Austin Market Update: 2009 – 2nd Quarter

The Austin real estate market continues on an even keel, with pockets of high inventory, particularly in upper end homes.  Below is a review of our second quarter market analysis -  focusing on the number of months of inventory for sale in each MLS section.  Our goal in this study was to spot changes in inventory that predict where the market is going.  This data is for single family houses, without condos. 

2^nd Quarter 2009 results are posted here:  Austin Market: 2009-2^nd Quarter         

1^st Quarter 2009 results are posted here:   Austin Market: 2009-1st Quarter

Austin as a Whole:

For the Austin area as a whole, the inventory of houses on the market was 6.3 months at end of 2^nd Quarter, 2009.  By comparison, the inventory was 5.9 months at end of the 1^st quarter.  So, inventory has grown slightly, but our position is still at a medium level.  Overall, Austin continues to have a balanced real estate market. 

Austin in Parts:

We reviewed 45 different geographic sections in the Austin area:

Seller’s Markets:  7 sections had less than 4 months of inventory 

Balanced Markets:  18 sections had 4 – 6 months of inventory

Buyer’s Markets:  20 sections had over 7 months of inventory

The buyer’s market sections were not so overloaded that they brought the whole Austin market into “buyer’s market” range.  The overall average for the Austin area was in the balanced range – at 6.3 months of supply.

Price Range:

It is clear from this study that higher priced homes tend to be over supplied in most market areas.  Areas with many homes over $800,000 include Central and Northwest Austin, Westlake, Barton Creek, and Lake Travis.  These neighborhoods tend to be selected by builders who add to the supply.  We expect to see this inventory dropping, since new starts are down.  However, by the end of second quarter the number of homes for sale over $800,000 increased.  Months of supply for homes over $800,000 are:

                   1^st Quarter             2^nd Quarter
                   Months Supply       Months Supply

Area 1B       25.1                      28.7

Area 8E        21                         21.6

Area 8W      22.1                      23.7

Area W        24                         25.8

Area LN        34                         40.4

Area LS        28.8                      38.8

Foreclosures:

On average, foreclosures are 3.6% of listings on the market – not a significant part of our market.  At the end of the first quarter they were 3.7%, so not much change.  However, some sections of Austin have more foreclosures than this.  These include the Manor, Elgin, Bastrop and some Southeast areas.  Here you may see foreclosures at 8% to 12% of listings.  These areas were popular with first time homebuyers, and were also targeted by investors during the boom market.  The good news is that these neighborhoods do not have high inventory levels.  This indicates that their foreclosures are being absorbed quickly and inventory is not building up. 

Conclusion:

In Austin we are not faced with serious depreciation, as a result of prices that were pushed to unsustainable levels. 

We are not faced with a serious foreclosure problem, generating its own downward spiral. 

And, we are not faced with widespread job loss.  We are a city that people are moving to.  Forbes ranked Austin #2 in Top Ten Cities for Relocating, citing “the metro area’s thriving music, film and fine arts scenes, but it’s also about the employers, which include University of Texas, Advanced Micro Devices and Dell.”

The current market still has higher than normal inventory in many popular neighborhoods – where builders were counting on faster absorption.  This is true of all price ranges, and is especially noticeable in the higher end. 

For buyers it is a great time to come into the market.  Interest rates are the best in a lifetime, and they certainly will not remain this low.  This is not the time to be waiting around for a better deal.  It is the time to start shopping for a great place to live in Austin!

Austin McMansion Ordinance – Considering the Consequences

Austin attorney, Chris Bradford, published an interesting article about Austin’s demographics entitled, How Austin’s Rise Became a Tale of Two Cities.  He looked at census data that shows that households with children are more concentrated in the suburban parts of the Austin area.  The reason, he says, is simply that people can get larger, cheaper, and newer homes in surrounding suburbs than they can in the central part of Austin.  I would like to add to his piece with a story from our own experience.     

