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September 7, 2009

How to Use Social Networking When Marketing New Homes The first in a series on social networking and marketing new homes. Social media is quickly becoming a mainstay in modern marketing plans. It’s fast, it’s direct, it’s inexpensive and it’s catching on. According to the “Social Media Marketing Industry Report” by Michael Stelzner, who writes and blogs about marketing and other business-related topics, 88% of marketers surveyed for the study use social media in their overall marketing strategies. And of those surveyed, 72% indicated they only started using social media in their marketing recently. For new home builders who are considering joining this trend, social media is simply using Internet-based networking tools to engage with online communities in order to generate exposure and sales opportunities. But what builders need to understand is that using social media when marketing

new homes will not necessarily generate direct sales. Social media is a different marketing tool than a builder’s sales center and even his Web site. Social media is versatile, offering builders opportunities ranging from finding interested and targeted prospects to generating public relations and providing immediate customer service. It’s all about building relationships and conversation, but it is not necessarily about closing the sale. “Home builders are asking us if social media works,” says Dana Forrest, sales and marketing director at Simmons Homes in Tulsa, Okla. They want to know if a sale can be tracked to social media, she says. “For us, this question seems a little short-sighted. We look at our social media and networking efforts as a way to build long-term relationships and powerful

communities. We know this won’t result in immediate sales, but that doesn’t mean we shouldn’t invest our time and effort,” Forrest says. “We know a strong relationship is not built overnight.” Since social media requires a different approach to new homes sales and marketing than what builders traditionally use, to give builders a better understanding of social media and its capabilities, Nation’s Building News will feature a series of articles about social media in upcoming issues. The articles, written by social media See SOCIAL, Page 12

Tickets Available in September for Realty Round Up: Growing a Greener Austin Learn about hottest trends in green building and energy efficiency at this year’s Realty Round Up trade show. Hosted by the Austin Board of REALTORS®, this popular event is themed “Growing a Greener Austin” and will take place on Wednesday, October 7 from 10 a.m. to 4 p.m. at the Austin Convention Center, located at 500 Cesar Chavez Street. Realty Round Up is the largest real estate trade show in Central Texas, drawing over 1,500

attendees each year. Advance tickets are only $10 and may be purchased online at https://www. a b o r. c o m / e v e nt s / roundup.cfm beginning September 1, 2009. Your ticket purchase includes admission to all educational programs, a keynote speech by Dr. Jim Gaines, a noted economist with the Texas A&M Real Estate Center, and the Realty Round Up exhibit hall, featuring over 100 vendors. Tickets will be available

for pick-up at the registration desk on the day of the event. Booths and sponsorship packages are also available for Realty Round Up 2009. For more information, contact Gina Willemsen at gwillemsen@abor. com or 512/454-7636, ext. 1601. The Austin Board of REALTORS® is a non-profit, voluntary organization representing more than 8,000 licensed REALTORS® in Central Texas. For more, please contact Angela Brutsché at 512/454-7636.

Eye on the Economy: Drumbeat of Bad News Starts to Fade Instead of singing, “Happy Days Are Here Again,” Franklin Delano Roosevelt’s campaign song when the country was in the throes of the Great Depression, maybe a more appropriate song today would be, “Less Painful Days Are Here Again,” as the drumbeat of bad news that has pounded the economy begins to fade. Real (inflation-adjusted) gross domestic product (GDP) fell sharply — 5.4% — in the fourth quarter of 2008, was down 6.4% in the first quarter of this year, but only fell 1.0% in the second quarter. The most recent reading marks the fourth consecutive quarterly decline in real GDP — the first time this has occurred in the post-World War II period. However, it also marks a slowdown in the rate of decline. NAHB forecasts that the economy will register growth in the current and the fourth quarters of this year. The decline in employment appears to be slowing. After job losses peaked in January of this year, monthly losses through July were trending smaller — with some violatility on a monthly basis as the figures are revised. Quarterly averages eliminate some of the volatility and “noise” found in See ECONOMY, Page 14

Stable Housing Market Seen as Key to U.S. Economic Recovery Mark Zandi, the chief economist at Moody’s Economy.com, says a healthy housing market is one of the leading indicators for an economic recovery. “I think it’s a necessary condition. I don’t think the financial system stabilizes nor does the economy gain traction unless the housing downturn comes to an end. And I think it is

coming to an end,” he said. Zandi identifies the ongoing foreclosure crisis as “the most significant threat to the economy at this point." Unemployment, which is expected to peak next year, could complicate the recovery. “One of the reasons why we’re seeing such job losses is because businesses have really been fearful for their own survival,”

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he said. “And of course, investors, until recently [were] very nervous, very scared. It’s been that loss of faith in our economy that made this a very difficult and different time. But it also highlights something that I think is important and that is: confidence is a very fickle thing. It can turn. We can go from dark pessimism to something brighter

The Limelight Zip Realty

than that relatively quickly.” (www. voanews.com) Voice of America News (8/7/09); Mil Arcega The above ar ticle has been provided to you compliments of NAHB and Nation’s Builder News.

