Texas Realty Blog

Stocks Crashed and Burned Yesterday

So there's been a lot of talk about the supposed stock market "crash" yesterday and how it will affect real estate sales. So we're on the same page, we're not talking about a slight downturn in the markets. We're talking about the worst day since 9/11 where billions in currency was lost globally.

DID I CAUSE THE CRASH?

Since I'm horrible at picking stocks and always immediately lose money, it made me wonder if I'd purchased something on accident. I'm toying with a theory that any stock I buy will bomb the minute I make the purchase, but it looks like that wasn't one of the factors.

So what factors caused the crash? Don't make me cite sources because you'll learn that they all come from "some guy". I have links to legitimate sources in the bottom of this article, for people who value more factual information.

• The Drudge Report did it. The smart fellows at the Drudge Report told the world that Alan Greenspan commented during a speech in Hong Kong that a recession is coming later in the year. I'm not sure if the Drudge Report wields that much power, but I need them on my side.
  
• The Chinese market did it. The Chinese stock market dropped by 963 points, which is significant overall. One thing people have been afraid of is how reliant the U.S is on other markets. If they crash, we can crash. I can see how this can happen, but can't say whether they had anything to do with each other.
• The Taliban did it. The Taliban is claiming they targeted Vice President Cheney in an attack. Other people are saying that he happened to be at a compound that happened to have been attacked. They claim many places in Afghanistan are attacked on a daily basis, which somehow doesn't make me feel better about the whole issue.

The only true, albeit smart-aleck, answer is that people sold stock more than they bought.

SO WHAT ABOUT REAL ESTATE?

The best real estate investors and buyers follow the basic rule that you BUY when prices are LOW and SELL when the market is HIGH. If real estate or stock prices decrease, the true investor will watch the dip and buy once it settles. Regardless, real estate shouldn't be affected by one bad day in the stock market. If there is a consistent trend and the federal reserve sees a recession is coming, interest rates may be lowered to spur spending.

By the way, even though "bubblettes" are bursting in some states, such as CA, AZ, and FL, but Texas has a stable economy.

Read the legitimate articles: Stock Crash, Chinese Stock Crash, Texas Economy.

Dallas Apartment Association Against Citizenship Ordinance 2903

Here's a controversy for commercial practitioners, civil rights advocates and U.S citizens to think about. The Business Journal reported a proposed ordinance in Dallas that requires apartment complexes to screen for U.S. citizenship or legal residence before they can accept an applicant. I can see why this is so controversial because it crosses the line on many things Texans are proud of,  such as which is property rights and the right to vote.

THE ISSUE

According to the article, Ordinance 2903 requires apartment owners and managers to collect proof of citizenship or proof of legal residence from people who want to rent apartments or renew their leases. Farmers Branch voters will vote on the ordinance on May 12.

In fairness, I read the other side to this issue, which is that the purpose of this ordinance is to force apartment managers to follow the law. The City Council passed the ordinance unanimously in November. One contention is that they didn't get any input or require a vote from their constituents.

OUR OPINION

While Texas is facing issues with illegal immigration, we need to be careful about passing local ordinances that do not allow the U.S. solve the problem first. Although we can all agree that illegal immigration is a problem, we can create a slippery slope we we try to tackle it in City Council, especially without input from the people they represent.

I disagree with passing such a controversial ordinance without a proper vote even though each side has valid points. City Council has a right to act on our behalves, but I'm glad they decided to take this one back to the public.

Read more: Apartment association opposes Farmers Branch ordinance. Learn more about the PRO ordinance movement. Let us know what you think. Have the proponents of the ordinance gone to far or is this a valid solution?

TXU Buyers Concede to Environmentalist Pressure

You don't want to mess around in Texas when it comes to messing with our environment. I have a lot of friends who are concerned with the energy crisis, so receive articles every few weeks with on new data green energy, cleaner burning coal, wind power, and other alternatives to coal as a fuel source.

