Austin Texas Real Estate Blog

The State of Texas is prepared to spend big money to lure social networking site Facebook to the Austin area. The $1.4 million incentive package is intended to make Austin even more attractive to Facebook, which has its main corporate headquarters in Palo Alto, California and has recently announced plans to open a national office outside the California area. The new office is expected to provide around 200 well-paying jobs in the sales, customer service and risk management fields, making it a valuable asset for the city Facebook selects. The incentive package offered by Texas will be funded by the Texas Enterprise Fund and is dependent on the city of Austin agreeing to ante up approximately $200,000 worth of local incentives; the proposed incentive plan will go before a public hearing on March 11, 2010.

Austin has long been considered one of the high-tech centers in the region, and the addition of a national Facebook office would add to the city’s well-deserved reputation. Chief Operating Officer of Facebook Sheryl Sandberg indicated that Austin was under serious consideration as a potential site for the office, stating “Austin, with its deep talent pool, would allow us to hire the high-caliber employees we need to properly serve the people, advertisers and developers that rely on our service.” Facebook currently has over 400 million active users, so its presence in Austin would be a high-profile addition to the city’s already vibrant high-tech industry scene.

This is not the first time a major online company has chosen Austin as a site for expansion; Google opened an office in Austin in 2008, but closed it along with several other offices worldwide soon after due to financial cutbacks throughout the company. While only twenty jobs were lost due to the closing, the Austin community felt the blow to its reputation as a high-tech hub. If Austin is able to snag the Facebook office, the effects will be felt not only economically but also psychologically throughout the region.

Facebook’s interest in opening an Austin office follows on the heels of recent announcements by LegalZoom and Pioneer Surgical Technology to open offices in Austin; LegalZoom’s new expansion is expected to bring around 600 jobs to Austin in the next few years, while Pioneer Surgical’s new office will employ around 30 people when it opens in the second quarter of this year. These acquisitions are expected to boost the local economy still further in the latter part of 2010.

Well, it’s been a long time and I have to admit, that I am surprised super happy that REALTORS Property Resource,LLC has shared the Content License Agreement with NAR’s members. I just read about the revamped RPR agreement on Inman News. Seems to be a pretty long document, but as Brian Larson pointed out, the more clear and complete the agreement winds up being, the less trouble there will be down the road. I couldn’t agree more.

Ok, so I’m like a kid on Christmas morning and would love to have more to post now, but I’ve got to grab a glass of wine, sit by the fire (it’s snowing today in Austin), and crank through this baby!

And to RPR, thanks for ruining my funny use of this clip. :-P

It would have been something like, How RPR Responds to questions…

NAR makes it rain to the tune of $20MM for the boys at RPR!

I’ll be the first to say that technology can be sexy. Especially, when it’s technology that you wished you had. That kind of thinking makes me wonder if NAR didn’t fall in love with the idea of the REALTOR Property Resource and make a mistake by funding it completely alone.

A luxury once tasted, becomes a necessity. Not sure who coined that, but it’s very true. Use the new iPhone and it’s the next item on the shopping list; buy a GPS and it’s hard to imagine getting around without it. Now put yourself in NAR’s position. There are some awfully talented guys who used to run Cyberhomes. They have been with Fidelity, have been with LPS, and they’re used to selling to REALTORS with sexy looking technology. (LPS is a MLS provider.) Now take these Cyberhomes guys, put them in a room with some REALTORS who run the Association, and the Association’s big fat checkbook and what do you think the outcome will be???

I’m thinking a $20MM company replete with Cyberhomes guys and paid for by Joe and Jane REALTOR. Note that the CEO and a VP are actually brokers, which makes me feel a lot better. Of course, the details are not there for us to see. I mean, sure, there are a few extremely vague agreement drafts floating around there, there are likely some coders integrating data, maybe a few social media evangelists (we met Reggie of RPR in a previous post), and other than that, a whole lot of sealed lips.You can get some great info over at MLS Tesseract if you want to bone up on the current state of RPR. The lack of communication and attempt to get buy in is for some other posts so back to the main thought of this post.

Did NAR fall in love and blow $20 large on RPR? I think they might have.