National News Strong Gain in Existing-Home Sales Maintains Uptrend Page 2

Page 3


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September 7, 2009

• “ZipRealty 2008 Top 10 Brokerages in US”- NAR • “2008 Deloitte – Technology Fast 50” • “ZipRealty Receives a 2009 “Webware 100” Award for Commerce” • “ZipRealty Becomes First Non-Traditional Brokerage in the Top 10 of REAL Trends 500”

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LOCAL/STATE NEWS

4

Austin-Area Home Sales Volume Continues Momentum, Reaches 2008 Pace For July

NATIONAL NEWS

3 5 9 10 11 13

2nd Quarter Existing-Home Sales Rise in Most States, Helped by Affordable Metro Prices Decline in Commercial Real Estate Sectors Appears to be Slowing Fed’s Beige Book Sees Spotty Signs of a Housing Turnaround Builders Say Ending Tax Credit Could Halt Home Sales Gains Realtors® Raise Walls on Habitat House for San Diego Area Family How and Why to Make Lasting Impressions With Realtors®

Strong Gain in Existing-Home Sales Maintains Uptrend For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 millionunit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005. Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said. The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999. “Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June; the rate was 6.43 percent in July 2008. An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in DallasFort Worth, said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said. “Realtors® are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.” Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, which was unchanged from

June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record. The national median existing-home price3 for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes. Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago. Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price4 was $178,800 in July, down 18.9 percent from July 2008. Regionally, existing-home sales in the Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.

"The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999."

WCAOR STATISTICS

16-17

Stats through August

SALES PEP TALK

18

This Bid Is For "YOU"

Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008. In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago. Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. Copyright National Association of REALTORS. Reprinted with permission.

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2nd Quarter Existing-Home Sales Rise in Most States, Helped by Affordable Metro Prices Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas, according to the latest survey by the National Association of Realtors®. Total state existing-home sales, including single-family and condo, rose 3.8 percent to a seasonally adjusted annual rate1 of 4.76 million units in the second quarter from 4.58 million units in the first quarter, but remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008. Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises. Lawrence Yun, NAR chief economist, said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said. “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska. More recently, we’ve seen strong doubledigit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin,

Indiana, South Dakota and Montana.” Yun explained housing’s impact on the overall economy. “Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession. In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.” During the second quarter, 129 out of 155 metropolitan statistical areas2 reported lower median existing singlefamily home prices in comparison with the second quarter of 2008, while 26 areas had price gains. Distressed sales – foreclosures and short sales – accounted for 36 percent of transactions in the second quarter, which continued to weigh down median home prices because they typically are sold at a 15 to 20 percent discount; first-time buyers accounted for onethird of transactions. The national median existing single-family price was $174,100, which is 15.6 percent below the second quarter of 2008. The median is where half sold for more and half sold for less. According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate

mortgage declined to a record low 5.03 percent in the second quarter from 5.06 percent in the first quarter; the rate was 6.09 percent in the second quarter of 2008.

“Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy...”

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are unique opportunities in the current market. “Housing affordability is hovering near record highs and there’s a wide selection of homes, but first-time buyers need to move quickly to take advantage of the $8,000 tax credit because they have to finalize the transaction by November 30,” he said. “Various state, local and nonprofit programs target first-time buyers, and a Realtor® can help you identify the

programs and financing options that are currently available in your area.” The largest sales gain between the first and second quarters was in Idaho, up 67.5 percent; followed by Hawaii which rose 24.2 percent; New York, up 22.3 percent, Wisconsin; with a 21.7 percent gain; and Nebraska with a 20.3 percent increase. Twelve other states experienced double-digit sales increases from the first quarter. Year over year, California, Minnesota and Michigan are showing double-digit gains from the second quarter of 2008 but are off from the first quarter of this year. The largest single-family home price increase in the second quarter was in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price of $113,200 rose 30.6 percent from a year ago. Next was the Cumberland area of Maryland and West Virginia at $123,500, up 21.7 percent from the second quarter of 2008, followed by Elmira, N.Y., where the median price increased 11.3 percent to $85,000. “The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona and Nevada, where distressed homes comprise many of the transactions,” Yun said See METRO PRICES, Page 7

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Austin-Area Home Sales Volume Continues Momentum, Reaches 2008 Pace For July Austin Board of REALTORS® releases July 2009 real estate statistics According to the July 2009 Multiple Listing Service report by the Austin Board of REALTORS®, the volume of Austin-area home sales reached 2008 levels for the first time this year. In July 2009, 2,069 homes were sold, statistically unchanged from the 2,068 homes sold in July 2008. The median home price for Austin in July 2009 was $191,500, a two percent decrease from the same month the prior year. “The sales volume momentum in Austin continues, now reaching 2008 levels. That’s good news, but I think it’s even better news that we’ve achieved that increase while maintaining a steady median home price,” said Jay

Gohil, chairman of the Austin Board of REALTORS®. “Throughout 2009, the median price has fluctuated only slightly compared to 2008. Looking back further, prices have remained above 2007 levels, one of the most lucrative years of the last decade in Austin real estate. That long-term price stability, particularly in the face of market fluctuations, bodes well for Austin’s future.” The Austin Board of REALTORS® is a non-profit, voluntary organization representing more than 8,000 licensed REALTORS® in Central Texas. For more, please contact Angela Brutsché at 512/454-7636.

