Texas Real Estate Daily

The U.S. landscape industry has enjoyed decades of prosperity, but that will continue only if operators find more environmentally-friendly growing and selling methods, and embrace sustainability, says the executive vice president of the American Nursery and Landscape Association.

Speaking Wednesday at Texas A&M University, Robert Dolibois, delivered the keynote address for the Distinguished Lecture Series of the Ellison Chair in International Floriculture.

Dolibois said his Washington, DC-based organization represents some 2,300 companies that provide products and services to about 80 million U.S. households, but he said the relative good fortune of the industry faces crucial challenges that must be overcome for future success.

For one, the industry “has ridden on the back of the Boomer behemoth” for the past 15 years, he said, but now must realize that the primary purchasing population - the middle-aged households - are diminishing.

The industry certainly must pursue the Gen Y’ers - those who now are 18 to 30 years old - as they transition toward maintaining their own homes, Dolibois said, but the industry must also look for ways to extend the Boomers’ interest in buying plants and landscape items.

“In all instances, we need to reverse an alarming trend of reducing the proportion of plant materials relative to hardscaping in residential and commercial design,” he said.

Hardscaping is the use of non-plant materials such as sand, gravel or rock to landscape a space. It is preferred by residents weary of yardwork or those in arid urban environments such as Las Vegas who must decrease the amount of water they use to maintain their properties.

Dolibois said new programs such as the Sustainable Sites Initiative being developed in Austin in cooperation with the American Society of Landscape Architects, the Lady Bird Johnson Wildflower Center and the U.S. Botanical Gardens, can show the way.

Just as the U.S. Green Building Council’s LEED® rating system measures a building’s environmental impact, the Sustainable Sites Initiative will measure the sustainability of designed landscapes of all types including public, commercial, and residential projects using a site rating system now under development.

The U.S. Green Building Council is lending its support to this project and anticipates adoption of the Sustainable Sites metrics into its LEED system once they are finished.

“Embracing sustainability,” said Dolibois, is a vital key for the industry’s success.

“At this point, it is invoked as both blessing and curse,” Dolibois said. “It is time for us to more fully pursue the concepts, define its threats and opportunities and, in significant measure, declare industry ownership of its implications for us.”

“Let’s re-engineer, re-use, revert and recycle like we never have before,” he said.

But pursuing customer groups and stepping up environmental efforts, along with possible increased regulation and the industry’s lack of research and development funds, can only be met with better problem-solving skills, Dolibois said.

“Our defense must now be built on hard data and communicated by industry business owners in their terms with authentic examples, repeatedly,” he stressed. “Such a defense will require much more research and understanding than we currently enjoy.”

Dolibois said meeting the industry’s challenges successfully is achievable “provided we build on a strong foundation of collaboration.”

The Sustainable Sites Initiative will issue its next major report on sustainable landscape design for public comment in November. A preview was presented at the American Society of Landscape Architects annual meeting and trade show that concluded Tuesday in Philadelphia.

Credits: Ens-Newswire

Retail gasoline prices in Austin have fallen an average of 22 cents over the last week as refiners increase the supply of fuel on the market after recovering from Hurricane Ike last month.

Also, the current economic downturn is driving down the price of crude oil on the commodities market.

Drivers in San Antonio are currently paying $3.26 on average for a gallon of regular gasoline. That’s down from $3.49 the week before, according to AAA Texas.

Three months ago, local drivers were paying a record high of $3.96 a gallon, more than 78 cents higher than what they are paying at current levels.

“Fuel demand in both the U.S. and Europe is lower than last year, the current economic situation has driven down the price of crude oil, and Gulf refineries are just about back to their normal volumes for production and delivery, after Hurricane Ike,” says AAA-Texas Houston spokesperson Sarah Schimmer. “With lower demand, and more fuel in the market, Texas prices have decreased.”

The statewide average price of regular unleaded gasoline fell by more than 22 cents over the past week to close at $3.28 a gallon. That mirrors the national average of $3.40 a gallon, also down about 19 cents from last week.

Credits: Biz Journals

Only six months ago, John McCain advocated “temporary” help for homeowners facing foreclosure while preaching against a “bailout” of irresponsible parties – “whether they are big banks or small borrowers.”

