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.

Three extensions of the tax credit for first-time home buyers have been proposed in the Senate. The hope is that a liberal extension of the amount as well as the length of time in effect will permanently raise the housing market to a sustainable level of activity before it is phased out or time runs out. Hopefully we’ll have something soon, as the current credit ends Nov. 30, the Monday after Thanksgiving. [Link]

Joe Biden is helping promote green jobs that stay at home, literally, through a proposal for a new program to boost energy savings for homeowners and help our environment, too.  The White House estimates greenhouse gas emissions could be lowered by up to 160 million metric tons by 2020.  Find more info in the Recovery Through Retrofit report.   The proposals here promote better information for consumers  with wider dissemination re energy cost savings & benefits, access to better financing options, and a training and certification program to enhance consumer confidence and promote job growth here at home. Read more about the report here.

Increase in housing starts are up for the month, but down 45% from a year ago.

Not in Austin, but nationally, there is still a glut of homes on the market, many of which are foreclosures or distressed properties. The low interest rates and the $8,000 tax credit have had a major impact on the reductions in that glut, but it’s not over yet. As interest rates rise, more people will be excluded from the market. Some experts feel that the rates will be forced lower to sustain the housing recovery. Some hope for a $15,000 tax credit for all buyers to significantly alter the damage done by the falling market. We in Austin will reap the benefits as our housing market ramps up this summer.