CENTRAL TEXAS DIGEST

Austin area job growth rebounds

COMPILED FROM STAFF REPORTS
Friday, March 07, 2008 TEXAS WORKFORCE COMMISSION

Job market up 4.2% in January; unemployment same as year ago

Central Texas’ job growth rebounded to 4.2 percent in January, as the region’s employment market continued to outperform most other areas of the country.

The unemployment rate was 3.9 percent, the same as in January 2007, the Texas Workforce Commission reported.

The region’s job market was growing at more than a 4 percent pace in early 2007 but slowed later in the year.

Job growth fell to 3 percent in December.

Statewide, the unemployment rate was 4.3 percent in January, compared with 4.5 percent a year ago.

By comparison, the U.S. jobless rate was 4.9 percent in January, down from 5 percent a month before.

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Tags: austin, economy, growth, jobs, money by Aria
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BERNANKE’S MORTGAGE RELIEF PLAN

By Jeannine Aversa
ASSOCIATED PRESS
Wednesday, March 05, 2008

WASHINGTON — Ben Bernanke is using his bully pulpit to try to keep more Americans from getting swept up in a wave of home foreclosures.

Bernanke, chairman of the Federal Reserve, urged mortgage lenders Tuesday to reduce the principal on loans for many people whose homes are no longer worth as much as what they owe. He also suggested that the Federal Housing Administration broaden its insurance program and let more people switch from subprime mortgages to cheaper, federally insured loans

“This situation calls for a vigorous response,” Bernanke said in a speech to a banking group in Orlando, Fla.

Even with relief efforts under way by industry and government, foreclosures and late payments on home mortgages probably will increase “for a while longer,” Bernanke warned.

Rising foreclosures threaten to increase the problems in the housing market and the economy.

“Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole,” Bernanke said. “Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done,” the Fed chief said.

Some owners can avoid foreclosure by selling their homes to pay off the loans. But that’s not possible when the homes are worth less than the mortgage balance.

Bernanke acknowledged that reducing balances might be a tough sell to lenders.

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Tags: austin, austin real estate, economy, financing, foreclosure, investing, lending, money, mortgages, politics, real estate, real estate outlook 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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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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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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Long-delayed project finally begins construction.

By Shonda Novak
AMERICAN-STATESMAN STAFF
Tuesday, January 29, 2008

The Four Seasons Residences, one of downtown Austin’s highest profile luxury condominium towers, will break ground this week, seven years after initial plans were thwarted by the tech bust of 2001.

The newly designed 32-story tower will rise in the parking lot next to the Four Seasons Hotel overlooking Lady Bird Lake. The building’s 166 residences will be priced from $400,000 to $4 million, with units from 880 to 5,500 square feet.

Four Seasons will manage the building, which is expected to open in the first quarter of 2010 and become a landmark on the evolving skyline.

The $125 million project is a venture between local developers Ardent Residential and Atlanta-based Post Properties Inc, the financier. Michael Graves & Associates Inc. designed the tower, which will have a terracotta-colored brick base that will blend with the hotel, developers say.

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Austin Wins!

Today, the U.S. Conference of Mayors, Novelis Inc. and Keep America Beautiful, Inc. (KAB) announced the winners in the fourth annual Cans for Cash: City Recycling Challenge at the U.S. Conference of Mayors 76th Winter Meeting in Washington, D.C. To encourage recycling, the program challenges like-sized cities to compete against each other in aluminum can collection for monetary awards. During October 2007, more than 50 cities collected over 191 million used beverage cans.

“Through the City Recycling Challenge, we continue to actively promote and encourage growth in aluminum can recycling programs in communities,” said Kevin Greenawalt, President, Novelis North America. “In addition to its economic benefits, recycling reduces carbon emissions which helps combat climate change; so it is more important than ever to energize community recycling and build a sustainable environment. By recycling these aluminum cans, cities avoided more than 24,000 tonnes of greenhouse gas emissions, which is equivalent to taking more than 25,000 cars off the road for a year.”

“We are proud that our Cans for Cash Program helped jump-start existing programs and redirected many communities to focus on a common goal,” said Douglas H. Palmer, Trenton Mayor and President of The U.S. Conference of Mayors.

“The City Recycling Challenge is an excellent example of the type of sustainable initiatives we are encouraging through the U.S. Conference of Mayors’ 10-Point Plan. As outlined in the 10-Point Plan, cities are encouraged to implement programs to improve community energy efficiency and reduce community carbon emissions. The goals of the Recycling Challenge complement this and demonstrate how aluminum can recycling positively impacts the environment. Participating cities should be excited and proud that they contributed to the recycling of more than 4.5 million pounds of aluminum cans.”

he winners of the $5,000 awards for the most aluminum cans recycled are:

• Division One (population 250,000+) Milwaukee, WI* - 1,385,328 pounds, Mayor Tom Barrett
• Division Two (population 100,000-249,999) Fontana, CA* - 774,614 pounds, Mayor Mark Nuami
• Division Three (population 50,000-99,999) Des Plaines, IL - 1,120,660 pounds, Mayor Anthony Arredia
• Division Four (population below 50,000) Richmond, IN* - 43,381 pounds, Mayor Sally Hutton

* Note: 2006 Winners in Division Category

To help mayors engage their communities in recycling and raise awareness about its importance over the long term, cities submitted innovative education and marketing ideas for an additional $5,000 award. The cities being recognized for the most innovative campaigns are as follows:

• Division One: Austin, TX, Mayor Will Wynn
• Division Two: Irvine, CA, Mayor Beth Crom
• Division Three: Fargo, ND, Mayor Dennis Walaker
• Division Four: Poland OH, Mayor Christine Yash

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Friday, January 18, 2008

Austin Business Journal - by Jean Kwon ABJ Staff

The Austin City Council later this month may approve some of the city’s most aggressive affordable housing incentives to date targeted at developers and builders of downtown and Central Business District projects.

Developers of high-rise condos and other multifamily projects located downtown and within a 2-mile radius of Sixth Street and Congress Avenue who reserve a small percentage of units for affordable housing will automatically be able to exceed floor-to-area and height limits, potentially getting substantial boosts in density. These bonuses will be in addition to perks given during the development review process such as fee waivers and fast-track approval. Council members are set to review the proposed ordinance on Jan. 31.

To get the bonuses, developers must keep at least 10 percent of condo units affordable to households making equal to or less than 120 percent of Austin’s median family income. In 2007, the median income for a family of four was about $71,125. Rental units deemed affordable would have to be within reach to those who make equal to or less than 80 percent of the median family income, which is about $45,500 for a couple.

Alternately, instead of building affordable units on-site, developers may be able to contribute money to a fund devoted to paying for affordable housing elsewhere downtown. In the proposed ordinance, developers who choose the fee-in-lieu option would pay $10 for every square foot that exceeds the FAR limitation. That fee is based on the current value of land in downtown, which ranges from $15 to $20 per buildable square foot.

By code, downtown projects are limited to 5-to-1 FAR — meaning they can build up to five times the area of their lot. Central Business District projects are limited to 8-to-1 FAR and heights up to 120 feet. Under the proposed ordinance, the City Council would have the discretion to waive these limits altogether, depending on the project.  >>> Click for full article

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