From Forbes.com
Real EstateBest Cities To Buy A HomeMaurna Desmond
Houston, we don't have a housing problem.
The city's $152,500 median home sale price is up 6.6% from 2005. It boasts a low vacancy rate and an oil-rich economy. Throw in a bubbling entrepreneurial tech scene, and you've got four factors that put Houston on the top of our list of best places to buy a home.
San Francisco, Charlotte, N.C., Jacksonville, Fla., and St. Louis, Mo., are other areas buyers can feel safe investing in.
We examined the country's 40 largest metropolitan areas and looked at where home prices have appreciated over the last two years. We also measured tightening vacancy rates. These metrics indicate places where buyers are investing in homes in order to live, not just make a quick buck, and where the housing market is relatively solid. We culled our vacancy and home price information from the U.S. Census Bureau and the National Association of Realtors.
The average vacancy rate across the major metro areas was 2.88%, and the average percent appreciation was just .07% over the last two years.With lending tight, we also factored in the spread between a monthly rent check and a mortgage payment at the median level (assuming that the down payment was 10% and the fixed interest rate is 6.25%). Encino, Calif.-based real estate brokerage firm Marcus & Millichap provided stats on median monthly rents.
Cities where a mortgage payment was close to, or less than, the average rent were given a higher score. For instance, in Cleveland the average rent is $702, and the average mortgage is $565.78. With a lower monthly payment, tax incentives and the opportunity to build equity, it makes sense to buy here.
In stark contrast, San Jose, Calif., has an average monthly mortgage payment of $4,322.33, versus an average rent of $1,612.
The University of Texas campus provides young blood and research-related jobs to No. 2 city Austin. This state capitol is a hip area on the rise. The vacancy rate has fallen by 37.5% in the last 24 months to just 1.5%, despite a lot of building in recent years. And buying isn't much more expensive than renting. An average mortgage payment is $1,022.40, and average rent hits $767.
San Antonio, No. 5, and Dallas, No. 6, made the list thanks to affordable housing, which continues to appreciate. In both cities, the median home price hovers around $150,000, and a monthly mortgage payment of around $800 is pretty close to what one pays in rent. If you can pony up the down payment, these are great areas to live.
The South made a nice showing with Charlotte, N.C., Jacksonville, Flo., and Atlanta, Ga., making our list. Charlotte and Jacksonville have surged in price by 12.9% and 8%, respectively. Atlanta has seen huge amounts of growth and remains reasonable with a median home price of $172,000.
San Francisco, this year's best city for young professionals, came in at a respectable No. 8. While housing certainly isn't cheap in the City by the Bay, it is definitely in demand and continues to appreciate. For a buyer, San Francisco offers a culturally rich and beautiful city that is chock full of opportunity.
Several construction projects are appearing on the west side of Dripping Springs:
1. Java Sea Traders has started construction on their new building
2. 3 professional buildings with office spaces
3. Construction has begun on the conversion on both the high school and middle school
4. Driftwood Baptist Church has started construction
5. First Baptist Church has recently completed a slab inspection and have submitted there building plans to the city
6. Rob Shelton will be completed in the next 3 weeks
Other areas of town:
1. Site plan has been approved for Best Western (58 rooms)
East of the Dominoe’s
2. Harper’s Towing (short term storgage lot) has been approved on S. Canyonwood.
3. Possible Auto Repair shop on North Canyonwood
Other construction timelines:
1. Pioneer Bank will be completed in October
2. The Shops at the Springs will include: LK Nails, AT&T, Great Clips, Koi Lantern and Quizno’s
3. Flores, McDonalds, Chase and possibly Quizno’s will be opening between Thanksgiving and Christmas
4. Walgreen’s will open in early 2009
Median household income in the Austin-Round Rock metro region jumped 7.3 percent between 2006 and 2007, far outstripping the 1.3 percent increase nationwide.
The latest report from the U.S. Census Bureau shows median household income in the local area stood at $56,746 last year, up from $52,882 in 2006. The U.S. median was $50,233 in 2007.
Aggregate household income in Austin in 2007 totaled $44 million, up from $40.4 million the previous year.
On a per capita basis, income locally rose 3.2 percent to $28,822.
