May 5th, 2012

AUSTIN, TX — The Capitol City is quickly becoming “the city” to live in. Forbes.com ranked Austin as the “Fastest Growing City in America” for the second year in a row, partly because of a healthy job market.

That’s something Smith Scarborough knows all about. He was hired to work in Austin this past Friday, and now comes the hard part.

“Living in Houston right now. Job starts Wednesday, and I need to find a place in Austin,” a frantic Scarborough said Saturday afternoon.

He started his apartment hunt at 7:30 in the morning. Hours later, he turned to a austin real estate company for help. The manager of the company Ashley stated:

“It’s a lot of people in Austin who need to move. A lot of their rents are going up, so they’re still looking to try and stay in a certain price range if they’re moving. And then, of course, relocations are really high right now,” Ashley explained.

According to Austin Investor Interests LLC, Austin apartments are 95 percent full. In the first quarter of 2012, only 94 new apartment units were added, and that means higher rent. The average is $899 a month.

Ashley says rent is even higher the closer you move to downtown Austin. Still, it’s a price many are willing to pay for Austin.

“You can walk into a place that may not fit your budget, and there’s someone right after you who’s going to walk in and lease it,” said Ashley.

“It’s steep, but I mean, Austin is a cool city, so I feel like it’s to be expected,” said Scarborough.

There is good news. Several complexes are set to open next spring and summer. Ideally, that will bring rent prices down. Still it may just be a temporary fix.

“We don’t think it will affect us like it has in the past few years because we just don’t have enough new inventory,”  said. “Right now what we are getting we need just to be able to meet the demand.”

Renters will have to adjust to smaller spaces. Austin Investors Interests LLC is reporting that the new trend hitting the apartment market is smaller spaces. New complexes are building units 100 to 200 square feet smaller than units built in the 2000s, with more open floor plans. This fits more units into a high rise.

Still, Scarborough is keeping his fingers crossed that he’ll find a place in time, competing with thousands of others who are looking to call Austin home.

Posted by Michael Carpenter 512-522-6683

Austin American Statesman

May 4, 2012

After a slow start in January and February, momentum is building in downtown Austin’s condominium market, with 17 sales closing in March in the four newest projects, a survey shows.

Six sales were completed in January, and nine sales closed in February, according to a first-quarter report from Capitol Market Research, a real estate consulting firm that tracks downtown condo sales.

The survey covers sales in the Four Seasons Residences, the Austonian, the W Residences and the Spring condominiums. The projects, which have been open since 2009, were part of a downtown building boom in the past decade that added hundreds of residential units.

The 32 condo sales in the first quarter had a total value of nearly $30.5 million, with the average sale price at $952,800, according to Capitol Market Research. To date, 513 of the 732 units — 71 percent — in the four projects have sold.

Charles Heimsath, president of Capitol Market Research, said units are selling well, even at their lofty price points.

At the three “super luxury” projects — the W, Four Seasons and Austonian — average sales prices have consistently been in the range of $500 to $600 a square foot, which make them among the most expensive units in the Austin region, he said.

“And even so, they’re selling at a very rapid pace in contrast to some of the older, less expensive downtown projects,” which have units in the range of $300 to $400 a square foot.

The success of the new wave of luxury condos “is largely due to their wide appeal to a large range of buyer groups,” said Heimsath, whom developers hire to conduct market analyses for their planned projects. Those include out-of-state buyers purchasing a second home, “empty nesters” and affluent singles and couples.

At Spring, only five of the 247 units remain.

“More than 55 percent” of the 162 units at the Austonian have sold, said Terry Mitchell, strategic marketing director for the 56-story high-rise.

“The market is good,” Mitchell said. And with no new condo projects currently planned downtown, “prices have gone up as folks see scarcity,” Mitchell said.

At the Four Seasons, 108 of the 148 units — or 73 percent — have either sold or are under contract, according to the Four Seasons sales office.

Heimsath said there is a lack of financing for high-rise condos because of “the inherent risk and enormous supply that exists nationally.”

Larry Warshaw, a Spring developer, said the financial markets “are all chasing apartments now” as the rental market experiences high demand, rising rents and scarce new supply.

At the current sales pace, Warshaw estimates that downtown would deplete its supply of new condos in 10 to 12 months, “and then that’s all she wrote for several years at least” because of financing challenges and the time it takes to bring a project to completion.

