The Austin American Statesman newspaper has decided to increase their coverage of real estate since the Central Texas real estate market is so hot.

We spend more hours at home than anywhere else. Much of our leisure
is spent there. Our homes give form to our lifestyle. They are our
shelter, protection and gathering place for family. Today we bring you this, the first weekly edition of StatesmanHomes.
It will appear on Sundays, and is a sharp expansion of content that
formerly appeared in the Saturday business section.

The time is right. Austin is having its best real estate year ever,
as the region rides on strong job growth and a steady influx ofnewcomers from other states where houses are more expensive. Central Texas has been able to increase its market without the crazy
price appreciation that afflicted California and other coastal states —
most of which are now paying the price in a sharp slowdown.

I bring this up because it shows, once again, how vastly different our market is than other areas. I’m not speaking to the increased coverage, but the fact that our local newspaper has enough interest and readership that it has to expand coverage of real estate. Besides the Austin Business Journal, the Statesman is a good resource for information about the local market and upcoming Texas real estate developments. They’re also looking for more stories, so you can contribute to the local knowledge base.

Link: Central Texas home market on the rise, and so is our coverage.

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I’d previously written about the Mueller Airport Redevelopment, which is the 700 acre tract of land where the old Austin airport was until it moved further South. Both residential and commercial investors are falling all over themselves to get a piece of the action. I purchased a home near this area of East Austin in 2004. I took out 80k in equity from the start and am now taking about another 50k to reinvest. My closing is next Monday.

The Mueller Neighorhood Coalition meeting is Wednesday, Oct. 4, 6:30 pm at the Asbury United Methodist, which is on the corner of 38 1/2 St. and Cherrywood Rd.

Other Upcoming Dates:
Sun., Oct. 15, 2 pm, Mueller Family Day
Thr., Nov. 9, 6 pm, Mueller 101

Draft Agenda:

- Construction Update

- University of Texas update, especially updating last meeting on re-scoping of UT’s space needs

- Reclaimed Water Tower update

- Wilshire Wood/Delwood II Water Line update

- Cap Metro update

- Other questions

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IKEA stores in Round Rock are almost built and on the way. According to their press release, they should be open this November, which is ahead of schedule. The IKEA store represents an exciting time for Round Rock because their retail market is back with a vengeance. IKEA is right by the new outlet mall, so the area will be a hub for the community.

Round Rock has been on a small, incremental rise, but we’re expecting the market to start really hitting it’s stride by next summer.

Link: IKEA | national press releases.

P.S.

I am in a real estate convention this week, so it was tough trying to make my writing deadline for yesterday. I have a lot of news to write about, so stay tuned.

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DEE COPELAND HAS BEEN AWARDED THE CERTIFIED RESIDENTIAL SPECIALIST DESIGNATION BY THE COUNCIL OF RESIDENTIAL SPECIALISTS.

Austin, TX. September 25, 2006- Dee Copeland a Greater Austin, Texas Realtor, has been awarded the prestigious Certified Residential Specialist (CRS) Designation by the Council of Residential Specialists, the largest not-for-profit affiliate of the National Association of Realtors.

Realtors who receive the CRS Designation have completed advanced courses and have demonstrated professional expertise in the field of residential real estate. Fewer than 38,000 Realtors nationwide have earned the credential.

Home buyers and sellers can be assured that CRS Designees subscribe to the strict Realtor code of ethics, have access to the latest technology and are specialists in helping clients maximize profits and minimize costs when buying or selling a home.

Dee Copeland is a sales associate with Keller Williams in Northwest Austin. She is a member of the Austin Board of REALTORS and is on Economic Development Committee for the African American Chamber of Commerce. Dee holds a GRI Designation and e-PRO certification. She is currently completing requirements to obtain her broker’s license. For more information on Dee, visit www.DeeCopelandTeam.com.

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Lago Vista is a city that is Northwest of Austin. The planned retirement community had a lot of promise during the pre-"tech bust" era of the city. Just as the community was being built, the bottom fell out of the tech markets and foreclosures peaked.

I was just speaking with a friend two days ago about Lago Vista. We were discussing the limited availability of low-cost land near Austin. I told him that I think it’s time for Lago Vista to appreciate, but that I hadn’t really been tracking the market. I’d heard that Lago was making a comeback, so promised to look further into the area.

According to an article printed in the Austin Statesman last Friday, a Dallas-based developer is has purchased "The Falls at Lake Travis"… a 315-acre tract on the
shoreline of Lake Travis. The company is proposing 510 single-family
homes and townhomes on the wooded, hilly terrain. The Falls tract also
includes some 3,000 feet of shoreline property.  WY Atlantis intends
to create a highly amenitized residential community with a clubhouse,
resort-style pool, more than 120 acres of open space and
three-and-a-half miles of trails. Homes are expected to be priced from
the $300s to more than $1 million.  The Falls at Lake Travis is
located in the Lago Vista Extraterritorial Jurisdiction, approximately
a 40-minute drive from downtown Austin.

Talk about good timing. Investors may want to start paying attention to this area. Read the full story: Statesman.com: Developer Plans 510-Home Community in Lago Vista

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I’ve been getting questions from buyers about Option ARMs (Adjustable Rate Mortgages). I recently wrote an article on how adjustable rate loans have been the source of foreclosures in Dallas, San Antonio, and Austin. With our state having high property taxes compared to the rest of the nation, buyers need to be careful when purchasing using ARMs. Once they start adjusting, the peaceful ride is over and you’re on an ascending roller coaster.

