Texas Real Estate Daily

More small buyers are investing in undeveloped land.

“There is a really attractive market emerging for the small investor,” says Eric O’Keefe, editor-in-chief of Land Report magazine. “With credit tightening, what you’re seeing in essence is some of the air being let out of the bubble that was driving prices up.”

Buying land is no slam-dunk. An investor must be able to judge which land is most apt to deliver a profit down the road and be able to hold onto the property long enough to benefit.

Also, variations in prices make these kinds of investments painful for the faint of heart. For instance, the Texas real estate commission reported that land prices went up by 20 percent in 2007. But land values in Southern California have tumbled at least 50 percent along the coast and as high as 90 percent. inland, investors say.

Plus, ownership can be expensive. Besides high borrowing costs, there are property taxes and liability insurance costs to pay.

Nevertheless, some investors are convinced now is the time. “It’s a delicate business, but it’s just about bad enough to be good again,” says William Shopoff, chief executive of Shopoff Group, a real estate investment firm in Irvine, Calif.

Credits: Waldo Village Group

The Austin City Council yesterday approved a 20-year, power purchase agreement (PPA) with Nacogdoches Power LLC for the electricity generated from a 100-MW facility fueled with biomass. The proposed facility is scheduled to commence operations in 2012.

The project, located in northwestern Nacogdoches County, will use a variety of wood wastes, including residues from forests and sawmills, as well as waste pallets and municipal wood waste. The facility will use a bubbling fluidized bed boiler to directly combust the wood wastes, together with a steam turbine for power generation. With respect to air emissions, the design includes a baghouse to control particulate emissions and a Selective Non-Catalytic Reduction (SNCR) system for NOx control. With respect to carbon emissions, biomass power generation is deemed carbon neutral.

Unlike wind and solar renewable resources that generate power only when the wind blows or the sun shines, the hour-to-hour generation from a biomass facility can be dispatched by the operator to meet changing load and market conditions.

Gainesville Regional Utilities (GRU) is discussing a similar project with Nacogdoches Power LLC that could be constructed at the existing Deerhaven Generating Station near Gainesville, Florida.

Earlier this week, Georgia Power submitted a request to the Georgia Public Service Commission for approval to convert an aging, coal-fired unit at its Mitchell Generating Plant in Georgia to use wood wastes. The modified unit would use a direct-fire, stoker technology for a design capacity of 96 MW.

These three projects show a rising interest in developing large-scale, electric generating facilities that are reliant solely upon biomass as the fuel.

Credits: Energy Online

Enterprise Products Partners boosted expansion plans for its pipeline network to carry more natural gas from the Barnett Shale region of Texas to northern and eastern markets.

A 40-mile conduit increasing shipping capacity from Tarrant and Denton counties by 1 billion cubic feet per day will be added to the 178-mile Sherman Extension under construction, the Houston-based partnership said today in a statement.

The Sherman Extension, which connects to the nation’s interstate pipeline network, is expected to be finished in this year’s fourth quarter. It traverses the Barnett Shale region, where gas output is 3 billion cubic feet a day and rising.

The addition announced today, to be operating in the third quarter of 2009, will ship supplies in the Trinity River Basin north of Arlington and the Newark East Field in Wise County.

Enterprise said it has long-term agreements for 900 million cubic feet per day of the Sherman Extension’s daily capacity of 1.1 billion cubic feet.

Enterprise rose 11 cents to $29.45 as of 9:35 a.m. in composite trading on the New York Stock Exchange. Before today, it had fallen 8 percent this year.

Credits: Chron

To finance employee pay increases, higher fuel bills and escalating utilities, more Texas school districts are encouraging residents to agree to higher property taxes.

Austin, Corpus Christi and Houston school boards are among those seeking higher funding through increased levies. After property tax relief was required by the Texas legislature in 2006, about 20 percent or 230 districts sought taxpayer approval on hiking property taxes. The relief resulted to districts reducing their maintenance and operations tax rate to $1 for every $100 property value assessment from $1.50 for the next two years.

Since Texas has placed a limit on district funding at 2005 or 2006 levels, many districts said they are financially challenged. School district officials argued that they need more money because their costs are not frozen, while funding has flat growth.

