The Early Bird

We’re so proud! 

One of our favorite clients, and now, long-time friends, Richard Fellows was recently featured in the Austin American Statesman’s portrayal of downtown residents.  What the article doesn’t say is that Richard has also successfully invested in several other downtown projects.  With a background in financial advising - as managing director of the Morgan Keegan Austin branch, we feel confident to say that in this case, its not just Realtors and developers who are padding and puffing the real estate investment success of a local.  See Richard’s success for yourself.

A new study done by Intuit, (parent company of Turbo Tax) recently named Austin 4th on the top ten tax procrastinators list.  But should this be any surprise?  A self-proclaimed city of hippies could be to blame, or perhaps its just that in Austin, there’s just too many better things to do than sit at the kitchen table and punch a calculator.  According to the study, this is Austin’s second year as #4 on the list, ahead of both Dallas and San Antonio (which both round out the top 11), but preceded by Chicago at #1, New York City at #2, and Houston at #3.  So if enjoying our fun-loving, nature-inspired city is our reason for the late night number crunching . . . what’s Houston’s excuse?  Either way, if you’re one of the last to file, looks like your neighbor isn’t far behind you.  As always, misery loves company.  Read the full article here.

More recent job announcements for Austin is good news for the area:

Global ad firm WPP is combining with Dell to form a branch firm called “Project DaVinci”.  The firm will start out as the dedicated ad agency for Dell, consolidating their advertising efforts to a single office.  Eventually, they plan to expand into other accounts with additional clients that do not compete with Dell.  The firm recently signed a lease for 70,000 SF at Capitol Tower at 9th & Brazos.  The building was recently renovated by Pomeroy Investments – the same firm that is completing the Brazos Lofts across the street.  Project DaVinci plans to open later this year with 200 employees, making it the second largest ad firm in town, surpassing T3.

Capitol Tower Rendering  www.capitoltoweron9th.com

Also, Dimensional Fund Advisors, which opened shop in Austin about a year ago, recently announced that they have awarded the $27million finish-out contract for their new office at the Palisades office complex at 360 & Bee Caves to Spaw Glass general contractors.  Dimensional plans to expand their Austin office to 800 employees over a 10 year period.  Learn more about Dimensional Fund Advisors here.

The Texas economy has, so far, bucked the increasingly dire national downturn, largely because of the thriving oil and gas industry and healthy employment rates.

But experts warn that the state is not immune to the effects of the souring economy and that it typically lags national trends by several months. Read the full article here.

The Wall Street Journal named Austin again as one of the few appreciating markets in the country last week.  More importantly, the article made a key point:  In difficult times, go back to the basics….and in real estate that means one thing:

 Location.  Location.  Location.

The article made interesting notes about the difference in appreciation within different areas in a city.  Round Rock is compared with south Austin in the chart below. 

So what’s the difference in the areas in the charts?  Schools, employers and infrastructure certainly play a factor, but for Austin I believe it is available land.

As national level builders are suffering in the coastal markets, they’re scaling back production and selling inventory in Texas and more stable areas to help recover some of their losses elsewhere.  As a result, they are cutting prices locally to quickly sell their inventory which affects the re-sale markets in suburban Austin.  In the end, pricing all comes back to supply and demand, and Central Austin is remains stable because there are few sizeable tracts available for development which constricts the supply, while demand continues to grow as job growth remains high.  Read the WSJ article.

Case in point, WPP Advertising announced a 70,000 SF lease downtown last Friday.  The new branch agency was formed in conjunction with Dell to consolidate all of Dell’s advertising.  When they open their doors, they will house 200 employees and will be the second largest ad agency in Austin behind GSD&M.  My prediction: as long as job growth remains stable, Austin (especially central) will continue to thrive.  Dell ad agency announcement.

A recent study by economist Ray Perryman states that Austin can absorb all the condos under construction and on the boards.  The article cites 4,000 planned units.  I show more than that in my records, however the article does not specify what they are excluding.  Either way, the summary of the article is that approximately 40,000 NEW people are moving to Austin each year.  If, on average, 800 new units are delivered per year then only 2% of NEW Austin residents each year have to decide to live downtown.  That figure does not include existing Austin residents that may choose to move into a condo for any number of life changes.

Read the Business Journal article on Dr. Perryman’s study.

Joining the ranks of Robert  Kiyosaki (Rich Dad, Poor Dad), and Donald Trump (Billionaire Lessons for the Small Investor), David Crooks hit the nail on the head with his version of the Complete Real Estate Investing Guidebook.  Small enough to fit easily in your carry on (or your back pocket), this tiny guide proves that good things do come in small packages – and this one packs maximum punch. 

Whether you are new to the investing game, or have done it for years, reading David Crook’s guide will be time well spent.  Covering everything from foreclosures, property values, borrowing money, to tax laws this book is simply written, but smartly thourough.  Crooks includes how to save money, and where to spend it to make the maximum amount on your investment.  He discusses where to buy, how to buy, and who to find to help you with the process.  With chapters titled “Why the IRS is your friend,” ”Do you really want to be a landlord,” and ”Why your home is not an investment property” you get the full disclosure on all things investment realated in the real estate world.  For the seasoned investor, it is a fantastic refresher with some new tips , and for the beginner it is a soup to nuts survival guide.  

Keep a pen or highlighter handy and by the end of this read, your book will look like an author’s first manuscript – and you will be ready for the world of real estate investing.  And when that happens – please do give us a call. 

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