Ritch's Austin Blog

Fannie Mae and Freddie Mac will halt foreclosures of occupied dwellings from November 26 to January 9 so that servicers have more time to develop workout plans for struggling borrowers. The plan could buy extra time for approximately 16,000 borrowers to try to save their homes, according to the mortgage giants, but some experts worry that it only will delay inevitable foreclosures. Meanwhile, the companies will commence a streamlined modification program on December 15, under which hundreds of thousands of borrowers shelling out over 38 percent of earnings on mortgage payments could see their payments lowered by lenders.

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Now is a good time to review whether or not this could apply to you.  Please give me a call to discuss your situation and I will put you in touch with a lender that may be able to help.

Ritch

I just added a search feature on my site to get you connected with foreclosures.  This is a great service and something that may be of interest to you.

surf, surf - surf away and let me know how I can help you meet your real estate goals.

Ritch

Ben Stein How Not to Ruin Your Life

http://finance.yahoo.com/expert/article/yourlife/115733

This is my most serious column yet. So let's get to it.

I get a fair amount of mail about the economy. Lately, much of it asks the same questions:

* What the heck happened to our economy so suddenly and powerfully that it caused the immense uproar and fear and stock market crashes we have had lately?

* Why didn't I, Ben Stein, famous so-called braino, get what was happening and why did I remain optimistic so long?

* What is the future going to bring?

First of all, obviously, I don't know what the future will bring. If I knew the future, I would be the richest man on the planet very soon and I assure you I am very far from that.

But I now see what has happened and I can explain that, and it might give a tiny bit of insight into what will happen in the future.

Start around 1995. Groups involved with civil rights issues and activities for poor people began to complain that poor people and especially non-white poor people got mortgages much less often than white well to do people. Many economists, including me, explained that it was not at all surprising that poorer, less credit worthy people were often turned down for credit. That's how credit is supposed to work: you lend to people who will pay you back.

But the advocates for poor and black people had immense political clout. Under President Bill Clinton, they passed legislation that called on banks to be required to lend to non credit worthy borrowers. The laws, including the Community Reinvestment Act, the CRA, required two large government sponsored enterprises, Fannie Mae and Freddie Mac, to buy those lower quality mortgages from the banks, guarantee them, and sell them to the public. These were bundled into immense pools of subprime mortgages as they were called, and sold all over the world.

Soon, the private sector got into the act in a vast way. They also went to banks and bought their subprime loans, packaged them, and sold them as Collateralized Mortgage Obligations all over the world.

Supposedly, the subprime collateralized mortgage obligations (CMOs) were sliced up in such a way that buyers could have a very high likelihood that they would be repaid even if many of the mortgages in the portfolio defaulted. This assumption was based on a misunderstanding of poor quality credit that had been popularized during the era of the junk bond investment powerhouse, Drexel Burnham Lambert.

As it happened, these low quality mortgage bonds were recognized as highly likely to have real problems very soon after they started to be issued by private banks in the billions. The people who recognized the high likelihood of defaults were able to profit from that likelihood:

First, they could sell the mortgage securities short, a straightforward wager that has long been available.

Second, they could buy credit default swaps (CDS) from financial entities. These were essentially a side bet that anyone could make about a certain mortgage bond (or any other kind of security). It paid off fantastically if the bond went into default or was close to default. The people who sold these CDS were banks and insurers, especially Merrill Lynch and A.I.G., that believed the mortgage bonds would not default and therefore charged very little to the other side, the counterparty, to make the bet.

Things went along well for everyone on the long side for several years as the housing market boomed. Even if borrowers could not repay their mortgages, they could refinance the mortgages for more money than was owed on the original mortgage, pay off the first mortgage and live happily in their new home. The mortgage in question in the bond would - again-- be paid off and the bond would continue happily in its owners hands.

Then, the housing market started to stabilize and soon fall, as housing prices do. They move in cycles, although around a rising mean, as we economists say.

Now, when the subprime mortgage holder could not pay off his mortgage, he could not refinance. Instead, he had to default. When a lot of these mortgages defaulted, the bonds into which they had been lumped declined in value.

