Develop Austin Texas

The 2010 Texas Construction Outlook, released last week my McGraw-Hill, expects a 30% increase in Austin’s construction starts, and a 16% increase statewide, for a $52.5 billion industry. Austin is leading the other metropolitan areas, with Houston expecting a 17% boost, Dallas 16%, El Paso 8% and San Antonio 6%.

The biggest category for growth is expected to be in residential housing. Single family housing starts will increase by 31%, and multifamily by 34%. Nonresidential housing construction is expected to slip 1%, but public works and utilities should increase by 21%, boosted by federal stimulus funding.

For more than 100 years, McGraw-Hill “has compiled project and product information, plans and specifications and industry news and forecasts” to make their predictions.

Now is a great time to invest in development land in Austin and central Texas.

Pictured: The Falls – 315 Acres on Lake Travis

As the Austin Business Journal reported on Monday, a new Grubb and Ellis Co. forecast ranked Austin as  the number one market “for long term office, industrial, retail, and multi-housing investment potential.”

One other city in Texas, Houston, appeared on the list, in the sixth spot.

Says Bob Bach, Grubb and Ellis Senior Vice President and Chief Economist: “The good news is that the freefall we saw in 2009 is over and the future is more certain, giving owners and users of real estate the confidence to begin making decisions again.”

Grubb and Ellis Co. is a real estate and investment services firm out of Santa Ana, California.  You can view their entire 2010 Forecast for the whole US or your local area. Now is the time to look at the commercial real estate opportunities Austin has to offer.

Sandy Ranch

CNN Money’s article “What Housing Bust?” covers what areas of the nation have done well in the housing market, and why. According to writer Les Christie, areas with plenty of available developable land have smaller swings between home price highs and lows. This is because, when the demand for housing spikes, home builders are able to build more homes and keep the housing prices in check. Speed is also of the essence here, home builders need to be able to build quickly, thus, the need for available land.

“Elasticity of supply,” this is called, according to Mark Fleming, chief economist for First American CoreLogic. And Christie says, it is the definition of Texas real estate, and similar throughout all the metro areas.

“Texas is the poster child for these ‘steady Eddie’ states. House prices during the past three years rose in all 26 metro areas with gains ranging from 2.8% for Dallas, the second largest metro area, to 9.7% in Houston, the largest, to a whopping 32.5% in Odessa.”

This is part of what is causing the metro areas in Texas, including Austin, to grow so rapidly. Landowners in the Austin area should continue to see their investments in high demand for buyers and developers.

The results are in, and Texans have voted to pass all 11 proposed amendments to the state constitution, including those we’ve reported on, for appraisal reform.

Proposition 11, which limits the government’s power to eminent domain, was hugely popular and passed by an 80-20 margin. “The amendment bans governments in Texas from seizing private property and giving it to a private developer to boost the tax base,” reports KXAN News.

Over 43,500 residents voted in Travis County.

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If you’re used to not voting when it isn’t a big ticket year, or if you’ve never voted before, skipping your chance to vote this year may be a mistake you’ll be paying for, for a long time. Some of the propositions on Texas’ ballot this year deal directly with home values and appraisals, and it’s important that we understand what we’re voting for and why, even if someone would still decide it’s not important and not go. Even if you don’t own a home now, it may be an issue that affects you in the future. Here is a re-print of October 16th’s blog.

November 3^rd’s ballot in the State of Texas won’t have the same hot button races as a presidential election year, but the propositions on it will directly affect Texas homeowners and their money, right now and in the immediate future. The language can be tricky and there is misleading information floating around from misinterpretation, but it is important to understand the proposed amendments and vote.

Gabriel Lopez wrote a great column translating the amendments into simpler terms. The Houston Chronicle also offered an interpretation. There are a few amendments in question, namely, Propositions 2, 3, and 5.

Proposition 2

As it will appear on the ballot: “The constitutional amendment authorizing the legislature to provide for the ad valorem taxation of a residence homestead solely on the basis of the property’s value as a residence homestead.”

What it means: We’ve talked about the increases in appraisal rates in the state. Currently, “the central appraisers are using a practice called ‘highest and best use,’ which allows a property to be valued on potential use rather than current use,” Lopez writes. In other words, if this amendment passes, if an area is experiencing rapid commercialization, the land can’t be valued for the potential value – it will mandate “that a residence be valued only as a residence, regardless of what the ‘highest and best use’ is.”

“This amendment is intended to protect less affluent homeowners from situations in which rapid commercialization in their area threatens to drive up property taxes unreasonably year after year,” writes the Chronicle. “…such development can occur quickly and with potentially difficult consequences for homeowners. The measure would be strictly limited to residences qualifying for the home-owners exemption, thus eliminating the potential for use by speculators.”

Proposition 3

As it will appear on the ballot: “The constitutional amendment providing for uniform standards and procedures for the appraisal of property for ad valorem purposes.”

What it means: This amendment is another reaction to the state appraisal policies leading to inflated rates recently. It would require uniformity in appraisal processes statewide, allowing the state to have oversight and enforcement over every district. “This is important because state funding for public schools is based on the taxable property in each school district,” says Lopez.

Writes the Chronicle: “Unfortunately, the proposition has been plagued by Internet rumors that it is a back-door method to introduce a statewide property tax. It is no such thing, assures state Sen. Tommy Williams, R-The Woodlands, an author of the amendment. Williams says it is simply a means to achieve uniformity of appraising methods in the interests of more equitable appraisals in all areas.”