Meanwhile, the region’s poverty rate declined a bit during the year period. Roughly 12.7 percent of the population was living in poverty in 2007, down slightly from 13 percent in 2006. Nationally, the rate remained stagnant at 12.5 percent. Similarly, the number of residents on public assistance or food stamps improved, dropping 1.4 percent to 34,957 last year.
Looking across the United States, median incomes rose in both the South and the Midwest, declined in the Northeast and remained the same in the West.
The Census report, which also looked at health insurance, shows that Texas had the highest rate of uninsured individuals between 2005 and 2007. A three-year average of nearly 25 percent of those living in Texas were uninsured.
A growing number of first-time home buyers - 41 percent - say that when it comes to finding a new place to live, proximity is their top priority, according to an online survey of Coldwell Banker brokers nationwide.
That was one of the survey's key findings, perhaps influenced by the rising price of commuting that is driving first-time homebuyer trends.
Brokers today have a tougher job, as they report that first-time buyers look at five to 10 homes, on average, before making a purchase.
Gone are the days when buyers fought over the first home they were shown and a bidding war broke out.
And appetites are still large: 71 percent report first-time buyers are looking for larger homes than they were 10 years ago.
Good news for the industry: 73 percent of today's first-time buyers want a broker's help in identifying neighborhoods, negotiating prices and paperwork. That's up from just 32 percent who wanted help 10 years ago.
Even with a slumping real estate market, brokers claim 35 percent of their buyers said "investment" is still the top reason they are making their purchase.
The Kyle City Council has set a maximum tax rate increase for the upcoming fiscal year and will host a series of workshops and public meetings before approving the rate hike and budget next month.
City staff has proposed a budget of $33 million for the fiscal year that starts Oct. 1. The council has capped the tax rate increase at about 37 cents per $100 of valuation. The current tax rate is 27 cents per $100.
If approved, the rate increase would be Kyle's first in 11 years. The council is set to approve both the tax rate and the budget at its meeting on Sept. 16.
"The city of Kyle has been, and continues, to grow at a very rapid rate," says City Manager Tom Mattis. "This tax rate funds not only many of the improvements we've already made to Kyle's streets, water systems, services, and public facilities, but also funds future improvements that will add to our public safety, quality of life and economic development."
City staff point out that, even with the potential tax increase, Kyle would still have one of the lowest tax rates among Austin-area municipalities.
For a schedule of workshops and public hearings on the budget, go to www.cityofkyle.com
Even as housing prices drop across the country, fewer people appear close to buying a home.
The Mortgage Bankers Association reports that the volume of mortgage applications fell last week to the lowest level in nearly eight years. Additionally, the group says applications are down 61 percent from this year's peak in February.
The decline in new home construction is a major factor in the drop in activity, the association says. On top of that, fewer people are refinancing existing mortgages.
On Tuesday, the U.S. Department of Commerce reported construction of new homes and apartments in July fell to the lowest level in more than 17 years.
Home and apartment construction nationwide fell in July to its lowest level in more than 17 years.
The U.S. Commerce Department says builders broke ground on 965,000 housing units on an annualized basis, down from a pace of 1.08 million in June and the weakest showing since March 1991. However, July's performance was slightly better than the 950,000 units analysts expected.
The report shows that construction of single-family homes in July fell by 2.9 percent from the previous month to a pace of 641,000. That is the lowest mark since January 1991, when the economy was teetering on recession.
The Commerce Department says unsold new homes declined to a 10-month supply in June, down from a peak of 11.2 months in March, but still significantly above historic norms.
Inventories of existing homes, meanwhile, represents an 11.1-month supply in June, the second highest level in 24 years, according to the National Association of Realtors.
Housing permits also fell steeply, according to Tuesday's report, a sign that construction starts likely will continue to decline. Permits were reported at 937,000 in July, a 17.7 percent drop from June, but above analysts' expectations of 925,000.
In the coming year Austin will outperform the rest of the country in job growth and in the health of its housing market, according to Mark Dotzour, chief economist at Texas A&M University's Real Estate Center.
Austin is expected to add 8,500 new jobs between now and August 2009, despite a negative job growth across the country, he says. The local housing market will turn around faster than the rest of the country by next summer, Dotzour predicts.