A family relocating to Austin from another city tells us that they can afford up to $500,000, and would like to live in one of Austin’s central neighborhoods.  We show them homes in our older central areas with their eclectic mix of homes and tree lined streets.  Slowly, they become aware of the degree of remodeling necessary to make these homes suitable for their needs – a daunting task for most folks. 

For example, in one area (W of Lamar; E & N of Lake Austin; S of 2222) the average home between $300,000-500,000 may be described as follows: 

Price – $415,975
Bedrooms – 3
Baths – 2
Built – 1952
Size – 1,583 sq feet
Garage – 0 to 2

Even though they are older, these neighborhoods are suburban in nature, built around the use of a car.  Yet, often the garage has been taken in by prior owners for extra interior space.  Perhaps a carport and some storage could be added, my clients say. 

Next, we consider the house.  What can be done to make the structure better fit their needs?  Should they budget $85,000 to remodel and add on?  This will bring them to the upper end of their range for a home.  Will $85,000 be enough?  No, it will not.  Another 1,000 square feet would bring the size up to 2,583.  At $200 per square foot, this will come to $200,000.  

And what about the nearly sixty year old foundation, plumbing, wiring, duct work, and roof?  What about the new code requirements since 1950?  What about the amateur remodeling done in the 70’s and 80’s?  What about that silver wallpaper, popcorn ceiling, and vinyl siding that made so much sense at the time?  Remodeling is a tricky business that takes skill and experience.  Is this relocating family up to the job?  Or will they burn up a lot of money trying to renew an old structure, and find that their investment has burned up in the process?    

Perhaps this house should be considered a tear down.  Now we are up to $450,000 for a lot, including the demolition.  The usual rule of thumb is to allow about 25 – 30% for the land out of the total budget.  This calls for a $1.5 – $1.8 million total cost package.   

Perhaps a suburban neighborhood around Austin would be a better fit for our relocating family at this time in their lives.  There are plenty of choices – some suburban neighborhoods are quite close-in, others belong to a small satellite city.  Their choice is to adapt to a much smaller home in central Austin than they would prefer, or to move on to greener pastures – a suburb on Austin’s perimeter.  

We bought our first home in central Austin as college students years ago – the only young people on the block.  Over the years we have witnessed the central neighborhoods of Austin evolve.  A variety of people – from singles, to couples, to large family groups – moved in and improved or expanded their homes. Remodeling and revitalization was constant.  Demand was steady and prices moved up.   

Today, more than ever, the entry level budget for a home in central Austin is high.  But, many people would like to do as we did years ago.  They would like to buy a house with the idea of saving for a remodel and addition in the future.  They get their foot in the door, and figure out how to improve the house later.  It is a risk they are willing to take. 

In 2006, moving to central Austin got a lot harder.  The McMansion Ordinance added a new level of difficulty to an already expensive and risky process.  The word McMansion conjures up a cheaply made extra-large house that that is devoid of architectural integrity.  Ironically, this does not describe the mostly modern, craftsman, or prairie style homes built on expensive lots in central Austin in recent years.  

Under the Ordinance, homes are restricted to either 40% of the lot size or 2,300 square feet.  An expert is needed to figure out if your remodel plan complies with this law.  Does your house plan stay within the virtual three-dimensional envelope?  What about the side wall articulation (think of a 10’ chunk carved out of your dining room)?  Can you squeeze bedrooms into an attic or basement that does not count as living area?  And the carport – counted as living area if there is interior space above it, or not counted if free standing.  Do you have the presentation skills to ask for a variance?  How many billable hours will it take to figure out what you can legally do?    

Austinites have lived with this ordinance for three years.  Perhaps it is time to take a look at how these rules are working for homeowners.  Are people happy with it, or are they giving up in frustration on remodeling projects?  Have we weakened demand for central Austin neighborhoods?  And, could this ordinance lead to some unintended consequences, as Chris Bradford points out?

Website:  www.weloveaustin.com

Austin Present & Future: A Joel Kotkin Interview

(Roselind)  I was pleased to read your recent article about the best cities for job growth.  You selected Austin as the #1 Big City for job growth.  What put Austin at the top of the list?  

