Lakeway annexing 1,000 acres in the next 10 years


By Aden Holasek Friday, 05 November 2010 (Source: Community Impact News, for access to actual article, please click here.)

LAKEWAY — Under the recommendation of developers, the City of Lakeway plans on annexing about 1,000 acres in the next 10 years. Much of the annexed areas is already under construction or planned for new single- and multifamily homes, as well as some mixed-used developments.

City Manager Steve Jones said once that land is annexed the city will be finished expanding. Jones said the Lakeway City Council has discussed annexing portions of the Hill Country but believes the ranching culture in that area does not match the lakeside lifestyle of Lakeway. He said the city feels the same about land to the south, beyond Hwy. 71.

The rest of the City of Lakeway is bordered by the City of Bee Cave, Lake Travis, the Hill Country and Austin’s extraterritorial jurisdiction.

Growth in the city

Former Lakeway Mayor Steve Swan said Lakeway was developed in the late 1960s as a place for Houstonians to retire or to buy a second home. At that time, it was not considered an Austin suburb.

In the past 20 years, Lakeway’s population has doubled due to modern infrastructure and the quality of schools in the area, making Lakeway more accessible to those with jobs in downtown Austin and to families with school-aged children.

With Lakeway Regional Medical Center planned to be complete in 2012, more families are expected to move in.

Mayor Dave DeOme said the medical center will bring an estimated $300 million to the city’s tax base, increasing the current tax base of roughly $2.4 billion by 12.5 percent.

“I don’t think any of us have a full understanding of what the hospital can or will do for the community,” Swan said. “But it will have a major impact on the whole area.”

Though the total impact the hospital will have is unknown, employees at varying salary brackets will likely be looking for housing in Lakeway as the hospital begins hiring.

While the hospital will not be complete for another two years, the need for more homes is already growing in Lakeway.

“Activity in single-family development revenue shows that the economy [in Lakeway] is recovering,” Jones said. “More people are moving out here for the quality of life.”

He said the first model homes in two years have been built in Lakeway—in the Ridge at Alta Vista and Terrace at the Preserve Condominiums. Buyers are already showing interest in the homes, with eight out of the available 30 homes in Terrace at the Preserve sold within 30 days.

Those communities are two of the half dozen or so under construction in the city. Little residentially zoned land remains open outside of these developments, but according to city records, these communities will add approximately 3,400 residences to the city.

Legend Communities, the company that is developing Rough Hollow and Tuscan Village—two of the eight residential communities being developed in Lakeway—owns the majority of the undeveloped land in the city. The company develops mostly single-family communities; however, Haythem Dawlett, founder and principal of Legend Communities, sees a need for additional multifamily units in Lakeway.

He said there are approximately five apartment complexes in the nearby area, each 94 to 98 percent full. He believes hospital employees will need this type of housing, so he plans on including apartments and town homes in Rough Hollow, which will be the first multifamily housing within the city limits of Lakeway.

The residential growth in Lakeway has resulted in an increase in commercial growth, Jones said.

According to city data, there are eight developments already planned for Lakeway that will have commercial space. Included in these projects are one to two hotels, some restaurants and medical complexes. The majority of the space, however, will be for retail shops.

Dawlett said retail will follow demand, but he sees the limited amount of land in Lakeway as a hindrance to potential businesses. He believes the land and community can only support one more large retailer—such as H-E-B, which already owns land in Serene Hills. The rest of the land, Dawlett believes, will be developed into shopping plazas or a centralized town square.

“Mom and pop stand-alone businesses will not work; they need the density [of a shopping plaza] to create a mass attraction,” Dawlett said.

Impact on the city

Adding all this new residential and commercial traffic to an area that is not increasing in size will put more traffic on already strained roads, water systems and schools, Jones said.

Jones said while people rarely like to pay higher taxes, it usually takes bonds or tax hikes to pay for those infrastructure changes, such as new schools.

“Growth does not pay for itself,” Jones said. “For example, people move in and drive the need for a new school, but it is the people who live here already that pay for it. They did not cause the growth, but they have to pay for it. It is not the fault of the school district but the fault of the design.”

Two schools are already planned for Lakeway: an elementary school inside Rough Hollow and another just outside the city limits on the west side of Bee Creek Road.

Dawlett’s company paid to install a right-turn lane from Lakeway Boulevard onto Lohman’s Crossing Road and constructed Highland Boulevard, giving Lakeway residents greater access in and out of the city. He said he believes this will greatly help the residents of southwest Lakeway but does not think roads are the most limiting infrastructure issue.

“The compromising thing about growth in Lakeway is the sewer,” Dawlett said.

He said there is no sewer system that serves the whole city, but there are six utility districts. He adds that some of the open land in Lakeway is being used as irrigation land for those districts and believes they could be relocated in Rough Hollow to allow for additional growth near the city center.

Regardless of whether the infrastructure is ready for it, growth continues in Lakeway.

Swan said that while citizens may be split on whether growth is a good thing, he said he thinks the strict ordinances already in place will help the city maintain its charming nature.

“Lakeway will be different than what we know today,” Swan said.

Austin commercial foreclosures up; banks get aggressive

Austin Business Journal – by Francisco Vara-Orta

Date: Thursday, November 11, 2010, 5:13pm CST – Last Modified: Friday, November 12, 2010, 8:11am CST

Read more: Austin commercial foreclosures up; banks get aggressive | Austin Business Journal

Foreclosure postings of commercial real estate in Austin are up 13 percent so far this year compared with the first 11 months of 2009, according to a new report. But the tail end of the year has shown improvement, and as savvy investors pick up some few remaining steals, the market is cautiously optimistic.