So far, I, your humble servant, followed the deal just fine. It was extremely similar to the collapse of the Drexel Burnham Lambert junk bond empire. This had caused barely a ripple in the national economy when it fell apart in the early 1990's. I assumed that the same would happen with junk mortgages. There would be some failed banks and insurers, but the Federal Reserve, the Federal Deposit Insurance Corporation, and the Treasury could make all of those losses good. The total amount of subprime mortgage bonds was large but not compared with bank capital or the regenerative powers of the Fed.

So, I assumed, and wrote, things would be fine.

Where I missed the boat was not realizing how large were the CDS based on the junk mortgage bonds. They were not only large, but absolutely staggeringly large. Where the junk mortgage bonds were in the hundreds of billions, the CDS were in the tens of TRILLIONS. If the sellers of the CDS had to pay off in large part, the liability greatly exceeded the total bank capital in the United States and maybe in the world. That is, the derivatives based upon the junk mortgage bonds could be - and were - not in any way limited to the size of the mortgage bonds themselves, and this I did not know until a few months ago.

It is this liability that swamped the banks, investment banks, and insurers. It is the CDS liability that broke AIG and Lehman.

When I realized the extent of this problem, I wrongly thought the federal government would step in and in some way rescue everyone who had sold CDS. They did, except they ‘forgot' to rescue Lehman. Lehman was so large that when it failed, it was like a torpedo striking an ocean liner below the water line. A gaping hole was left in the whole world finance system.

Bankers panicked. If Lehman could fail, then anyone could fail. In that case, the banks that were still solvent figured they had better hoard their assets and stop making loans. This led to the ongoing credit freeze. This led to a rapidly gathering economic downturn and a drastic fall in prices of all kinds of securities, real estate and commodities. It also led to a severe credit squeeze on hedge funds, which saw credit dry up and their asset prices fall suddenly, and were forced to sell stocks and other assets on a dramatic scale, leading to still greater falls in securities prices, and the worldwide panic that it still unfolding.

In turn, this led to huge infusions of liquidity into the banks of the world, the semi-nationalization of the banks of the United States and of many other nations to shore them up, thaw credit, and bolster world markets and economies. These were drastic steps for drastic times, all generated by derivatives. Warren Buffett had warned us against them, and he was dead right, as always.

Now, these acts should help. But it might not do the job all by itself. Major lender solvency issues remain. If housing prices keep falling, more mortgage bonds will default and the liability attached to the credit default swaps based upon them will still be in the trillions or even tens of trillions.
I might well be too alarmist here, but I think the only rational possibility is for the federal government or the New York State government (because most of the CDS were entered into in New York) to simply annul the credit default swaps as void as being against public policy. After all, there was no insurable interest in most cases, which tends to void insurance contracts, which is what a CDS is.

Once that happens, the banks can breathe freely again, take risks, and the economy can revive. Or, perhaps the housing market will stabilize, mortgage based bonds will rally, and the CDS will be out of the money and will not be a threat to the lenders. But something has got to happen to defuse these deadly derivatives.

In any event, we now know a lot we did not know before. Credit default swaps are way too dangerous. Derivatives generally are dangerous. There is much that Ben Stein does not know. I hope this explains some of how we got to this precarious place, I apologize for not seeing it sooner. But I am still optimistic that the government will save us from the CDS, and we will go on to renewed prosperity. In other words, I am still buying.

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Always good to understand what happened.  More important to know that we can and will move through this.

Ritch

The economic storm sweeping the country has left Americans with few places to hide.

10 home-buying tips for uneasy times

Mortgages are harder to obtain today, and deals require more money down, but it's still a good time for buyers. Here's how to get the home you want at the best price.

By David Koeppel, MSN Money

Nervous about buying a home?

You should be. Your home is probably the single biggest investment you'll make in your lifetime. With an unpredictable economy, a mortgage crisis and record foreclosures, the commitment to buy can be downright overwhelming.

In recent years, lax lending standards eliminated some of the obstacles, but now lenders are once again getting picky.

