Tuesday, March 25, 2008

Austin Business Journal

Austin’s newest HEB grocery concept is opening this week in Westlake.

The 65,000-square-foot store at 701 S. Capital of Texas Highway will offer innovative services and products to fit in with its neighborhood, such as curbside grocery loading and in-home fresh floral service. The store opening this Friday is one of five Albertson’s locations HEB purchased last year. The company reopened the first two locations in Central Austin and Round Rock in December.

Westlake Market HEB will include Central Market’s Café on the Run with take-home prepared foods, a Gourmet Coffee Bar, and a Sushiya sushi bar among other features.

“After years of receiving requests and personal calls to serve Westlake, we’re excited to finally be able to respond,” says Jeff Thomas, HEB senior vice president for Central Texas. “It’s been a long time coming, but we’re sure customers will agree it was worth the wait.”

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COMPILED FROM WIRE REPORTS
Tuesday, March 25, 2008 HOUSING

Surprising experts, February sales of existing homes rise

WASHINGTON — After falling for six straight months, sales of existing homes posted an unexpected increase in February, which may reflect more aggressive price cutting by sellers in some parts of the country, a real estate trade group reported.

The National Association of Realtors said that sales of existing homes rose 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million units. It was the biggest increase in a year and caught economists by surprise. They had been expecting a small decline.

The trade group reported that the median existing-home sales price in February fell to $195,900. That was the largest year-over-year drop in data that go back to 1999.

CELL PHONES

Icahn seeking court order for access to Motorola documents

CHICAGO — Billionaire investor Carl Icahn said he’s seeking a court order that would force Motorola to turn over documents about its trademark cell-phone business and senior executives.

“Over the past 12 months the statements and predictions of Motorola’s management and the board about mobile devices business have too often proven to be wrong,” Icahn said in a statement. “We demanded these materials for the purposes of enabling us to investigate whether and to what extent the board of directors of Motorola failed in their duties as directors in supervising management and setting policy and direction of Motorola.”

Icahn is battling to win four seats on the company’s board.

Motorola was withholding comment until it had a chance to review any lawsuit filed by Icahn, spokeswoman Jennifer Erickson said.

MORTGAGE CRISIS

Former Countrywide chief to lead new mortgage firm

LOS ANGELES — Stanford Kurland spent nearly three decades helping build Countrywide Financial Corp. into the nation’s largest mortgage lender. Now, the former president and several key colleagues hope to cash in as the housing market collapses.

Kurland will head a new company unveiled Monday that will acquire and restructure distressed mortgages.

Private National Mortgage Acceptance Co. LLC, also known as PennyMac, intends to help borrowers restructure loans so they can avoid foreclosure and maintain payments.

COMMUNICATIONS

Sirius-XM merger approved by the Justice Department

WASHINGTON — The Justice Department approved Sirius Satellite Radio’s $5 billion buyout of rival XM Satellite Radio, saying the deal was unlikely to hurt competition or consumers.

The government also appeared to endorse a central argument the companies used in pushing for their merger: that ample competition is provided by other forms of audio entertainment, including high-definition radio, Internet-based radio stations and devices like the iPod.

The deal was approved despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry. The combination still requires approval from the Federal Communications Commission.

INVESTMENTS

Rates for 3-month, 6-month Treasury bills creep upward

WASHINGTON — Interest rates on short-term Treasury bills rose in Monday’s auction to the highest levels since earlier this month.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 1.200 percent, up from 1.100 percent last week. And $22 billion in six-month bills was auctioned at a discount rate of 1.550 percent, up from 1.310 percent last week.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,969.67, and a six-month bill sold for $9,921.64.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 1.35 percent last week from 1.52 percent the previous week.

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Tags: austin real estate by Aria
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By Ben Johnson
Mar 25, 2008 12:33 PM

While the nation’s credit markets and economy might appear to be in a freefall, sellers of office properties continue to toe the line on pricing, stubbornly refusing to give up record-high valuations gained over the past three years.

But the question begs, “How long before the pressure builds and sellers slash prices?” asks Robert White, president of New York-based research firm Real Capital Analytics.

According to the firm’s newly released numbers, February office sales amounted to a measly $2.5 billion, which is a 45% decline from January, a 95% drop from a year earlier and the lowest monthly volume total in five years. While early 2007 sales figures are skewed a bit thanks to the huge privatization of Equity Office Properties Trust, the early-2008 metrics point to continued buyer skittishness.