The Humble and North Forest school boards are seeking the maximum $0.13 rate increase, while Alief would be content with a $0.075 hike to pay for a 3 percent wage adjustment for school workers.

Sarah Winkler, president of the Alief school board, told the Houston Chronicle, “In reality, the 3 percent isn’t even a cost-of-living increase, but that’s all we thought we could afford… You hate to have to ask your taxpayers when you know they’re struggling, but we’re all struggling for the same reason.”

The maximum amount that could be hiked without voter approval is $0.04.

According to the Austin Chronicle, the city’s tax rate is $0.18 lower than San Antonio, $0.25 than Houston, almost $0.30 lesser than Dallas and $0.46 lower than Fort Worth.

Credits: All Headline News

The Palestine Historic Landmarks Commission, local residents, and property owners are to be congratulated on their desire, drive, and commitment to preserve Palestine’s wealth of historic resources. By the end of September, the City of Palestine and its citizens will have designated over forty historic properties as Palestine Landmarks and two Palestine Historic Districts since January 2007. This is, of course, only the “tip of the iceberg” as over 1,800 historic resources were identified in the 1993 Historic Resources Survey and that number has grown substantially since. The goal of the historic Preservation Office is to update the Historic Resources Survey by the end of 2010 and that will be ten years after the last update in 2000.

One of the criterion for listing on the National Register of Historic Places is that a building must be at least fifty years of age, which means that houses and buildings built as late as 1958 could be eligible for Listing on the National Register and next year the fifty year mark will be 1959, and so on. The majority of Palestine’s houses and buildings are at least fifty years old. Palestine has a higher percentage of historic houses and buildings than almost any of Texas’ small towns. People are beginning to recognize this and, as I have said before, they are coming form all around the United States to take advantage of our history, the value of our historic properties and neighborhoods, and our quiet, peaceful lifestyle.

That being said, we also have to recognize that Palestine has room for improvement and some of Palestine’s citizens are making a commitment to improve our neighborhoods and provide affordable housing for people of modest means. By rehabilitating some of Palestine’s older and historic sub-standard houses and building affordable new houses in existing neighborhoods, they plan on Palestine becoming an even more desirable place to live, work, and play.

One of the groups is a recently formed Texas Non-Profit corporation, Palestine Makeover, Inc. The corporation is currently accepting donations of properties, materials, money, and labor to achieve those goals. Another corporation, Historic Palestine, Inc., which is the corporation that saved the Gregg-Link building from demolition in 1995, has also accepted the donation of a condemned historic house for rehabilitation. That makes a total of five houses that have been condemned and been issued their demolition order by the City of Palestine Building and Standards Commission that will now be rehabilitated. Once the houses are sold and occupied, they will once again be put back on the tax rolls and be beautiful, safe houses for a family to enjoy. Palestine Makeover also wants to follow the Habitat for Humanity model by screening applicants and, if selected, they will be allowed to work on the rehab of an existing structure or the construction of a new one, thus producing equity for the homeowner in their home. This proven model makes it possible for a family to own their own home rather than rent when they do not have the money for a down payment to buy a home.

I might add that one of the advantages of a non-profit corporation is it can receive tax deductable donations from for-profit corporations and businesses and individuals who have like-minded goals, but they may not have the time to participate in accomplishing their goals. It is a win-win-win situation that will make Palestine an even nicer place to live for all people. We are looking forward to seeing more of Palestine’s sub-standard houses once again become beautiful homes that people can be proud of and raise their families in. We are also looking forward to seeing more of Palestine’s historic neighborhoods, houses, and buildings become rehabilitated and be designated as Palestine Historic Districts and Landmarks for all to see and enjoy.

The August 28th “Your Old House…or Building” program and workshop at the Palestine Public Library on Thursday evening was entitled, “What Are Historic Landmarks and Historic Districts?” and it was presented by Peggy Riddle, Architectural Historian and Historic Preservation Consultant with Cornerstone Heritage Preservation Services and Neely Plumb, Palestine Historic Preservation Officer and Main Street Manager. The program explained the types of historic designations, the criteria for obtaining a historic designation, and the types of historic districts that are in Palestine and other cities. The September 15th program, entitled, “How Do I Get A Historical Marker?”, will explain the procedures for obtaining the various types of designations and markers and the costs involved.