But why do you think this Joe? Aside from the obvious reasons that we all sell locally (so why do we need a national system) and the fact that the resources they are aggregating are already out there, FOR FREE; Well, I was reading press releases and news stories about the past wonderful experiences that NAR and business partner/related tech companies have had and a few things popped up.

Remember HomeStore.com? Remember the CEO of HomeStore.com who was sentenced to 15 years in a Federal facility for defrauding investors. The outcome, just a little loss of $100 Million dollars to investors and stockholders. No biggie there. I mean it wasn’t Enron and at least NAR wasn’t the sole owner of that baby, who by the way is now called Move.com. Just for your reference that Move stock is now trading at about $1.30 per share down from it’s all time high of something like $102. (Note that Move.com is currently worth less than 70% of LoopNet and less than 50% of CoStar.)

So then I decided to check out what NAR had said about Realtor.com. How was this such a success when HomeStore and Move were disasters less than ideal engagements. Here is what I found interesting that either NAR has forgotten or the fun bunch from Cyberhomes helped them over look. My commentary in blue.

Directly from the Press Release

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History of REALTOR.com
In November 1996, the Board of Directors of the National Association of REALTORS® approved an agreement between the REALTORS® Information Network (RIN)—NAR’s wholly-owned subsidiary–and RealSelect, Inc. to take over the operations of NAR’s official Internet site, REALTOR.com. At the time, many business models were considered to finance the development of REALTOR.com.

NAR’s Leadership Team decided against using dues dollars or asking for a special assessment of the membership to fund REALTOR.com. While Homestore and its investors have spent hundreds of millions of dollars to build and operate REALTOR.com, no NAR funds or NAR member dues dollars have ever been used for the creation or operation of the site.

Remember the fraud guy and the hundreds of millions of dollars. Seemed like a good idea then. With the current load of fraud ala Madoff, Standford, and the list continues, it SEEMS LIKE A BETTER IDEA NOW.

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Key Provisions in the Operating Agreement
The operating agreement negotiated more than eight years ago contained a number of important provisions ensuring NAR’s control over the content and operations of the site. Those provisions remain in full force today and continue to guide the relationship between NAR and Homestore (NASDAQ: HOMS), which owns RealSelect.

Homestore operates REALTOR.com as a business. Its separation from NAR allows the company to make decisions that could potentially pose difficult problems for a trade association on business terms. These include the pricing of REALTOR.com products and services to REALTORS® and the development and marketing of new products and services.

Ok. Why has this changed? I mean, I love technology as much as the next guy, but if there aren’t private investors out there willing to provide funding then maybe the NAR shouldn’t step in an fund this start up with member dollars. Are any of the NAR board members technology incubator guys? What about venture capital guys with experience in taking a technology startup from soup to nuts??? I’m sure the guys from Cyberhomes are stoked. “Hey check this Bobby, we got an angel investor and get to play start-up now with other people’s money.” Also, since the exact product offerings are not set in stone, nor are any pricing models for members, what’s the deal here? Before owning the whole enchilada posed difficult problems, now, now sweat.

Outlook for the Future
Homestore has survived the shake-out among dot com start-up companies and complete turnover in its management team. It has undergone major cost-cutting and restructuring to adjust to changing business realities. Certainly, its relationship with NAR has helped see it through challenging times and REALTOR.com has never lost its lead in the real estate space.

The two organizations have continued their relationship essentially unchanged because they both benefit. Homestore has access to the best brand in real estate and NAR has a vehicle to provide its members a strong presence on the Internet without incurring the cost or risk of operating REALTOR.com itself. Time and trials have tested the formula, and now it’s poised for new growth, profitability and service to REALTORS®, shareholders and consumers alike.

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Um. yeah. If I hadn’t sworn off the blink tag long ago, the middle sentence above would be blinking like John McCain at a presidential debate. Why has the time tested formula been changed? Remember what happened when Coke tried that??

So now you see why I think NAR fell in love with RPR and wrote a fat $20MM check. The past taught us as an association what works, why it works, and leave it to NAR to forget the history only 10-15 years in the rear view. As a NAR member, it saddens me. As a technology guy, it frightens me.

