Now's the time to buy, if . . .

COLLEGE STATION— “It appears we are at the bottom of the housing market in most Texas cities,” said Real Estate Center Chief Economist Mark Dotzour after reviewing the state’s latest home sale numbers.

Dotzour mentioned two years ago that new home construction needed to fall dramatically to avoid the level of overbuilding that could damage Texas housing markets. He even picked summer 2009 as the bottom of the housing cycle because bankers would constrain credit to homebuilders and developers.

Apparently he was right on all counts. The Texas inventory of unsold new and existing homes is in good shape.

“I feel now is the time to buy a house in most Texas cities,” he said. “Housing affordability has never been higher, and I never thought I would see 5 percent mortgages in my lifetime. If you plan to live in the house for at least two or three years, now is the time to buy.

“If you are planning to build a home to retire to in the near future, now is a great time to do it. Contractors are plentiful, construction costs are lower and mortgage money is cheap,” he said.

Dotzour said mortgage rates should remain low as long as the federal government continues to purchase almost all residential mortgages. When they stop, rates will move up.

U.S. Foreclosure Filings Rise 7 Percent

IRVINE, Calif. (RealtyTrac) – Foreclosure filings were reported on 360,149 U.S. properties in July, an increase of nearly 7 percent from the previous month and a 32 percent increase from July 2008, according to RealtyTrac's July 2009 U.S. Foreclosure Market Report.

"July marks the third time in the last five months where we've seen a new record set for foreclosure activity," noted James J. Saccacio, CEO of RealtyTrac.

"Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we're seeing significant growth in both the initial notices of default and in the bank repossessions."

California, Florida, Arizona and Nevada posted the top foreclosure activity totals in the nation, accounting for nearly 57 percent of the nation's total. Texas ranked among the top ten at number six with 12,077 properties.

Spring Opens, Star Riverside Halts

AUSTIN (Austin American-Statesman) – The newest condominium project in downtown Austin will open its doors on Monday. Buyers will begin moving into the 42-story Spring tower at West Third and Bowie Streets.

Project developers say 55 percent of Spring's 248 units are under contract. Units range from $250,000 to $950,000.

Meanwhile, work has stopped temporarily on another condominium project, located at I-35 and East Riverside Dr. Constellation Property Group is halting work on Star Riverside for two to three months.

The development will be redesigned to include more lower-priced units in an effort to accommodate a changed market. Units in the revised project could range from $375,000 to $850,000 — compared with a top price of $975,000 as of April.

Ad Valorem Tax Seminar Taking Registrations

COLLEGE STATION (Real Estate Center) – More than 600 attended last year, and it is not too late to sign up for the 23th Annual Legal Seminar on Ad Valorem Taxation.

A wealth of information awaits attendees to this year's seminar Aug. 27–28 at the Hyatt Regency Hotel in San Antonio.

Presented by the Real Estate Center in cooperation with the State Bar of Texas Property Tax Committee, the seminar covers a variety of legal topics influencing ad valorem taxation.

For details, including a downloadable brochure, visit the Center's website.

NAR to DFW: Housing Looking Up

DALLAS-FORT WORTH (Dallas Morning News) – Area home sales were essentially flat in the second quarter following a long period of declines, according to the National Association of Realtors (NAR).

The second-quarter survey indicated that North Texas experienced a 0.2 percent decrease from a year earlier in the median price of homes. Nationwide, median prices fell by 15.6 percent.

DFW's second-quarter drop represented the smallest in over a year, welcome news after a nearly 5 percent drop in the first quarter.

The NAR report has supported recent housing data pointing to a flattening of the North Texas home market.

"We are beginning to see some more positive trends in the housing market, which is great news," said David Brown, head of the Dallas Metrostudy office. "Although it is a short trend, both the new home and resale closings during the last quarter suggest the market is bottoming out in sales volume."

Hillwood Expands at Heritage

FORT WORTH (Dallas Business Journal) – Hillwood Residential broke ground yesterday on 78 lots in the Bluffs section of its 2,300-acre Heritage development.

The Bluffs addition — where houses will start at $280,000 — marks the next phase of the Heritage master-planned community in north Fort Worth.

Heritage, opened in 2001, is currently home to about 7,000 residents in 2,600 houses. Work began on 232 houses last year with an average sale price of $230,000.

The community includes ten miles of hiking and biking trails and 100 acres of parks.

Toll Brothers and Standard Pacific will be responsible for building the Bluffs phase.

Houstonians Pad Pockets With Raises

HOUSTON (Houston Chronicle) – Houstonians pocketed bigger raises than those in most other parts of the U.S., according to the U.S. Bureau of Labor Statistics.