(Joel)  Austin has a very good combination of assets.  You could call it blue state sophistication – universities, culture, music, high end knowledge workers – meets red state cost structure – that is, relatively cheap housing and low taxes.  It’s driven a lot of growth. 

Perhaps more than even other Texas cities, Austin benefits by having huge publicly-subsidized employers – the University and state government.  Ironically, these are more stable in Texas because there is still some private sector growth in the state, and costs are not totally out of control, as they are, say, in New York or California.  Again, the bizarre blue state in a red state phenomenon works out to Austin’s favor. 

(Roselind)  I read the article on your site about the four great growth waves in the U.S. and the cities they produced:

           a. The original power spot was the New York, Washington DC and Boston areas.  

          b. The rise of agriculture and industry gave us Chicago, Detroit, Cleveland, and Pittsburg. 

          c. A westward migration after World War II developed Los Angeles, Seattle, Las Vegas and other cities.  

          d. Now the baton is being handed off mostly to Texas.    

This is a huge fundamental change that I was not aware of.  We are an artsy, laid back, university town.  The mantra is “Keep Austin Weird.”  This was a misspelling of a “Keep Austin Wired” bumper sticker, but it seemed to resonate with Austinites.  How do you think this wave of migration and prosperity will affect Austin?  

(Joel)  I think Austin has this self-image but its reality is changing. When I go there, I see it more and more like an elite version of Dallas.  I remember Austin in early 1970s when it was a small college town.  Now it’s more like other big cities in Texas.  The big difference is its shtick is different. 

Houston’s self-image is as a wide open “opportunity city”.  Dallas craves respect as a sophisticated business city.  San Antonio relies on Texican charm.  In the same way, “weird” is Austin’s shtick. And it works as long as the Texan fundamentals remain in place. 

But it is clear that growth and success will change the city. 

Los Angeles became a very different place by 1990 than it was in 1975 when I got there. There were huge improvements in food, shopping, culture and intellectual climate but declines in the wide-open, sun-worshipping classic LA culture. You will see some trade-offs as well. 

(Roselind)  We have some interesting urban growth in Austin promoted by the city – part of an overall green incentive to be the greenest city in the nation.  These include the new residential buildings downtown.  There are also some “urban hubs” such as the Mueller area – the old airport converted to homes, offices, and retail. 

Austin has always been a suburban town, since most its growth took place after World War II.  Commercial buildings, or even a grocery store, were not allowed in a residential area.  Even in our old neighborhoods, you go and come in your car.  

What do you think of these areas?  Are they happening in other parts of the country?  They seem to be what people want.  The trade off is that the lots and houses are very small compared to suburban houses. 

(Joel)  Urbanism has a future, but it will likely remain a niche. Nationally the urban condo market is in free fall, in many ways worse than suburbs. I would estimate 10-20 percent of people want to live in dense environments, perhaps more in places like Austin and less elsewhere. The real estate industry hyped itself into hysteria. 

Some trends – like huge numbers of downshifting boomers moving downtown – were vastly over-exaggerated. The research shows very few moved, and many who did were largely speculating.  Now there’s a surplus of units that were built for the affluent and older people, and they are desired mainly by younger, less affluent people.  In places like Austin, these places likely won’t remain empty, but some developers will take a huge haircut. 

The problem with the “green” and “new urbanist” approach is that it is top down.  It does not jibe with job growth (overwhelmingly suburban), or market and price signals, and relies on government to force it onto the market.  Better to improve existing suburbs with parks, local pedestrian-friendly districts, and let the city develop organically. 

In other words, let well enough alone and focus on schools, the economy, and basic infrastructure.  If there’s going to be a huge shift to urban living, let the market drive it.  Btw, every city is right now on a green kick.  Nothing particularly unique about it. 

Thanks to Mr. Kotkin for sharing his highly valued opinion with me.  Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.)

