Rumors and News from Austin and Dripping Springs

The population of the Austin metro area will grow to more than 2.7 million by the year 2025, according to an analysis of government data by bizjournals.

The projected growth rate of Austin and its suburbs ranks 5th among 250 U.S. metropolitan areas studied in the report.

Bizjournals forecasts that the Austin-Round Rock area will grow nearly 87 percent from its 2005 estimated population of nearly 1.5 million to a 2025 projected population of 2.7 million, an increase of nearly 1.3 million residents.

Austin will see the most growth of any Texas city, according to the bizjournals analysis. The McAllen-Edinburg area will be the second-fastest growing metro in Texas, ranking 22nd on the list with an estimated 56 percent growth in population.

Among the major Texas cities:

• Dallas/Fort Worth ranks 26th with a projected 50 percent population increase to 8.8 million people;
• Houston ranks 27th with a projected 48 percent population increase to 7.9 million people;
• San Antonio ranks 40th with a projected 41 percent population increase to 2.7 million people.

Sixty-two percent of Texans surveyed by Texas Lyceum believe the economy and unemployment are the most important issues facing the country today, according to a survey released Tuesday by the nonprofit, non-partisan leadership organization.

Respondents were split on the overall direction of things, with 48 percent saying the United States is moving in the right direction and 45 percent saying the country is on the wrong track, according to the survey.

In addition, 53 percent of respondents think the worst has yet to come for the national economy, and 58 percent say the country is in a worse position now than it was last year.

Meanwhile, almost two-thirds said the Texas economy was healthier than the national economy.

Other findings included that two thirds of respondents did not have confidence in the stock market, and nearly half were concerned that their retirement funds might not be safe.

A majority of respondents — 58 percent — support Gov. Rick Perry’s rejection of $556 million in federal stimulus dollars for the unemployed, claiming that there were too many strings attached, though 34 percent of respondents thought Perry should have accepted the funds.

According to 58 percent of respondents, the stimulus is helping to make the economic downturn less severe, and 44 percent of respondents said they would be willing to wait two years or more to see if the new administration’s policies were working.

The telephone poll surveyed roughly 1,000 Texans between June 5 and June 12

Conservative Approach to Home Pricing Makes It Harder to Refinance or Sell

By JAMES R. HAGERTY and RUTH SIMON

Appraisals are becoming one of the biggest obstacles for Americans trying to sell their homes, refinance their mortgages or tap into home-equity credit lines.

During the housing boom, appraisers often complained of pressure from lenders to inflate home-value estimates to justify dubious mortgage lending. Now, some people in the mortgage business -- and some borrowers -- say the pendulum has swung too far the other way.

Patti Sanders, an aerospace engineer in Oakdale, Calif., knew prices were down sharply but said she was "flabbergasted" recently when her 3,100-square-foot Victorian home was appraised at $250,000, compared with $635,000 assayed two years earlier. The new estimate prompted a lender to reject her application for a refinancing that would have lowered her mortgage payments about $400 a month.

Lenders burned by huge losses from defaults now are pressing appraisers to be more conservative. And appraising itself is more difficult with home prices fluctuating rapidly and transactions few and far between in some markets; sale prices from a few months back may no longer reliably indicate the value of nearby homes.

"If history is no longer valid, then it is very difficult to get good and accurate values," said Mark Rattermann, an appraisal trainer in Indianapolis.

John Rooney, an appraiser in Phoenix, said about half the recent appraisals he has done for people seeking to refinance have been too low to allow it. Applying to other lenders is likely to cost borrowers $350 or more for another appraisal.

Valuation disputes are also throwing a monkey wrench into some sales. Chris Rubis, a real-estate agent in Fairfield County, Conn., said one client recently accepted an offer of about $750,000 on a four-bedroom, four-bathroom home. But the appraisal, which was done by someone outside the local area, came in last week at $700,000. That might require the buyer to come up with more cash for a down payment.

"It's opened a whole new door for negotiation," Mr. Rubis said.

Credit lines are also vulnerable. J.P. Morgan Chase & Co. recently froze one customer's home-equity line of credit because, the bank said, his Manhattan apartment -- a 2,650-square-foot three-bedroom, two-bedroom duplex with a terrace appraised at $1.475 million in 2005 -- was worth just $600,000. Chase told the borrower, who asked not to be identified, that the lower credit line would remain in effect until a new appraisal could demonstrate the value was much higher than $600,000.

The borrower then paid for a new appraisal that pegged the property at $1.8 million.

"To protect borrowers and the bank, we use an automated appraisal system on our portfolio," a Chase spokesman said. "The system has proven effective. However, we encourage customers who think that the valuation is too low to order an appraisal and we will reimburse them...if it supports their claim." Chase will restore this borrower's full credit line, he added.

In some cases, lenders are requiring that appraisals be based on sales closed within the past three months rather than the prior six-month norm, appraisers said. Some lenders are also asking for comparisons with at least one sale in the past 30 days.

Taking their cues from lenders, appraisers are avoiding any estimate that could be deemed excessive. "I don't want to stick my neck out," said Mr. Rooney, the Phoenix appraiser.

The situation became more complicated on May 1 when the appraisal industry adopted the Home Valuation Code of Conduct. These new rules apply to mortgages that will be owned or guaranteed by government-backed mortgage companies Fannie Mae and Freddie Mac, which recently have accounted for about two-thirds of all new home loans.