“You’d have to pre-sell 40 or 50 percent of a tower before you could even start construction,” Warshaw said. “At the moment, I don’t think buyers are pre-buying after the recession. I wish they were, but I don’t think people are ready to buy pre-construction yet.”

Just south of downtown, about 100 units — about 40 percent — remain to be sold at Barton Place, a 270-unit condo complex that Warshaw co-developed behind Austin Java on Barton Springs Road. Prices start at $272,000 for one-bedroom units, $344,000 for two-bedrooms and $555,000 for three-bedrooms, said Mike Cummins, director of sales.

Cummins said he’s been selling residential units since 1978 and that there have been only a couple times when it has cost less to own than rent. He said some prospective buyers’ accountants “are yelling at them” to buy versus rent.

“That’s given us tremendous momentum right now,” Cummins said. “It’s the perfect storm for buying. (Mortgage) interest rates are low, rents are high, and compared to other cities, prices are downright reasonable.”

Danny Hamilton and his partner Paul Hilliard moved into a 2,000-square-foot condo on the 24th floor of the W project in March 2011.

Prices for the remaining units in the W range from $441,000 to upwards of $3.5 million.

Hamilton said he and Hilliard liked the design, the amenities and that the W shares a block with the new venue for “Austin City Limits.”

“We envisioned it being the hub of downtown activity, which it has become with ACL,” said Hamilton, who works in the financial services industry, while Hilliard is a vice president for Whole Foods Market Inc.

The services at the W “are just amazing,” Hamilton said. “I feel like I’m spoiled rotten. You get waited on hand and foot.”

Contact Shonda Novak at 
445-3856

First-quarter downtown condo closings*

Closings Value Square Footage Avg price/sq ft

January 6 $8,378,500 12,609 $664.49

February 9 $7,429,538 12,725 $583.85

March 17 $14,681,550 26,524 $553.52

Total 32 $30,489,588 51,858 $587.94

Average $952,800 1,621

Source: Capitol Market Research *Austonian, W Residences, Four Seasons Residences, Spring

More high-rises could be headed to downtown Austin’s southeastern edge, with a local developer envisioning two towers in the Rainey Street area that each could reach as tall as 50 stories.

The Sutton Co. wants to build the project on about two acres it has under contract bounded by Rainey and Driskill streets and East Avenue. The development would continue the transformation of a part of downtown where a new nightlife scene has emerged with the addition of numerous bars and restaurants.

Together, the towers could have as many as 800 to 1,000 apartment and condominium units, along with hotel rooms in the first tower to break ground, said Mac Pike, a principal — along with Wally Scott — in the Sutton Co. The first tower, which Pike estimated would cost $75 million to $100 million to build, is at least a year to 18 months from breaking ground and would require a number of city approvals, he said.

Pike said that financing has not yet been arranged for the project but that the Sutton Co. is talking to potential capital partners and hopes to select one “in the next 30 days or so.” Pike said a private equity firm, Woodgen, is partnering with Sutton in the land sale, which is due to close this summer.

On Monday, the Sutton Co. will seek approval from the city’s Historic Landmark Commission to demolish what are mostly older houses on the nine parcels it is purchasing from several owners. The approval is needed because the Rainey Street neighborhood is listed in the National Register of Historic Places.

After being rezoned by the city in 2005 for higher-density development, the Rainey Street area took part in downtown’s residential building boom of the past decade, with two condominium towers and a high-rise apartment building constructed in recent years.

Pike said Sutton Co.’s project could serve as a “gateway to downtown” and “greatly enhance” an area where other planned projects include a convention center hotel at Cesar Chavez and Red River streets, as well as SkyHouse, a proposed 23-story tower with 320 apartments and 15,000 square feet of retail.

SkyHouse is being planned for 47 Rainey St. by an affiliate of Novare Group Investments LLC and its Austin partner, Andrews Urban LLC. It could break ground in June and open in early fall of 2013.

In addition to the towers that would come in the first two phases, a third phase could include a mid-rise building with office and retail space, Pike said.

The Sutton Co. was a pioneer in developing housing downtown, having converted older buildings into the Brazos Lofts in 1999, the Avenue Lofts in 2000 and, later, co-developing the Plaza Lofts, a new condo high-rise built in the early 2000s.

“We saw the vision of housing needed in downtown … and we see the same things along Rainey Street,” Pike said. “We think there will be a lot of demand for people living and working and staying in the Rainey Street area.”