On Wednesday, he pitched his new $300 billion plan for the government to buy distressed mortgages from banks without making them take a discount on the sale. The loans would be reduced, at taxpayer expense, so borrowers could afford to keep their homes.

The plan reverses Mr. McCain’s long-held aversion to bailouts, yet reflects a rising consensus that only the federal government’s deep pockets can save both banks and homeowners. Some critics conceded the plan might work even as they criticized it as welfare for banks that made bad loans.

“One of the pluses of Senator McCain’s plan is he’s saying we need to make this happen, the government needs to play a proactive role in buying these loans,” said John Taylor, president of the National Community Reinvestment Coalition.

Yet Mr. McCain would have banks selling the endangered mortgages at face value.

“It’s a total bailout,” Mr. Taylor said.

The proposal is likely to generate fans in some battleground states, such as Ohio, where foreclosure rates are among the nation’s highest. It may be viewed less favorably in states such as Texas, where the number of subprime-loan foreclosures is below the national average.

The plan may also be more difficult to implement than Mr. McCain suggests because individual loans are sliced and wind up as pieces of complex securities held by different investors, making it difficult to determine who owns a single loan.

Democrat Barack Obama criticized the plan Wednesday, saying it would “massively overpay for mortgages” and “guarantee” that taxpayers lose money.

“The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud,” his campaign said in a statement.

Critics said Mr. McCain’s idea isn’t new. Elements have appeared in proposals by Hillary Rodham Clinton in March, in the bailout engineered by Treasury Secretary Henry Paulson and by conservative academics in recent weeks.

Mr. McCain’s campaign conceded the plan echoes previous calls for the government to buy mortgages. But the proposal would work more quickly and could reach “millions of people,” said Douglas Holtz-Eakin, Mr. McCain’s senior policy adviser. The plan would use existing government programs to reduce foreclosures and stabilize housing prices.

Borrowers with subprime or adjustable-rate mortgages who can show creditworthiness would get federally insured fixed-rate mortgages. The interest rate would be around 5.25 percent, according to the McCain campaign.

The campaign says that if the program is successful, it could reduce the need to spend even more money to buy mortgage-related securities held by banks. Lawmakers authorized $700 billion for that effort, which can purchase whole mortgages.

Mr. Holtz-Eakin said more lenders would participate if they don’t have to take a loss on loans they sell. Lobbyists for financial-services companies agreed.

“Offering to purchase them at face value vs. a discount would make them more attractive,” said Scott Talbott, a lobbyist at the Financial Services Roundtable, which represents the country’s largest banks and insurance companies.

However, it’s not clear that the mortgages could quickly be sold to the government. The packaging of mortgages to investors creates “a layer of complexity” that may slow progress so much that the effort is “helpful, but too late,” Mr. Taylor said.

But James Gaines, research economist at Texas A&M University’s Real Estate Center, said the government could buy individual mortgages. The government has made some progress refinancing exotic mortgages through a voluntary program known as Hope Now, though its reach has been questioned by some critics.

“It does seem that a fundamental level buying the mortgage might have the most bang for the buck,” Dr. Gaines said. “You’ll be helping the borrower and keeping people in their houses, which also simultaneously might help stem the flow of the real problem, which is declining home prices.”

Yet analysts cautioned that Mr. McCain’s approach might not reach enough borrowers to make a difference.

Many loans were made to borrowers who didn’t provide a down payment or didn’t show proof of income – the latter known as Alt A loans.

In the first half of 2006, 16 percent of the value of all loans was in Alt A loans, according to the Mortgage Bankers Association. Even in the second half of 2007, after lenders began to pull back on such loans, the figure was 7.8 percent.

“In general, he has the right idea,” Dr. Gaines said. “What they are leaving out is there are other loans, beside subprime, that are also problematic.”

Credits: Dallas News

As Wall Street reeled and global markets plunged, President Bush on Monday said the U.S. economy is going to be “just fine” in the long run. But he cautioned that the massive rescue plan will take time to work.

On another jittery day in the financial markets, the president made two rounds of unscheduled comments on the economy — first after meeting with small-business owners in San Antonio, and then at the top of a speech in Cincinnati about judicial nominees.