In the meantime there will be a marked drop in new construction next year as a result of tightened debt and equity markets, Dotzour says. Still, the credit crunch is starting to thaw, and the pressure on national banks is beginning to move to regional banks including those in Texas. Those banks are tightening the terms on outstanding loans and demanding additional collateral or partial paydowns based on reappraisals. Loans for single family developments will bottom out between now and next summer and some builders will leave the market involuntarily, says Dotzour. By next fall he predicts a turnaround in the market and a renewed uptick in homebuilding.
The local demand for apartments is at an all-time low, says Dotzour. There will be demand for about 2,500 units next year, a fraction of the 9,000 to 11,000 units that will come online. He anticipates occupancy will be 90.4 percent and rents will fall to an average of 94 cents-a-foot.
The office market will see very little new construction in 2009 and 2010 as a result of the recent credit crunch. But that means when the economy picks up in mid-2009 the region will see the next wave of rent growth, says Dotzour.
About 350,000 square feet of office space is likely to be absorbed next year, and 700,000 square feet will come online. Occupancy will be 84.7 percent.
Industrial development is seeing the biggest wave of construction in the history of Austin despite a 25 percent increase in construction costs last year, says Dotzour. He predicts ownership will begin to change hands as rents stagnate.
Dotzour predicts 250,000 square feet of flex/R&D space will be absorbed and that 400,000 square feet will be completed next year. The warehouse and distribution market will see 2 million square feet come online, and 376,000 square feet of that will be absorbed. Occupancy rate will be 82.4 percent and rents will be down 7 percent.
Local downtown retailers like REI, Whole Foods and Anthropologie have fared well but retailers will likely struggle in the coming year. Investor demand in retail is low and institutional investors have broken off deals as a result of being over-allocated in real estate, says Dotzour. The International Council of Shopping Centers predicts store closings in 2008 could reach 5,770 nationwide, the highest number since 2004. Unless gasoline prices return to under $3 a gallon, discretionary consumer spending will languish, Dotzour says.
If demand slows for local commercial real estate there could be a decline in construction material costs in the coming months, he adds.
"If this hypothesis doesn't hold water, and oil is still 125 bucks a gallon and steel costs what it does now, then we're in an entirely new era for living in the U.S. where things cost a whole lot more than they used to," says Dotzour.
The Texas residential real-estate market is experiencing a reduction in the number of homes hitting the foreclosure block.
According to the July report compiled by Irvine, Calif.-based RealtyTrac, over the month of July, a total of 10,354 homes in Texas entered the foreclosure process -- marking a 6.3 percent decline from the volume of filings posted in June 2008.
Meanwhile, foreclosure filings were down 16.8 percent between July 2007 and July 2008.
With more than 10,000 filings in July, Texas ranks among the Top 10 states in the volume of foreclosure filings. Texas ranked sixth in the country between No. 5 Michigan, which reported 11,591 foreclosure filing during July, and No. 7 Georgia, which had 10,061 filings.
Nationwide, a total of 272,171 residential foreclosure filings were reported over the course of July -- representing an 8 percent increase from figures posted in June. However, compared with July 2007, the number of residential foreclosure filings was up 55 percent.
RealtyTrac figures are based on filings for all three phases of foreclosure: Default, auction and real estate owned. (Real estate owned, or REO, means that the property has been foreclosed on and is now owned by a lender).
It is the last category that showed a significant spike. Over the course of July, 77,295 properties nationwide fell into REO status -- marking a 184 percent increase from the number reported for July 2007, RealtyTrac reports.
It is a phenomenon that has created an unbalanced housing market, according to James J. Saccacio, CEO of RealtyTrac.
"The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale," Saccacio says.
At present, more than 750,000 homes nationwide are categorized by RealtyTrac as REO properties, Saccacio adds.
Dripping Springs is going through a transition to more of a generic American city. Expect to find these businesses in Dripping Springs within the next 12 months.
HEB
Walgreens
Super Cuts
McDonalds
ICB Bank
Chase Bank
Quizno's
Also there are rumors of:
Lamb's Tire and Automotive
Chili's Restaurant
The addition of these businesses will change the flavor of Dripping Springs from a sleepy little town to a bustling suburb of Austin. People will have less of a reason to drive into Austin and most of these businesses will flourish.
