Austin Texas Real Estate Blog

The Austin City Council has named Brewster McCracken to the new Mayor Pro Tem position at a special meeting on Wednesday, June 25, 2008. Mr. McCracken replaces Betty Dunkerley who had served as Mayor Pro Tem from June 20, 2005 to June 15, 2008. Mr. McCracken was nominated by council member Sheryl Cole and seconded by Mayor Will Wynn. The nomination was passed unanimously.

The mayor pro tem serves as a stand in for the mayor, running council meetings, standing in as head of the city at ceremonies, and performing other duties in the mayor’s absence. Mr. McCracken has been a city council member since June of 2003. His mission, as a council member and as mayor pro tem, according to his web site, states “As your Council Member, I have a responsibility to be forward thinking in my initiatives and to be fair in my deliberations and decisions. Above all, I know that I have a responsibility to do my best to ensure that every Austinite has a better future and that we leave this place better than we found it.”

He takes evident pride in the city of Austin and is a big fan of Austin’s vision for alternative energy and green building initiatives. His focus is on supporting Austin’s leadership in emerging technology, including clean energy, digital media, and wireless technology, as well as maintaining Austin’s leadership world wide in semiconductor manufacturing and raise Austin’s status in the nation as one of the top five regions in the biotechnology field.

Finished before it was even started, the Magnolia condo project was forced into foreclosure in July 2008.

The Magnolia was to have been a five-story condominium building close to the downtown area, consisting of 139 units priced at between $220,000 and $600,000. Amenities were to include private balconies or courtyards, an outdoor pool on the second floor, a fitness center, rooftop gardens, retail space, and granite counter tops among others. The project was estimated to cost $40 million and would have covered three acres on the corner of South Lamar and West Gibson Street.

A series of events, combine with bad luck and difficult topology, have scuppered plans for these luxury condos.

In February of 2007, the lender who was to finance the construction, Fremont Investment & Loan from Los Angeles, reneged on its loan promise. It seems the Federal Deposit Insurance Corporation (FDIC) refused to allow the lender to fund any new projects, as regulators tighten the purse strings on a nationwide scale.

Then, in October of 2007, the development company, Avena Development LLC, attempted to sell the project, and it was reported they had a buyer. The deal fell through in June of 2008 and foreclosure proceedings loomed. The undisclosed buyer backed out of the project purchase when they failed to find a partner to commit to the project.

The site is in a prime location, close to downtown and in a corner lot. There are projects with tree preservation and topography that were threatening to raise construction costs. Still, experts are cautioning against panic, saying this incident is isolated and “is related more to the specifics of the project and to the overall slowdown in residential sales and does not necessarily indicate the beginning of a trend in foreclosures.”

For more than a year West 17^th Street at Lavaca Street has been closed. There’s been construction, which residents have accepted and adapted to. After all, there is nearly always construction in some part of Austin. You can’t avoid it; you can only accept it, even when it does inconvenience several thousand state employees.

Besides, this construction, when it started, was expected to lead to luxury condos and an office building, to be called La Vista on Lavaca. The permit was taken out for it in April 2007. At that time, Jason Redfern, manager of the Right of Way Management Division in Austin’s Watershed Protection and Development Review Department, said, the developers planned to keep the street closed for six months. When six months came and went, they renewed the permit for another six.

April 2008 should have seen another renewal or the completion of the project. It saw neither, and in fact, didn’t even see construction. No one has been there for months and the permits are expired. The city is now probing into the whys and whats of the situation, hoping for a clear answer in this mysterious halt.

The developers claim that their permits are up to date, and that the city is mistaken. But their claims do nothing for the fact that the street is still closed for no apparent reason.

If nothing is going to be done, citizens want it open; so does the city. There should not be, they say, inconvenience for no reason. There should only be inconvenience with the promise of future convenience. And that has disappeared from West 17^th and Lavaca.

The saturation of rental units on the Austin market is good news for tenants who can expect cuts in rent and possibly pick up some amenities as landlords vie for their attention. Yet, the demand remains high for upscale urban apartments as people look for residential units closer to their place of employ.

