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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Wednesday, March 5, 2008 - 3:50 PM CST

Austin Business Journal

The steel and glass residential towers set to reshape the downtown Austin skyline aren’t a pipedream. They’re coming–and they’re going to be filled, a new study shows.

The analysis from Texas economist Ray Perryman suggests that while the nation battles a housing correction, Austin’s residential market remains relatively healthy. Moreover, says Perryman, there is clear demand among Austinites to live in the city’s vibrant downtown.

There are currently about 6,000 people living downtown. And with about 4,000 residential units under construction or planned around downtown, that population is expected to double over the next two years. Perryman says with the Austin area adding more than 40,000 new residents annually, the local housing market will continue to fair well, and rising energy costs and traffic woes will drive a growing interest in urban living.

“This housing market will fundamentally support the type of housing being developed downtown,” Perryman said at a morning press conference at City Hall organized to discuss the report. “There is an amble population to absorb these units.”

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Tags: austin, building, buyers, condos, downtown, economy, investing, neighborhoods, real estate, urban living by Aria
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Home values have declined across the country, giving homebuyers the best buys they’ve had since 2004.

NEW YORK (CNNMoney.com) — It may be the best time to buy a house in more than four years.

Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they’ve been since 2004, according to a report.

The Cleveland-based bank National City Corp. (NCC, Fortune 500), together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.

“Housing valuations are almost back to long-term norms,” said National City’s chief economist, Richard DeKaser. He called current affordability “the best in the past four years.”

But DeKaser cautioned that home prices could fall even further.

“This isn’t to say home price declines are over,” he said. “We could move below historic norms. By the end of 2008, housing markets could be broadly under valued.”

Prices still improving

There are still 21 housing markets, or 6% of those surveyed, that are severely over valued, including Atlantic City and Madera, Calif. That’s down from 56 overvalued markets at the peak of the housing bubble in 2006.

The report compares actual median home prices with what the authors determine are proper home values based on population density, relative income levels and interest rates, as well as historically observed market premiums or discounts, to determine whether markets are over or under valued.

The report also factors in market intangibles that make some areas more desirable places to live, and more expensive.

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Tags: austin, austin real estate, buyers, economy, financing, investing, money, neighborhoods, real estate, real estate outlook, sellers, where to buy by Aria
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Brian Wingfield and William Pentland 01.30.08, 2:20 PM ET

It’s no secret that the Southeast and Western United States are booming. The costs of living and doing business there are often cheaper there than in big coastal cities. But where and how much those cities are thriving might surprise you.

Take Alabama. The state has some of the fastest growing metro areas in the country, including Mobile, which is projected to have the greatest change in “gross metropolitan product (GMP),” 34% between 2007-2012, according to research forecasts done for us by Moody’s Economy.com.

In Pictures: America’s Fastest-Growing Large And Small Metros

One boon to Alabama is ThyssenKrupp’s announcement last year to build a $3.7 billion steel plant in Mobile. And Huntsville–expected GMP growth 15% by 2012–has long been a hub for defense and space research. Since the mid-1990s, Alabama has also become a manufacturing center for automakers like DaimlerChrysler (nyse: DCX - news - people ), Toyota (nyse: TM - news - people ) and Hyundai.

“The automotive industry has been Alabama’s real growth industry in the last 15 years,” says Brian Hilson, president and CEO of Huntsville’s chamber of commerce.

Other metro areas, like Port St. Lucie and Palm Bay, are part of a growing biotech cluster in central Florida. Straddling Texas and Arkansas, Texarkana is seeing war-related development: Its Red River Army Depot is a major maintenance and storage facility for military equipment. And St. George, Utah, located about 120 miles from Las Vegas, has boomed in recent years as a destination for retirees.

All of them sit at or near the top of Forbes’ list of America’s fastest-growing metropolitan areas, places large and small that offer at least the promise of booming economies for years to come.

To compile our list, we looked at all of the country’s 363 metropolitan areas, defined by the U.S. Census Bureau has 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.

Bruce Katz, director of the Metropolitan Policy Program at the Brookings Institution, says there are several factors to take into consideration when measuring the pulse of a metro area: innovation, human capital, infrastructure and the actual quality of a place.

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Builders and remodelers who work steadily on readjusting their business practices in response to the current economic downturn stand a good chance of surviving until better times arrive and trouncing the competition during the recovery, according to housing industry veterans appearing at the International Builders’ Show (IBS) in Orlando last month with the battle scars to prove they have weathered previous housing slumps.

