As I recently posted, I have switched career paths this summer, and have transitioned from Austin to Houston (still in the process somewhat).  As a result, I'm looking to buy this fall, and take advantage of the tax credit!

So, to all of your lenders and listing agents out there, please feel free to get in touch with me if you have anything I might be interested in.  I'll post some guidelines below.  All my contact information is listed in my profile. 

Areas - Galleria, West U, Rice Military, River Oaks, Uptown, Midtown

Type of Home - Townhouse Preferred, Then Single Family, Then Condo.  MF is ok too, duplexes only

Price - Under $200K

Timeframe - Oct/Nov close

BR - 2+

BA - 2+

Reasonable HOA's

Mediterranean style architecture preferred (not necessary though)

15 Year Fixed Note (15% - 20% Down)

Ideally I like something on the newer side, and with a bit of a modern look.  I'm definitely a fan of granite countertops, stainless steel applicances, hardwoods/stained concrete floors, and the like.  Please let me know if you have something, or have any questions.  Thanks!

It' been a while since I've had the opportunity to make a post on AR, as I've been on a 2-month trip around the world.

For those of you who don't personally know me, I've decided to move on from the Austin commercial real estate arena to become a commodities trader in Houston.  I start in the middle of July, and have been traveling around the world since I graduated from UT in May.  I still have a couple of listings that I will cooperate with other brokers on a bit, and will naturally keep my license active.  For anyone with any spectacular listings in the West U/Upper Kirby/Galleria areas in Houston, I'll be looking for a townhouse, condo, or SF house this Fall.  Feel free to shoot me the information on it.  Realistically, I'm looking for a October/November close.

If anyone is interested, I've been blogging pretty regularly on my TravelPod blog which can be viewed at http://travelpod.com/members/prfoley. 

This is an article from the Wall Street Journal opinion section, and echoes a post that I previously wrote after Obama was elected.  Now I realize this article isn't exactly unbiased, but it does represent my feelings, and the feelings of a number of investors that I know and/or work with.  What do you think?

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.

The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush. And Mr. Obama has inherited an unusual recession deepened by credit problems, both of which will take time to climb out of. But it's also true that the economy has fallen far enough, and long enough, that much of the excess that led to recession is being worked off. Already 15 months old, the current recession will soon match the average length -- and average job loss -- of the last three postwar downturns. What goes down will come up -- unless destructive policies interfere with the sources of potential recovery.

And those sources have been forming for some time. The price of oil and other commodities have fallen by two-thirds since their 2008 summer peak, which has the effect of a major tax cut. The world is awash in liquidity, thanks to monetary ease by the Federal Reserve and other central banks. Monetary policy operates with a lag, but last year's easing will eventually stir economic activity.

Housing prices have fallen 27% from their Case-Shiller peak, or some two-thirds of the way back to their historical trend. While still high, credit spreads are far from their peaks during the panic, and corporate borrowers are again able to tap the credit markets. As equities were signaling with their late 2008 rally and January top, growth should under normal circumstances begin to appear in the second half of this year.

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama's ministrations so far have gone toward triage and life support, rather than repair and recovery.

AIG yesterday received its fourth "rescue," including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here.) Citigroup's restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury "stress tests" will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.

Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.

For those of you that haven't heard, the House of Representatives is sticking it to us once again by attempting to pass a tax on all trades in the financial markets.  Though they are pitching it as a way for the government to recoup costs from bailing out Wall Street, it is really a tax on most of us.  The majority of Americans own stocks, bonds, or other financial instruments through 401(k)'s, IRA's, mutual funds, pension funds, or their self-directed brokerage account. 

I've contacted my Senators and Congressman, I encourage you to take a moment and visit this website to do the same.  It takes just a few moments (for real)!

Below is a copy of the letter that the site sends to your reps in D.C.