The good news is that for those who qualify for a mortgage -- with a steady income, strong credit and a modicum of savings -- this is actually a good time to purchase a home. Mortgage rates are low, and home prices have been declining in most parts of the United States. Buying my first home

To help you navigate the uncertainties, especially if you're entering the market for the first time, here are 10 tips for buying a house:

1. Find out how much you can afford, and stay within your budget.

Don't overreach. Forget the McMansion on the hill if it's beyond your means. Focus on finding something that will offer affordable monthly payments and a debt load you can handle. Calculator: How much can I afford?

To make sure you fully understand and remain within your boundaries, consider a preapproved mortgage. Many reputable lenders offer them. The preapproval process tells you exactly what you will have to pay. Preapproval also provides some extra peace of mind, ensuring that when the time comes, you'll have financing in place. That can be important to real-estate agents and sellers as well as to buyers.

If you're planning to buy, your household budget should allow for hefty savings toward a down payment, unless you're expecting a generous gift from a family member. The days when first-time buyers could purchase a home with a down payment of less than 10% are gone. Lenders are now requiring buyers to put down a minimum of 10% and sometimes up to 20% to 25%.

"First-time buyers must come to the table with some dollars," says Ilyce Glink, the author of "100 Questions Every First-Time Home Buyer Should Ask" and "100 Questions Every Home Seller Should Ask." "You need more income, a better credit score and to think about how much debt you can carry. It has become a more difficult process." Get your credit score up

2. Shop around for the right agent.

Real-estate agents operate on different internal clocks. One may be inclined to call you every day, while another may want to call every few weeks. Ask questions about the agent's approach and try to find one well-suited to your situation.

Ideally, the agent you choose will do a lot of business in your neighborhood of choice and will have been in the business for years, gathering plenty of useful information about lending options, title searches and useful ways to compare properties. Try to avoid real-estate agents who are doing on-the-job training.

"Finding a Realtor is a lot like a short-term marriage," Glink says. "Shop around; look for the Realtor who is working the most. What's their level of experience? Are they a good fit with you personality-wise?"

3. Do your homework.

A diligent and dedicated agent by your side is not enough. Buyers need to research their potential new home and neighborhood as thoroughly as possible. Thankfully, a lot of that work can be done from your bedroom or office computer.

The National Association of Realtors says 84% of buyers use the Internet to help them find a home. Do not be part of that other 16%. You'll find the Net is packed with resources about cities, neighborhoods, crime statistics and school districts. Local bloggers can give today's homebuyers insight into everything from pricing trends to who's feuding with a neighbor down the block.

"The Internet is a terrific tool. When I last looked for a house in 1992, that kind of information was nonexistent," says Elliot Goldstein, 46, who, with his wife, Stacey, 45, and their two children, is planning to move to Hoboken, N.J. "I get virtual house tours, multiple listing services . . . everything I need to find out about Hoboken I can find out online."

4. Visit the neighborhood.

Rich as the information on the Internet is, it's no substitute for showing up. Experts suggest repeated visits to your neighborhood of choice, so you can check out homes for sale and attend open houses. Walk around. Shoot the breeze with the neighbors. Visit the community several times at different times of day.

"Walk it, smell it, hear it," says Dennis Torres, director of real-estate operations at Pepperdine University. "At 3 p.m., maybe your lawn will be overrun with kids getting off school. At 10 p.m., there could be a club that's only open at night playing loud music."

5. Don't be afraid to haggle.

How low can you go? Real-estate agents say it all depends on the pressures facing the individual seller. Some of those pressures are related to particular locations -- towns go up and down in appeal -- and some have to do with the individual's situation. But broadly speaking, if ever there was a buyer's market, this it.

"In a strong market, a seller would laugh off a lowball bid," Glink says. "Now you may be able to bid 20% less than you did nine or 12 months ago. Sellers will entertain lowball bids if they're truly desperate to get on with their lives."

Or at least negotiate a few additional amenities. That was the case for first-time homebuyer Jenna Smith, 23, whose six months of near-constant house hunting in suburban Atlanta taught her what she could and couldn't negotiate.

Smith wound up buying into a new suburban development in January. But first she asked the builder to install hardwood floors instead of carpeting. She also wanted a new refrigerator and microwave. The builder eventually agreed, and Smith had her home -- with hardwood floors and appliances -- for $197,000.