Austin Texas Real Estate

 

Austin Texas Real Estate: 2009 1st Quarter Report

 

It has been said that real estate markets are very local.  This is clear to us as we work throughout Austin.  On one day we may find ourselves dealing with multiple offers, or see clients lose their favorite choice because they did not act quickly enough.  And, on another day in another part of town, we pull up a long list of homes with multiple price reductions to show a client.  Even just within the Austin region, painting with a broad brush can hide the nuances in the marketplace. 

 

So we looked at the market section by section.  We checked the median price for each section and counted the number of foreclosures for sale.  And, we computed the number of months of inventory for sale.  The time needed to sell current inventory – at the sales rate of the previous 12 months – reveals the state of the underlying market.  The results are posted here: Austin Market: 2009-1st Quarter

Austin as a Whole:

For the Austin area as a whole, inventory stands at 5.9 months of supply.  This medium level of inventory indicates that, overall, Austin has a balanced real estate market. 

Austin in Parts:

We reviewed 54 different geographic sections in the Austin area:

8 had less than 4 months of inventory:  Seller’s markets.  

25 had 4 – 6 months of inventory:  Balanced markets.

21 had over 7 months of inventory:  Buyer’s markets. 

Price Range:

It is clear from the data that the higher end price range has an excess of homes on the market.  Areas with many homes over $800,000 include Central and Northwest Austin, Westlake, Barton Creek, and Lake Travis.  These neighborhoods were favored by builders who built or remodeled homes for sale.  We expect to see this inventory dropping during 2009 since new starts have virtually stopped. 

Foreclosures:

On average, foreclosures are 3.7% of listings on the market – not a significant part of our market.  However, some sections of Austin have higher foreclosure levels – up to about 10%.  These include the Manor, Elgin, Bastrop and some Southeast areas.  These areas, popular with first time homebuyers, were targeted by investors several years ago.  At the same time, these neighborhoods do not have high inventory levels – indicating that the foreclosures are being absorbed quickly. 

Conclusion:

In Austin we are not faced with serious depreciation, as a result of prices that were pushed to unsustainable levels.  We are not faced with a serious foreclosure problem, generating its own downward spiral.  And, we are not faced with widespread job loss.  We are a city that people are moving to. 

We do have high inventory and slower turn-around in some popular neighborhoods where builders were counting on faster absorption.  This is true of all price ranges, and is especially noticeable in the higher end. 

For buyers it is a great time to come into the market.  Interest rates are the best in a lifetime.  This is not the time to be waiting around for a better deal.  It is the time to start shopping for a great place to live in Austin!

Austin Texas Real Estate Guide

Austin Real Estate – The Downtown Effect

Steve Forbes: Don’t you think the demise of the major metropolitan [area] will be stanched by the fact that these aren’t just commercial capitals but cultural capitals as well?

Randy Frederick: While I’m a little too old to be attracted to it, downtown Austin continues to be a major draw for many people, especially the young and artsy types. There are several residential high-rise construction projects underway, because the demand is there–and I think it has more to do with being culturally attractive than anything else.

Since the University of Texas, the largest university in the U.S., is located [in] downtown Austin, there is a thriving night life, and many young people want to be part of that. In the nine years I’ve lived here, there has not really been a real estate boom, and as a result, the real estate decline has been far less severe than in many other parts of the country.

——————–

(Roselind) Randy, I appreciated your comment about Austin on the Forbes.Com – Investing Panel.  Austin is blooming as a cultural capital, and downtown plays a big part in the Austin experience. 

I recall going to the closing sale of Scarborough’s Department Store downtown in 1981, the same year that Barton Creek Mall opened.  That seemed to be a low point in the abandonment of downtown as a retail destination.  City task forces and business groups have worked hard for years to re-vitalize Austin’s center. Music venues led the way, bringing young people downtown.   

In 1999 we began to see the first residential construction.  Today downtown Austin is a growing residential and entertainment district, and it gets better every day.  I was just there for a little of SXSW.  Music everywhere.    

Tell me a little about what you have noticed during your nine years in Austin?