Workers in Harris, Montgomery, Fort Bend and Galveston Counties (along with eight surrounding counties) received an average 2.1 percent wage increase for the year ending June 2009.

Nationwide, American workers saw an average increase of 1.6 percent. Boston workers saw the biggest increase at 3.6 percent. Windy City workers saw the lowest raise, netting only an additional 0.2 percent.

It was Houston's relative prosperity and 8 percent unemployment rate that contributed to the area's pay raises, according to Joel Wagher with Workforce Solutions.

Vizcaya Joins Rocky Creek Ranch

AUSTIN (Austin American-Statesman) – Yet another planned residential development has been posted for foreclosure, marking the second major land foreclosure in Central Texas in just over a month.

Haas & Haynie had plans for a $120 million Vizcaya development off Bee Creek Rd. near Pace Bend Park. On Monday, the Covert family listed it for the Sept. 1 foreclosure auction after the developer defaulted on a $20.4 million loan.

The 1,050-acre property, former home of the Covert family ranch, is one of the last large undeveloped tracts with water access to Lake Travis. It was to include an 18-hole Reese Jones-designed golf course.

Project developers planned for 450 to 500 custom homes to be built over ten years.

The Vizcaya posting follows the takeover of 468-acre Rocky Creek Ranch last month.

From Prison to Museum

SUGAR LAND (Houston Business Journal) – The Houston Museum of Natural Science has now ventured out of Houston, set to open a new museum on Oct. 3.

The new location is 13019 University Blvd., at the corner of University and New Territory Blvd., in a former prison building within the Telfair community in Sugar Land.

Four permanent galleries will be housed within the 43,000-sf building, reflecting the most popular exhibit areas of the main museum campus. The 5.5 acres surrounding the museum will play host to a variety of traveling exhibitions.

Permanent exhibitions will include Science On a Sphere and the Hall of Earth Science.

Speed FC Expands Lease

DALLAS (globest.com) – Speed FC has doubled its space at the ProLogis Northgate Distribution Center after signing a lease to occupy all of Building 18.

The company signed a long-term lease more than a year ago to take 267,000 sf in the 535,000-sf building at 10300 Sanden Dr.

Expansion is set for Sept 1.

Northgate Distribution Center Building 18 was completed in January 2008, and Speed FC signed its first lease in May 2008. The asking rate was $3.30 per sf, net.

Dan Lawson represented the tenant while the landlord was represented internally by Jacob Milligan.

Joeris Finishes Work in Boerne

BOERNE (San Antonio Express-News) – Joeris General Contracting is finishing up work on a $22 million facelift at Boerne High School.

With classes slated to resume on Aug. 24, 850 students will return to 97,000 sf of new facilities — including a cafeteria, library, science wing, dance studio and band hall — and 85,000 sf of renovated space.

Located off FM 474, the high school was closed last fall as Joeris tore down 70 percent of the campus and rebuilt it, according to spokesman John Casstevens. It now has a capacity of 1,250.

The completion of the Boerne High School project ends four years of school construction by Joeris in Boerne, funded by $100 million in bonds approved in 2004. The biggest component was the $45 million Boerne-Samuel V. Champion High school, which opened last year.

Class-A Office Buoys Office Market

HOUSTON (Colliers International) – The local office market recorded stronger leasing and sales activity in second quarter 2009 compared to the first quarter, even as year-over-year vacancy increases and negative net absorption prevailed citywide, according to Colliers International.

Houston is experiencing a widening gap between Class-A and -B office properties at midyear 2009, with the latter bearing the brunt of the slowing economic conditions.

In the Central Business District, Class-A office vacancy remains in the single digits while Class-B vacancy has reached over 20 percent.

Likewise, year-to-date 1.1 million sf of negative absorption has plagued suburban Class-B properties, compared with 482,881 sf of positive net absorption for suburban Class-A properties.

Zero Short-Term Rates Going Nowhere

WASHINGTON, D.C. (New York Times) – It was the most optimistic assesssment of the economy in more than a year. Still, the term the Federal Reserve used Wednesday to describe the good news was "leveling out."

The Fed said it will keeep its benchmark short-term interest rate at virtually zero for some time. At the same time, it announced it would end the program to buy $300 billion in Treasury bonds by the end of October.

"The Fed’s move to keep rates unchanged was no surprise," said Mark Dotzour, Real Estate Center chief economist.

"The federal government appears to have decided to postpone the recognition of the losses that banks have incurred. It appears that we are now going to amortize those losses over a period of years, and keep interest rates low to allow banks to earn their way out of the losses they have incurred. I would expect rates to stay near zero easily through the end of this year."