In both cases, he defended the $700 billion economic bailout plan as one that won’t just help Wall Street, but everyday workers and businesses, too.

“I believe that in the long run, this economy is going to be just fine,” Bush said. In the short term, he said the Treasury Department must go about enacting its plan to buy up troubled assets from financial firms so that credit will start flowing again to consumers.

Recognizing the scope of the government’s intervention, Bush to reassure his audiences that taxpayer money will not be wasted.

The president added that the country has been through rough times before, and “we’re going to come through just fine.”

Earlier, in Texas, Bush emphasized that the program must be effectively designed and not rushed into action.

“It’s going to take awhile to restore confidence in the financial system,” he said. “But one thing people can be certain of is that the bill I signed is a big step toward solving this problem.”

Bush signed the bill into law after Congress approved it last week.

On Monday, the Dow fell as much as 800 points at one point.

The catalyst for the selling was the growing realization that the Bush administration’s $700 billion rescue plan and steps taken by other governments won’t work quickly to unfreeze the credit markets. Global banks, hobbled by wrong-way bets on mortgage securities, remain starved for cash as credit has dried up.

The president, after a weekend at his ranch in Crawford, Texas, met with small business owners at an old-fashioned soda shop in San Antonio. He said he understands why so many people are frustrated about why they were suddenly “helping Wall Street.”

“The answer is because had we not done anything, people like the folks behind me would be a lot worse off,” Bush said as the business owners stood with him. “We’ll make sure, as time goes on, this doesn’t happen again.”

Bush’s comments came as his top economic advisers pledged to work with their counterparts around the world to restore confidence and stability to financial markets roiled by tight credit and worries about a global economic slowdown.

To that end, the administration was expected to announce shortly that it had tapped a 35-year-old former Goldman Sachs executive, Neel Kashkari, to head the government’s rescue effort on an interim basis, according to an official who asked not to be named.

Credits: Associated Press

Voters in 3 Tarrant County towns went to the polls over the weekend voting on tax hikes to help local schools.

The measure failed in Crowley with 56 percent of voters against the plan, but it passed in Kennedale by a narrow margin.

In Lake Worth, 61 percent voted in favor of the tax hike.

The hikes add $260 to the taxes on a $200,000 home.

Credits: NBC 5

Several taxpayer relief provisions are available in the Texas Property Tax Code for governments, as well as property owners in counties that have been declared a disaster area.

Section 23.02 allows governments to require the appraisal district to reappraise all properties located in their jurisdiction in order to determine the values immediately after a storm.

Galveston County is one of 29 Texas counties declared to be disaster area and, therefore, all 68 taxing jurisdictions located within the county are eligible to require reappraisal. Cost of the reappraisal is shared by all jurisdictions participating.

Section 31.032 of the Texas Property Tax Code allows owners of residential properties of less than five units that were damaged by the storm to make installment payments without incurring penalty and interest if the following conditions are met: The first payment is received by Feb. 2 (second payment by March 31, third by June 1 and fourth by July 31); and a request to take advantage of the payment option is provided to the Tax Office along with the first payment.

Credits: Galvnews

The effects of Hurricane Ike on the Texas retail gasoline market faded this week, allowing prices at the pump to fall by an average of 10 cents per gallon.

The weekly AAA Texas gas price survey released Thursday showed regular-grade self-serve was averaging $3.50 per gallon at Texas pumps. Nationally, regular grade averaged $3.60 per gallon, also down a dime from last week.

“Supplies in Texas appear to be sufficient to meet demand, and prices are falling nearly back to the level they were before Hurricane Ike,” said auto club spokeswoman Sarah Schimmer. “The refineries and pipelines are reopened and increasing their capacity to refine and deliver gasoline.”

El Paso has the state’s most expensive gasoline with regular grade averaging $3.59 per gallon, down 6 cents per gallon. Amarillo has the cheapest average price at $3.29 per gallon, down a dime from last week.

Ike struck Southeast Texas on Sept. 13.

Credits: Chron

Texas real estate continues to be a lot more stable than the rest of the country.

There’s a less than 1 percent chance that home prices will fall in San Antonio, Austin, Houston, Dallas or Fort Worth during the next two years, according to the new Fall 2008 U.S. Market Risk Index.