“Today’s housing market is obviously not the same housing market that existed a couple of years ago, and that means you can’t afford to run your company the same way you did then,” said Michael Sivage, of Sivage Community Development in Albuquerque, N.M., who moderated the panel. The industry faces “another challenging year” following a “tough” 2007, he warned, and the burden is on builders to persuade consumers to consider the home-buying opportunities in today’s market despite the daily barrage of negative reports in the news media.

Sivage asked each builder to track where their businesses have gone since the start of the downturn in 2006 and discuss what they are doing to get through 2008 and prepare for better times ahead. Among the accounts shared with the convention audience:

Robert Camp, of Camp Corporation in Lakewood, Wash., said that his company closed sales on only 35 homes last year, compared to 125 in a good market; saw declining profit margins; and ran into cash-flow problems. This year, his objectives are to reduce the inventory and cut interest costs by 50%. To get out from under the interest burden, he is offering his customers the opportunity to rent houses in the existing inventory and then purchase them in two years, with rent set aside to help them qualify for a mortgage.

Camp has also resorted to “bare bones pricing” that has cut the selling price an average of $20,000 per unit by trimming construction costs, such as scaling back to a one-car garage. In a new subdivision going up on developed property owned by the company, on a pre-sale basis only, starter homes are being offered for just under $200,000, compared to $250,000 to $275,000 previously.

“The idea is to do something every day to help your company get through this downturn,” he said. For example, he has stopped accepting bids on projects. “We tell subcontractors what we can afford to pay, making sure they make a profit so we all will be in business in 2009.”

Camp is looking for 60 sales this year and has already made it a third of the way to his goal. “Don’t crawl into a hole thinking you can avoid all of this. It’s not going to go away,” he said. He also advised builders to take advantage of the resources available at their local home builders associations and “find people who can tell you how they got through things.”

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With the housing industry facing its greatest crisis since the Great Depression and the economy teetering on the brink of recession, NAHB last week called on Congress to move quickly to enact a second round of economic stimulus directed squarely at the housing sector — including a tax credit for the purchase of a home.

“The biggest bang for the buck most likely would be provided by a temporary home buyer tax credit,” NAHB Chief Economist David Seiders told the Senate Finance Committee on Feb. 28. “Tax credits for the purchase of a home are a means of eliminating excess inventory, relieving some of the pressure on falling housing prices and ending the waiting-on-the-sidelines strategy some potential buyers have adopted in response to overly negative media stories concerning the future of the housing market.”

The recently enacted Economic Stimulus Act of 2008 could fall short of achieving its intended results because it does not address the problems posed by the housing contraction that are at the root of today’s economic and financial market problems, he said.

“The U.S. housing market now is in the contraction phase of the most pronounced housing cycle since the Great Depression,” said Seiders. “Single-family housing starts are already down by 60% from their peak at the beginning of 2006 and the bottom is not yet in sight. Congress can, and should, do more.”

There are many models that Congress can look to when designing home buyer tax credits. The District of Columbia, for example, offers a $5,000 tax credit to first-time home buyers for the purchase of a new or existing home.

With housing affordability improving over a year ago, a national first-time home buyer tax credit would stimulate buyer demand among households that do not have a home to sell. In turn, those who sell their existing home to a first-time home buyer will purchase another home and spur additional economic activity.

A similar version of a home buyer tax credit was used successfully in the mid-1970s when Congress established a temporary tax credit for the purchase of a newly-constructed home to help clear off a then-record number of unsold homes on the market.

NAHB cited the efforts of several senators who are seeking similar solutions. For example, Sen. Debbie Stabenow (D-Mich.) has introduced S. 1988, legislation that provides for a temporary, one-time refundable tax credit for first-time home buyers of 10% of the purchase price of a principal residence.

Additionally, Sen. Johnny Isakson (R-Ga.) introduced S. 2566, a bill creating a one-time $15,000 tax credit for purchasers of a single-family principal residence that is a newly constructed home or a home in default or foreclosure purchased within a one-year time period.

“What is common among these tax credits for the purchase of a home is that they represent policies that increase housing demand, thereby enabling home purchases for families, and fight falling housing prices, which threaten the economy as a whole,” said Seiders. “We recommend a targeted home buyer tax incentive in order to maximize induced purchases.”