(Randy) I am not a real estate expert and having lived in only one other major metropolitan area (Indianapolis, IN). I have limited comparisons. That said, when I moved to Austin in 2000, I was struck by the number of people, especially well educated and affluent, who found living in the city to be desirable.

That trend has seemingly continued and even increased in the ensuing years. In the 30+ years I lived near the Indianapolis area, with only a few small exceptions, the suburbs were usually considered more desirable.

Metaphorically speaking, the center of a city is its heart and without a healthy heart, the body can not be healthy. There are many things I like about Austin (Music, Climate, Culture) but a vibrant and desirable downtown area is key to all of them.

(Roselind) I think that is so true – a vibrant downtown is crucial to having a city that attracts people.  It will be interesting to see this continue to develop.  In The City – A Global History, by Joel Kotkin, he talks about the need to bring more services into urban areas so that people don’t move to the suburbs when they have children.  Things like good schools.  Then the area will not turn over its population as rapidly.   

You made a good point about having the University almost downtown.  I had not realized how important that is.  It supplies a lot of people for music venues, cafes, retail and living quarters. 

On another subject – you mentioned that we did not experience a real estate boom in Austin.  Therefore the decline in real estate has not been as severe as in other parts of the country.  Comparatively, we are in great shape.  Two recent reports:

1)  Austin was rated the second healthiest housing market for 2009, in a study by Builder Magazine.  They said that the healthiest cities were great places to live and often had major universities.  And they did not have the run up in prices during the boom.   

2)  Forbes rated Austin #2 in their “Top Ten Cities Where People are Relocating.”  The Forbes article goes on to say that the top cities do not rely heavily on one industry. 

In my experience, sales are taking longer now than they did a couple of years ago.  And, there are some pockets where the supply has exceeded demand.  Some of these are popular neighborhoods where builders expected strong growth.  Others are areas where modest homes were oversold to investors or sub-prime borrowers.

Yet, in spite of all the good news about Austin, people still ask if perhaps a more severe downtown is coming our way.  What do you think?  Is the other shoe about to drop? 

(Randy) As I mentioned before I am not a housing market expert, but I do follow trends in economic reports such as housing starts, mortgage rates and Case-Shiller pricing reports. I also follow the earnings reports and stock prices of all the major builders.

While I wouldn’t describe it as “another shoe to drop”, I would say that from a national perspective, there is little sign that the housing market has bottomed yet. While there has been a slight uptick in existing sales, that is likely more the result of foreclosures, speculators and bottom fishers, than an actual pickup in demand. That said, any activity that effectively removes excess inventory is at least somewhat positive.   

As difficult as recessions are, they are a necessary part of the business cycle because they re-adjust runaway inflation, which is exactly what we had in the housing market. In the chart below, the navy line shows how the price of housing was tracking quite nicely with inflation until about the beginning of 2001.

The yellow line shows roughly where housing prices probably would have been had the bubble not occurred, while the green line shows how far out of line we went and how much we’ve corrected. More importantly, the teal line shows how much correction is still needed.

 

 

(Roselind) I have seen this index, and it is quite revealing of the problem.  Since Case-Shiller does not track Austin, we don’t have a graph for this area.  But, with modest levels of appreciation – 4%-5% – most years, I think our home prices would come a lot closer to the base line.    

As you said, Austin is one of several areas of the country that did not experience a big run up in prices from 2001 to 2007.  We were slowed down by the Dot.com bust of 2001, and were still recovering from that through 2004.  During that time builders pulled back on their programs, and we worked our way through an overload in high end inventory.  Looking back, that probably kept us from getting on the price roller coaster.  In 2008, we had a few percentage points of appreciation overall – an indication of the stability of our market.

Your perspective on the national market is one that we need to keep in mind.  While we may not have a lot of deflation to handle here in Austin, we need for people to be able to sell in other areas, for credit to be available, and for confidence to be up.  Until that happens we are going to operate with less demand than we were used to in recent years.  And, that is not all bad.  For buyers it is a good thing.  They get a more balanced market with great interest rates right now. 