Don Grillo, communications officer for the Rainey Neighbors Association, said the group isn’t opposed to new development. However, he said, the city needs to address problems of overcrowded streets and inadequate parking before more residents are added.

“In general, we welcome new businesses and new buildings,” Grillo said. “But another 1,000 or 2,000 people living in that neighborhood with those narrow streets is a major, major issue.”

Robert Velasquez, a former resident of the area who with his brothers intends to sell five lots to Sutton Co., said the project “would be a good development for the city of Austin,” generating additional sales and property tax revenue and bringing more patrons to the clubs and restaurants.

“I think it will complement the area,” he said.

Contact Shonda Novak at 
445-3856

Austin Statesman

The 5 best American cities to buy a home in today’s market were recently highlighted in an article published on Forbes.com. The article makes note of the extremely low mortgage rates available to homeowners, which currently hover right around 4% on a 30-year fixed rate loan. And although home prices have yet to fully recover from their peak in 2006, all signs point toward a steadily recovering market that may result in upward pricing pressure.

“Buying a home is not a decision to be taken lightly. Personal finance gurus warn against purchasing unless you plan to keep it for a minimum of five years and, since the housing bubble burst, many say it’s best to buy only if it fits your lifestyle – not your investing portfolio.

(Another important thing to always keep in mind is that) a lot of what we read is national but you have to take housing down to the local level and look at the reasons why a market may be turning around, may be a good place to buy,” says Steve Berkowitz, chief executive of Realtor.com, a Campbell, Calif.-based home listing site.

To determine the best places to invest in a real estate purchase now, Realtor.com created a list which sorted through February housing and jobs data for 146 Metropolitan Areas and Metropolitan Divisions (cities and their neighboring suburbs) across the U.S. The company, which boasts millions of home listings filtered from over 900 Multiple Listing Services, looked at listing price data, sales data and inventory trends such as the amount of homes available in each market and number of days on market. Realtor.com also utilized the peak-to-trough home price index from Fiserv Case-Shiller, which tracks how much home prices have fallen in the past five years and can serve as an indicator of whether they have bottomed. Lastly, unemployment rates from the Bureau of Labor Statistics were factored into the rankings, since jobs (or lack thereof) are a leading indicator of housing demand.

To determine the best places to invest in a real estate purchase now, Realtor.com created a list which sorted through February housing and jobs data for 146 Metropolitan Areas and Metropolitan Divisions (cities and their neighboring suburbs) across the U.S. The company, which boasts millions of home listings filtered from over 900 Multiple Listing Services, looked at listing price data, sales data and inventory trends such as the amount of homes available in each market and number of days on market. Realtor.com also utilized the peak-to-trough home price index from Fiserv Case-Shiller, which tracks how much home prices have fallen in the past five years and can serve as an indicator of whether they have bottomed. Lastly, unemployment rates from the Bureau of Labor Statistics were factored into the rankings, since jobs (or lack thereof) are a leading indicator of housing demand.”

According to the article, referenced in part below, the top 5 best places in America to buy a home right now are:

5. Fort Worth, TX

Median List Price: $160,000 (up 8% y-o-y)

Inventory Level: 8,242 homes (down 26.5% y-o-y)

Median Days On Market: 79 days (down 19% y-o-y)

Price Drop From Peak: 4.7%

Unemployment Rate: 7.1%

4. Baltimore, MD

Median List Price: $239,500 (down 3% y-o-y)

Inventory Level: 13,053 homes (down 25.5% y-o-y)

Median Days On Market: 120 days (down 4% y-o-y)

Price Drop From Peak: 22.3%

Unemployment Rate: 7.5%

3. Kansas, MO

Median List Price: $134,150 (up 0.3% y-o-y)

Inventory Level: 7,539 homes (down 21% y-o-y)

Median Days On Market: 103 days (down 15% y-o-y)

Price Drop From Peak: 8.8%

Unemployment Rate: 7.7%

2. Austin, TX

Median List Price: $229,500 (up 12% y-o-y)

Inventory Level: 8,329 homes for sale (down 19% y-o-y)

Median Days On Market: 77 (down 21% y-o-y)

Price Drop From Peak: 2.9%

Unemployment Rate: 6.1%

1. Tucson, AZ

Median List Price: $170,000 (up 3% y-o-y)

Inventory Level: 6,600 homes for sale (down 23% y-o-y)

Median Days On Market: 86 (down 12% y-o-y)

Price Drop From Peak: 45.1%

Unemployment Rate: 7.8%

You will notice that out of the top 5 cities, Austin real estate had the highest year-over-year price adjustment at 12% – to $229,500 – while boasting the lowest price drop from peak at 2.9%. Austin also had the lowest median days on market, at 77, just two under Forth Worth, and the capital city also showcased the lowest unemployment rate of the top 5 at 6.1%.

