep slide in housing has been a significant factor in the economy's overall slowdown.
However, a better-than-expected 3.4 percent increase in sales of new single-family homes occurred in November. It was the fourth straight month of decline in the backlog of unsold homes as builders lured buyers with incentives.

That has caused some experts to predict that the slump in the national housing market might be coming to an end.