The week began with the news that Circuit City filed for Chapter 11 Bankruptcy, and will be closing 150 stores - and this in advance of the holiday season, when most retailers make a larger portion of their profits for the year. Department store Nordstrom reported its growth rate is down 16%, where they were expecting an increase of 10%. Poor economic reports from Best Buy and Macy's followed a few days later, as well as lower future earnings guidance from Wal-Mart and Intel. As if the headlines of the week weren't enough, Friday's Retail Sales report showed that overall retail sales fell for the fourth straight month and plunged to their worst level since record keeping began in 1992. Looks like a pretty dismal holiday shopping season ahead...probably the worst that retailers will have seen in a long, long time.

In addition, there was bad news for the automobile industry as Deutsche Bank downgraded shares of General Motors from hold to sell, giving a price target of $0...yes, $0. As a result, General Motors stock fell below $3 for the first time since April 13, 1943. Interestingly enough, the automaker was not even making cars at that time but producing only military equipment for WWII.

And the bad news continued on the job front as well, as the Initial Jobless Claims report revealed the highest number of first time unemployment claim since 2001. In addition, Continuing Jobless Claims reached their highest level in 25 years. Remember, poor economic news and a weak labor market usually cause Bonds and home loan rates to improve. This is because fewer jobs and lower confidence about keeping or finding work causes people to spend less. In turn, businesses and retailers lose pricing power, and this is a cycle that keeps inflation - the arch enemy of Bonds and home loan rates - at low levels, especially if oil remains near present reasonable prices.

However, despite all the bad economic news of the week, Bonds and home loan rates were unable to make significant improvements this week as they fought to defeat and move convincingly above a very important technical level called the 200-Day Moving Average. Read on, to understand more about the significance of this technical indicator.

LOSING A JOB IS ALWAYS A TOUGH EXPERIENCE, BUT IT PAYS TO FOLLOW GOOD ADVICE IF YOU OR SOMEONE YOU KNOW RUNS INTO THIS SITUATION. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR JOB SEARCH TIPS THAT CAN MAKE ALL THE DIFFERENCE IN TOUGH MARKETS.

There are several important economic reports ahead this week...is more bad economic news on the way? Tuesday and Wednesday will be big days on the inflation front as Tuesday brings the wholesale measuring Producer Price Index while Wednesday's Consumer Price Index (CPI) report will show us inflation at the consumer level - that is, how much more expensive goods and services are for consumers this month over last month, as well as year over year. Given the Fed's recent rate cuts (which can trigger inflation), it will be important to see what these reports show.

Wednesday will also bring a read on the new construction housing market with the Housing Starts and Building Permits Report, and Thursday is another important day to note as the Philadelphia Fed Report will be released. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports. Given both the poor Jobs and Retail Sales reports of late, this is likely to be somewhat negative as well. Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds, so I will be watching very closely for improvement during the coming week.

However, to gain improvement, Bonds would have to convincingly defeat and move above a technical level called the 200-Day Moving Average. A moving average is the average closing price of a financial instrument over a given time period. In this case, the 200-Day Moving Average can act as a "ceiling of resistance", preventing Bond pricing from moving higher and helping home loan rates improve, or a "floor of support" that can keep Bond prices from moving lower and causing home loan rates to worsen.

You can see how Bonds danced around this level all last week, so I will be watching closely during the coming week to see if Bonds and home loan rates can breakthrough this resistance and move in an improving direction.

Dog Places

They give all you dog owners out there a great list of resources.  From restaurants and places where we are invited too, to parks, daycares, grooming, and even TREATS, it's a great website.

Now go out and have fun with a four-legged friend!

The PeopleFund, according to their website, was started in 1995 with the mission to "promote lasting economic vitality for low-income people by implementing strategies that create jobs, provide safe and affordable homes, and promote good economic policy decisions for communities... They have made over 290 loans totaling over $17 million to small businesses, schools, healthcare providers, and to develop affordable homes."

The summit in East Austin will be a really interesting and exciting event and should be applauded for tackling such complex issues in order to make the whole community better. 