The new year should usher in a healthier Central Texas housing market, experts say, thanks to job and population growth, high apartment occupancies and an anticipated uptick in consumer confidence.

Although 2011 home construction is down more than 60 percent  from the region’s 2006 peak, homebuilders say they expect 2012 to be better. Heightened demand and a scarcity of lots to build on in some areas will lead to rising home prices, “setting the stage for a housing recovery in Austin,” said Eldon Rude, director of the Austin market for Metrostudy, which tracks and forecasts the region’s housing market.

Higher prices, Rude said, will be “the key to the rebound in Austin’s housing market.”

“When home prices in Austin begin to increase again, families that have been waiting to buy will feel more confident that purchasing a home is a good financial decision, and at that point we will see more sales in the market,” he said.

Charles Heimsath, president of Capitol  Market Research, an Austin-based real estate consulting firm, predicted that home prices could rise by 5 percent or more “in the most desirable areas” and remain at least stable across the region.

Central Texas will end 2011 with builders having started construction on just more than 6,000 houses, a slight increase over 2010, Rude said. Despite the economic downturn, Central Texas was one of the best-performing housing markets in the nation in 2011. Rude predicts the number of new homes could climb as high as 7,000 next year, although strict mortgage lending rules and cautious consumers make a bigger leap unlikely.

Still, Heimsath said that “strong demand from (newcomers),  increasing employment, low interest rates and improving consumer confidence will combine to make 2012 a very good year.”

Further evidence of a 2012 bounce-back comes from national builders including Pulte Homes, D.R. Horton and Standard Pacific Homes and locally owned MileStone  Community Builders, all of whom are moving aggressively to get new projects off the ground.

Pulte launched three communities in September and October slated for 735 homes. Three more are coming soon: Hollow  at Slaughter Creek in South Austin, which will have houses starting in the $160,000s, with the first 90 of 211 homes starting next month; Paloma Lake in Round Rock, slated for 121 homes ; and Pearson Place at Avery Ranch,  where Pulte will start 74 homes in the first phase in the spring.

Scott Eckley,  vice president of sales for Pulte in Austin, said that “unlike many other parts of the country, everything we see here points toward continued job growth, low unemployment and increasing household formations.”

Austin added jobs at a rate of 1.2 percent during the 12 months that ended in November; Texas’ rate was 2.2 percent.

Eckley said Pulte wrapped up 2011 “on a very strong note,” having sold about 200 homes in the Austin area in the fourth quarter, up about 10 percent from the same period in 2010.

“First-time homebuyers continue to be one of the strongest parts of the market,” Eckley said. “Many are finding it more affordable to own a home rather than rent as a result of record low interest rates.”

MileStone also is making strategic moves. This month, the company broke ground on Riverside Villas at East Riverside  and Faro drives. Slated for 88 homes priced from the $140,000s to the $200,000s, MileStone expects the community to be one of its most successful when it opens in April.  Garrett Martin, president of MileStone, said he thinks 2012 could see area home starts rise as high as 7,000 to 8,000, assuming job growth continues and consumer confidence strengthens.

Other 2012 MileStone projects include 77 garden homes planned at Slaughter Lane and South First Street in South Austin with an average price in the $170,000s; Arbor Ridge, 103 homes planned for East Stassney Lane in Austin; and Shadow Creek, a master-planned community owned by financing partner Castletop Capital with more than 1,600 lots in Buda. MileStone plans to start building in Shadow Creek in early January, with prices in the $120,000s and the first homes ready by April.

Another player, Trio Investments, is developing home sites for builders in two communities in Northwest Austin.

One is Pearson Place at Avery Ranch, where Pulte, Streetman Homes and Grand Haven Homes  plan 392 homes. The community is on Avery Ranch Boulevard, 2 miles east of Parmer Lane.

“We believe the 2012 market and beyond will be strengthening for the Central Texas area,” said Gary Newman, who with Todd Janssen co-manages Trio Investments. “Austin has been a quality business environment during the national recession, and the job formation in 2011 bodes well for continued upswing in the homebuilding market in 2012.”