According to Bankrate.com: 

An option ARM is an adjustable-rate mortgage that gives the borrower four choices of a payment each month. The borrower can pay the amount necessary to pay the loan off in 15 years or in 30 years. The borrower can pay only the interest charged in the previous month. Or the borrower can make a minimum payment that doesn’t even cover the interest, so that the loan balance increases.

Most option ARMs have absurdly low introductory rates,
sometimes below 2 percent, that last just a month. Then they rise. And
rise. The rate changes each month, but the minimum required monthly
payment changes only once a year.

The main problem with Option ARMs is that buyers think it sounds great, but don’t properly compare loans. Although they sound like a great way to get into a home, they may be the reason why you’re in foreclosure within the next few years. Before you or someone you know gets an Option ARM, read the Bankrate article on the topic.

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I am refinancing a few properties and received estimates from a two lenders. When I compared the paperwork, one loan had a "demand clause" on the Truth in Lending Statement. Buyers should read their Truth in Lending page because it shows how much your loan really costs and let’s you know whether you have a prepayment penalty, etc. The "demand clause" is just a checkbox and isn’t explained on the statement, so I looked it up.

According to MortgageProfessor.com:

A demand clause is even better (for the lender) than a due on sale clause.  With a due on sale clause, the loan must be repaid upon sale of the property.  Its purpose is to protect the lender in a rising interest rate market.  Lenders are concerned that borrowers with low-rate loans who sell their homes will arrange for the buyers to assume the loans.  Lenders want these loans repaid so they can make new loans at higher rates.

A demand clause is also better (for the lender) than an acceleration clause.  An acceleration clause allows the lender to call the loan if the borrower violates some contractual provision, such as a requirement that the loan must be repaid upon sale of the property.

Imagine my surprise and dismay when I learned that my lender was trying to give me a loan that allowed the investor to demand my properties at ANY TIME for ANY REASON. I immediately contacted my lender and told him to remove the prepayment penalty as well as the demand clause or I won’t sign the docs.

In Austin, we have some areas with significant appreciation. My properties happen to be in East Austin, which is a very hot investment area. If I accept a loan with a demand clause, the lender could theoretically try to raise my rate or demand full payment for any reason. If I didn’t immediately pay off the loan in full, I could be forced to hand over the property. On top of that, there was a prepayment penalty, so I’d have to pay thousands of dollars if I tried to refinance.

Let the buyer beware indeed…

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I liked this article from the Texas A&M Resource Center because it describes some of the new apartments and residences coming to Austin. I’ve been reporting that mixed-use projects are very popular. City officials are encouraging more mixed-use and residential developments in Central and Downtown Austin as we continue to grow.

The Domain Residences is one of many examples in the Austin area of housing being built above retail shops. Currently under construction and located off Braker Lane and MoPac Expressway in the Arboretum area, the project will feature 390 luxury apartment units within and above 750,000 square feet of retail. Residents who live above retail space are a short walk from eating and entertainment. This type of arrangement seems to be a particular fit with two types of renters and buyers: young professionals and empty-nesters.

These mixed-use conveniences come with a price tag. It’s more expensive to build "vertical structures," as they’re called in the commercial real estate industry. If you want housing on top of retail, that means you have to build the retail shell of concrete in order to support the weight of the housing above. Land prices for prime sites that are suitable for mixed-use projects also tend to go for a premium price. In turn, that means it won’t make sense for every project site to contain a mixture of commercial and residential properties.

In Austin, the intersection of Sixth Street and Lamar Boulevard is turning into a blend of work-live-play uses. A number of apartment or condo projects already exist, and more are on the way. It’s anticipated that the redevelopment of the Seaholm Power Plant site will act as another hub of activity. The Domain in Northwest Austin, the Mueller redevelopment’s planned town center in Central Austin and The Triangle project north of the UT campus prove rooftops and retail shops can coexist outside the main core.

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I found a good article on News8Austin. They spoke about how Southwest Austin is rapidly growing and the area is red hot. Of course, most real estate agents and investors already know this. MLS areas 10 and SW have been excellent areas to buy or sell in for the past few years.

Southwest Austin is growing by leaps and bounds. New condominiums and commercial developments are constantly under construction, and a new elementary school just opened in Circle C to address the population growth…Growth in the area is limited because much of the land around Southwest Parkway is part of the Barton Creek Habitat Preserve. The 4,000 acres are home to the endangered Golden-cheeked warbler and the Black-capped vireo.

AMD is also a major draw to the area. The company’s new world headquarters is being built at the intersection of Southwest Parkway and William Cannon. The Vista Hills condominiums near William Cannon and Southwest Parkway are an example of the hot real estate market. When they were built a few years ago, a condo went for about $170,000. Now they’re valued at $259,00.

Area 10 and SW is a good place for long-term rentals. With the new condo communities, some purchasers may also want to use their property as a second-home. Read the full news article on this topic here.

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I just wanted to let all the RSS fans and others know that I am on vacation this week. Posts may be a little slow coming. I’ll be in the Grand Canyon, so am not sure I’ll have full internet access. I will be back in Austin this weekend, so can pick up any missed or delayed posts at that time.

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