6. Buying foreclosed properties? Proceed with caution.

This gets a bit tricky. Real-estate experts are talking a lot about foreclosed properties. Many suggest that, under the right circumstances, exploitation of a foreclosure can give a buyer a nice home at a very nice price. Map: Foreclosures across the country

Foreclosure filings and bank repossessions are up dramatically, according to RealtyTrac, a California company that monitors homes in stages of foreclosure. So much so that some agents and lenders have been organizing weekend bus tours (one charges passengers $97 a ride) to showcase foreclosed properties in hard-hit cities such as Stockton, Calif., Chicago and New Haven, Conn. The tours have been popular both with shoppers searching for homes and with investors interested in buying multiple properties. Check out a foreclosure bus tour

Though buying a foreclosed property can potentially provide big savings, it can also present a lot of problems that may not be apparent. Pepperdine's Torres recommends that buyers avoid homes with title uncertainties and consider only properties that have been officially foreclosed on and deeded back to the foreclosing bank.

7. Find the right lender and mortgage.

Many unscrupulous subprime lenders have been shut down. That doesn't mean there aren't still some shady characters around. Don't be tempted to deal with them. Find a lender with roots in the community and a record of integrity that offers reasonable rates.

It pays to do some comparison shopping. Real-estate agents can be a good source. A good agent should be able to recommend reputable area lenders and help a buyer compare types of loans.

"Mortgage rates are very near historic lows, and inventory is high," says Stephanie Singer, a spokeswoman for the National Association of Realtors.

Thorough research of loan offerings will pay off. Smith, the recent buyer from the Atlanta area, landed a 5.875%, 30-year fixed-rate mortgage from her employer, Merrill Lynch. Merrill required her to come up with a 20% down payment on the $197,000 home, or $39,400. Her monthly mortgage payments are about $1,100.

8. A good home inspector is hard to find. But find one.

In recessionary times, the pride of homeownership tends to suffer. It's not that people don't want to maintain their homes; it's that other priorities intervene. With competing pressures coming from credit card bills, skyrocketing gas prices and rising grocery bills, that new paint job on the house may not make it to the top of the list.

A good inspector can help you spot problems that may result from neglect. Bringing in a home inspector is relatively cheap (often from $200 to $300), but according to Torres, it's the least buyers should do to make sure they're purchasing a home in reasonably good shape. Torres recommends buyers accompany inspectors when they examine a home and look out for anything suspicious. Don't be afraid to ask plenty of questions, he adds.

"Ask what every crack, what every stain might be," Torres says. "Look beyond the cosmetic, the paint, the carpet and the flowers. Check under the steps, check under the eaves."

9. Buy for the long run.

Home buying should be viewed as a long-term investment. Don't expect the kind of price appreciation that occurred in the early 2000s. Buy a home you can live in happily for a good many years, if possible. A long-term commitment will pay dividends in peace of mind.

"A home is about putting down roots," author Glink says. "It's not about fixing or flipping or making a mint no matter what some infomercial tells you."

10. Don't time the market. Do take your time.

When will market prices hit rock-bottom? No one knows for sure, so waiting to get in at the lowest possible price isn't recommended. Still, experts predict it will remain a buyer's market for the foreseeable future, so don't rush.

Goldstein and his wife will be moving into their new three-story row house in Hoboken for about $1.2 million at the end of August, allowing his two children to spend a final summer at the family home in Closter, N.J. If negotiations hadn't gone his way, Goldstein was prepared to walk away, he said. That's the way to do it. "Don't let other people talk you into something you don't want," says buyer Smith. "It's your house; they don't have to live in it."

Published July 10, 2008

Real Estate
Best Cities To Buy A Home
Maurna Desmond, 07.14.08, 6:00 PM ET

Houston, we don't have a housing problem.

The city's $152,500 median home sale price is up 6.6% from 2005. It boasts a low vacancy rate and an oil-rich economy. Throw in a bubbling entrepreneurial tech scene, and you've got four factors that put Houston on the top of our list of best places to buy a home.

