Tight supply and high demand will keep the price of gasoline at $4 or above through 2009, according to the U.S. Department of Energy.
The Associated Press reported Wednesday that Guy Caruso, head of the Energy Information Administration, told a House hearing that crude oil prices will likely average $126 a barrel in 2009. Gas prices will hit $4.15 a gallon in August, and won't fall much after that, he said.
Alternative fuels and reduced demand will substantially reduce the demand for oil over the next two decades, Caruso added in the AP story.
Gas prices at record levels are not deterring Texans from their vacation plans.
AAA Texas reports most drivers are planning at least the same number of trips this summer as last year. Almost 90 percent will make at least one out-of-town trip, according to the latest survey.
The survey shows 53 percent of members polled by AAA Texas plan to travel the same number of times this summer as last year, while 15 percent plan to take more trips and 31 percent are planning fewer.
"Our members are concerned about the impact of high gas prices on their budgets," says Mark Bell, AAA Texas vice president and general manager. "But most are not giving up their summer vacations. People are finding ways to continue traveling."
A separate national report from AAA this week showed that U.S. drivers as a whole may be curbing their July Fourth plans this year because of gas prices.
But Austin-based BedandBreakfast.com said this week that a survey of more than 1,300 member innkeepers shows the majority are seeing at least the same number of reservations this July Fourth as in 2007.
Real estate appraisers from around the country were in Austin earlier this week for a seminar on how green-building components can affect property values.
The seminar from the Chicago-based Appraisal Institute looked at issues such as the most cost-efficient sustainable building elements and how appraisers can establish a benchmark for green building valuation with so few comparisons available.
This week's seminar focused on green commercial properties, but the institute also plans to create another seminar focused on the residential appraisals.
"There is an overwhelming push toward green building and as a result we have been actively developing coursework to help our members understand how green is going to impact the properties we are appraising," says Jim Amorin, the Austin-based president-elect of the Appraisal Institute.
Sustainable elements, such as high-efficient heating and air systems, provide energy cost savings. Lower operating costs in turn mean the building can become more valuable to an owner or a potential buyer.
"We are starting to see some empirical evidence that investors are willing to pay more for a green building than a non-green one," says Amorin. "I think we're at the precipice of a big change in commercial real estate." Once building owners realize that a growing number of companies want to be in green structures, the money will flow in that direction and the cost of non-green buildings will start to decline, Amorin predicts.
Some of the questions discussed at the seminar included:
Austin ranks third among U.S. cities when it comes to highest high-tech salaries, a new study shows.
The average high-tech worker in Austin earned $100,500 in 2006--113 percent more than that the metro area's average private sector wage, according to the American Electronics Association report titled Cybercities 2008: An Overview of the High-technology Industry in the Nation's Top 60 Cities.
The report tracks trends in tech employment, wages, payroll, employment concentration and wage differential across the country's largest cities.
As a whole the tech industry employed 68,800 people in Austin in 2006, making it the 23rd largest tech market in the nation ranked by total employment. The area's largest tech sector was the manufacturing of electronic components, such as semiconductors. That arena employed 16,000 workers in 2006, followed by computer systems design (11,900) and computer and peripheral equipment manufacturing (10,700). The combined high-tech payroll in Austin in 2006 was $6.9 billion.
In terms of high-tech employment concentration, or tech jobs as a percentage overall jobs, Austin ranked 8th in the nation.
Cybercities 2008 shows that the New York area ranked No. 1 in terms of overall tech jobs, followed by Washington D.C., San Jose/Silicon Valley, Boston and Dallas-Fort Worth in that order. Seattle saw the largest tech job growth, adding 7,800 jobs in 2006.
Consumers are beginning to think twice about their July 4th plans, according to a survey by the National Retail Federation.
Almost 60 percent of consumers say increased gas prices will impact their spending for the holiday, up from 42.1 percent of consumers who said so last year, according to the poll of more than 8,000 people.
"Americans will continue to commemorate Independence Day this year, though higher gas prices will impact how they celebrate," says Tracy Mullin, president and CEO of the D.C.-based organization. "Retailers are aware of the strain gas prices have on consumers' wallets and will be offering special promotions on food and beverages for the millions of people planning summer barbecues."
Additionally, almost 200 million Americans (87.8 percent) anticipate the price of gas to go up by the holiday. On average, consumers expect that the average price of gas nationwide will be $4.39 per gallon on July 4. Last year's estimate was a dollar less -- at $3.38.