I’d love to hear from other agents, brokers, MLS folks, even some of those tight-lipped RPR people are welcome here. Maybe if we knew more about what was going on some of the skepticism would melt away. That remains to be seen.

Yesterday, I was browsing around the net and came across another post on RPR. That’s REALTOR Property Resource for those of you not familiar. It would be awesome to get some good answers back from someone intimately involved in the RPR project, but, I have yet to get public responses to my comments calling into question the usefulness, plans, or financials around the RPR. I should have known that if RPR has a director of social media (Reggie Nicolay), that RPR might want to control the spin in the social media outlets. Oh well, that’s the blog owner’s prerogative, even if I think it’s a disservice to other agents who read that blog.

[UPDATE] Geek Estate Blog confirmed that my comment in question of the RPR was not deleted, but instead went to spam. My apologies to GeekEstateBlog and Reggie Nicolay.

Back to the actual RPR itself. According to NAR and the folks hired to run the RPR, it will be the panacea for all our woes. The press release below is typical of the media surrounding NAR’s new national property database. You can read the full release here: http://www.realtor.org/press_room/news_releases/2009/11/tech_property

My comments are RED and inline in the press release below.

NAR Tech Acquisition Will Create National Property Database
Washington, November 09, 2009

The National Association of Realtors® has acquired technology to create a database of all properties in the U.S. so Realtors® can better assist consumers in a high-tech, fast-paced business world.

Guess what? Agents don’t sell in Austin Texas on Monday morning, then board a jet and sell in Salt Lake City Tuesday. Real estate is a local business for the vast majority of practitioners. Yeah, if you work at a REIT you may be jet setting and buying across the nation for pension funds, but you make plenty of money and have better data than will any national database created for REALTORS.

The technology acquisition includes licensed data and secured data aggregation services from LPS Real Estate Group, a wholly owned subsidiary of Lender Processing Services Inc. (NYSE:LPS), a leader in real estate technology. NAR will use the assets to develop the Realtors® Property ResourceTM, a parcel-centric information database covering all of the more than 147 million property parcels in the country as a resource for NAR members. NAR is planning to launch RPRTM in the second quarter 2010.

This paragraph is particularly useful when you hear from an RPR evangelist that it’s not going to cost you anything. Of course, NAR used NAR funds to buy these assets. So my question is, if it’s not the member’s money, whose money is it? Did NAR get a grant from the Bill and Melinda Gates Foundation? I don’t think so.

“Realtors® are the first, best source for real estate information, and the RPR™ is another emphatic feature to that resource. RPR™ will give Realtors® nationwide data on all properties at their fingertips so they can respond quickly to consumers interested in residential and commercial real estate. This is exciting news and a terrific NAR member benefit. NAR is committed to keep Realtors® central to the transaction and to the buying and selling experience with their clients and customers,” said NAR President Charles McMillan, broker with Coldwell Banker Residential Real Estate in Dallas-Fort Worth.

Again, we are local in real estate. I don’t care about property in Paducah and likely never will. So that we’re not beating a dead horse, let’s add another aspect to the commentary on this paragraph. We already have all this data! What?!?!? We already have all this data! Yes. It’s true. We get tax information from the central appraisal district where the property resides. We obtain legal filings at the court house or online if the matter is federal. We can get flood plain data from any one of several GIS (Geographic Information Systems) in this or surrounding counties. So why spend all this money, time, and effort creating an RPR? I have yet to hear a good answer, although I have some cynical thoughts as to why.

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RPR™ is not a national MLS, and will carry no offers of cooperation and compensation, Stinton added. “It is a private, NAR members-only benefit. The assets acquired by NAR will be directed through a wholly owned subsidiary corporation, Realtors® Property Resource, LLC,” Stinton said.

The management team of RPR™ includes CEO Dale Ross, co-founder of the Metropolitan Regional Information System, the country’s largest regional MLS; President Marty Frame, former General Manager of Cyberhomes; Senior Vice President of Industry Relations Mona Steen, former SVP with Cyberhomes; and Jeff Young, NAR director of the Realtors® Property Resource™ and 2008 president of the Michigan Association of Realtors®.