Go!

It is good news then, for Austinites who, although we are not immune to the market’s volatility, will definitely fare better than the majority of the nation. We live in a city that currently ranks high on the top of most lists – best places to live and work; best city for singles; best city for live music; best city for technology; best city for outdoor recreation; and the list goes on and on. There will always be a strong desire for people to live in our beautiful city, and because of the demand and the reasonable real estate prices, we will always have stability in the midst of national uncertainty.

The Austin Business Journal recently shed some light on why Austin’s market will bounce back faster than others will amidst the economic downturn. Check out what they have to say here.

Let's take a quick look at the luxury market, that is, homes listed above $1 million dollars.  In Austin, many of these properties are geographically located to the West and out by the lake.  Currently, there are over 575 homes that fit this criteria on the market!

This is a staggering number.  This means that almost a billion dollars of inventory is sitting out on the market.  What will the absorption rate for this be?  How are banks and mortgage companies handling this?  How are the homebuilders doing?  These are all questions with complex answers.  Based on talks with luxury homebuilders they really seem to be sweating the homes they have built without a buyer contract, the “spec” home.  Many of them could float their spec homes if they were getting new clients to build for, but with so many new luxury homes available on the market, many times it makes more sense for a buyer to get a good deal on an existing home than pay to build a new one.

The funny thing about the way the free market works is that because of the choices available on the market right now, construction costs are actually dropping, and now might not be a bad time to build new and get exactly what you want.  It is fascinating to watch how the market seeks to correct itself in strange ways.

So, what would I do if I were in the market for a million dollar plus home?  Hire a smart Realtor who was going to find me the best deal possible in an established neighborhood!

Conventional Plastic Web Lawn Chairs

Clean plastic webbing with an all-purpose cleaner, using a scrub brush to remove stains. If the webbing is looking dingy, try mixing some detergent and a half-cup of bleach in one gallon of water to use as a cleaning solution. As a last resort, local hardware stores sell kits for re-webbing a chair when the original webbing resists your best cleaning efforts or has deteriorated beyond use. To keep the aluminum frames opening and closing easily, fill an eyedropper with vegetable oil and squirt into all the joints. If the aluminum has corroded, polish very lightly with a fine-grade steel wool.

Stacking Resin Chairs

White resin - Use a cleaning solution of three tablespoons of automatic dishwashing detergent dissolved in one gallon of warm water. The dishwashing detergent contains a bleaching agent that will whiten the plastic. Note: Do not use this cleaning solution on colored resin. Colored resin - Most commercial cleaners are too abrasive to be used on resin lawn furniture. To keep from scratching or dulling the surface, clean with a wet sponge dipped in baking soda, using circular motions, then rinse well. Soapy water will work well on lightly soiled chairs. To bring back color and shine to faded resin furniture, simply spray with WD-40 and wipe with a clean, dry cloth - you'll be surprised at the results!

Rattan and Wicker

First, dust the furniture or use a soft brush to remove debris from crevices. Clean with a mixture of one tablespoon of dishwashing soap to one gallon of water, and rinse well. Let them dry thoroughly before using again because the fibers can stretch while wet. If one of the stems on the back of the chair is broken, simply glue the pieces together and tape above and below the glued joint to stabilize while drying overnight.

Teak

Teak is one of the most durable and low maintenance woods used in outdoor furniture. If it is oiled, it will retain its warm, reddish-brown color. If left untreated, it will weather to a silver-gray patina.If your teak furniture requires cleaning, this can be done with a VERY soft brush or pad and some warm, soapy water. Wash down afterwards with clean water. Do not use high-pressure hoses, and steel wool or steel wire brushes should not be used at all, as any residue left in the grain will rust and discolor the wood. If the furniture has some stubborn and heavily ingrained stains, these can be removed by sanding with a fine grade of sandpaper, working only with the direction of the timber grain. After sanding the stains away, you may wish to re-oil the area, or if the furniture had previously been left natural, the fresh teak color exposed by sanding will soon mellow in with the existing patina.

Now get to work cleaning!