Newman said housing prices in Central Texas have not declined like those in some other U.S. markets. That stability has made for a healthy resale market, Newman said, which in turn has helped the new home market.

However, some parts of the region continue to struggle with price declines due to foreclosures or overbuilding. Hays and Williamson counties are seeing about 1 in 475 homes in the foreclosure process in contrast to 1 in 1,400 homes in Travis County.

But in Travis County, “we have had a fair appreciation (1.6 percent) the last year, particularly when compared to the rest of the nation or even the region,” said Mark Sprague, a veteran housing market analyst. Sprague said Travis prices appreciated 10 percent over the past five years, 31 percent over the past 10 years and 152 percent over the past 20 years, or 7.6 percent annually.

Newman also agreed with industry experts that consumer confidence will be key to the market’s rebound.

“We have all been worried about the national economy and the national government,” he said. “As those issues settle down over the next 18 months, the pent-up demand of homebuyers waiting to buy will emerge and we will see continued upswing in the home starts and sales.”

Sprague said the local real estate market turned from the bottom more than 18 months ago, “but it was a slow turn,” he said.

Like turning points after past downturns, 2012 will be the year “everybody will point back to and say you saw the market turn,” Sprauge predicts. “This will be the year people feel it.”

By: Shonda Novak

snovak@statesman.com; 445-3856

AMERICAN-STATESMAN STAFF

“Economically, the University of Texas is our 800-pound gorilla,” said Dave Porter, spokesman for the Austin Chamber of Commerce. “Its terrific engineering program produces a lot of young talent and it’s easy to recruit young people to come here [to work].”

The area, he said, has attracted the attentions of Silicon Valley’s hottest tech companies. Several, including FaceBook and LegalZoom, have opened branch offices in the area. Dell Computer, in nearby Round Rock, has also spawned many tech supplier businesses.

The young vibe in town is enhanced by Austin’s popular music scene, which is second to none. The city bills itself the “Live Music Capital of the World,” and boasts nearly 200 live music venues, according to the Austin Conventions & Visitors Bureau.

Its cultural jewel is its annual South by Southwest, or SXSW, festival, a 10-day film, music and interactive arts gathering that’s held each spring.

For 2012, the South by Southwest Interactive festival continued its trend of growing larger, more influential and attracting ever-more-recognizable names and well-moneyed events associated with it to Austin.

In terms of attendance, the festival grew almost 27 percent from 2011′s 19,364 to 24,569 for 2012. That includes Gold and Platinum badgeholders who had access to the Interactive fest. It started soggy and crowded, with rain at the start of the festival forcing attendees indoors to face long badge lines and crowded Convention Center hallways.

But by the midpoint, the sun arrived and festgoers fell in love with gorgeous downtown weather and the mind-boggling number of official and unofficial SXSWi events.

The mix of digital creatives — including Web designers, app developers, marketers, social media gurus and bloggers — attracts an ever-growing number of companies that want to get their apps, services or more mainstream products in front of them. Scrappy start-up companies hoped to get a jump-start at the fest the way previous hits like Twitter and Foursquare did, and established companies like Nike, HP and American Express used the fest to get face time with the geeks.

As fest director Hugh Forrest said in an introduction of presenter Al Gore on Monday, “Geeks are the new rock stars of the pop culture landscape.”

In the case of American Express and Nike, their gigantic, well-funded pushes at the festival drew lots of attention beyond the panels and happy hours happening in downtown venues. Amex introduced a new service called Sync allowing its customers to receive discounts by posting through Twitter. It brought rapper Jay-Z to town for a Monday show at ACL Live to promote Sync, becoming the hottest ticket of Interactive.

Nike took over the corner of Fourth and Colorado streets with giant screens and an athletic park and transformed the inside of the Spaghetti Warehouse building into an architectural advertisement for its new FuelBand, a $150 digital wristband that measures activity and syncs that data with smartphones and with the Nike+ online service. The company also brought in TV host Jimmy Fallon to moderate a panel on health technology at Interactive. Israeli-based startup Mobli attracted its most famous investor, actor Leonardo DiCaprio, to a private party March 10 at Kenichi along with DiCaprio’s buddies Tobey Maguire and Lukas Haas.

The festival itself boasted official programming featuring food celebrity Anthony Bourdain, filmmakers Kevin Smith and Morgan Spurlock and Gore, who did a Q&A with Napster founder Sean Parker.