Credits: Palestine Herald

Charlene Zeman spent more than a decade in the housing business, including the last three years selling homes.

But the housing slowdown – the worst nationally in a generation – sent her, like thousands of other agents, looking for a new career.

“I had to have a more steady income,” Ms. Zeman said. “I had to know when the next paycheck was coming. And they were getting fewer and farther between.”

With home sales in North Texas down almost 30 percent since the peak in mid-2006, real estate agents are feeling the pinch of smaller commission checks and less business.

No wonder many agents in the Dallas area and across the country are switching to a new line of work.

The National Association of Realtors, the Washington, D.C.-based trade association, dropped by more than 100,000 members from the end of 2006 to this March.

Even in Texas, which has escaped the worst of the housing depression, the number of licensed sales agents and brokers is down about 3,000 from last summer. And the number of new sales agent applications is off about 30 percent from a year ago.

“The fall-off would be expected as the market slows down,” said Dr. James Gaines, an economist with Texas A&M University’s Real Estate Center.

But he said it’s impossible to draw a direct correlation between the slowdown in home sales and the decline in agents.

“And since they often pay a two-year fee, the license numbers don’t vary as quickly from year to year,” Dr. Gaines said.

Ms. Zeman didn’t need a university study to tell her it was time to get out of the home sales business.

“I was in it when it was great, in it when it was good and in it when it wasn’t so good,” said Ms. Zeman, who is now working in sales for telecommunications giant AT&T.

“I love it,” she said. “It’s been very successful. I’ve been in the top 10 since I got here in February.”

Christian Walker spent almost two years in Dallas residential sales before deciding to change direction.

“At the time, I sensed that the Dallas market was going to contract some and that this, combined with the saturation of agents, made it a good time to consider other options,” said Mr. Walker, who has gone back to school while working at a Fort Worth architectural firm.

He’s just started working full time on a master’s degree in architecture at the University of Texas at Arlington.

Mr. Walker said he “saw an opportunity to put the experience and awareness of customer needs that I had acquired to move into a related field, architecture.”

“Endless showings and open houses also gave me a perspective about customer needs and expectations that I feel will be invaluable for an architect.”

Credits: Dallas News

Standard & Poor’s on Tuesday downgraded three U.S. mortgage insurers, including PMI Group Inc. (PMI.N: Quote, Profile, Research, Stock Buzz), citing further deterioration in the housing market and concerns about the profitability of insured mortgages originated this year.

The credit agency said it expects 2008 vintage mortgages to generate modest underwriting profit for most insurers, but warned they still face risks.

“The significant uncertainty in the mortgage and housing markets — coupled with unfavorable data on early payment defaults — suggests an underwriting loss is a real possibility,” S&P said in a report.

The credit agency said it now expects U.S. home prices to decline 29 percent from the peak in 2006 compared with a 20 percent drop it projected in April. It also sees unemployment rising to above 6.2 percent in 2009 compared to the previous forecast of 5.8 percent.

S&P said higher unemployment may drive significantly greater claims for mortgage insurance.

After reexamining the industry’s fundamentals, the agency concluded the sector’s credit quality was more consistent with the lower end of “A” category.

“Our more pessimistic assessment of the sector reflects our opinion that U.S. mortgage insurers have limited opportunities for long-term growth and diversification,” S&P said.

S&P cut Old Republic International Corp’s (ORI.N: Quote, Profile, Research, Stock Buzz) counterparty credit rating one notch to “A-minus” and financial strength ratings of its key subsidiaries one notch to “A-plus,” the fifth-highest investment grade rating.

It also cut PMI Group Inc’s counterparty rating two notches to “BBB-minus,” just above the junk level. PMI’s mortgage subsidiaries’ ratings were cut two notches to “A-minus” and the agency said it may cut them again.

Radian Group’s (RDN.N: Quote, Profile, Research, Stock Buzz) counterparty credit rating was cut two notches to “BB-plus,” the highest junk level, and its insurance arm’s ratings were cut two notches to “BBB-plus.”