Proposition 5

As it will appear on the ballot: The constitutional amendment authorizing the legislature to establish a single board of equalization for two or more adjoining appraisal entities that elect to provide for consolidated equalizations.

What it means: The board of equalization would hear appeals from homeowners regarding their home’s appraisal value. It can be difficult to find qualified individuals for these boards in rural and less populated counties; this amendment would assist them. “It is written to be ‘permissive,’ which means a larger entity cannot force a smaller one to participate without its consent,” says the Chronicle.

Along with the Houston Chronicle, The Texas Board of Realtors endorses “yes” votes for propositions 2, 3, and 5. A quick, concise flyer is available here.

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Yesterday, Forbes released their feature on US Cities on the Rise: vibrant cities welcoming the most newcomers. They’re not the big cities you’d think they are – in fact, New York is at the bottom of the list. It turns out Americans are most attracted to “job growth centers,” and college towns.

Three of the cities on the list are home to major universities, including Austin, Texas. Many young professionals, and everyone in thes areas, are very welcoming to newcomers. “If there are lots of newcomers, it’s easier to make friends; there’s a sense of vibrancy there,” says a senior fellow of the Brookings Institution, about these areas. “Places that don’t have a lot of new migrants tend to be older and more stagnant. They’re also more close-knit.”

Another draw to these cities are the universities themselves: universities are top employers and offer a steady flow of jobs. The population is educated, and it helps cities like Austin thrive. Says a senior fellow at the Joint Center for Housing Studies at Harvard, “these places retain people after they’ve graduated, and attract like-minded people.”

Austin sits at #4 on the list of US Cities on the Rise, with a population just over a million people and just over 6% of them having relocated to the area in 2008.

Forbes just recently published their “Best States for Business” list, ranking all states from 1-50. The list factors in six categories of data, with 33 points of data from nine different sources. Business costs including labor, energy and taxes were weighted most heavily.

 Texas ranked first for Economic Climate, and third in Growth Prospects. It also ranked tenth in Regulatory Environments. Strong rankings in these three categories, and three others, put Texas in the eighth spot on Forbes’ top ten list.

"A common theme with our top-ranked states is an expanding, educated workforce," writes Forbes.

The top ten states were:

1. Virginia

2. Washington

3. Utah

4. Colorado

5. North Carolina

6. Georgia

7. North Dakota

8. Texas

9. Nebraska

10. Oregon

You can see all fifty states ranked here.

This is not the first time Texas has been recognized as a top state for business – in June, Directorship named Texas number one.

Eagles Glen

The master planned community of Steiner Ranch is exceeding expectations, according to developers and agents, because of its great amenities and the strong reputation of local schools, Texas A&M’s Real Estate Center and the Austin Business Journal report.

In 2009, even with the economic downturn, 143 homes were sold in Steiner Ranch at the end of August. Compared to 164 homes by that time in 2008, just a 13% drop. Compared to the 35% drop the Central Texas area saw, particularly early in 2009, the Steiner Ranch development is going faster than planned. The median sale price for a home in Steiner reached $350,000 this year, also a significantly stronger performance than the rest of the area.

Currently in development for Steiner Ranch is Longhorn Village, a retirement community with assisted living services aiming to give University of Texas alumni a chance to reconnect with the University life.

Steiner Ranch, located northwest of the city on RR 620, is near both Lake Travis and Austin. To read more about our featured property on Eagles Glen and some more amenities Steiner has to offer, see here.

NuWire Investor and Housing Predictor released their Top 10 List for best housing markets to invest in for the remainder of 2009. “The top 10 US real estate markets for 2009 are not large metropolitan areas, but rather small communities with strong prospects for growth,” they report. “The following list of high potential housing markets may not appreciate in the short term, but have the highest likelihood of long term appreciation.”

Texas appears twice on the list: in the number one spot is Amarillo, Texas; and number eight is Austin, Texas. “Austin, Texas and Tucson, Arizona are the largest metro areas to be named to the list possessing the highest probability of growing through the recessionary economy over the next few years,” the article continues. “As a high-tech hub, Austin will have what it takes to not only sustain the downturn but see home values inflate.”

Seeing Texas twice-over on the list shouldn’t be a surprise; earlier in the summer NuWire Investor reported that the Southern region posted the strongest quarter-over-quarter price return in the housing market (despite the overall decline of 1.7%).

Austin, Texas clearly continues to remain a good investment with great development land deals to be made.

Turbines

For the second quarter of this year, Texas added 454 megawatts of wind generating capacity, giving the state of Texas’ capacity more than 8,000 megawatts for the first time, and to be the first state that has done so.

One megawatt of wind powers 225-300 homes.

The state of Texas is first in new wind power generating capacity, according to the American Wind Energy Association. Iowa is second, with around 3,000 megawatts. Missouri, Washington and California also appear on the list. Texas was second in wind growth, behind Missouri’s push to expand more than 90%.

Central Texas is home to the Roscoe Project, the nation’s largest wind project, which helped push Texas to its 8,000 megawatts.

According to American Wind Energy Association CEO Denise Bode, “Our challenge now is to sieze the historic opportunity before us to unleash this entrepeneurial force and build up an entire new industry here in the U.S. that will create jobs, avoid carbon and strengthen our energy security.”