Randy, thank you very much for sharing your perspective! ( Randy Frederick is Director of Trading and Derivatives – Charles SCHWAB)

 

 

 

 

 

 

 

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Green Building Project

 

Green Building at Ground Level: Site Selection

Green features cover a lot of territory – from site selection, to building design, to materials, to lifestyle and behavior. In this series, we will look at the many green decisions that may be made during a building or remodeling process. We will start at ground level, with site selection.

If you are choosing a lot, or looking for an existing house to remodel, here are some greener choices:

1) Sites that encourage walking instead of driving:

Austin, like most cities that grew up during the twentieth century, is suburban in design. Cars are required to get around, even in older neighborhoods. Zoning laws did not allow a mix of commercial and residential uses. Very few homes have an easy walk to a grocery store. The suburban style is now being reconsidered. Downtown Austin is a good example of the new urban ethic. Here people live, work and shop on the same street. And, the new Mueller neighborhood overturns many of the long established rules of neighborhood planning. Mixed use has a growing acceptance in Austin.

2) Sites in older areas:

These lots already have utilities and roads. They take advantage of existing infrastructure. Usually older neighborhoods are closer to job centers, schools, public transit, and shopping. So, less time and gas are required to get around. They offer convenience and a good quality of life.

3) Sites that are small:

Small lots increase density and concentrate the use of roads and services. They call for smaller homes, which cost less to build and operate. Small sites present some challenges, but also offer the opportunity for innovative design.

Green Star Rating System:

The Austin Green Building Program has a grading system for new homes or remodels that want to achieve a Green Star Rating. (Total points needed for a Green Star Home)

Here are the points for items that relate to choosing a site.

5 Points: 1.01 GBP Green by Design workshop attended by homeowner, designer, or builder

4 Points: 1.02 Lot size is less than 5,750 sq. ft.

4 Points: 1.03 Street, electricity, water and wastewater have been in place for a minimum of 25 years

2 Points: 1.04 Public transit stop is within a 1/4 mile radius

2 Points: 1.05 Grocery store is within a 1/2 mile radius

2 Points: 1.06 Public hike-and-bike trail, green belt, or park is within a 1/2 mile radius

Green building is a process that is being defined by all who care to participate and explore the possibilities.

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Austin Texas Real Estate

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Real Estate Market

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Austin Energy Upgrades

String Lights: An Old Style Made New

Low cost strings of lights have been around for a long time.  They are everywhere during the holidays.  And, they illuminate open-air venues, like tent parties and restaurant patios.  When we considered the lighting for our Taylor Road house, strings of lights came to mind for the large screened porch.  They are a good fit with the informal, industrial style of the house.  We had used low voltage cable lights inside the house, but these are not suitable for outdoors, and besides, they cost five to ten times as much.   

String lights are simple to install:  In the wiring stage, three outlets were placed high on the wall at evenly spaced intervals across the room.  The outlets were wired to a switch, so the lights could be turned on easily.  At finishing stage, eye screws were screwed into the walls.  At one end, the eye screw was next to an outlet, so that the light string could be plugged in.  Three strands of medium gage wire were attached to the eye screws and pulled tight across the room.

We first tried a package of little mini lights on one of the wires, but did not like the twisted green electric wire that came with lights.  It was too noticeable.  So we took those back and got three boxes of medium bulb Christmas lights.  These came with simpler electric wire and larger bulbs.  They were called C-7’s.  You can get C-9’s if you want bigger bulbs.  There are lots of bulb shapes and sizes to choose from, all the way up to regular sized bulbs. 

Each bulb has a little clip so that it can be hung on the wire.  We spaced them out, and then pulled the strand tight.  Fortunately, the light strand could be cut off, so there was not excess at the end.  When the strand is cut, you will need some black electrician’s tape to seal the end. 

 When the light strings were turned on we had a nice surprise.  The lighting was beautifully diffused throughout the room.  It was so soft and diffused that it seemed like moonlight.  Strings of small lights have a special ambience – they remind us of parties and festive times.  It was fun to re-interpret this familiar lighting style for everyday use. 