During the first two months of the year, office sales totaled $6.8 billion versus some $20 billion in properties brought to market. The slow volume speaks to the widening bid/ask spread between buyers and sellers, with new listings outpacing closings by 4-to-1 in February and 3-to-1 in January. And tellingly, the deals getting done are considered more “core” or stabilized assets rather than value-added properties.

“There is a big difference between wanting to sell and needing to sell a property,” says White. “In the current market, sellers aren’t yet pressured into accepting too much of a discount in price which is a primary reason why volume has sunk to such low levels.”

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 Matthew Kirdahy, 01.10.08, 12:00 PM ET

The Lone Star State shines brilliantly in a list of the best places to work in the U.S. when some economists peer into their crystal balls for 2008.

Austin, Fort Worth, Houston and San Antonio all rank high on the latest forecast data from Moody’s (nyse: MCO - news - people ) Economy.com. McAllen, Texas, is expected to have the highest job growth rate, as its leisure and hospitality, educational and health services and commercial construction jobs flourish.

“While the economy is cooling, Texas continues to generate more jobs than the national average,” said Krista Piferrer, deputy press secretary to Gov. Rick Perry. “Unemployment is low in Texas, thanks in large part to a favorable business climate that encourages businesses to expand or relocate to our state.”

In Pictures: Best Cities For Jobs 2008

Even still, Salt Lake City, in all its tech-job abundance, looks like it will remain No. 1 since Forbes.com’s most recent ranking ( see last year’s story).

To compile the rankings for the Best Cities For Jobs list forecast, we used five data points, weighted equally: the state’s unemployment rate, job growth, income growth, median household income and cost of living for full-year 2006 (only partial data is available so far for 2007). We measured the largest 100 metropolitan areas, as defined by the U.S. Census Bureau, and obtained the data from Moody’s Economy.com.

The numbers are compiled based on greater metropolitan areas; it’s also important to note that this list doesn’t weigh specifics like job composition or job stability, two significant characteristics that will appeal to any job seeker.

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Tags: austin, economy, growth, jobs by Aria
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How’s the economy in your hometown?

By Barbara Hagenbaugh, USA TODAY

On the campaign trail and in homes across the USA, the debate is underway about whether the U.S. economy in 2008 will see its first downturn in seven years.

Despite the recent onslaught of negative news, it remains unclear whether the current state of affairs meets the economists’ definition of a recession: a widespread decline in economic activity lasting more than just a few months. As in politics, all economics is local.

Mark Zandi, chief economist at Moody’s Economy.com, for example, believes the U.S. economy is in recession.

WHAT THE FED SAYS: Its latest regional look at the economy

But the contraction is far from uniform. Zandi’s firm estimates that in January, 30 state economies were expanding while 15 were “at risk” of slipping into recession.

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REAL ESTATE

Developers lining up for Green project

City is speeding up timeline for downtown redevelopment site

By Shonda Novak
AMERICAN-STATESMAN STAFF
Tuesday, March 18, 2008

Developers, start your clocks.

The city is adhering to a speedier-than-usual timeline for bidders competing for a choice downtown real estate opportunity — the redevelopment of the Thomas C. Green Water Treatment Plant at West Cesar Chavez and San Antonio streets.

In addition to local interest, the project is expected to attract national attention.

Proposals to transform the plant, which is being decommissioned, are due April 30. Developers would make presentations to the City Council starting May 14, with the council expected to select a winning bidder June 19.

“It’s beyond fast track… but we fully intend to keep this pace,” Byron Johnson, the city’s purchasing officer, said after a meeting Monday in which city officials outlined the vision for the project.

And in a first for the city, the conference was videostreamed. Johnson said the city received more than 20 calls from interested viewers in such places as California and New York.

“We anticipate significant national interest, just based on overtures we’ve received over the past couple of years as the national and international development community heard we were considering redeveloping that property,” said Fred Evins, project manager for the Green redevelopment in the city’s Economic Growth and Redevelopment Services Office. “I think it’s a reflection of our overall economic health and the vitality of our downtown,” which is experiencing a retail and residential resurgence.

The city sees the six-acre redevelopment as pivotal to the revival of a once largely industrial part of downtown that is getting housing, shopping, entertainment and cultural and civic attractions, including a new central library and a new home for KLRU and its “Austin City Limits” music show.