According to the apartment research firm, M/PF YieldStar, occupancy for June 2008 stood at 93.4 percent, down 1.5 percent from March and nearly 2 percent from the same time in 2007. This should raise some concerns with landlords, as the same firm predicts a flattening of occupancy for the rest of 2008, and foresees a drop of possibly 3 percent in 2009.

Construction of nearly 13,000 units is planned for the Austin area through 2009. Greg Willett, vice president of research for M/PF, says the real need is for about half that amount, based on demand which he feels has become sluggish.

This pessimistic opinion is not shared by developers in the Austin market, however. Spencer Stuart, managing director of Legacy Partners Residential Development Inc., says rental activity is strong in both downtown and close by suburban areas. Rising gas prices and the desire to be close to the action is fueling the demand for higher priced units closer in to the city.

Still, the rise in rental rates does appear to be slowing down and tenants will indeed find bargain lease rates. Rents rose less than 4 percent from 2007 to 2008, with average monthly rent standing at $839. Yet, this means the market becomes more competitive, and that means good deals for prospective tenants.

Design Workshop Inc. has taken up permanent residence in a 2,500 square foot space at 801 Congress Avenue a couple of months ago. Seven employees from Denver moved into the space in May 2008, hoping to grow their numbers to over 20 in the next three to five years.

Design Workshop is, according to their home page, ‘an award winning, international landscape architecture, land planning, urban design, and tourism planning firm.’ Combining concerns of environment, economics, art, and community, Design Workshop offers urban planning and affordable housing strategies, feasibility and environmental impact studies, project facilitation between the public, the corporate sector, and the community, as well as a host of other diverse land planning and design services.

Rebecca Leonard, a graduate of Ball State University College of Architecture and Planning, will lead the office. Her focus will be on developing projects for the firm, not only in the state of Texas, but will serve clients nation wide and in the Caribbean as well.

Texas projects by Design Workshop have thus far included master planning and design for the second phase of the Domain project in North Austin, initial planning for Hardy Yards in Houston and Bellaire Sustainable Development in Hurst.

The Domain development is a mixed-used community in Northwest Austin, combining commercial and residential uses in one area. The second phase of the Domain project will cover 27 acres south of the original Domain and plans include a three storey Dillard’s, an 80,000 square foot Dick’s, and an eight screen cinema complex, as well as a 340 room Westin hotel. Construction begins this summer, 2008, with plans for opening in November of 2009.

The Canadian-based company, Qualico Development, has bought up 1,600 acres in Del Valle, south east of the Austin city limits, for a planned community development in this area near the Austin-Bergstrom International Airport.

It’s not yet known how many units Qualico plans on building, but there is a golf course planned, as well as commercial space. The general manager of Qualico Communities, Glynn Hendry, estimates that the company spent about $19 million on the land. The types of houses will cover a wide range – from those priced for the first time home buyer to those qualified for the higher end prices.

For 60 years, Qualico had concentrated its interests in the western region of Canada – being based in Winnipeg - but they now see an opportunity to expand into the United States. Austin was chosen as a growing city with a great deal of potential for housing and commerce. Austin has weathered the national real estate meltdown fairly well and this Canadian company is convinced it’s got all the makings of a boom market.

The property itself is situated in a prime location. Its proximity to Austin makes it an excellent bedroom community for professionals who work downtown. As gas prices increase, commuters are eying neighborhoods closer to work. The development in Del Valle will raise the real estate value of the area, where homes typically range from $100,000 to $200,000.

Qualico Development isn’t the only Canadian company eyeing the real estate market in the US, either. Carma Developers LP, based in Calgary, announced in 2007 a plan to invest $500 million in a 2,500 acre area near the airport as well. The development is expected to create a community of 30,000 residents and 1 million square feet of commercial space.

What do the United States Investors need as a more clear indicator to continue their business expansion? With Austin as a focal market for impressive growth and expansion, foriegn investors will continue to grow and expand into the United States.