San Francisco, Charlotte, N.C., Jacksonville, Fla., and St. Louis, Mo., are other areas buyers can feel safe investing in.

In Depth: Best Cities To Buy A Home

We examined the country's 40 largest metropolitan areas and looked at where home prices have appreciated over the last two years. We also measured tightening vacancy rates. These metrics indicate places where buyers are investing in homes in order to live, not just make a quick buck, and where the housing market is relatively solid. We culled our vacancy and home price information from the U.S. Census Bureau and the National Association of Realtors.

The average vacancy rate across the major metro areas was 2.88%, and the average percent appreciation was just .07% over the last two years.

With lending tight, we also factored in the spread between a monthly rent check and a mortgage payment at the median level (assuming that the down payment was 10% and the fixed interest rate is 6.25%). Encino, Calif.-based real estate brokerage firm Marcus & Millichap provided stats on median monthly rents.

Cities where a mortgage payment was close to, or less than, the average rent were given a higher score. For instance, in Cleveland the average rent is $702, and the average mortgage is $565.78. With a lower monthly payment, tax incentives and the opportunity to build equity, it makes sense to buy here.

In stark contrast, San Jose, Calif., has an average monthly mortgage payment of $4,322.33, versus an average rent of $1,612.

Lots To Like In The Lone-Star State
Texas dominated our lineup of mortgage-worthy areas. Thanks to a business-friendly tax environment, many large corporations call the Lone Star State home, which creates jobs and tax revenue.

The University of Texas campus provides young blood and research-related jobs to No. 2 city Austin. This state capitol is a hip area on the rise. The vacancy rate has fallen by 37.5% in the last 24 months to just 1.5%, despite a lot of building in recent years. And buying isn't much more expensive than renting. An average mortgage payment is $1,022.40, and average rent hits $767.

San Antonio, No. 5, and Dallas, No. 6, made the list thanks to affordable housing, which continues to appreciate. In both cities, the median home price hovers around $150,000, and a monthly mortgage payment of around $800 is pretty close to what one pays in rent. If you can pony up the down payment, these are great areas to live.

Coast-to-Coast Sweet Spots
Philadelphia landed at No. 4, with homes appreciating by 9.1% in the last two years and vacancy rates staying low at 1.9%. This university town, which plays host to the University of Pennsylvania, certainly has its charm. A city on the rise with a tempting cost of living, Philly is a great place to buy a new home.

The South made a nice showing with Charlotte, N.C., Jacksonville, Flo., and Atlanta, Ga., making our list. Charlotte and Jacksonville have surged in price by 12.9% and 8%, respectively. Atlanta has seen huge amounts of growth and remains reasonable with a median home price of $172,000.

San Francisco, this year's best city for young professionals, came in at a respectable No. 8. While housing certainly isn't cheap in the City by the Bay, it is definitely in demand and continues to appreciate. For a buyer, San Francisco offers a culturally rich and beautiful city that is chock full of opportunity.

1. Houston, Texas

Houston, we don't have a problem. Well known as an energy industry hub, this growing metro area recently made Forbes.com's Top 10 Up-And-Coming Tech Cities thanks to the Houston Technology Center and bubbling entrepreneurial tech scene. With home prices on the rise by 6.6% and vacant homes disappearing by 11.3% in the last two years, this is one area where buyers can feel safe jumping in.

2. Austin, Texas

Here, a whopping 98.5% of homes are filled, and that small sliver of vacancy is thinning. Home prices, meanwhile, have surged from $163,800 in 2005, to $183,700 in 2007.

A trendy art and music scene--the city plays host to music festivals South by Southwest and Austin City Limits--makes it an affordable place to live for any culture vulture.

3. St. Louis, Mo.

St. Louis is a great place to settle because it's not overbuilt and is reasonably priced relative to income. Thanks to the attractive cost of living, many large corporations--including brewing behemoth Anheuser-Busch and financial heavies Stifel Nicolaus and Edward Jones--call St. Louis home. With a family friendly culture, and a steadily appreciating median home price of $145,400, the "Gateway to the West" is a great place to buy a home.