 Website:Austin Texas Real Estate

 

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Austin Energy Audits: Will Buyers Want Greener Homes?

 

The city of Austin is going green.  A new energy ordinance will take effect in 2009 that will require homeowners to have an energy efficiency audit done prior to selling their home.

 

In Austin, energy performance has a lot to do with how efficiently the central AC and heating system works.  In our hot climate we are more concerned about cooling than heating, but both are used during our hot and cold seasons.  The new law aims to reduce energy usage by making AC systems more efficient.  This means:

 

Reducing the loss of conditioned air through cracks in doorways and windows.

 

Finding leaks and closing gaps in AC ducts. (Ducts often have 10% – 30% leakage!)

 

Improving the level of insulation in the attic to retain conditioned air.

 

Keeping the hot sun out with solar screens on windows.

 

After some controversy, the law stopped short of making energy upgrades mandatory.  In today’s market, no one wants to make it harder or more costly to sell a house.  So, the law was pared back to require sellers of homes to have an energy audit, and disclose the results to potential buyers. 

 

But will buyers demand that the home they buy pass muster in terms of energy efficiency?  The market will have to sort this out.  But, over time they probably will.  Sellers will anticipate this by taking steps to correct areas of wasteful energy loss in their home.  Most sellers would rather not have a negative report to show prospective buyers.  They will want to have a clean bill of health.  And the items required for testing are kind of fundamental, we have to admit. 

 

In fact, they are so fundamental that they have been long ignored.  These are not the green features that are visually appealing or ego satisfying.  We don’t see them featured in Dwell Magazine.  We are not talking about wind turbines, or rainwater catchment, or solar panels, or Icestone counters.  We are talking about things that most people would rather not think about.  Like caulk and duct mastic.  And, unglamorous dark screens and dusty old attic insulation.  These are not the upgrades that cause buyers to say, “I love it.” 

 

So they haven’t been getting a lot of attention.  The new energy audit law is going change all that.  It will bring these behind-the-scenes basics into the limelight.  Old houses will meet new tech.  It will give homeowners a roadmap to improve energy efficiency.  That will mean lower utility bills.  And fewer carbon-spewing power plants.   And, in the long run, a greener Austin.  

 

Austin Energy Audit

 

Austin Energy Ordinance 

 

Austin’s New Energy Ordinance: Two Ways to Comply

In June of this year Austin’s new Energy Audit and Disclosure Ordinance will take effect.  This law requires that the seller of a house must have the house checked for energy efficiency, and disclose the status to potential buyers.  It applies to homes in the city of Austin that are over ten years old; and that are served by Austin Energy.  There are two ways to meet the requirements of the ordinance:

 

Audit Plan

 

Homes must be audited for energy efficiency prior to being sold.  Under the law you do not have to make the repairs noted in the audit.  You do have to provide a copy of the audit to the buyer.  If the house needs major work, you could apply for an exception from the audit requirement.  

 

Although repairs are not required, the de facto result is that home sellers will be pressured to make the upgrades.  Most sellers would prefer not to offer a negative report on their home to prospective buyers.  In any market, a loss of value is not something to be taken lightly.  So, in many cases, it makes sense to complete the repairs before putting a home on the market.  

 

The energy audit will check these four items:

 

          Duct pressure test on the AC ducts to check for leaks.

 

          R value of the insulation in the attic.  

 

          Weather-stripping on doors.

 

Shade screens or window film on the south, east and west side.

 

The Austin Energy Website lists their registered contractors who do energy audits.  They are called Energy Raters.  The cost of the audit will vary.  I have heard quotes of $300 for 2,000 square feet, with cost/size increments.  The audit report must be attached to the Seller’s Disclosure when the home is sold, and is good for ten years. 

 

If you elect to have repairs done, the most efficient place to go is Austin Energy’s list of Home Performance contractors.  These are city registered contractors who do energy related repairs.  When the work is complete, an inspector from Austin Energy will inspect the work and clear any building permits that were obtained.