The old saying “April showers bring May flowers” is very true when it comes to the real estate market. Buyers seems to go underground at the first hint of cold weather and emerge, like so many Punxsutawney Petes as the ground and air thaws and the weather is more friendly toward house hunting activities.

According to this article in the Realty Times, the housing market in the nation as a whole is beginning to shake off the winter doldrums, as well as the residue of a burst real estate bubble, and starting to show a positive trend once again.

Austin is right up there with the fastest-selling inventories – houses average 67 days on the market.

Prices are beginning to rise slowly, indicating a healthy seller’s market, but also a good buyer’s market as inventory is still somewhat high and buyers have their choice of properties at still reasonable prices.

In its continued penchant to buck against national trends, average sales prices of homes in the Austin area rose almost 2 percent in April, with prices up about 12.5 percent over 2007. Average price of a home in Austin stands at just under $267,000.

Another event that is having a huge effect on the real estate market trend is the drastic rise in gasoline prices. This has had the social effect of potential home buyers considering what a commute would mean to their pocketbooks as they look at the choices between rural and urban home locations. Many energy-conscious consumers are beginning to cast an eye toward home-owning possibilities in the downtown area. A number of luxury apartment and condominium projects are underway in downtown Austin, and prospective homeowners are eagerly awaiting completion of these projects as they look toward a more urban and energy-efficient lifestyle.

With apologies to Frank Zappa, it’s Austin and not Centerville that’s a great place to raise a family. House prices remain low, but jobs continue to grow, creating a quality spot to relocate and settle for the duration.

Austin is home to eight independent school districts, which include the Austin Independent School District in Travis County and the Round Rock Independent School District in Williamson County. There is no lack of educational opportunities in the area as Austin is home to a branch of the University of Texas which offers studies in Business, Communication, Education, Engineering, Fine Arts, Nursing, Natural Sciences, Architecture and Social Work among many others.

The climate in Central Texas is conducive to many outdoor activities and Austin offers much in the way of events and activities for the whole family. There are plenty of art galleries, some that offer child-friendly activities and many with low or free fees. There is a long list of out- and indoor markets – flea markets, farmers markets, garage sales, and such on the weekends.

The Austin Zoo posts a very low entry fee. With 60 different species and over 200 animals, the zoo is a great place to spend the afternoon. The Topsey Exotic Ranch offers a drive-through safari for wildlife viewing from the comfort of your car for a low entry fee. And, if you love wild flowers, the Lady Bird Johnson Wildflower Research Center is open Tuesdays through Sundays. The Research Center reflects the late first lady’s love of wildflowers and her campaign to create beauty along the highways of the nation.

Austin’s low crime rate, clean environment, and low cost of living is a definite draw when families start looking around for a prime relocation area.

The Leadership in Energy and Environmental Design (LEED) Green Building Rating System, is the standard by which Austin’s building projects are measured these days. Developers seeking LEED certification must meet stringent requirements for reduced waste, conservation in energy and water use, healthy environment for occupants and employees, and demonstrate their commitment to environmental conservation and responsibility.

Austin lays claim to starting the green building trend. The city government has been at the forefront of providing incentives for home and office builders to apply sustainable building practices as they plan and develop residential and professional properties.

Austin recently hosted the Austin Green Living & Home Products Expo, April 18 through 20, at the Austin Convention Center to showcase new products and designs and offer workshops for consumers to learn simple ways they can change their lifestyles and products they use to help contribute to a more environmentally friendly future. Small changes such as using compact fluorescent bulbs and reusable shopping bags can make a big impact when a lot of people get involved.

The Expo featured builders, landscaping architects, producers of renewable and alternative energy sources, and natural, organic, and fair trade products. Mayor Will Wynn spoke about his Climate Protection Plan, introduced in 2007 to raise awareness and set some goals for sustainability for the city. His aim was to set an example for the rest of the state by encouraging area home and business developers to study ways of lowering energy costs and use and he�s leading by example. In an article in the Austin Chronicle, he stated “my home electricity bill is $28 again this month. I’m also driving a fifth what I used to”. His hope is that the city will set an example for the rest of the country and, indeed, the world.