This year, nearly two-thirds (61.2 percent) of consumers will light up their grills or attend a cookout or barbecue on the Fourth of July. Additionally, consumers will attend a fireworks celebration (40.2 percent), go to a parade (10.5 percent) and travel or take a vacation (11.2 percent).
As far as spending on American flags and decorations, 16 percent of consumers stated they'd purchase additional patriotic merchandise this month, compared to 17.3 percent who said they would last year.
It's showing signs of a possible rebound, but the Austin home market remains sluggish.
Single-family home sales in the metro area totaled 2,154 in May, down 20 percent compared with May 2007, according to data from the Austin Board of Realtors. However, the May figure is the highest number of total sales the area has experienced in eight months.
Austin is not seeing the drastic price drops that many other markets around the country have experienced. The average price for a single-family home stood at $263,151 in May, up 5 percent from a year ago.
"Despite economic conditions across the nation, Austin continues to have a relatively low unemployment rate and cost-of-living index," says ABoR Chairman Socar Chatmon-Thomas. "While we're not enjoying the booming real estate markets of 2006 and 2007, we have seen steady increases in sales volume since January 2008."
Pending single-family home sales totaled 1,418 in May, down 55 percent from May 2007. New listings for the month were down 7 percent from a year ago.
Townhome and condo sales are also on the downswing. A total of 239 units were sold in May, a 24 percent decline from a year ago.
A new study makes the case that solar power is emerging as a cost-effective hedge against fossil fuels and is likely to reach parity with retail electricity rates in most regions of the United States in less than a decade.
The Utility Solar Assessment Study, produced by clean-tech research and publishing firm Clean Edge Inc. and green-economy nonprofit Co-op America, says that for the first time, solar power is beginning to reach cost parity with conventional energy sources. As solar prices decline and the capital and fuel costs for coal, natural gas and nuclear plants rise, the U.S. will reach a crossover point by around 2015, the study says.
Installed solar photovoltaic prices are projected to decline from an average $5.50 to $7 per peak watt (15-32 cents per kWh) today to $3.02 to $3.82 per peak watt (8-18 cents per kWh) in 2015 and $1.43 to $1.82 per peak watt (4-8 cents per kWh) by 2025.
The study lays out a plan for utilities, solar companies and regulators to reach 10 percent solar usage in the U.S. by 2025. The investment to arrive at 10 percent solar is not small, the study adds, reaching $450 billion to $560 billion between now and 2025 -- an average of $26 billion to $33 billion per year.
"One of the big takeaways from this report is that, in many ways, the future of solar is in the hands of utilities," says Ron Pernick, Clean Edge co-founder and managing director and study co-author. "Reaching 10 percent of our electricity from solar sources by 2025 will require the active participation of utilities along with the support and participation of regulators and solar technology companies."
The study, written by Pernick and Clean Edge contributing editor Clint Wilder, is based on interviews with more than 30 solar, utility, financial and policy experts and leverages proprietary Clean Edge data on solar PV market size, cost, pricing history, projections and other key market factors.
Read the full report here: www.cleanedge.com/reports/reports-solarUSA2008.php
Advanced Micro Devices Inc. opened its $270 million Southwest Austin campus Tuesday with a $1.5 million commitment to preserve open space.
The Sunnyvale, Calif.-based company drew a lot of heat when it first announced its plans to build the campus in the environmentally-sensitive area, which sits over the Edwards Aquifer.
The campus measures 870,000 square feet and sits on 58 acres off of Southwest Parkway.
The company is distributing $1.5 million among conservation organizations Westcave Preserve, Hill Country Conservancy and the Lady Bird Johnson Wildflower Center. That completes AMD's (NYSE:AMD) $3 million commitment to environmental groups that the company pledged when it began the project in 2005.
"Three years ago, we announced our plan to build a new campus closer to our employee base and made a promise to set a standard for responsible development," says Hector Ruiz, chairman and CEO of AMD. "We hope others will recognize the Lone Star campus not only as an example of our commitment to sustainable development but as a model for how to grow responsibly by partnering with communities."
AMD built its campus using environmentally-friendly materials and a sustainable design. The company's site plan also aimed to limit site impact and protect water quality. AMD intends to gain Gold certification from the U.S. Green Building Council's Leadership in Energy and Environmental Design.
Construction on the campus began in 2006, and includes four four-story buildings as well as its Lone Star building, which includes employee amenities such as a fitness center, cafeteria, gourmet coffee bar and gaming center.
Austin is home to AMD's largest nonmanufacturing campus. The company employs more than 2,500 people here.
