Just read an exuberant post about how “Austin Real Estate Is Kicking Major Butt”: with relatively low 6.7% unemployment rate, Austin’s job market is a magnet, home sales are up, values are stable, mortgage rates are low. According to this post, it’s a healthy market.

Though the Austin American-Statesman doesn’t say Austin’s “kicking butt,” it suggests that the “housing market might be recovering”, noting that home starts were up 27% in 3Q 20ll and there was a 2% growth rate in jobs over the 12 months ending in August – that’s 15,500 new jobs. The Statesman’s piece is not altogether rosy. It quotes Eldon Rude of Metrostudy: “Although Austin continues to exhibit the key drivers for housing demand — job creation and population growth — the one ingredient we are missing is strong consumer confidence. Considering the dark economic news that has circulated in the last 60 days, it is hard to expect that the demand for new homes will pick up strongly in the short term.” However the Statesman says that “a number of builders are putting new homes on the ground and say they are seeing encouraging signs.” Scott Eckley, vice president of sales for Pulte Homes in Austin, is quoted as saying “for the month of September we are going to sell more than 75-plus homes net, which is obviously a robust number.” He says that the key to the healthy market is continued job growth.

Another good sign from the Statesman: 221 homes will be added to the local inventory via new development in the Mueller subdivision, the former site of the Austin airport which was repurposed as a sustainable development project by the City of Austin and Catellus Development.

My view is that the market has picked up steadily for the last year, and we are approaching a balanced market where there’s around a six month supply of homes on the market. I think this will hold into the spring, meaning a robust 2012 and contninued strong sales through the fall and winter, if the economy remains fairly stable. This is probably due to pent-up demand and the incredibly low interest rates.

Contact me (mlebkowsky at cbunited.com) for more specific and concrete information about the neighborhood you’re interested in.

Now called Circuit of the Americas, the new Forumula One track in southeast Austin will have a big impact on the area. Big news today is that the track will also host MotoGP, a premiere motorcycle racing event. (More on Circuit of the Americas at Wikipedia.) Follow this link for images of the site southeast of Austin.

These events could trigger a surge for Austin real estate through the creation of new jobs, and through potentially attracting new real estate investment.

Here’s the recent press conference video:

As a University of Texas football fan, I was happy to see an end to the team’s four game losing streak yesterday. In yesterday morning’s paper, I read a fascinating article about Eddie O’Connor, Ph.D, whose business is to overcome losing streaks and who talked about the psychology behind ‘em. In a recent paper, according to the article, O’Connor lists “nine common reactions to losing streaks: focusing on losses, focusing on mistakes, blaming teammates, blaming one’s self, utterly giving up and so on. He suggests that none of those helps.” He says that losing kills motivation.

The Statesman reporter also talked to Art Markman, a UT psychology professor, who suggests that winners are focused on positive outcomes, and you have a problem when your focus changes to avoiding negative outcomes. When you’re trying not to fail, you tend to think “about skills that are better left un-thought about,” for instance, “A quarterback who’s worried about the position of his arm isn’t thinking about the pass rush or where the linebacker went.” You get into an “avoid” state rather than an “approach” state. “Approach states result in high-energy emotions such as elation and joy. Avoid states foster sadness and despondence.” One way around this is to focus on “process goals” associated with specific tasks. “Process goals ask a question: ‘What’s your job? Don’t worry about the score.’”

In reading all this, I was thinking about the state of the economy – as a Realtor, I have to be an economy-watcher, so I think about this every day. The U.S. economy has felt like a losing streak lately – some people are using terms like “collapsonomics.” However because of the increase in jobs and the continuing popularity of Austin and the Hill Country in general, our area leads a national trend toward recovery.

How do you move from a near-depression to a winning economy again? I still hear some people say that it’s impossible, that there are too many downward-spiraling variables. But isn’t that just a symptom of losing-streak thinking? We have to turn our heads around.

So I come back to the last paragraph, and apply it to the economy, starting with myself…

“Approach states result in high-energy emotions such as elation and joy. Avoid states foster sadness and despondence.” One way around this is to focus on “process goals” associated with specific tasks. “Process goals ask a question: ‘What’s your job? Don’t worry about the score.’”

Construction and manufacturing sectors lost 5,500 jobs from February 2009 to February 2010, according to Texas Workforce Commission statistics reported in the Austin American-Statesman. The leisure and hospitality sector gained 5,000 jobs over the same period. The statewide unemployment rate was 8.2 percent last month, holding steady, a sign that the labor market has bottomed out. Austin and Texas are starting to feel some of the economic pain of the recession.