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By Shonda Novak | Thursday, February 28, 2008, 12:47 PM

Work is expected to start in about a month on the $120 million BartonPlace condominium development on Barton Springs Road, after the project won unanimous City Council approval for a zoning change today, the developers said.

The 270-unit project will replace the Shady Grove Trailer Park on Barton Springs, behind Austin Java.

The developers are Larry Warshaw and Perry Lorenz of Constructive Ventures Inc., builders of the The Pedernales, Saltillo Lofts, TwentyOne24, and Este condo projects in East Austin. Constructive Ventures is partnering in BartonPlace with Rick Engel, co-owner of Austin Java, Little Woodrow’s, Paggi House and Uncle Billy’s.

The development team has signed a private agreement with the Zilker Neighborhood Association that will forever limit the development of the portion of the property that fronts Barton Springs Road, to help preserve the local businesses that make up Austin’s popular “restaurant row.”

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FROM STAFF AND WIRE REPORTS
Friday, February 15, 2008 WASHINGTON — Median home prices fell in more than half of the nation’s 150 metropolitan areas during the October-December quarter, a real estate trade group said Thursday.

But fourth-quarter data from the National Association of Realtors show that Texas was largely unaffected by the price slump.

Only one metro area in the state, Beaumont-Port Arthur, posted a decline in median price for a single-family home, down 5.3 percent, when compared with the year-earlier quarter. The median price in the Austin-Round Rock area rose 6.4 percent, one of the best results in Texas, the trade group said.

Of the 150 metro areas, 77 experienced price declines, with 16 showing double-digit percentage drops, the trade group said. The largest price declines were in Lansing, Mich.; Sacramento, Calif.; Jackson, Miss.; and Riverside, Calif., which posted price declines of 17 percent to 19 percent.

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NEIGHBORHOOD SPOTLIGHT

Lost Creek tucked away in the western hills, with views

By Clayton Stromberger
SPECIAL TO THE AMERICAN-STATESMAN
Sunday, February 17, 2008

Saying goodbye to the cosmopolitan bustle of Washington, D.C., was not easy for Nancy Vaden-Kiernan and her husband and young twin boys.

Headed back to Texas for family and work reasons, the four were leaving behind a classic, old two-story home down the street from the Washington National Cathedral and all the parks, museums, and cultural events a big city has to offer. Vaden-Kiernan knew they’d need a special new home to make the twins excited about the move.

“We wanted a view and a good school,” she says. Searching online, they found both — and a swimming pool — in a home in Lost Creek, just off Loop 360 in the Eanes Independent School District. They flew out for a visit, gazed at the hills and valleys of the Barton Creek greenbelt from the back deck and bought the house that weekend.

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The burbs no longer beckon residents who want to end commutes and be close to it all.

By Shonda Novak
AMERICAN-STATESMAN STAFF
Sunday, February 10, 2008

‘Urban Re-Renewal: Downtowns making a comeback as places to call home.”

“Downtown Living All the Rage.”

“Crazy for condos: Downtown Scottsdale joins nation’s upscale urban living boom.”

Headlines in cities across the country document the continued popularity of downtown living, a trend that re-emerged in the 1990s locally and nationally. In this sense, Austin isn’t so weird after all.

Like Boston, Detroit, Denver and many other cities, Austin has its share of singles and young professionals, executives, empty nesters, retirees and, increasingly, young families headed to where the action is: downtown.

They’re being drawn by the dining, music, nightlife and recreational and cultural amenities, from galleries and performing arts venues to Lady Bird Lake.

They are a diverse group, of all ages and occupations.

“Time is the most important commodity that people have in their lives, and living downtown means people spending less time stuck in traffic and more time enjoying life,” says Larry Warshaw, a co-developer of four condominium projects in East Austin and the 42-story Spring tower under construction downtown. “I see it being a trend that will continue for several decades.”

Warshaw echoes the views of other experts, including John McIlwain, senior fellow resident for housing with the Urban Land Institute who himself moved from the suburbs of Washington, D.C., to live in that city’s downtown.

“There are and always will be those who want a house with a yard in the suburbs,” McIlwain says, “but more and more are opting to move to the revived cities. Decades of major investments in cities by the federal government along with mayors focusing on the basics have made cities safe and vibrant places to live.”

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Tags: austin, building, buyers, condos, downtown, investing, money, neighborhoods, urban living, where to buy by Aria
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