Fannie and Freddie agreed to the code last year after New York Attorney General Andrew Cuomo accused them of failing to ensure that appraisers were shielded from pressure to inflate their estimates.

The code bars loan officers, mortgage brokers or real-estate agents from any role in selecting appraisers. This has encouraged lenders to outsource the selection to appraisal-management companies, or AMCs, which take a sizable cut of the appraisal fee. As a result, appraisers are under pressure to "do it faster, do it cheaper," said Bill Garber, a spokesman for the Appraisal Institute, a trade group.

Debbie Huber, a Las Vegas appraiser for 20 years, said she has turned down requests from AMCs that offer to pay 50% to 70% of her standard fee and require that the work be completed in as little as 48 hours.

Some appraisers said AMCs settle for appraisers who have little experience or live far from the homes they evaluate. John Simms of Peoria, Ariz., said he often gets assignments more than 100 miles away in neighborhoods he doesn't know well.

The upshot, appraisers said, is less accuracy and certainty about a property's actual value.

The code also permits lenders to own stakes in AMCs. That means lenders can profit from a service they require borrowers to buy -- and that protects the lenders themselves.

Appraisal-management companies said they need a big cut of fees to cover their costs and ensure quality. Jeff Schurman, executive director of the Title/Appraisal Vendor Management Association, said AMCs typically take about 40% of the fees and appraisers get the rest. Mr. Schurman said he has seen no evidence that AMCs' practices lead to lower quality.

While the new code is likely to prevent some abuses, it also removes flexibility. For instance, loan officers or mortgage brokers used to be allowed to discuss specific home values with appraisers, who sometimes would advise against ordering an appraisal if it seemed unlikely to be high enough to warrant a loan. That would save borrowers money.

The new regime also results in higher costs in at least some cases. Mitch Ohlbaum, a Los Angeles mortgage broker, said one client was recently charged $500 for an appraisal that would have cost about $300 before the code took effect.

Another source of frustration: If a borrower is happy with an appraisal ordered by one lender but decides to seek better loan terms from another, a new appraisal will likely be needed. The Mortgage Bankers Association said it is looking at ways to make appraisals more "portable" from one lender to another.

Texas Governor Rick Perry signed a house joint resolution on Monday that will establish an amendment to the Texas Constitution to protect Texas landowners from eminent domain, if Texas voters approve the resolution during a vote in November.

Perry’s office said House Joint Resolution 14, if approved by voters, will establish greater protections for property owners by including landowner rights in the Texas Constitution.

The purpose of the proposed amendment is to protect Texas citizens from eminent domain abuses when the government and other entities insist on taking land for other purposes.

“Land ownership is an essential part of Texas’ culture, and we owe it to our citizens to protect their rights as landowners and members of the community from government entities that overstep their bounds and abuse eminent domain,” Perry said. “The Legislature has moved us in the right direction with the passing of HJR 14, which will give Texans the right to vote in November to protect their homes and property from being taken by the government and given to someone else.”

Perry’s office added that if the amendment obtains the voters’ approval, it will reinforce Senate Bill 7, which passed during the 79th legislature to prohibit government acquisition of land for non-public purposes, including commercial economic development.

The new house joint resolution also will require two-thirds of all house members to approve any request to grant eminent domain authority to a party.

Perry’s office added that the bill prevents government entities from calling a neighborhood “blighted” without evaluating the quality of each property and factoring that into the equation

The Austin area had the nation's strongest job market among big cities last month, according to data released Wednesday by the Bureau of Labor Statistics.

Among the 38 metro areas with a work force of at least 750,000, only Austin gained jobs from April 2008 to April 2009, the bureau said.

It was the third month in a row Austin had earned that distinction.

Austin added 3,400 jobs in that period, a 0.4 percent gain that brought the regional job count to 781,400.

In January, Austin, Houston and San Antonio were the only large metro areas that had more jobs than a year earlier.

But Houston and San Antonio have been losing jobs since then.

Austin's job picture isn't all rosy: The area has been losing manufacturing and construction jobs at an accelerating pace, but those losses are being offset by gains in government, retailing and services fields.

Central Texas is holding up better in the recession than other technology hubs.

In April, the Silicon Valley area lost jobs at a 4.4 percent annual rate. Portland, Ore., was down 4.7 percent, Seattle was down 3.4 percent, and Raleigh, N.C., was down 3.3 percent.

A local team of youth from the Dripping Springs Methodist Church has made it to the national finals of the Junior Bible Quiz in Chicago from June 10th through the 15th. 

The tem consists of boys and girl ranging age from 9-12.  The team had to fnish in the standings in the district and regional competitions to advance to the finals. 

The team will compete against almost 100 other teams from around the country for the national title of JBQ. 

Texas ranked No. 11 for real gross domestic product growth in 2008, according to statistics the U.S. Bureau of Economic Analysis released Tuesday.

Real GDP is the total of goods and services produced, but adjusted for inflation.

The real GDP in Texas was $1.2 billion in 2008, up 2 percent from 2007.

The national real GDP also increased 2 percent from 2006 to 2007.

More information is available on the Bureau of Economic Analysis Web site.