In past years, the festival wouldn’t have had the clout to attract the kind of star power typically drawn to the SXSW Film and Music festivals, but times have changed, and so has Interactive. Forrest said after the festival’s conclusion that its organizers are struggling to maintain a balance between the hype and money surrounding the fest and making sure programming still reflects the larger tech community, especially in featured and keynote presentations.

But outside the walls of the Austin Convention Center, companies took over restaurants, threw lavish private parties and marketed as hard as they could to the crowds. “All these companies want to be here because they heard that these are the most cutting-edge thinkers and the leaders of tomorrow,” he said. “Nobody wants overcommercialization of the fest. But I think we’ll see more and more of this until this particular boom busts.”

Ah, the bust. Throughout the fest, especially among veterans of the fest and the tech industry, there was free-floating anxiety about a potential “bubble” in the social media industry.

On a panel called “Social Media is a Bubble and SXSW is a Fad,” panelists and audience members complained about the fest’s rapid growth, calling it a symptom of a larger problem of start-up companies with weak business plans built on hype and a social media industry that has become oversaturated with bad ideas.

“It feels a lot like it did in 2000,” said panelist Curtis Hougland, of the ad firm Attention, referring to the dot-com boom whose bust ended much of the irrational exuberance of the late ’90s.

Still, companies including Paypal, Turntable.fm, Instagram, Hulu and even Marvel Comics used the festival to announce revamped products or new services, taking their messages straight to the geeks.

But proving that money and attention-getting tech aren’t everything, one of the biggest controversies (and most blogged-about things at SXSW Interactive) was “Homeless Hotspots,” a street campaign by New York ad agency BBH. Employing homeless Austinites for $20 a day, plus donations, the company had the individuals offer Wi-Fi access to attendees on the street. The company worked with the nonprofit Front Steps, which approved of the effort to raise awareness of homelessness, but the campaign received withering criticism from tech blogs as being insensitive and perhaps dehumanizing. A second wave of blog posts argued that this might be a knee-jerk reaction, and thus was born an official Internet controversy that the fest couldn’t possibly have planned for.

Panel discussion, as usual, was wide ranging, from talks about the future of tech in government, trends in health gadgets, the problematic future of online privacy, 3-D printing and the challenges of copyright in a wired world. Futurist keynote speaker Ray Kurzweil laid out a vision of sentient robots that we’ll come to accept, blood-cell-sized devices that’ll be mainstream in 20 years and the potential threat of bioterrorism.

As for actual technology at the festival (yes, there was some), apps like Highlight, Glancee and Kismet forced the issue of festival serendipity by putting users in touch with friends of friends or people with similar interests in their proximity.

Whether these apps, which were tested out by attendees at the fest, will go mainstream is anyone’s guess. Five-year fest veteran Jeremiah Owyang, a widely read tech analyst, posted after the fest on his blog that Interactive is “A Petri dish of social and interactive behaviors, a bellwether of what could be a trend for the year. It also has a downside from overhype, fanboyism, and an overinflated view of behaviors that may not persist as people return to work.”

Contact Omar L. Gallaga at 445-3672.

Twitter: @omarg

Judith Bundschuh, chairman of the Austin Board of Realtors, said she recently began showing a house in the Canyon Creek neighborhood and within 10 days had three seriously interested buyers. One put in an offer at the top end of the price spectrum—higher than the house sold the previous time and at the full asking price.

“It’s like we are in a different environment altogether,” Bundschuh said.

The numbers tell a similar story. ABoR data show that sales of single-family homes in Northwest Austin were up 13 percent last year, compared with a 1.7 percent rise nationwide, according to data from the National Association of Realtors. In Austin, sales rose 7 percent.

Meanwhile, the average price of homes in the northwest quadrant, although down about 1 percent in the past year, have been held in check at about $250,000 on average, according to ABoR, because the houses that are selling are “top-notch,” Bundschuh said.

But perhaps the most notable force in the Northwest Austin residential real estate market—and what is exciting Realtors who focus on the area—is the low number of houses, or inventory, available.

Based on findings by the Real Estate Center at Texas A&M University, when housing inventory is at 6.5 months, the market is balanced. In Northwest Austin, single-family inventory is 2.2–2.7 months, one of the lowest in the city.

What all this points to is a shift in the market, experts said.