At the same time, S&P affirmed ratings of Genworth Financial Inc (GNW.N: Quote, Profile, Research, Stock Buzz) and MGIC Investment Corp (MTG.N: Quote, Profile, Research, Stock Buzz).

“All the mortgage insurers we downgraded today have capital adequacy ratios above Standard & Poor’s minimum ratio for a “AA” rating. However, we expect the capital adequacy ratios to decline for the next few quarters because of operating losses,” it said.

S&P’s action could further pressure U.S. mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), which must reserve for losses for claims the mortgage insurers might fail to pay.

Credits: Reuters

With the constant speculation of the failure of Fannie Mae and Freddie Mac creating mortgage market crisis across the country, it would seem appropriate for home buyers to steer clear of any real estate ventures in the near future.

However, according to the Temple Belton Board of Realtors (TBBOR), this could not be further from the truth.

During a committee meeting Thursday, August 7 TBBOR President Terry Covington stressed the “importance of reporting the local news” and getting the facts out to Central Texas homeowners. She emphasized the fact that the Texas real estate market has managed, for the most part, to avoid these mortgage market problems due to continued growth and said that now is a great time to buy in Texas.

Covington strongly desires to get the word out about the Belton and Temple real estate markets’ success amidst chaos and believes that doing so will ensure a continuation of local prosperity.

Those considering buying or selling a home should not be scared off by the threats of market failure but should take advantage of the recent changes stemming from the Housing and Economic Recovery Act of 2008 that was passed on July 30 by President Bush.

Caren Hildinger, CMPS of Castle & Cooke Mortgage detailed a few of these changes on Thursday.

Those in danger of losing their home, who meet eligibility requirements, may be able to refinance into government-insured mortgages that are much more affordable.

First time buyers may be capable of receiving a refundable tax credit of up to $7500.

Lending guidelines will also be significantly tightened. This may seem counter- productive in an effort to stimulate a struggling market, but with stricter qualifying parameters comes a higher faith of repayment and a greater trust between buyer and lender.

This combined with the new buyer incentives and aid to those nearing foreclosure, will provide those selling a home with a more reliable pool of buyers, those buying a home the security of an honest and trusted lender and possibly government assistance, and those in fear of losing their home with hope.

According to Hildinger these new guidelines were necessary and long overdue, and will bring us back to a “new normalcy.” She feels that this is a very exciting time in the mortgage market and knows these changes will benefit an already thriving Central Texas real estate market.

Credits: Belton Journal

Old newspapers, phone books and lottery tickets are trapped within the walls of three homes in Mason.

Mason Greenstar, a new company settling into Mason, is mixing recycled paper with water and cement to create home building blocks to use in place of the conventional wood framing and cement cinder blocks.

Zach Rabon started the company.

“I was just fascinated with the amount of waste that was going into every one of those homes,” said Zach Rabon. “Not to mention all the different crews that had to go into the process of construction itself.”

Rabon plans on sticking to his motto: ‘one material, one crew.’ Each block weighs about 17 pounds and is made of 65 percent recycled paper. When they stack up and are cemented down, they create a monolithic wall.

The material is designed to do more than create less waste in the landfill.

“I have a 3,200 square foot home, and my electric bill runs about $130 a month,” said Rabon.

Rabon built his first “paper block” home for himself. Not only do the walls keep the heat out in the summer, but they help retain heat in the winter. He says home insurance is lower, because the blocks do not succumb to termites, mold, fire, and even bullets.

For Rabon’s father, a fellow home builder, it is the environmental side he has warmed up to.

“I just don’t believe we can afford to cut down anymore trees for houses,” said Kent Rabon.

He also enjoys the Santa Fe style look the walls create.

With so many wood framed homes going up, finding crews with the right skill set to build the homes may the biggest challenge.

“This is very nice, because it is standard masonry and that’s done around the world, but a majority of the frame homes in United States use a different skill set,” said Mason Greenstar investor Ed Risinger.

Risinger is confident the building ‘green’ trend is here to stay.

Equipment is being transferred to mass produce the blocks at their first plant in Mason. The plan is to open up five additional plants across the U.S. over the next five years.  For more information on the material, visit their Web site.

What do you think about this new way of making homes?

Credits: KXAN