Ultimately, Green is seen as a key link in the city’s vision to connect downtown’s western edge to the Austin Convention Center via the planned extension of Second Street.

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Tags: austin, development, downtown, green building, urban development by Aria
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ECONOMY

Fed again slashes key interest rate

Cheaper credit might help housing market, but inflation fears remain.

By Neil Irwin
THE WASHINGTON POST
Wednesday, March 19, 2008

WASHINGTON — The Federal Reserve took another aggressive step in its campaign to prevent a potentially devastating recession Tuesday, cutting a key interest rate by three quarters of a percentage point. The stock market rallied the most in five years, with the Dow Jones industrial average rising 420 points.

Fed policymakers cut the federal funds rate, at which banks lend to each other, to 2.25 percent. The Fed has slashed that rate by 3 percentage points since September, its most aggressive two months of action in a quarter-century.

That lower rate is expected to make it cheaper for Americans to take out adjustable-rate mortgages and borrow money through credit cards or auto loans, and for businesses to borrow money to expand.

But the Fed’s action could also help fuel inflation, some economists said. By reducing the interest rate that the central bank charges financial institutions for short-term loans, the Fed makes money more readily and cheaply available. If it miscalculates, it can pump too much money into the economy, fueling excessive demand for goods, housing and capital spending — and driving up prices.

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Tags: economy, fears, fed, housing market, inflation, interest rates, mortgages, real estate by Aria
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HOUSING

Austin-area foreclosures up, but well below U.S. pace

AMERICAN-STATESMAN STAFF
Saturday, March 15, 2008 Home foreclosures are rising in Central Texas, although the region continues to avoid the worst effects of the national housing slump.

The 340 postings for the April 1 auction are up 15 percent for Travis County compared with a year earlier, according to Foreclosure Listing Service Inc.

That was the third increase in a row, said Georgy Roddy, president of the Addison company.

By contrast, there were only three increases in all of 2007 and four each in 2005 and 2006.

Overall, postings rose 5 percent for Travis, Williamson, Hays and Bastrop counties for April. They’re up 12 percent for the year.

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Tags: austin, economy, foreclosures by Aria
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By Les Christie, CNNMoney.com staff writer

Last Updated: March 7, 2008: 12:23 PM EST

NEW YORK (CNNMoney.com) — Mortgage costs just got cheaper for buyers in high-cost areas.

The size of loans that can be guaranteed by Freddie Mac and Fannie Mae was raised today by the Office of Federal Housing Enterprise Oversight. The new, higher loan limits will stay in effect through the end of the year, allowing the government sponsored enterprises (GSEs), to buy much higher-priced mortgages in some areas of the country.

Also today, the size of the loans that the Federal Housing Authority (FHA) can insure was raised by Housing and Urban Development (HUD).

Both moves will lower borrowing costs for buyers of higher priced homes, and aim to boost flagging real estate markets.

Best time to buy a home in four years

Previously, Fannie and Freddie could only insure mortgages of up to $417,000, called conforming loans. That meant, assuming a 20% down payment, that only buyers of homes costing $521,500 or less were eligible for mortgages with GSE backing.

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Tags: FHA, Fannie Mae, Freddie Mac, GSEs, HUD, buyers, economy, financing, foreclosure, investing, lending, loans, mortgages, real estate, real estate outlook, when to buy, where to buy by Aria
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The number of filings jumps year over year but decreases modestly over last month.

By Ben Rooney, CNNMoney.com staff writer

March 13, 2008: 5:02 AM EDT

NEW YORK (CNNMoney.com) — Foreclosure filings nationwide jumped 60% in February compared with the same month last year, but they decreased slightly versus January, according to a report released Thursday.RealtyTrac, an online marketer of foreclosure properties, said 223,651 homes got hit with foreclosure filings last month, which include default notices, auction sale notices and bank repossessions. 46,508 of those were lost to bank repossessions, which more than doubled over last year.

The report also indicated that foreclosure filings in February fell 4% compared with January, similar to a 6% decrease that occurred during the same time-span in 2007.

The monthly decrease is a “seasonal occurrence,” according to Rick Sharga, a RealtyTrac spokesman. Foreclosure rates spike in January when homeowners are saddled with extra debt from the holidays, then settle in February, he said.

The report suggests that efforts from government and consumer groups to combat the rising number of foreclosures have not had a significant impact, according to Jared Bernstein, a senior economist at the Economic Policy Institute.

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