Seems like another Realtor.com deal to me. NAR has an essentially captive audience of consumers, read members, and partners with a technology provider to use our data to resell us a product. I’m not sure if you’re aware, but that $50 per listing per year that you pay to Realtor.com to have your listings on there is exactly what I describe above. Just for a little kicker, throw in the fact that the reason people come to realtor.com is that they publish data on listings that you take and you’ll really feel the love.

RPR™ will provide nationwide access to public record information such as tax and assessment data, liens, zoning, permits, environmental information, and information on neighborhoods, school district and community demographics, along with advanced search features for property searchers, as well as market-to-market comparisons and referral opportunities not currently available.

Yep. So we already covered the fact that you can get all this data locally as paid for by your taxes or fees. Now I see this as potentially poking the bear (DoJ). The public and DoJ LOVE NAR. I mean, the DoJ loves to make sure that NAR isn’t a monopoly or engaging in anti-trust practices. That said, WHY create a GIANT target for the public and DoJ to use for the next round of anti-real estate association sentiment? Could it be that there are other, more lucrative plans for the RPR?? Maybe there is a large market out there for this and all NAR needs is to create it on the backs of it’s members, wait for the DoJ to complain, and then voila, sorry Realtor members, but now we have to open this system up to any paying entity, BY COURT ORDER. Ok, I know this could be construed as a little Alex Jones and all, but based on the last 7 years of NARs technology direction, I have no doubt that the individual member’s interest are subordinate to making money.

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RPR™ will develop business strategies to make it affordable and feasible for NAR members, and will complement, not compete with, MLSs and CIEs.While many MLS and CIE systems provide a range of services, no two are alike. Brokers are looking for tools that support their agents across multiple markets with similar service levels and access to robust and valuable data. RPR™ is designed to support local MLS and CIE models to create a common experience for agents and brokerages.
…

For more information on the Realtors® Property Resource™, visit www.realtor.org/about_nar/realtors_property_resource.

Check out the latest from Inman on RPR.  I doubt my comments will be there long given the pro-RPR sentiment there, but you can always try and see.

Of course, the folks at RPR are busily spinning this beast as fast as she will go and only time will tell what’s to come. Would love to hear other REALTOR’s feedback!

Nothing like trying to get the real down low on our own association’s doings. It’s like trying to figure out what our local MLS is doing. Makes you recognize the clip below!

According to the Urban Land Institute, Austin is one of the real estate hot spots for 2010 development. Along with Washington, D.C., Boston, San Francisco and New York City, Austin is expected to see a surge in commercial development in coming years; the study indicates that 2010 will be one of the best times to buy, coming as it does at the expected bottom of the cyclical market. For those in a position to acquire real estate at this advantageous time, the return on investment is likely to be exceptionally high; 2010 may well be the year to watch in terms of commercial real estate investments.

Austin’s low rate of state tax and continuing commitment to corporate investment is credited with a large part of its economic stability and potential for growth. Its position as the capital of Texas provides robust support for its local economy, while its highly desirable residential environment has helped to keep housing prices stable during recent housing industry downturns. Austin’s high-tech industrial base also contributes to the overall real estate market stability, ensuring high demand for commercial and residential real estate continues well into the future.

The study also outlines some strategies for commercial real estate investors throughout the U.S. market. One of the most crucial is, of course, to invest in high-growth areas like Austin; this ensures the ability to attract and retain high-quality tenants for commercial properties. Additionally, investors should be highly selective in their choice of properties. Class A properties offer higher quality in materials and manufacture, and therefore represent a better long-term investment than other buildings. Location remains a key element to return on investment; cities like Austin offer investors a much better chance for a high rate of return on their initial investments. The study also recommends sticking to a cash basis for all real estate transactions; this will allow investors to take advantage of exceptional opportunities as they arise. Finally, the Urban Land Institute study recommends patience; by remaining steadfast and purchasing wisely, investors will be set to reap the profits when the commercial real estate rebounds over the coming years.

Austin’s real estate market offers unique advantages to investors and homebuyers. The commercial real estate picture in Austin is already showing signs of recovery, making this an optimal time for investors to jump into the market and take advantage of current low prices. Austin’s combination of desirable residential areas and robust economic growth makes it the perfect arena for commercial real estate investment in today’s market.