4. Philadelphia, Pa.

The City of Brotherly Love has a tight housing market--just 1.9% vacancy--reflecting the lure of a charming and historic American city. Steeped in tradition, this city is priced well, with a median home price of $234,900, up from $215,000 in 2005. With abundant cultural outlets, including universities, museums and theaters, Philly is a great place to call home.

5. San Antonio, Texas

This Latin-flavored American city is growing fast thanks to bustling businesses and a low cost of living. Having major corporations like IBM certainly helps attract residents who bring brains and tax revenue to the city. With a median home price of $150,900, up from $133,900 in 2005, it's an affordable place relative to the rest of the country. Home to professional basketball's Spurs, this town is packed--just 2.4% vacancy--and full of Texas pride.

6. Dallas, Texas

Shiny skyscrapers and charming suburbs make Dallas a tempting place to sign mortgage papers. With appreciating median home prices in the $150,000 territory, just about anyone can get in. And with just 2.5% of homes vacant, it appears they are. While the city has a reputation for cowboy boots and big trucks, Dallas is a sophisticated metropolis that rivals any major U.S. city in terms of culture and cuisine.

7. Charlotte, N.C.

Don't be fooled by the sweet Southern accent; Charlotte is the second-largest banking capital in the U.S., behind New York City. With the University of North Carolina nearby and tons of cultural attractions, this is a city that won't get tired. The market is reflecting what residents already know: Median home prices hopped to $205,400 in 2007, from $180,900 in 2005. Charlotte's vacancy rate is just a bit above the national average at 3.1%, reflecting a lot of space that is likely to get snapped up.

8. San Francisco, Calif.

The City by the Bay may be pricey, but it's one of a kind. If high culture, good food and great architectural bones are to your taste--this is the town for you. If a median home price of $805,000--up $52,800 from 2005--and cold, damp weather all year long aren't, you might try somewhere else. This city is rich in history, human capital and fun. That's part of why it topped our 2008 list of Best Cities For Young Urban Professionals.

9. Jacksonville, Fla.

Since 2000, Jacksonville's population has grown an impressive 8%. Meanwhile, median home prices have climbed 14% in the last 24 months to $189,200. Along with its other virtues, sunshine-rich Jacksonville came in at No. 3 on our 2008 Cleanest Cities list thanks to fresh air and clean water.

10. Atlanta, Ga.

A city that constantly tops our lists of best places for just about anything, Atlanta is a great place to buy a home. With median properties in the $170,000 neighborhood, this booming city is affordable and packed with things to do. Ranked No. 6 on the 2008 Best Places For Business list, Atlanta has jobs and a competitive cost of living. This means taking out a mortgage is a safe long-term decision.

West Fifth Street development transforming a gateway into downtown

By Shonda Novak
AMERICAN-STATESMAN STAFF
Sunday, July 20, 2008

West Fifth Street, one of the main gateways into downtown Austin, is undergoing a revival.

Not that many years ago, the stretch of West Fifth between MoPac (Loop 1) and Lamar boulevards was filled mostly with car lots, warehouses and a handful of restaurants. By the end of next year, it will have more than 300 apartments, new stores and the first office project in the downtown area since the Frost Bank Tower opened in 2004.

The street's funkier landmarks, including the Mean-Eyed Cat bar, will remain. Other longtime businesses are getting makeovers, including Castle Hill Cafe, which will reopen soon as Corazon, with an interior Mexican menu.

Before Whole Foods Market opened its flagship store at Lamar and Sixth Street, there wasn't much energy on the western edge of downtown. But the store has been a catalyst for development nearby.

And the activity on West Fifth is a natural extension of the changes going on downtown, where high-rise apartment and condo towers are filling the skyline.

"Fifth Street is really the last opportunity for commercial development on a major roadway into downtown. It's very, very valuable because there's just a finite amount of it left, and people figured it out," said developer Perry Lorenz, a co-owner of Castle Hill and the restaurant that will succeed it.

"Everybody that works in those big buildings downtown drives right down West Fifth every day on the way to work," he said.

His assertion is bolstered by figures from the Weitzman Group, a commercial real estate brokerage, which show that as many as 48,000 cars empty from MoPac onto West Fifth each day between 7 and 9 a.m.