The recent addition of Home Depot to the area is reporting to be a success with early sales figures being higher than expected.
Whole Foods Market Inc. says it's eliminating 49 of its 650 corporate jobs in Austin.
The organic grocery giant cites the impact the "current economic environment" is having on its business.
Whole Foods (Nasdaq: WFMI) declined to elaborate on exactly what types of jobs are being cut.
The move comes a week after Whole Foods released a disappointing fiscal third-quarter earnings report showing a 30 percent decline in profits.
Whole Foods' shares hit a new 52-week low of $18.26 last week following those results. The stock has rebounded a bit since then, closing at $18.95 on Wednesday.
The profit decline is only one of several problems Whole Foods is currently coping with. Last month a federal appeals court ruled that a lower court judge should not have denied a move to block Whole Foods' acquisition of rival Wild Oats Markets. The Federal Trade Commission had sought a preliminary injunction blocking the deal before it closed in August 2007.
Last month's decision allowed the FTC to reopen its antitrust investigation into the deal. On Wednesday the FTC rescheduled an administrative hearing on the deal to Sept. 8.
Also last Friday Whole Foods recalled fresh ground beef sold in several states due to concerns over E. coli bacteria. The move pushed the company back into the headlines over the weekend.
Nearly $700 million in commercial property has changed hands in Austin during the first half of the year, significantly less than in the same period in 2007.
The latest report from New York-based Real Capital Analytics, which tracks properties and portfolios valued at $10 million and up, shows 28 commercial properties sold in the area during the first six months of the year. That's a 68 percent drop in the number of deals.
The 28 sales total about $689 million, an 83 percent decline from the same period in 2007.
The local sales breakdown by product type shows:
Other Texas markets are witnessing similar declines. In Dallas, 128 deals of $10 million or over were completed in the first half of the year, down 58 percent from the first six months of 2007. In Houston136 deals represented a 45 percent drop.
For all of North America, there were 3,869 deals in the first half of 2008, a 59 percent decline. Those properties represented a collective sales volume of $87 billion, down 70 percent from the year earlier.
The Austin City Council this week adopted new floodplain maps that put some properties in the floodplain for the first time and takes others out.
Whether or not a property is in the floodplain is significant because it affects a property's assessed risk. Being in a floodplain carries different development regulations, and lenders with federal financing require flood insurance for such properties.
With the new maps, there are some subdivisions that are no longer in the floodplain, mainly due to improvements. But there are also businesses and houses now in the floodplain that were previously outside of it.
The city advises those whose properties are located in the floodplain to consider buying flood insurance.
The Federal Emergency Management Agency began updating Austin and Travis County's floodplain maps in 2003 as part of a national Map Modernization Project. At the time, the area's floodplain maps were paper, nondigitized and an average of 22 years old.
To see the new maps go to www.cityofaustin.org/watershed/flood.htm
Growth in personal income slowed in the Austin metropolitan area last year, according to a federal report released Thursday.
Total personal income in the region rose 7.7 percent in 2007, down from 9.2 percent growth in 2006, according to the latest report from the U.S. Department of Commerce.
On a per capita basis, the average Austin worker made $37,517 in 2007, up 3.3 percent from the previous year. From 2005 to 2006, per capita incomes rose 4.7 percent.
The region ranked 90th among 363 U.S. metropolitan areas for per capita personal income.
The local slowdown in personal income growth mirrors that of the rest of the nation. The average metropolitan area saw a 6.2 percent rise in personal income in 2007, down from 6.8 percent in 2006.
Still, personal incomes in several other Texas cities were among the fastest growing in the country. Odessa, Midland and Houston were among the top 10 cities. All are active in oil and gas production, which helped elevate their incomes.
The continuing construction job crunch reached a loss of 522,000 jobs since the beginning of 2007, according to the U.S. Department of Labor's Bureau of Labor Statistics.
The Laborers' International Union of North America on Friday says the crisis "calls for an aggressive economic stimulus program focused on building America and creating jobs."
In the last month alone, the statistics show, 22,000 constructions jobs were lost.
"The American Society of Civil Engineers gives the basic infrastructure of the United States a near-failing grade due to years of neglect and estimates that $1.6 trillion is needed over the next five years to build America," the Laborers' International Union says.