CNN reported that the investment buyers of Dallas-based TXU utility company conceded to pressures from environmental groups by scrapping plans for 8 coal-fired plants. According to the CNN article, As part of the deal, the private equity owners agreed to abandon plans for eight of 11 controversial coal-fired power plants that TXU previously had aggressively sought, winning support for the buyout from two major environmental groups - Environmental Defense and the National Resources Defense Council.

"The buyout and turnaround of TXU's position on global warming is an earthquake that happened in Texas, but shock waves are going to be felt from Wall Street to Washington," Dave Hawkins, director of the Natural Resource Defense Council's Climate Center, said on a conference call Monday afternoon. In addition to revising its coal plant strategy, TXU Corp. has pledged to support programs that regulate carbon emissions.

It should be noted that, although TXU is based in Texas, the 11 proposed coal-powered plants were not necessarily in this region and groups from across the nation came together to protest. My eco-smart friend Scott said, "In my opinion no more than 20% of Texas state electrical needs should be addressed by coal, 30% by natural gas, 20% by Wind, with biomass and other technologies making up the remainder."

I'll have to do more research on the issue since it is definitely a hot button for many. Read more about this issue online at: CNN Money.

Houston Real Estate Market Still Strong

The real estate market analyst for HoustonRealNews recently reported that the city's sales were strong in January. Inventory continues to shrink as demand stays high.

Per their site, "The Houston Association of Realtors' (HAR) monthly report shows that the Houston market is still very strong. According to HAR, Houston's year-over-year median price grew 2.9% to $142,00 and the average price increased 1.4% to $181,350. The number of home sales grew at 8.1% over January 2006."

The statistics are still in line with the real estate outlook they reported in January. Houston is a great market that we're excited to start working in. We'd identified them in a previous post as one of the best cities to buy real estate in Texas.

Upcoming Austin Zilker Park Kite Festival Provides Fun for All

Besides our film and music festivals one of the coolest outdoor events in Austin is Annual Zilker Park Kite Festival that's held at Zilker Park in Central Austin the first weekend of March. This year, it's next Sunday on March 4th. I've been encouraging residents to go because it's one of the annual events that symbolizing what makes Austin unique.

I have attended the annual festival for at least the past three years. There's usually food, fun, face painting, jumping castles, and literally hundreds of CRAZY homemade kites. Kite contests include Highest Angle, Steadiest, Strongest Pulling, Smallest, Largest, and my favorite, Most Unusual. For the Most Unusual category, you may see a pirate ship, dragon, fruit, tugboat, or other odd-shaped kite. There will be lots of children and pets, so don't leave yours at home.

Keep track of their homepage in case there is rain or unfavorable weather. Zilker Kite Festival Home Page.

Homes at the Mueller Redevelopment in East Austin Available March 5th

I was in a meeting with Councilmember Brewster McCracken yesterday and we chatted a little bit about the Mueller redevelopment in East Austin. He's going to miss the invitation-only event March 5th where they initially announce the chosen home builders. Like many of us in Austin, he's also excited and anticipating the launch of the Mueller Community. Of course, I will be there and plan to discuss the latest happenings once I have the scoop.

Here are some details from latest Mueller Livewire, their newsletter. You can sign up for it online at MuellerAustin.com.

THE BUYING PROCESS

Registrations will be accepted beginning March 5 through April 30, 2007. Interest in living at Mueller is high, so we’ve developed the Mueller Pioneer program in an effort to ensure a fair, equitable and hassle-free process.