“For a long time, we had a buyer’s market. Now, the sellers are getting a taste of it,” said Mary Battaglia, a real estate agent with Coldwell Banker United who focuses on Northwest Austin.

Adam Boenig’s company, Brohn Homes, is constructing and developing a 26-house subdivision on Cima Serena Drive near the intersection of Steck Avenue and Mesa Drive. He said he already has a waiting list for the homes, which will range from about $380,000 to $480,000.

“We haven’t even done any marketing or advertising. They haven’t even seen our product. We are finalizing our architectural plans right now,” he said.

Bundschuh had a similar experience when construction started last year on Pearson Place at Avery Ranch, a new neighborhood at the intersection of Parmer Lane and Avery Ranch Boulevard.

“They haven’t even put roads in there yet, and I am getting calls from clients wanting to buy in there,” she said.

Why northwest?

The public schools located in Northwest Austin are at the center of the area’s appeal, the Realtors said.

“I get calls from people who are relocating [to Northwest Austin], or moving from one area of Austin to another, primarily because the schools in the Northwest area have a really good reputation,” Bundschuh said.

Battaglia estimates that 90 percent of her clients are interested in living in Northwest Austin because of the quality of the public schools, which are primarily in the Round Rock and Austin school districts.

“If they’re not going for the schools, they are going for the resale value. Either way, it’s about the schools,” she said.

Also driving demand is the fact that interest rates are historically low.

On a day in early February, Kendall Garrison, senior vice president of lending at Amplify Credit Union, said he was quoting a 3.75 percent interest rate on a 30-year fixed rate loan.

“I have been in the lending industry for 30 years, and never during my lifetime have interest rates been this low,” he said.

Favorable interest rates would likely last another year or so, Garrison said, though he added that they are determined by the market, and therefore, unpredictable.

Scoring a loan

While rock-bottom interest rates are piquing buyers’ interest, Realtors say mortgage loans are still tough to get.

“You have to be an A-plus borrower to get a loan. And not only that, [lenders] ask you a million questions before they are willing to give one to you,” Bundschuh said.

She argues that this rigidity is hampering the market: “Getting a loan is what drives the market. You can make the argument that the bust happened because there was free money, which was absolutely the case, but I feel like the pendulum has swung too far the other way.”

Kenton Brown, president of the Austin Mortgage Bankers Association, disagrees.

“It’s not as hard as it sounds,” he said. “It is more difficult than it was four years ago. Then, you had a fog and mirror, and you got a loan. But 10 years ago, this wasn’t unusual.”

Moreover, Brown said, lending standards are slowly loosening up and mortgage insurers, which guarantee mortgage payments to lenders in the case that a borrower defaults, are providing more policies.

Garrison, too, said money was flowing. In fact, 2011 was a record year at Amplify, with $95 million worth of single-family real estate loans approved. That number represents a 20 percent increase from 2010.

And so far, 2012 is looking even better, the bankers said.

“I’ll be honest,” Brown said, “February may be a record month for me.”

Apple Inc. Apple Inc.Latest from The Business JournalsFollow this company will expand its Austin presence with a $304 million campus that will ultimately create 3,600 new jobs, according to an announcement today by Gov. Rick Perry.

The new campus will more than double the size of Apple’s workforce in Texas over the next 10 years. The new staff will expand customer support, sales and accounting functions for the region. In exchange for Apple’s commitment to create these new jobs in Texas, the state has offered Apple an investment of $21 million over 10 years through the Texas Enterprise Fund.

It’s unclear where Apple (Nasdaq: AAPL) would locate the campus.

Instead of expanding its existing campus, Apple is considering a new location in Austin, spokeswoman Kristin Hugoetsaid.

“Our operations in Austin have grown dramatically over the past decade, from less than 1,000 employees in 2004 to more than 3,500 today,” she said.

Julie Huls, president of the Austin Technology Council Austin Technology CouncilLatest from The Business JournalsFollow this company                    , said Apple’s expansion in Central Texas would cement the region’s reputation as a technology hub.

“I think it’s a game changer for the state of Texas and Austin,” she said. “It’s a scale tipper for Austin to have an A-list company like Apple.”

If all goes as planned, this would be one of the largest job creation projects in the TEF’s history, which was set up in 2003 to entice large companies to move or expand here. To date, the governor’s office reports that the TEF has doled out more than $443.4 million and closed the deal on projects generating more than 62,000 jobs and more than $15.4 billion in capital investment in Texas.

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