From January through November, there were 951 foreclosure postings filed on commercial properties in the Austin metro area, compared with 838 for the same 11-month period last year, according to Foreclosure Listing Service, which tracks such activity throughout Texas.

Addison-based Foreclosure Listing Service’s report included several …

Read more: Austin commercial foreclosures up; banks get aggressive | Austin Business Journal

Fannie Mae asks for $2.5B in new government aid

WASHINGTON (AP) — Government-controlled mortgage buyer Fannie Mae is asking for $2.5 billion in additional federal aid after posting a narrower loss in the third quarter.Fannie Mae also said Friday it was likely that the market disarray and suspension of foreclosures due to big lenders’ problems with flawed documents will have a negative impact on the delinquency rates of its loans, its expenses and foreclosure timelines. However, the company said, “we cannot yet predict the extent of its impact.”

Fannie Mae said Friday it lost $3.46 billion, or 61 cents a share, in the July-September quarter. That takes into account $2.1 billion in dividend payments to the Treasury Department. It compares with a loss of $19.8 billion, or $3.47 a share, in the third quarter of 2009.

The government rescued Washington-based Fannie Mae and sibling company Freddie Mac about two years ago and it estimates that will cost taxpayers up to $259 billion. That’s nearly twice the $133.4 billion Fannie and Freddie are in line to receive from taxpayers so far and would make it the most expensive bailout of the financial crisis.

The $2.5 billion in additional aid that Fannie is asking for compares with a request for $1.5 billion in the second quarter.

Fannie and Freddie together have repaid $16.7 billion as dividends to the Treasury Department.

Fannie’s chief executive said Friday the latest results reflect ongoing efforts to contain losses from the high-risk mortgages it bought from 2005 to 2008 and to build up new, more profitable loan business with tighter lending standards.

McLean, Va.-based Freddie Mac reported Wednesday that it managed a narrower loss of $4.1 billion for the third quarter and asked for an additional $100 million in federal aid — far less than the $1.8 billion it sought in the second quarter.

But neither Fannie nor Freddie are out of the woods yet.

The two mortgage giants have been hit by massive losses on risky mortgages purchased from 2005 through 2008. The companies have tightened their lending standards after those loans started to go bad, and default rates on new loans are far lower.

The housing market, however, remains a huge challenge. High unemployment, tepid economic growth, tight credit and uncertainty about home prices have kept people from buying.

Add to that the uncertainty stemming from allegations that big lenders used flawed foreclosure documents to seize millions of homes, a controversy that could put added scrutiny on Fannie and Freddie and bring fresh losses for them.

Fannie and Freddie used some of the same law firms that are accused of processing foreclosure files with flawed documents. They are revoking thousands of foreclosure cases from one Florida law firm which is under investigation for falsifying documents used to complete foreclosures.

Several major banks have been accused of similar conduct. If the banks can’t resolve their foreclosure problems and are barred from seizing many homes, Fannie and Freddie could absorb huge losses on loans they own or guarantee. That’s because they would no longer be able to recover anything on loans that have gone bad.

Fannie and Freddie buy up home loans from lenders, bundle them together into securities with a guarantee against default and sell them to investors worldwide. They own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion.

Fannie Mae reported its earnings three days after midterm elections in which criticism of the government’s financial bailouts had figured prominently in many races. Fannie and Freddie have many critics, especially among Republican lawmakers whose party gained control of the House in Tuesday’s elections.

Over the next year, lawmakers plan to review the nation’s mortgage-lending system and consider a potential replacement for Fannie and Freddie. The financial overhaul signed by President Barack Obama in July didn’t address that issue, despite protests from Republicans that it was incomplete without such a plan.

An analysis issued Thursday by Standard & Poor’s found the total eventual cost to taxpayers of rescuing Fannie and Freddie and funding new entities to replace them could reach $685 billion.

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Tax credit pushes April home sales up 7.6% from March

By Stephanie Armour, USA TODAY

Existing home sales jumped in April as buyers rushed to take advantage of home buyers tax credits before they expired last month.Sales increased 7.6% to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, according to a report Monday from the National Association of Realtors (NAR). That’s 22.8% above the 4.70 million-unit pace in April 2009.

Economists attribute much of April’s boost to buyers’ scramble to buy homes before the deadline for the tax credit, which provided up to $6,500 for move-up buyers and up to $8,000 for first-time buyers. Sales are expected to weaken after June.

“I thought the market would get a nice impact (from the tax credit),” says Lawrence Yun, chief economist with NAR. “But (growing) inventory is raising a little concern. It could put downward pressure on prices. Through June, sales will be elevated, and after June, measurably lower.”

The national median existing-home price was $173,100 in April, up 4% from April 2009. Distressed homes, which include those sold at foreclosure or short sales, accounted for 33% of sales last month. Distressed properties tend to bring down overall home prices.

Total housing inventory at the end of April rose 11.5% to 4.04 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, up from an 8.1-month supply in March.

The recent rise in home sales is attributed to other factors along with the tax credit. Home prices in general have fallen so low that they’re luring more buyers.

Mortgage rates also have hovered around a low 5%, making it an attractive time to purchase a home, says Stuart Hoffman, chief economist at PNC Financial Services.

“Everything sort of just lined up,” Hoffman says. “You had a very active market. (But) the upward momentum won’t be sustained at this pace.”

Joel Naroff, at Naroff Economic Advisors, says he expects sales will fall fairly sharply in the next couple of months.

“We are going to get a couple of months of softer sales,” Naroff says. “But there are enough factors out there to provide growing sales throughout the year. I also think prices are going to go up.”