Of the major metropolitan areas across the United States of America with a potential labor force above 750 thousand, only 1 has gained jobs since 2008. That incredible achievement was reached in Austin, Texas. The National Bureau of Labor released the results comparing Apr. 2008 and Apr. 2009, and for the 3rd month in a row, Austin bested all others in job gains. The current unemployment rate for Austin, Texas is 5.8 percent down 3.6% from the national average of 9.4 percent. Only the 38 top metropolitan labor force cities were involved in this survey.

The significant job increases for 2009 have been in the industries related to Restaurants, Retail, and Hospitality. These services are provided direct to the public and even through a recession they are seeing modest growth opportunities. Direct impact on Austin’s job market, goods producing industries and technology based industries are down across the region. The jobs in the direct to consumer industries mentioned above, compensate significantly for those jobs lost.

The lowest unemployment rates in Texas are Austin with 5.8 percent and San Antonio with 5.4 percent. After that the next closest job healthy cities are Huston at 6.3 percent and Dallas-Fort Worth with 6.6 percent. Both are still below the national average, as are many smaller metro area’s who are reported at 8 percent and above unemployment. This proves the value that the Austin Metropolitan area offers to their residents and new home owners.

Today’s links

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From the National Association of REALTORS

Promoting Energy Efficiency in the Nation’s Buildings

The American Recovery and Reinvestment Act of 2009 does much to promote energy efficiency in the nation’s buildings. And tax incentives are among the engines driving the shift. That’s great news for you and your clients.

Here is a sampling of the new federal incentives as reported by the Tax Incentives Assistance Project.

Residential Buildings

• Energy efficiency incentives for upgrades to existing homes, which cover improvements to building envelope and heating, cooling and water heating equipment, are now available through 2010. The cap has increased to $1,500.

• The existing home incentives are now calculated at 30% of the cost of installation, up to the $1,500 cap. Until further clarification on the legislation, it appears that labor is not included.

• On-site renewable energy systems, including solar photovoltaic and hot water systems, small wind systems and geothermal heat pumps, are eligible for a tax incentive worth 30% of the total cost of the system. There is no cap on the amount.

Commercial Buildings

• A tax deduction of up to $1.80 per square foot is available to owners or tenants of new or existing commercial buildings that are built or reconstructed to save at least 50% of the heating, cooling, ventilation, water heating and interior lighting energy cost of a building that meets ASHRAE Standard 90.1-2001. (The standard provides minimum requirements for the energy-efficient design of buildings).

• Partial deductions of $.60 per square foot are available for improvements to one of three building systems – building envelope, lighting or heating and cooling – that reduces total heating, cooling, ventilation, water heating and interior lighting energy use by 16 2/3% (totaling 50% when applied to all three systems).

• Buildings placed in service between January 1, 2006 and December 31, 2013, and covered by the scope of ASHRAE Standard 90.1-2001 are eligible.

Learn more about the incentives stemming from the American Recovery and Reinvestment Act of 2009 and download a matrix of energy efficiency incentives.

Individual states offer additional energy efficiency and renewable energy tax incentives. The Database of State Incentives for Renewables & Efficiency is a central clearinghouse for them.

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Green Statistics from Mcgraw Hill

Global: Early adopters are deeply involved in green, with 30% building green on over 60% of their projects in 2008. Over the next five years, more than half (53%) expect to reach this level of involvement.

Nonresidential Building: Industry Players in commercial and institutional buildings are getting increasingly active in green building, with those largely dedicated to green building (30% or more of their projects built green) reporting a 50% increase(10 percentage points) from 20% in 2008 to 30% in 2009.

Residential Home Builder: Builders heavily involved in green building (60% or more projects green) is expected to also increase from 26% in 2008 to 36% in 2009.

Statistics taken from McGraw – Hill Construction’s Green Outlook 2009

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While I don’t see the downturn the way the folks who sell papers need to see it, I’m all for presenting both sides of the story.

From the Austin American Statesman

RECESSION SLAMS INTO TEXAS

AUSTIN  – The recession has finally slammed into Texas after keeping away during most of 2008, says a new report from the Federal Reserve Bank of Dallas, and Austin and Dallas could feel the brunt of it.