A recent survey and a rate increase could mean more competition for homes
Recent indication is that first time home buyers are getting tired of sitting on the sidelines. According to a recent online poll taken by the National Apartment Association, 17 percent of renters plan to make the jump to home ownership in the next year; 41 percent of the 2,041 respondents planned to be home owners within two years. Only 31 percent planned to still be paying rent five years from now.
Another factor that could very soon contribute to an increase in home buying could be rising mortgage costs. Fixed-rate mortgage rates rose to 6.32 percent, the highest it has been since October. After months of aggressively dropping interest rates, many lenders are worried that the Fed will be forced to raise rates back up. As interest rates rise, so do mortgage rates. According to a press release on freddiemac.com, Frank Nothaft, Freddie Mac vice president and chief economist said that, "Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman [Ben] Bernanke and Vice Chair [Donald] Kohn, expressed concern over a threat of inflation." We may very well be seeing the beginning of the end of the super-low mortgage and potential buyers may realize that with rising rates, now may be the time to jump in. Nothaft added, "Moreover, pending home sales for April unexpectedly rose by 6.3% and mortgage applications for home purchases ... were also up last week."
Austin's share of sales tax revenue rose slightly in the first half of 2008, but local growth in consumer spending appears to have decelerated in the midst of the economic downturn.
Austin has received $74.8 million in sales tax payments from the State Comptroller's Office through June. That's up 1.5 percent compared with the first six months of 2007.
While still positive, Austin's increase in sales tax revenue was the smallest of the five major Texas cities. In the first half of the year, Houston's collection rose 7.1 percent, Dallas' increased 2.42 percent, San Antonio's rose 2 percent and Fort Worth increased 6.3 percent.
This time last year, Austin was posting double-digit percentage increases in sales tax revenue. The slowdown in sales tax revenue has city officials scrambling to cover an anticipated budget shortfall.
For the month of June alone, Austin collected $11.7 million, up 3.6 percent from a year ago.
The comptroller's office collected $1.8 billion in sales tax revenue statewide in May, up 4.7 percent from May 2007. The state sent cities, counties, transit systems and special purpose taxing districts $459 million in June local sales tax allocations, up 9.3 percent compared to June 2007.
For the full breakdown of taxes collected by municipality go to: www.window.state.tx.us/taxinfo/allocsum/top20.html
Manufacturing-related employment in Texas is holding steady, according to the 2008 Texas Manufacturers Register. Industrial employment grew by a half-percent over the past 12 months.
The Texas Manufacturers Register is published annually by Manufacturers' News Inc. in Evanston, Ill. Texas gained 4,579 industrial jobs from April 2007 to April 2008.
The report indicates a smaller increase in industrial employment in 2008 than in previous years. However, throughout much of the United States, the manufacturing sector posted significant job losses over the past year.
In 2007, Texas manufacturers recorded a job increase of 1.1 percent. Two years ago, employers added 2.7 percent to the manufacturing base.
In Austin, the number of manufacturing jobs fell 2 percent this year to 42,377 positions. That puts the city in fifth place among Texas cities in terms of overall manufacturing employment.
"Manufacturing output is higher than ever, but employment is stagnant," says Tom Dubin, president of Manufacturers' News. "So much of Texas' principal industries, such as metal fabricating and electronics production, has become automated and made more efficient through technology that fewer employees are needed to produce these products."
Manufacturers' News reports that Texas is home to 24,273 manufacturers employing more than 1.2 million workers. This makes Texas second in the nation behind California in the number of manufacturing jobs and plants. Texas also accounts for 62 percent of the Southwest's manufacturing jobs and 55 percent of the region's manufacturers.
Houston ranked No. 1 in both the nation and the state in the number of manufacturing jobs with 222,072. However, jobs are down 1.6 percent there over last year. Dallas ranked second in the state and seventh nationally with 92,223 jobs, down 2.4 percent over last year. Fort Worth ranked third in the state and 12th nationally with 67,671 jobs, down 2.6 percent over last year. San Antonio ranked fourth in the state.
Among the state's manufacturers, companies that make industrial machinery and equipment comprise Texas largest sector with 167,831 jobs, unchanged from a year-ago April. The oil industry currently accounts for 143,080 of industrial jobs in Texas, up 2.1 percent from last year. Fabricated metal product manufacturers employ 119,824 Texas workers, up 2 percent from last year. Food manufacturers saw no significant change in employment. This sector employs 115,154 workers across the state.