In case you have no idea what I am talking about, take a look here:  cleek

This is a one-day workshop held by Austin Energy and seeks to educate anyone interested in "greening" their home.  This is yet another great thing our city offers in to anyone interested in helping the enviroment, and it makes me proud to live in Austin.  Plus, for only $35, you get meals! 

Notes from South Austin Business Council LuncheonWhat’s Really Going on Downtown?

Tuesday, July 15, 2008

Currently there are 8,000 residents Downtown 67,000 day employees work Downtown § 90,000 day employees within a one mile radius of Downtown § Projects shaping Downtown include:    o DT Austin Texas plan    o Downtown Retail    o Parks Master Plan    o Waller Creek Restoration    o Transportation    o Hotels    o Downtown Living § 4,730 condo units planned for development since 2000 § 2,500 units are currently completed § Prices have remained pretty constant    o $300-350 per sq ft    o $500-550 per sq ft for super luxury § Buyer profiles are varied – under 30, over 60; not very many families with children § 68% of buyers currently live in Austin, Texas § 14% of buyers are from other Texas cities § 19% of buyers are from other states § 70% of buyers will use as a primary residence § 18% of buyers will use as secondary residence § 12% of buyers will purchase as an investment – resales are limited by resale  restrictions because we have learned from other markets. § Vertical developments are a great market for small businesses § HOA fees depend on amenities    o $0.22-0.69 per sq ft § Residents will experience savings in gas prices and utilities (party wall savings) § Typical Development Process:    o Identify    o Acquire or Contract    o Entitle/Design/Plan/Finance    o Pre-Sale    o Construct    o Convey 4 Frequently Asked Questions: § Are we overbuilding? – No    o Demand is currently meets supply, not outpacing it.    o There are strong fundamentals to the build up of Downtown; much of it targeting young professionals.    o Developers face barriers to entry – so it’s harder & longer process to get permits, etc. § Who is moving in?    o 60-70% are young professionals    o Empty nesters    o Techies, lawyers    o Not so many students; they tend to choose the West Campus area   o Not so many families with young children – the missing element Downtown is a daycare! § Should I wait? – No!   o Demand is increasing    o Construction costs, entitlement costs, and gas prices are all going up – so price reductions are at the end of the list of options for developers to consider. § What are the biggest draws for living Downtown?    o Lifestyle    o Rising gas prices – no longer have to drive on nights & weekends    o Green/sustainable consciousness

We would love to hear your thoughts on Development. Whether you live, work or play there - or if you dabble in all of these areas, the Downtown development in our special city impacts us all on some level. I will continue to keep you abreast of the latest news and updates! Here are a couple of articles regarding development in the Greater Austin area for your review as well:

Catellus laying infrastructure for more homes at Mueller development 

Prime East Austin land to hit market

Round Rock Development – New vision for Eastern Round Rock: 100 Acres with homes, stores, offices

Lake Travis ranch on the auction block

Forbes is very accurate to rank Texas so high.  While it may not feel like anywhere in the U.S. is a good place to buy a house right now, a lot of the slow-down in the market here is due to the weakness in the lending industry as well as a fear that the slowdown on the coasts will hit us here. 

From my perspective, this is just false.  Lending is, without a doubt, the major hurdle right now for any purchaser, as they are not handing out loans like candy anymore.  Two years ago, you could call a mortgage broker or a bank, and with no verification of assets and no money down you could get right into a house.  There is no way that that business model could sustain itself long-term, so now you have a lot of banks that have tightened up considerably.  Also, banks cannot sell mortgages on the market like they used to, but that is an entirely different subject for another day.

Beyond the lending issues, the fact is that Texas never experienced the absurd inflation and price jumps that places like Florida and California experienced.  Those are two good states to compare to Texas because of their size and economies.  While those two states had home prices that were going through the roof, Texas maintained a steady home appreciation rate.  Couple that with the fact that our cost of living is lower and jobs (especially coveted tech jobs) are being added incrementally, and you have a real recipe for success.