Steps to Becoming a Mueller Pioneer:

1. Between Monday, March 5 and Monday, April 30, 2007, complete our registration form, which will be available at www.MuellerAustin.com or at Mueller Central, 4550 Mueller Blvd. (703-9220). We’ll need to know which home type from which builder you’re looking to buy. (Please note: there is no existing “waiting list” of Mueller home buyers.) Applicants may only select one home type and one builder. Due to anticipated high demand, families that register for more than one builder will be disqualified from the Pioneer program.
2. Obtain a pre-qualification letter from the builder’s preferred lender. Contact information will be available at www.MuellerAustin.com or at Mueller Central beginning March 5 through April 30. Obtaining the pre-qualification letter requires a $50 nonrefundable payment to its preferred lender. Please note: while you must obtain a pre-qualification letter from the builder’s lender, you can use any lender of your choice to obtain your financing.
3. If you’re interested in buying an affordable home, a home that is designated specifically for families with lower-than-median income, the registration form is the same, but the pre-qualification will also include income certification from the homebuilder’s preferred lender and, if you need it, consultation with our credit counselors.

Builders will be announced and plans will be made public on Monday, March 5. Your complete Mueller Pioneer package must be postmarked by Monday, April 30, 2007.

Process After Registrations Submitted:

1. Catellus will build the list of prospective Pioneers for each builder and style of home. We’ll use a randomizing process, overseen by a third party, to assign priority numbers to each Pioneer registration.
2. Each Mueller builder will then work directly, in order, with each prospective Pioneer to complete home sales. Catellus will not sell Mueller homes directly.

What if my selected builder sells all of its lots before getting to me? Mueller Pioneers unable to purchase their preferred home from the selected builder can advance (and keep their place in line) to the next phase of Mueller housing, assuming that builder is selected by Catellus to build homes in the next residential section. Or you can seek to purchase a different Mueller home plan from another builder selected by Catellus for the next section; but you will not retain your priority status.

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TexasRealtyBlog will have more information for you after the March 5th launch. Catellus also announced (in the last Mueller Implementation Plan Advisory Commission meeting) that they planned to hold some information sessions March 6-8th for the affordable housing piece. Keep in mind that this may change and also remember that "affordable" housing does not mean low quality. The affordable homes at Mueller will be the same style and quality as others. 

Wal-mart Still Not In Good Graces with Northcross Residents

The developers for Wal-mart and Lincoln Properties (the asset manager) are still on the outs with neighbors in the Northcross Center area in North Austin. It seems the some very vocal residents could care less about their "low, low prices" even though developers plan to build an upscale "Urban Wal-mart" in the current space.

WHERE IT STARTED

Wal-mart applied for and received a permit from the City of Austin to build in the commercial retail space that used to be Northcross Mall. Currently, the building is mostly unused. Some local businesses never fully recovered from the downturn in traffic when the mall closed years ago. Residents yearned for a nice, high-end mixed-used development and were initially happy to hear of an upcoming project.

Then...they learned...Walmart was coming. They were outraged and heartbroken. Some felt their high hopes of a nice, high-end shopping area were dashed. Naturally, residents did what many upset people do, they blamed City Council and demanded action.

LET'S TAKE SIDES

First, I have to say that I can't really take sides on this issue because I think both parties are right. I can be pretty judgemental when needed, but I work with developers. If you've ever built anything in Austin, you know that it can be a painful, sad process. The permitting process is definitely arduous and I've seen grown men want to cry. At the same time, I may be upset if I was hoping for a mixed-use retail development and learned that Wallyworld was on the way instead.

Argument FOR Wal-Mart:

• This one is easy. Wal-mart went through all the correct legal channels and followed the city's process. They correctly notified residents, filed the right paperwork, and are now incorporating feedback from locals into their plans, including addresses traffic concerns.
• The upcoming Wal-mart isn't exactly what people think. It will be a two-story, high-end place with appeal that will match the tastes of locals. Per the News 8 Austin article, "The new design features an atrium for outdoor dining, a shrub-lined driveway, and a state-of-the-art parking structure".
• Wal-mart revealed their plans today, where they agreed to scale back the project by 6000 square feet. This not an insignificant amount of space and means they're losing money up front if they can't accommodate the change. If I plan to build a rental house, but start taking away square footage, I have to recover that cost somewhere.