The city of Kyle now confirms that Target, Kohl's and a City Lights Theatre will anchor the 1 million-square-foot Kyle Crossing retail center.
Construction on the project on the southwest corner of Kyle Parkway and I-35 should begin next month with completion slated for spring 2009.
Dave Berndt Interests is developing Kyle Crossing for the project and will receive up to $6.5 million in publicly funded rebates via sales taxes collected from the project.
The Kyle Crossing project is one of two major retail developments in the immediate area. Just across I-35, the Seton Family of Hospitals and SCC Development are working on another 1 million-square-foot development that will include retail, commercial and professional buildings as well as a 210-bed Seton hospital.
If gas hit's $5.00 per gallon this may look like a good idea. Watch and learn...
Hyper Mileage
At first I thought it was stupid but now I am thinking he might have something...Can someone give me a push please?
Passenger traffic at Austin-Bergstrom International Airport rose 3 percent in April and cargo traffic saw an even bigger increase.
More than 832,450 passengers traveled through the Austin airport in April with Southwest Airlines and Delta Air Lines posting significant increases over April 2007.
Air cargo for the month totaled 18.3 million lbs., up 7 percent from April 2007, led by a 27 percent increase in ABX Air Inc. cargo and a 22 percent increase in UPS cargo.
General aviation operations at ABIA increased 3 percent.
So far this year, nearly 2.9 million passengers have traveled through the airport, a 5.5 percent increase over the same four-month period in 2007.
Air cargo for the year is up 12 percent and general aviation has increased 6.5 percent.
www.ci.austin.tx.us/austinairport
A slew of new retailers, including outdoor clothing store Backwoods and footwear shop The Walking Co., are opening up at Hill Country Galleria in Bee Cave.
Backwoods, which leased a 10,000-square-foot space, opened its doors last month. Also joining the lineup at the 1.3 million-square-foot lifestyle center this month are:
Retailers and restaurants scheduled to open in July include:
The galleria, located 16 miles west of Austin at the intersection of State Highway 71 and RM 620, is anchored by Dillard's, Barnes & Noble and Cinemark. Rounding out the anchors will be Dick's Sporting Goods opening in 55,000 square feet in August.
The multi-use Hill Country Galleria developed by Phoenix-based Opus West Corp. features 650,000 square feet of retail, 145,000 square feet of Class A office space, 300,000 square feet of multifamily housing, 80,000 square feet of retail pad space, 100,000 square feet of condominiums and 50 acres of green space.
www.hillcountrygalleria.com
Your Money
Letters From the Home Front: A Real Estate Deal Seen From 2 Sides
By RON LIEBER
Published: May 31, 2008
A few years ago, when multiple bidders would show up at a real estate open house, the truly desperate resorted to writing love letters to the sellers.
Their plaintive scribblings painted a picture of first-time buyers chasing the American dream or growing families hungry for more space. The letters dripped with compliments for the property and ended with a plea for mercy (and a signed contract).
Today’s real estate market, however, calls for a different kind of letter, less a fuzzy valentine and more like a cold splash of water. It’s what you write to accompany a bid that is so far below the listing price that it cries out for explanation.
Inspired by the success of a friend who used this tactic, I drafted a sample letter that buyers who fear overpaying might send to homeowners. Then, I crafted a reply that confident sellers could fire back.
No seller would be happy to get a letter like this. The most powerful missives stoke doubt and create fear. Sellers who get them may be tempted to write off the bidders as lowballers. But it makes little sense not to at least reply, given the number of competing properties in most places and the difficulty lately in getting mortgages.
The sample letters on Page B6, which I wrote after conversations with representatives of the National Association of Realtors and the National Association of Exclusive Buyer Agents, don’t mention local economic conditions, comparable sales or other such data. You’ll want to fill in those details yourself. But the templates below should work as a starting point.
One caveat is that you’ll generally be relying on real estate agents to deliver your letter. Ask them point blank whether they intend to do so.
Dear Seller:
I’m writing to let you know that I would like to make a bid on your property. I love the area and am committed to buying a house nearby. And your home fits my needs.
But given that my offer is well below your asking price, I also feel I owe you an explanation.
First, consider the big picture. Nationwide, home prices in the first quarter of 2008 fell 14.1 percent compared with the same period a year earlier, according to the Standard & Poor’s/Case-Shiller U.S. National Home Price Index.
That’s the biggest decline in the 20-year history of the data. And just in case you’re wondering, during the housing downturn of the early 1990s, the decline was never worse than 2.8 percent.