That visibility is invaluable for retailers, who are gravitating to the area because they can capture potential customers not only from downtown, but also from workers who drive in each day from North and South Austin and the more affluent western suburbs.

Michele Gary, vice president of Weitzman's retail division in Austin, said she already has lined up tenants for more than half of the retail space in the 5th Street Commons. Gables Residential is building the project, with 150 apartments and 38,000 square feet of retail space, at West Fifth and Campbell streets.

"The interest has really been high," she said of the project, which is scheduled to open in December. And the prime location is allowing developers to get base rents of $32 a square foot — close to downtown levels.

Studio apartments will start at $1,300 a month and two-bedroom units at $1,850, said Jennifer Wiebrand, a development associate with Atlanta-based Gables Residential.

A short distance away, on the north side of West Fifth, Gables and Capital City Partners are building a project called Pressler. It will have 168 apartments and 25,000 square feet of retail space, said Joe Lamy, principal with Capital City.

It will open in March with apartment rents comparable to those at 5th Street Commons, Wiebrand said.

Lamy said the changes along West Fifth are "just the next logical step in Austin's growth. Austin's growing, and it had to grow in all the other areas before this became the next."

Capital City Partners is joining with Sage Land Co., owned by Lamy's father, Pete, to build Capstar at Compass Plaza, an office building at the western end of Fifth Street. It will be across the street from Hartland Plaza, which Sage bought in the early 1990s, and connected by the bridge that now crosses above Fifth Street.

The new building, 115,000 square feet and eight stories, was permitted in the 1980s, exempting it from later limits on building heights.

More than 90 percent is pre-leased to tenants, including several companies owned by Austin entrepreneur Steve Hicks. They include Capstar Investment Partners LP, digital music company DMX Inc., Harden Healthcare and Girling Healthcare.

At West Fifth and Lamar, Schlosser Development Corp. plans an office and retail project that will include West Elm, a contemporary furniture and home accessories store. The 12,000-square-foot store is scheduled to open next summer.

Brad Schlosser said more tenant announcements are expected soon. His company, which owns four blocks in the area, has been the principal player in development at downtown's western edge.

Cathe Dailey, co-owner of Castle Hill, has seen the changing of West Fifth firsthand.

Castle Hill was at 11th Street and Lamar for five years before moving in into a larger location at West Fifth and Baylor Street in 1991.

At that time, the location "was considered the edge of downtown, kind of a dead zone, a no man's land surrounded by car lots," Dailey recalls.

But the site came with 70 parking spaces, a prize for a restaurant.

"Certainly, I thought that eventually downtown would move in our direction," she said.

Dailey said Whole Foods has been a huge catalyst in the transformation of downtown's western edge.

"Whole Foods is like the epicenter, and we're in their orbit," she said. "If we don't capitalize on that, we're missing the mark."

Dailey said that although Castle Hill was perceived to be a good bargain, Corazon's more affordable menu and casual dining atmosphere will be more appealing to downtown's growing residential population,

The Mean-Eyed Cat, housed in a century-old building, will be overshadowed by its new neighbor, 5th Street Commons. Gables acquired the bar site along with the site of its new project.

Bar owner Chris Marsh said he knew development would eventually come his way and credits Gables for being willing to preserve his business as part of its plans.

"I think they were sensitive from the beginning about how to keep me open and how I was to be incorporated into their plans," he said.

Marsh said he hopes the development along West Fifth will benefit the longtime businesses, such as the El Arroyo restaurant and Donn's Depot bar across the street.

"I think it will be a good mix," he said.

Lorenz said the Tips Iron & Steel Co., just south of Castle Hill, remains one of the most interesting development opportunities in the West Fifth area.

In 2003, Tips President Steve Wimberly envisioned a preliminary long-range development plan for the 5.3-acre site that, under one scenario, was to include up to half a million square feet of locally owned shops, restaurants and businesses, and possibly a hotel. Nothing materialized, and Wimberly did not return several calls for this article.

Lorenz has called the Tips site "a diamond in the rough."

