Last Thursday the U.S. House of Representatives passed the FHA Reform Act, establishing some new Federal Housing Administration (FHA) regulations and authorities. The bill will strengthen FHA’s capital base by raising mortgage insurance premiums, and will crack down on FHA-approved lenders.

According to a statement released by House Democrats, the reforms outlined in the bill will “rebuild the American dream of homeownership,” while reducing federal spending by $2.5 billion over the next five years and holding FHA accountable.

The FHA Reform Act is supported by a wide coalition of organizations, including the National Association of Realtors, Mortgage Bankers Association, and National Association of Home Builders.

Robert E. Story, Jr., CMB, chairman of the Mortgage Bankers Association, commented, “The reforms contained in this bill will help stabilize FHA’s finances by allowing the agency to raise its annual premiums and better take corrective action against lenders who are putting the program at risk.

As you might have guessed, those “reality shows” about real estate on channels like HGTV are not particularly real. Given that, is there something you can learn from them? Read more in the Chicago Tribune.

” ‘House Hunters’ is house candy,” [Chicago Realtor Eric] Rojas said. “It’s not realistic.
It’s directed. You don’t learn anything about buying. You learn about
real estate values. You learn about how houses look.”

Despite all that, agents who’ve done it say they still watch the show,
and they’d go back on it again. After all, it’s great marketing
exposure, particularly because programs are repeated.

“It’s totally fake, but does anybody think reality TV is real? It’s all
canned, but it’s fun to watch,” said real estate agent Karl Vogel, who
also was featured in a recent episode helping a Boston native find a
home in Chicago. “Who can say they don’t like to be on television,
except you look fat?”

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.

From the Coldwell Banker channel on Youtube:

The Hill Country Galleria in Bee Cave filed for Chapter 11 bankruptcy protection ahead of foreclosure earlier this week, so it’s not going away. The Galleria is a huge beautiful new outdoor mall similar to The Domain in North Austin. Go see for yourself – it has a state of the art movie theater, book store, sporting goods store, lots of restaurants and boutiques. With all the looming activity in the Lakeway area, it should be a huge attraction for a long time.

Opus and officials from the City of Bee Cave, which had provided sales tax incentives to the mall, said the bankruptcy was not the result of the mall’s performance.

Rather, John Greer, executive vice president of Opus West, blamed constricting credit markets and the complexity of refinancing the $191.8 million construction loan that was held by a consortium of 10 banks, which include Bank of America, Sovereign Bank and Guaranty Bank.

“With the protections afforded by bankruptcy law, we hope to complete a successful restructuring of the project’s debt on terms that will allow us to optimize value for the project’s lenders and other creditors,” Greer said in the release.

According to Opus, the mall had been meeting its debt obligations until earlier this year, when the short-term construction loan matured. At that point, no refinancing was available, the interest payment doubled, and the project went into default, Opus spokeswoman Winston Hewett said last month.

The S&P 500 had a 3.4 percent surge Monday, erasing the last of its 2009 losses, and the Dow was up more than 200 points. Leading the recovery:

A double dose of good housing news ignited the advance: Pending U.S. home sales rose more than forecast and had their second straight monthly gain, while construction spending rose unexpectedly in March after five straight declines.

More detail:

The rally came after the National Association of Realtors said its index of pending sales for previously occupied homes rose 3.2 percent to 84.6. That was well ahead of the 82.1 economists had been expecting and the second month of gains after the index hit a record low in January.

Separately, the Commerce Department said construction spending rose 0.3 percent, the best showing since a similar increase in September. Economists surveyed by Thomson Reuters had expected spending to drop 1.5 percent.

Does this mean we’re out of the woods? Possibly not. David Kotok, chairman and chief investment officer of Cumberland Advisors, notes that the real estate market is still weakening and banks are still taking losses on loans. He says the question is whether we’re looking at a “V,” a dip followed by a surge, or a “W,” with another big dip ahead. What do you think?

The way I understand it, the Fannie Mae/Freddie Mac decline would cripple the housing industry if left to flounder on its own. 40% loss in share value in three days – OMG! If banks and credit unions are the only lenders left standing after the air clears – interest rates will be much higher, and only the best applications for credit will be approved, meaning the vast majority of Americans will be unable to finance a home. (Business Week compares Fannie and Freddie to fast food – which is the better buy?)

 Hotel Going Green.

Westin plans a 300 room hotel downtown on 3rd & Colorado.  Lake/Flato Architects from San Antonio whose work includes the San Jose Hotel and the Harry Ranson Center were chosen for the project.  The hotel will incorporate energy saving features & use local & recycled materials in an effort to achieve a national green building certification.

Jet Blue Strikes Again

Non-stop flights to Fort Lauderdale, Orlando & San Francisco announced today are added to the list of recent non-stops (including Boston, New York, & Long Beach. Ca.) that Jet Blue Airlines had introduced in Austin.  Introductory rates are $99, going fast!

 Together these 2 announcements are indicators that Austin is on the national map and once again we’ll buck the trend in falling real estate prices.