Not only that, earlier this month, the National Association of Realtors pointed to the huge number of existing homes on the market. As of the end of April, the total number was 4.55 million. At the rate people are buying right now, that represents an 11.2-month supply.
So buyers have options right now. A lot of them. I’m no different. Your home is great, but it isn’t unique. Few homes are. I know this may be hard to hear, since you’ve spent years creating memories here. But you may be waiting a long time if you hope to find a buyer with the same emotional connection that you have.
My mindset is hardly unique. We’ve all been reading the headlines. The accompanying articles appear prominently in major newspapers and sit on the Web pages where people check their e-mail every day. Everyone sees them, and the psychological impact is real.
Has your real estate agent laid any of this out for you? Maybe so, and you didn’t want to believe it. But it’s also possible that your agent, afraid of offending you and losing the listing, simply doesn’t want to initiate that sort of discussion. It may be worth sitting down for a candid reassessment.
It will be tempting to view my low bid as an insult. Please don’t make that mistake. Your home is genuinely appealing, and I wouldn’t have written this note unless I was serious about buying it. Getting a firm offer in this market is an accomplishment. So congratulations!
Oh, and one more thing. You presumably need someplace to move. My guess is that you’ll find these same points compelling when it’s your turn to buy. You just might succeed in buying for a better price, too.
I look forward to hearing from you soon.
Yours Truly,
The Realist
***
Dear Bidder,
Thanks so much for your note. I’m truly glad that you like our home as much as we do. You’re right that my family and I have many great memories of this place, and we hope someday you will, too.
And I just want you to know that I’m not insulted in any way by your offer. The fact is, none of us are very good at buying and selling homes. We don’t do it often, and as much as we know we’re not supposed to let emotions get in the way, it’s hard not to. After all, few people buy or sell anything else as expensive as a home in their lifetimes.
That said, your offer disappointed me. You seem to believe that I’m not aware of how bad things are out there or that I’m in denial. But I do read the headlines, and I priced the house accordingly. I knew I might have to wait awhile to sell it.
I should point out that your data draws on what has already happened in the housing market. Instead, I’d ask you to consider what’s about to happen.
One big reason for the falling prices is that it’s harder to get mortgages. Lenders went from giving money to anyone with a pulse to demanding higher credit scores and larger down payments. All sorts of buyers simply couldn’t make the numbers work anymore.
That may now change. Starting June 1, Fannie Mae and Freddie Mac, which buy mortgages from lenders and help make it possible for them to lend more money, are loosening restrictions on the sorts of loans they’ll buy in many markets. That is supposed to make it easier for people to buy a home with a down payment of 5 percent, or even less. Many more qualified buyers should mean more bids, and I’m willing to wait to see if it turns out that way.
I know you talked about having choices, but presumably we wouldn’t be engaging in this correspondence unless you liked my home best. Given that, I’d ask you to think about something: How often do you find a place that you can actually imagine living in? Sure, there are a lot of other properties out there. But an increasing number are in foreclosure and probably have problems lurking within the walls. So don’t let fear of a falling market keep you out of a home that you truly want.
It’s probably obvious by now that I’m not going to counter with a particular number. This doesn’t mean that I do not want to negotiate. I’d just like you to consider what I’ve said and see if you find it convincing. In the meantime, other shoppers who are interested in my home now have a price to beat. So thanks for helping me out with that.
Just one more thing. Please take another look at whatever mortgage calculator you’re using and see how your monthly payment will change if you brought your price up a bit. It almost certainly is not going to be enough to break you. But it may be enough to get us to a deal.
I look forward to your reply.
Yours,
The Undaunted
South-Central Texas businesses lead the nation in disaster preparedness, according to a survey by AT&T Inc.
Eight out of ten, or 81 percent, of South-Central Texas executives indicate their companies have a business continuity plan.
South-Central Texas is made up of Houston, San Antonio and Austin. The region was one of five U.S. metropolitan/regional areas surveyed for the AT&T 2008 Business Continuity Study. Other markets surveyed included Chicago, New York, North Carolina (Charlotte/Raleigh/Greensboro) and Seattle/Portland.
In particular, the study found that two-thirds, or 65 percent of South-Central Texas executives implement specific protective actions when the state or federal government issues an alert for an impending disaster, compared to 50 percent nationally.
This marks the seventh year that AT&T (NYSE:T) has surveyed IT executives from companies throughout the United States that have at least $25 million in annual revenue to get their views on disaster planning/business continuity trends.