This is where Forbes is on the money when it comes to recommending so many Texas cities.  We are in the unique environment of low cost of living, coupled with reasonable home prices and a growing economy and job market.  So take advantage of this and stop paying someone else's mortgage!

The real key, and where the money is made, is you buy when everyone is selling and you sell when everyone is buying.

This is a really sad story, not just for the loss of trees like that over such a large area, but really for the fact that this could have easily been prevented.  I do understand the president of the contracting company when he stated that the loss of the trees does not benefit the project, and I can actually believe that he truly means this.  Having a basic understanding of the development process and working with developers, I know that there are restrictions on building size to lot size (impervious coverage) that, unless there was a variance, would make it harmful to your project if you cut down so many trees.  I'm sure it also changes the landscaping plans and is a real pain to go back and plant new trees.

Let me just say though, the City of Austin should be more skeptical than I am and make sure that their tree ordinance is not a law filled with loopholes....

I don't know the details on this project, but I do know that a project of this scope requires the people on the development team to be very diligent and remain on-site and provide clarity to their workers so problems like this do not occur.  Now they have to go back and plant smaller trees equal to the diameters of the ones they cut down.

This, however, raises other issues.  Who is there to ensure that the new trees are planted correctly?  Who will be monitoring these trees to ensure that they are watered and cared for correctly?  Planting smaller trees is nice, but they also take up a lot more space if planted correctly and do not provide the shade, look, and general ambiance of a beautiful old tree. 

There are always going to be two very opposing factions on this topic, especially as building becomes more and more prevalent in Austin over the next few years.  My wish is that Austin will be the type of town where developers can make money in a way that preserves our natural beauty and adds to the community in unique and positive ways.  I know we can do this without chopping down mature and protected trees, accident or not.

Auditorium Shores is where a lot of my friends like to hang out, and I like to stop by and exchange pleasantries.  One day there was even a remote control car that we all chased around and made all our humans laugh at us (they are so easy).  But I'm not in the greatest shape and sometimes playing a lot gets me tired, so I like to now take casual strolls across the street in Butler Park!

There is a nice pond over there and this really cool fountain that changes colors and you can run through it and splash around, oh oh and there's a doggy drinking fountain just for us, and the hill has such a nice view and people play funny human music there sometimes, and there is a big field to eat grass and lounge around, and you can hang out all day and just have the best time ever, I mean ever!  ~wheeze~ ok, got too worked up, gotta go take a nap.....maybe some food first......

Now, if you are still using a tube monitor you will have to use a screen saver to save the screen from burning out on a single image. However, if you are still using a tube monitor, I commend you for being really green by not purchasing new computer equipment every few years and adding to the world's "tech garbage"! 

New screens don't suffer from burning, so just turn the thing on and off, or set the screen to automatically turn off after a few minutes of inactivity.  It starts with the little things!

Austin's landscape continues to evolve, and the Austin Business Journal included an article this week about the redevelopment of the Green Water Treatment Plant and Austin Energy Control Center site. Check out the latest news surrounding it:

Austin Redevelopment

Also big in Austin's real estate news, the proposed homebuilding ordinance which would require disabled-friendly features, such as wheelchair ramps, on new homes, was mentioned. See what people are talking about regarding this:

Homebuilding Ordinance Update 

Lastly, we can't hardly go a day without talking about the high gas prices across the nation. Whether we want to hear it or not, it's an issue affecting all of us, so check out this fun story from CNN about driving techniques people are using to get the most bang for their buck at the gas pump:

CNN's "Hypermiling"

Enjoy! I look forward to spreading good news about Austin's real estate market to you on a regular basis.  

Christy

A sample quote: "Don’t think for a minute that the laid-back, rockers-and-tacos atmosphere of downtown Austin is all this metro area has to offer."

They based their rankings on a formula (of course), but before you slam this list for also including Provo, UT (I love UT, best fly-fishing in the U.S., but Provo as top 10?) the reasoning looks sound.  Even though it seems like Austin is getting more expensive everyday, our cost of living index is still below the national average, we have seen steady job growth, and a 17% population increase in the past 8 years are all strong indicators that we are thriving here!

LINK