On Friday, February 13, your colleague, U.S. Congressman Peter DeFazio, introduced H.R. 1068: “Let Wall Street Pay for Wall Street's Bailout Act of 2009”, which aims to impose a 0.25% transaction tax on the “sale and purchase of financial instruments such as stock, options, and futures.” Without a doubt, many Americans are appalled at the reckless behavior of large Wall Street companies, and the notion of making those who ar e responsible for putting the global financial system in jeopardy help repay taxpayers for bailing them out is certainly justifiable.

Unfortunately, I feel that this proposal is the wrong way to do that, as this tax applies to all investors, the vast majority of whom have done no wrong. Effectively, this tax will punish anyone who wants to save their money, whether it be by investing in stocks or options directly, putting their hard earned money in any mutual fund, or by simply placing a portion of their paycheck in a 401K. There’s no doubt that banks and mutual funds will pass along this added cost to their customers, giving this proposed tax a much further reach than was initially imagined.

Moreover, the unintended consequences associated with H.R. 1068 are also hard to ignore.

First, many hard-working Americans make their livings by running small businesses that trade stocks, options and other financial instruments. Many of whom will be put out of business due to the fact that their margins are often quite thin. In addition, those who work for or with these individuals will also lose their jobs.

Second, a transfer tax such as this will lower capital gains dollar for dollar, making the notion that anyone who invests their money will be on the hook for the excesses of Wall Street all that more poignant.

Finally, such a tax will undoubtedly affect the number of shares traded on an absolute basis, thus reducing liquidity – a necessary ingredient in the effective pricing of assets. It’s the complete lack of liquidity, for example, which made collateralized mortgage obligations effectively worthless.

The body of the bill suggests that such a tax would have a negligible impact on the average investor. I beg to differ. For example, a $10,000 trade (or approximately 100 shares of stock in Apple, Inc.) would increase the cost of a round trip transaction by $50. 100 shares is generally considered to be a minimum size for a trade, which would devastate any small business executing even a handful of similar trades each day.

As you can see, while this bill may sound good on the surface, the effects, if it is passed, will reach anyone who wants to invest their money and will ruin many small business people who are not at fault for this distressing situation all Americans are struggling through.

I urge you to vote NO on H.R. 1068

As a native Houstonian, I've always hoped and wished for more rail.  Every year when I blew out those birthday candles I would wish for better public transit...just kidding.  I didn't take it that far, but Houston has been far behind the rest of the country in developing public transit, and I think train service has got to be one of the main points of focus for METRO.

When the downtown light rail line opened, a lot of people laughed.  Who would ride this ridiculous 7.5 mile line that doesn't serve anybody?  I must admit, the only time that I've used the rail is when I've gone to the rodeo, and it's probably more for fun than actual convenience.  Turns out (at least last i heard), Houston has the highest light rail ridership in the entire nation, ahead of Philadelphia (#2). 

Today we hear that METRO has approved four new lines, and I think it's great news.  The total rail lines will only total 30 miles, and the cost is in the billions, but I think it's a worthwhile investment.  Ridership will increase, and 60,000 jobs are being created (so says the propogranda from METRO at least).  I hope that this will provide an impetus for rail lines that will run along the major highway corridors (I-10 east and west to downtown, 290 up to AT LEAST Cypress, if not Waller County, I-45 from the Woodlands to Galveston and maybe even up to Conroe, and of course a 59 line down to Sugar Land and up somewhere NE).  That's my vision, and I think it would be great for Houston! 

I'm excited, and I'm living in Austin.  Let me know your thoughts!

Although I am looking at this from a commercial standpoint, I have to imagine that this certainly applies to residential real estate as well, where many markets have come off even more than the commercial markets.

Over the past several weeks I have talked to a lot of clients and potential clients about their needs.  Most of these people are looking to lease, but I always ask them if they might consider a purchase, especially if it might be possible to get a multi-tenant building/property. 