 

At this time, paperwork for rebates will be submitted to the city by the contractor.  About 20% of the cost of some upgrades can be rebated.  Texas Gas Service offers some additional rebates.  And, you may be entitled to some federal tax credits. Save your receipts and check with your accountant on this. 

 

 

Energy Star Plan

 

Homes that have participated in the Home Performance with Energy Star Certificate program within the last ten years are exempt from the audit requirement.  This program is an alternate way to comply with the energy ordinance.  Low interest loans are available for participants in this program.     

 

To participate, call a Home Performance contractor for an energy analysis.  Some of these companies offer a free analysis in conjunction with a bid for the work.  An inspector from Austin Energy will review the analysis and the bids for proposed work. 

 

The inspection will cover the following:

 

Central air conditioning and heating or heat pump

 

Air Duct sealing or replacement

 

R value of the insulation in the attic.

 

Shade screens or window film on the south, east and west side

 

To receive an Energy Star Certificate of Completion you must be in compliance with at least three of the above items; (or) you must receive a rebate of at least $500 from Austin Energy.  When the work is complete, an inspector from Austin Energy will inspect the work and clear any permits.  Rebates will be submitted by the contractor.  A copy of your certificate of completion should be attached to your seller’s disclosure.  It is good for ten years.      

 

Summary

 

The Audit plan allows you to simply disclose the results of an audit.  Or, you may choose to correct some, or all, of the repairs.  

 

The Energy Star plan is an established program that predates the Energy Audit requirement.  You may get a free energy analysis by a participating contractor who will also bid for the repairs.  To get a certificate of completion you have to comply with at least three of the listed items.        

 

At this time, the energy audit disclosure applies only to Austin Energy customers within the city of Austin.  However, it is likely that energy inspections will become a part of the sale process throughout the region.  The outcome will be the re-weatherizing of older structures to make them more efficient and less costly to live in.  And, that is a good thing.   

 

Website:  Austin’s Energy Ordinance

 

Client’s Energy Upgrade:  Kathleen’s Story

 

 

 

 

 

Screened Porches – A Idea Whose Time Has Come Again

Screened porches are a perfect fit in a green building project.  They provide an outdoor room that is in touch with the natural world, and at the same time, safe and sheltered.  In our recent building project we incorporated two screened porches.   

 

The central porch is truly the heart and soul of this home.  Both the entrance hall and the living area open to the porch in a big way.  The space can flow together for large gatherings.  On the porch there is room for a dining table, plus a seating area around the fireplace.  It is an inviting place to eat outdoors, entertain, or sit by the fire on cold days.  Beyond the porch, an open patio transitions to ground level.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The vaulted ceiling raises a 12 foot screened wall to a view of sky and distant hills.  Board and batten siding, exposed metal roof, cedar trim, and concrete floor combine interior and exterior materials.  On the lower screen panels we added galvanized wire mesh for extra strength.  The wire mesh panels are also incorporated into the railing for the outside patio.    

 

Old Texas homes often included a screened sleeping porch.  This was back before air conditioning.  The porch brought in cool night air and kept out mosquitoes.  High ceilings allowed heat to ventilate out.  With this in mind we built a sleeping porch off the master bedroom.  The lifted roof allows air to circulate and cool the space – important in our hot climate.  There is a stone wall on the front for privacy, with screen walls open to the view on the back.   

  

 

 

 

 

 

 

 

 Double glass doors extend the master bedroom to the porch, and expand the bedroom space.  Interior and exterior colors and materials relate to each other – limestone walls, cedar trim and concrete floors.  The sleeping porch offers a connection to nature outside the heated and cooled envelope of the house. 

 

The appeal of screened porches has endured for over a century.  They are romantic and historic.  Flapping screen doors recall a simpler time when interiors were not as tightly sealed.  Today, screened porches are in a period of re-discovery.  They are an idea whose time has come again.  They are a greener way to live, and today, we need them more than ever. 

 Austin Texas Real Estate – Green Building Project