With views of Lady Bird Lake, he said, many developers "have made a run at it," but no deals have been struck. Lorenz thinks the site would be prime for an upscale mixed-use project similar to the Domain in North Austin.

Ultimately, Dailey foresees the West Fifth strip shaping up to become a "self-sufficient living space" with an "inner-city village feel," with people walking about, or on their bikes or scooters, connecting with their urban world.

Said Dailey: "We're not destroying a neighborhood — we're creating a neighborhood."

snovak@statesman.com; 445-3856

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Interesting read on continued development in Austin.

Ritch

Check out the following link:

http://www.ci.austin.tx.us/ahfc/first_dpa.htm

This site gives information about the City of Austin's program for first time home buyers with down payment assistance.

Another option to consider when looking at buying your first home.

Let me know if you have any questions.

Ritch

NEW LIFE FOR OLD WATER TREATMENT PLANT

AUSTIN (KXAN-TV, globest.com) – Trammell Crow Co., USAA Real Estate Co. and Constructive Ventures Inc. will turn the Green Water Treatment Plant in downtown Austin into a $700 million mixed-use development.

The partnership plans to fill the six-acre site with 2.6 million sf of condos, apartments, offices, retail space and public gathering space. The project will also include affordable housing and a 250-unit senior assisted-living facility.

Tentatively called Project Green, it will cover several city blocks, including Shoal Creek, Caesar Chavez, Nueces and 3rd streets, and West Ave.

The city will start the decommission process on the plant next year with hopes of construction beginning in 2010.

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This will be a tremendous addition to the developing downtown scape.  It is very close to Lady Bird Lake.  Check it out....

Have a great weekend,

Ritch

Austin American Statesman - online - June 09, 2008:

Texans must restore historic mansion

By The Editorial Board | Monday, June 9, 2008, 04:32 PM

Former Gov. Mark White, among others, stood across the street from his onetime home Sunday afternoon and mourned the fire damage to the Governor’s Mansion. White said he particularly hoped there wasn’t much too much damage to the front parlor. In that parlor in 1861, he said, Gov. Sam Houston is thought to have quietly burned a telegram sent to him by President Lincoln, offering him military support to keep Texas in the Union. Houston wouldn’t take the help, but he opposed secession and was forced out of office.

That’s the kind of memory that makes the Governor’s Mansion so important. It is a bit easier to imagine the world of our founders and ancestors when we can see and touch the same buildings, stand in the same rooms, even enjoy the same furnishings that they did. This is a building that opened in 1856, just 20 years after the Alamo fell and just five years before the Civil War.

Even as smoke was still drifting from the ashes and charred wood on Sunday, state officials began pledging to restore the mansion, which was already under renovation. Fortunately, because of the renovation, all of the building’s furnishings, paintings, silverware, personal belongings and even such features as the original glass in the windows had been removed and stored. Gov. Rick and Anita Perry are living elsewhere during the renovation.

The scale of the renovation, though, has been multiplied several times because of the destruction wrought by the fire. What was supposed to be an 18-month restoration project costing at least $7 million now surely will take longer and many millions more.

As for paying for the restoration, this will be a project worthy of full funding by the people of Texas, either directly through legislative appropriations (or a state bond issue) or some kind of public fund-raising campaign - or a combination. This is a home the people of Texas built for the governors they elect and the people should pay for its restoration, just as they paid for most of the reconstruction and expansion of the Capitol after a fire almost destroyed it in 1983.

What we should not hear is state leaders bemoaning a tight budget and hitting up the business lobby for heavy donations to rehabilitate the mansion. Nor should the state turn to corporate sponsors to pay for the project. With all due respect to the state’s homebuilders and corporate good citizens, the Governor’s Mansion should not be brought to us by Bob Perry Homes or Dell Inc.

Texans also need to know just how this fire could happen, particularly because officials were so certain so quickly that arson was involved. Not only must be the arsonist be caught and punished, but the Texas Department of Public Safety must explain how that person was able to get past security.

For now, though, let’s be grateful the Governor’s Mansion was not destroyed, though heavily damaged, and no one was injured. And thanks, too, to the Austin Fire Department, which saved the mansion, just as it saved the Capitol in 1983.