Case in point is a client looking for some land or industrial space to operate a specialized auotmotive sales business.  He needs a particular zoning, a small office, and some yard area.  He also needs signage, and prefers to be along a major thoroughfare.  He has a budget in mind, and there are definitely properties that fit the bill.  So I pitched him a property that is currently leased up, but there is an opportunity to use some additional space on the property for his business. 

With 20% down, at current rates, he would actually produce positive cash flow and have a space for his business.  If you have the cash to put down on the property, this is like hitting the jackpot!

Let's face it, rates are at historic lows, and property values have declined.  Granted, property values will likely to continue to decline (especially commercial values and especially in Austin, as both of these markets haven't faced a major decline to this point, so some devaluation seems inevitible).  Even if they do, if you can build equity in a property, generate cash flow, and avoid paying rent for your own business, why wouldn't you explore this option?

For real estate agents, if you have thought about this for a particular client, give it a look and see if it might make sense for them.

For potential lessors, consider whether or not a purchase makes sense for you right now.  It may not only save you money in the near term, but allow you to invest in a market that will likely appreciate in the years to come.  Not to mention the tax benefits of owning property.

Finally, you're helping out the economy, do your PATRIOTIC duty! 

Just my two cents from my (limited) view down here in the trenches.

I will also be posting this on my company blog which can be reached through our website at www.bulshodge.com.

Just for those of you that aren't aware, the City of Austin has a new law going into effect on June 1, 2009 that will affect everyone buying or selling a home or commercial property built more than 10 years ago.  As a result, you will have to have an energy audit performed on the property before the sale can go through.  This will be required of all Austin Energy users.  The cost is estimated around $350 - $400 for a 2500 SF home, but will obviously be much more expensive for large commercial properties. 

I'm all about being green and energy efficient, but I think it needs to be an individual choice, not forced on you by the government at any level.  However, it doesn't matter what I think!  Just in case you were thinking of skipping out on this extra cost, the penalty from the city will set you back $2,000.

Today I was fortunate enough to take a trip to La Grange, Texas which is about 70 miles from where I live in Austin.  I say forunate because the weather is phenomenal, and I rode most of the way with my windows down and because I had some time to do some thinking which is always nice.  Along the way I realized how many For Lease signs I saw. 

To be fair, today isn't the first day that I saw a lot of For Lease signs, but it really began to hit home for me.  There is a LOT of supply of commercial real estate in the Austin market.  A TON!  More than I've seen, though I have only been around this market for 3 years.  What is even more amazing to me is that people are still BUILDING! 

Drive along MoPac, I-35, 183, or any other major throughfare and count the For Lease signs, it truly is amazing.  Now what doesnt' jive, is that market rates haven't come down all that much, at least not on the surface.  In reality, deals are being done at way below asking rates, but of course nobody aggregates this data, so it is difficult to get a bead on where the market truly is, especially if you don't happen to be a commercial real estate agent actively working in the Austin market.  I can tell you for a FACT that rates are way below anything you read in a research report, or see offered by a landlord.  If you want proof, call me on my cell at 832.659.5076 and I will prove it to you. 

Bottom line - Supply is up, rates are down (remember that microeconmics class you took many years ago that taught you about supply and demand?), supply is only going to grow, and rates are only going to continue to go down (at least in the short-term).

Buls Hodge Consulting is the only firm (that I'm aware of anyway) in the Austin area that is gathering the information on subleases and publishing a report about commercial sublease space.  The report is available through our website, and some of the most salient points are posted on our website blog which can be seen here.  Check it out and see what you think!  Be sure to be on the lookout for the latest sublease statistics this week.

One of the big things that I've been pushing for a couple of years now is a new website.  We have gone through a couple of iterations (I think we are on our third) but have now come to a "Final" product.  That being said, I think that our team at Buls Hodge has all come to realize that the web is a dynamic place, and there is no truly final website, as it is a living, breathing, and ever-changing thing.  In any case, I'd love to hear some feedback if you have a moment to check it out at www.bulshodge.com.

Thanks!