The index is released by PMI Mortgage Insurance Co. and looks at measures including price appreciation, affordability, unemployment, mortgage origination trends, foreclosures and unsold inventory to predict volatility in home prices in the largest 50 cities.

Nationally, increases in foreclosures and unemployment have made price declines more likely, according to PMI.

The nation’s riskiest real estate markets are in California, Florida, Nevada and Arizona.

There’s more than a 99 percent chance of home prices falling in the next two years in Tampa, Miami, Orlando and Fort Lauderdale, Fla., and in Riverside, Calif., according to the risk index.

In addition to Texas cities, other low-risk markets include Pittsburgh, Indianapolis, Charlotte, N.C., St. Louis and Memphis, Tenn.

All of the low-risk cities on the index had relatively affordable home prices and low unemployment rates. The riskiest cities for real estate had more unaffordable home prices, according to the index.

Credits: My San Antonio

Tracie Staten has everything she needs to buy a house: a down payment, great credit and a job. But with the nation’s economy in turmoil, she lacks the one thing required to move forward — confidence.

“I don’t want to get this house and all of a sudden things go downhill in our economy,” said Staten, a 25-year-old insurance adjuster. “I don’t know what the next few months will hold.”

The government’s struggle to reach an agreement on a $700 billion bailout package, a tightening credit market and lingering effects of Hurricane Ike are adding to the woes of Houston’s already softening real estate market.

“Right now there’s a general pervasive attitude that everything is going down: ‘I don’t want to buy a home now because prices may go down. I don’t want to invest my money because all my friends just lost thousands of dollars in their 401(k) yesterday,’ ” said Jim Gaines, an economist at the Real Estate Center at Texas A&M University.

Houston-area home sales have fallen each of the past 12 months, making their biggest drop in August when they plunged 20 percent. September figures are still being tallied.

Housing experts said the failure of Congress to complete a financial bailout has only worsened the problem.

Sellers have begun pulling homes off the market as they wonder if it is the right time to sell, said Steve Barnes, president and chief operating officer for the Houston region of Coldwell Banker United, Realtors.

Though perceptions about the economy can be blamed for part of it, some is hurricane-related. Insurance companies are requiring buyers to have homes reappraised, reinspected and recertified.

“With Hurricane Ike, coupled with no bailout, consumer confidence has got to be at an all-time low,” Barnes said.

Despite the uncertainty, Houston could be in a better position to weather the storm.

The area housing market has outperformed many others because of energy-related job growth. While sales have been slipping, inventory hasn’t gotten out of whack, and prices have remained stable.

That’s not to say the credit crunch hasn’t affected Houstonians. For months, buyers have been subject to tougher lending standards from banks burned by defaulting borrowers.

Builders have scaled back, too, and some are having a hard time getting loans themselves.

There’s little or no money available for land development loans, also known as “ADC loans,” which stands for acquisition, development and construction, Gaines said.

For those who sell real estate for a living, volumes are down — hurting some more than others.

“Our business has just fallen off a cliff,” said Shad Bogany of ERA Bogany Properties. “We were doing OK until the bailout. It’s almost like the phones have stopped ringing.”

Though buyers are skittish and lenders more cautious, it hasn’t gotten so bad here that it’s halted mortgage lending.

“They’re still in business. And if nothing happens, they won’t make any money,” Gaines said about the lenders.

Complicating matters for would-be buyers, mortgage rates are up over the past week.

In Texas, rates for 30-year mortgages were 5.94 percent at the end of last week, up from 5.75 percent the week before, according to Zillow, a real estate Web site that tracks home prices and mortgage rates.

Still, that doesn’t necessarily mean they’re on an upward trend, said David Zugheri of First Houston Mortgage.

Rates went down when the government said it was taking over Fannie Mae and Freddie Mac, he noted.

“The one thing we all know and can agree upon is the government is fully committed to the housing market,” he said.

Consumer sentiment should improve when the government agrees on a plan that’s expected to put more liquidity in the market, experts said.

Staten, while concerned about her taxes going to rescue banks, is craving some sort of solution. She’s been saving for more than a year and is ready to sign a contract on a three-bedroom Humble-area house.

“To at least have something in place, I would feel a little bit better,” she said.

Credits: Chron