Argument AGAINST Wal-mart:

• This one is easy. It's WAL-MART. Who wants a Wal-mart next to them? Have you seen the people who shop at there at night? You may even see my friends hanging out there at all hours of the night waiting to buy a Nintendo Wii.
• So Wal-mart is starting to resolve issues with traffic, appeal, etc. but would they have taken action if the neighbors didn't make ruckus about it? If they're just now opening their big, burly Wal-mart arms to the people, what would have happened if no one made noise?
• Residents don't want a super-center. They wanted variety. Austin is the best place to be if you're a small retailer. Neighbors were ready to support independent businesses. Now they're stuck with the big supergiant.
• How do we know whether the traffic issues will really be resolved? The conservative answer is that it depends on how much you trust Wal-mart. The real answer is that we won't know until we look back a few years from now and re-asses the situation. My guess is that we're going to grab a nice cup of hindsight to see how this turns out.

WHAT HAPPENS NOW?

According to News 8 Austin, the City of Austin spent several hundred thousand dollars for lawyers to look into this issue only to learn that Wal-mart didn't technically do anything wrong. Some may think that $200k+ wasn't worth it, but I think the city made the right choice. Even if we can't necessarily change a decision, we should at least be able to have our voices heard. In this case, residents will at least be able to provide input on the development. If that's not good enough, it will unfortunately be time to start packing.

Read more on News 8 Austin  or KVUE. Learn more about the proposed changes at an open house on Monday, March 5 from 3 to 8 p.m.at the Norris Conference Center at Northcross Mall.

City of Austin Selling Downtown Land for Development

For those of you who would like your own slice of downtown...

Approximately 11,367 square feet of land is for sale by the City of Austin. The land is located at 301 North Lamar, which is the northeast corner of 3rd Street and Lamar Boulevard In City of Austin, Travis County, Texas.

The city is accepted RFPs right now. Additional information regarding the property may be obtained from the City's Website found at www.cityofaustin.org/realestate.

City of Austin
One Texas Center, Ste. 1350
505 Barton Springs Road
Austin, Texas 78704
[email protected]

Austin Business Journal Reports New Town Lake Condos

According to the Austin Business Journal - 5:09 PM CST Thursday, February 15, 2007...

The Austin City Council on Thursday gave final approval to a project that will bring two new condominium towers to the south shore of Town Lake. Grand Prairie-based Fairfield Residential LLC plans to build 200-foot tall towers on a 10-acre site adjacent to the Hyatt Regency Austin. The company asked the city to relax the zoning to allow for more impervious cover at the site.

The council voted unanimously to give the project preliminary approval in early January and did so again Thursday. The number of units Fairfield has planned for the project is uncertain at this point. Fairfield purchased the Hyatt hotel and the adjacent property in 2005. In December, the company put the 448-room hotel up for sale, retaining the land for the condo project.

You may be wondering if there are too many condos coming in Central/SouthCentral Austin. Only time will tell, but with our expected growth and the huge number of boomers and relocation buyers, demand is expected to increase.

Gotcha Guide™: How Bad Real Estate Deals Are Made

NOTE: This information is part of a forthcoming book, the Gotcha Guide™ to Buying and Investing in Real Estate.  
by DeeinAustin™

I'm a fan of the Active Rain blogs and will reference their articles there every now and then. Active Rain is an online real estate blogging community for agents, mortgage brokers, home stagers, and other industry professionals. Since the audience is so diverse, the topics can range from what we think about gardening to politics or home buyer advice.

I usually post articles about topics that interest me, including communication, technology, and personal rhetoric about psychology and other aspects of buyers or sellers think. My most recent article is about how bad deals are made, which came from my thoughts on how hot the Austin real estate market is. Why are so many buyers are overpaying for properties and why they want to take a gamble on a losing deal?

Read my theory on the latest Active Rain article on How bad deals are made. Let us know what you think! You can comment there or on this blog.

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