Austin and Dallas were cited as being especially vulnerable because they have more exposure than other large Texas cities to cyclical industries, such as construction and financial services.

Statewide, employers could cut 296,000 jobs this year, sending the unemployment rate to roughly 8 percent, according to Fed economists Keith Phillips and Jesus Cañas, who co-authored the article in the Fed’s quarterly publication on the region’s economy.

In January, almost 120,000 Texans applied for unemployment benefits, 85 percent more than in January 2008.

You can check out the rest of the story at Austin American-Statesman.

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From The Austin Chamber of Commerce

Red Oxygen Chooses Austin for American Headquarters
The Austin Chamber and Opportunity Austin recently announced that Red Oxygen, one of the world’s leading developers and distributors of Enterprise Text messaging software applications and services, has made plans to open their American Headquarters in Austin, Texas.

“Red Oxygen’s highly efficient and innovative SMS platform is a perfect complement to Austin’s expanding mobile services and software industry,” said Gary Farmer, 2009 Opportunity Austin Chair and President Heritage Title of Austin. “The city welcomes Red Oxygen and hopes that the announcement will not only encourage other tech-based companies to consider relocating to Central Texas, but that it will also reinforce the fact that Austin is one of America’s most talented and qualified cities for an array of industries.”

In the process of launching their new 2,000 square-foot facility near downtown, Red Oxygen plans to create 10 to 12 new high-paying jobs for Austinites. The average office salary of $50,000 will provide excellent employment opportunities and take-home pay for Central Texans. Not only will the headquarters create new corporate jobs, but the move will also open new avenues and opportunities for local Austin engineers, sales associates and college graduates.

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Finish reading the story at The Austin Chamber of Commerce

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It used to be that a house delivered pre-built to a lot wasn’t something most people considered. When they bought, there was generally a house already there. If there wasn’t, they erected one on-site, trucking in pieces rather than a structure. But times have changed, and modular housing has gone from rare to trendy to logical.

A modular home is delivered to the site approximately 90 percent assembled, saving the owner a considerable amount of time, money and frustration. Built to the same standards as a regular family home, it now garners the same respect. Awards are given for the best ones on the market – 2008’s winner was Genesis Homes‘ Bunbury, the company’s newest urban in-fill.

The beauty of the Bunbury is the combination of flexibility and aesthetics. The home is designed to fit into the typical urban lot, making it perfect for urban fill projects. It can be built with a variety of exteriors and in a variety of styles to match the environment, and a garage can easily be added into the home. Similarly, the Homestead, built by Building Systems Network, is well designed and built to last. It appeals to the buyer with its impressive use of modern construction methods and forward-thinking amenities.

Modular housing used to be a rare occurrence, but today may be a wise choice. With well-built, beautiful homes that can squeeze into even the most restricted areas, it can be the perfect solution to a difficult problem. If you’re not sure which way to go, consider a house already built and waiting for an address.

You have amazing plans. They involve you buying a house that might need a little work but has a lot of potential. You’ll take that potential and use it to create a green haven. Your home will be more eco-friendly than even you had ever imagined. Everything in it will work to sustain some part of the environment, from the roof, which will hold a garden, to the cooling system, which will be energy efficient and made from recycled parts. You have grand plans, but there is one small problem: your wallet, for the money in your savings and checking accounts won’t go as far as you may think.

HyoJung Kim and husband Seth Garland of New York both thought they could easily renovate their home, making it green for as little as $70,000. What they found instead was that going green was putting them in the red. Units that were energy efficient and moderately priced were costing them thousands of extra dollars to install. Architectural designs that would save money in the future were causing complications and costing money they didn’t have in the present. And the falling real estate market was only adding to the real estate debt they had already accumulated. To make ends meet, they had to forgo many of their plans, sell their mortgaged condo and attempt to make the house, rather than a green place to live, a livable place to live.

Before you wind up in the same situation as Kim and Garland, assess your finances. Whatever you imagine it will cost to make all of the renovations you are envisioning, add a little more. And then, find ways to go green that you can afford. You don’t have to knock down walls, build roof gardens or use only plastic plumbing to help the Earth. There are other things you can do, less costly things that will keep the world and you in the green.