Meanwhile the Obama Administration is revising its plan to prevent foreclosures. Borrowers will get help in three ways: Jobless homeowners can get a three- to six-month break on their mortgage payments. Banks will get financial incentives to reduce mortgage balances for underwater borrowers. And lenders can offer refinanced loans backed by the Federal Housing Administration to these borrowers.

There’s a specific program for unemployed homeowners:

Borrowers will have three to six months in which they’ll have to spend no more than 31 percent of their monthly income on their mortgages. If you do find a job during that time, you will be evaluated for a loan modification that could permanently reduce your payments.

The story links to the National Foreclosure Mitigation Counseling Program.

If you are struggling to make your monthly mortgage payments you should contact a HUD-approved housing counseling agency for free advice and help working with your mortgage servicer. Trained professionals are available to help you explore loan modification or refinance options, including those offered through the Making Home Affordable program.

That site has a foreclosure counselor lookup.

From the Austin Real Estate Blog: in December, for the fourth month in a row, Austin real estate sales were up over the previous year. The average and median sales price were up 6 percent, and the number of active listings is down 5% from this time last year. With 1373 sales, December was still weaker than October (1783 sales) and November (1542 sales). The market’s strength is probably attributable to the Federal housing tax credit, which will expire. According to the Real Estate Blog, “For buyers the trade off is that later there might be less buyers to
compete with in the market later but interest rates might be higher.
For sellers there is no real trade off. Waiting a few months for higher
interest rates and less buyers is probably far from ideal.”

More collateral damage from the housing bust: workers are less apt to relocate for employment because they can’t afford to sell their homes in a down market — so they stay put. [Link]

The ability to relocate for employment, which helped the U.S. economy recover quickly after previous deep recessions, is the latest victim of the housing bust. About 12.5 percent of Americans moved in the year ended March 2009, the second-lowest on record, estimates Brookings Institution demographer William Frey, after a 60-year record low of 11.9 percent the previous year. Out-of-state moves, usually associated with job changes, have been at a record-low 1.6 percent for two years, he said.

Austin’s housing market hasn’t been hit as hard as other areas, but it’s harder for workers with homes in other states to sell their homes and relocate here, so there can be an impact on relocation business.

The Austin Board of Realtors and the Home Builders Association of Greater Austin held a housing and economic forecast event Wednesday at the AT&T Executive Education and Conference Cetner at UT. Eldon Rude of MetroStudy said that economic and housing fundamentals are the strongest among the more than 40 housing markets across the country, and that “when the U.S. economy improves, Austin will be one of the first markets that shows stronger growth in its housing market.” Housing starts are down but stable, with an increase possible this year. Read more at Statesman.com.

Selling a home below the current moertage amount create a “short” sale. This minimizes the damage to the seller’s credit and minimizes the financial loss of the lender, as well as minimizing the fall of the local market prices. Good for all, right? Except it takes a long time, and many buyers can’t or won’t wait.

The new Treasury Department rules may improve the situation for some, but in most cases don’t go far enough to have real impact, such as the $1,000 offer to lenders to cover their admin costs, or the $3,000 offer to cover losses of second mortgages, which can be hundreds of thousands of dollars.

It will be some help for pricnipal residences, delinquent loans, and loans made before 2009.

“Thirty-year fixed-rate home mortgages averaged 4.78% during the week of
Nov. 23, an all-time low, according to Freddie Mac’s weekly surveys.” [Link]

This is good news for home buyers and potential sellers, especially given the extension of tax incentives. If you’re thinking about buying or selling, now might be the best time! Prices are low now, too, and there are foreclosures available on the market that are really good buys. Besides, experts say every home sale adds over $40,000 to the economy.

According to the Austin Business Journal, the Austin-Round Rock area was named best performing city on the 2009 Milken Institute/Greenstreet Real Estate Partners Best Performing Cities Index. This is based on Austin’s ability to create and sustain jobs, considering metrics for employment, salary growth and technology output.

“Texas’ strong position in our best performing cities study demonstrates that a favorable business climate, combined with a low-cost/low-tax environment, is highly supportive of job creation,” said Ross DeVol, senior economist at the Milken Institute and lead author of the report. “The state has diversified its economy by fostering several key high-tech clusters, and the passage of Proposition 4, allocating $500 million in funding for research universities, will make Texas an even more formidable competitor in the future.”

The Milken Institute press release is here. Note that Austin is the first metro to ever be ranked number one twice on the index, the last time being in 2000.