July 2009 Statistics $508,810,549 – Total dollar volume of single-family properties sold. $191,500 – Median price for single-family homes, a two percent decrease from June 2008. 9,988 – Active single-family home listings on the market, an eight percent decrease from June 2008. 2,069 – Single-family homes sold, unchanged from July 2008.

Decline in Commercial Real Estate Sectors Appears to be Slowing Commercial real estate activity has suffered from a severe credit crunch for commercial sectors, sustained job losses and weak consumer spending, although the decline appears to be slowing. A forward-looking indicator shows commercial real estate will remain weak into 2010, but recent actions by the Federal Reserve should improve some flow of capital into commercial lending, according to the National Association of Realtors®. The Commercial Leading Indicator for Brokerage Activity1 declined 1.3 percent to an index of 101.5 in the second quarter from a downwardly revised

reading of 102.8 in the first quarter, and is 13.7 percent below the 117.6 recorded in the second quarter of 2008. The index is at the lowest level since the first quarter of 1994; NAR’s track of the commercial leading indicator dates back to 1990. Lawrence Yun, NAR chief economist, noted the pace of decline moderated, but the leading indicator has fallen sharply and quickly from the peak, suggesting much lower business opportunities for commercial real estate practitioners engaged in leasing, sales and property management. “The reduction in commercial real estate activity is

expected at least through the first quarter of 2010. Any meaningful recovery is not likely to occur before the second half of next year.” The decline is driven by falling industrial production, far fewer jobs requiring office and retail space, a fall in durable goods shipments, much lower personal spending, lower retail and wholesale sales, and a negative return on commercial investment. “With the economic recession likely coming to See COMMERCIAL, Page 8

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PACESETTER HOMES INVENTORY LIST

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Approx. 1501 Two story, 3 Bdrms, 2 ½ Baths, 1 car garage

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Approx. 1830 Two story, 3 Bdrms, 2 ½ Baths, Gameroom, Covered Patio, 2 car garage

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502 $229,500 602 $229,500 702 $229,500 803 $229,500 903 $254,900 1103 $254,900 1203 $254,900 1303 $254,900 * GameRoom

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September 7, 2009

Real Estate Industry News

& Events

San Antonio

Real Estate Industry News

& Events

Austin

The ShowCase USA Real Estate Industry News Events

El Paso, Teller, Elbert & Douglas Counties

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METRO PRICES from Page 4 Median second-quarter metro area single-family home prices ranged from a very affordable $55,700 in the Saginaw-Saginaw Township North area of Michigan to $569,500 in Honolulu. The second most expensive area in the second quarter was the San JoseSunnyvale-Santa Clara area of California, at $500,000, followed by San Francisco-Oakland-Fremont at $472,900. Other affordable markets include the YoungstownWarren-Boardman area of Ohio and Pennsylvania at $71,500, and Lansing-East Lansing, Mich., at $81,200. “Recently sold homes are concentrated in lower price ranges. The median price may not be representative of overall values in a given area because many middle priced homes are not on the market,” Yun clarified. In the condo sector, metro area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existingcondo price was $176,900 in the second quarter, down 19.8 percent from the second quarter of 2008. Four metros showed annual increases in the median condo price and 53 areas had declines. The metros with condo price rises were the Virginia Beach-NorfolkNewport News area of Virginia and North Carolina at $195,000, up 2.6

percent, followed by the Wichita, Kan., area, where the median price of $109,500 rose 2.0 percent from the second quarter of 2008, Dallas-Fort Worth-Arlington, at $137,800, up 0.7 percent, and the Colorado Springs, Colo., area, which rose 0.2 percent to $145,200. Metro area median existing-condo prices in the second quarter ranged from

$66,400 in Las Vegas-Paradise, Nev., to $405,700 in San Francisco-OaklandFremont. The second most expensive reported condo market was Honolulu at $318,400, followed by BostonCambridge-Quincy at $277,400. Other affordable condo markets include the Sacramento-Arden-ArcadeRoseville area of California at $101,200 in the second quarter, and Tucson,

Ariz., at $102,500. Regionally, existing-home sales in the Northeast jumped 15.0 percent in the second quarter to a pace of 797,000 units but are 8.4 percent below a year ago. The median existing single-family home price in the Northeast declined 9.7 percent to $246,000 in the second quarter from the same quarter in 2008. After Elmira, the best gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $115,400 rose 6.7 percent from the second quarter of 2008, followed by Syracuse, N.Y., at $124,600, up 0.8 percent. In the Midwest, existing-home sales rose 3.2 percent in the second quarter to a pace of 1.06 million but are 5.3 percent below a year ago. The median existing single-family home price in the Midwest was down 8.6 percent to $146,800 in the second quarter from the same period in 2008. After DavenportMoline-Rock Island, the next strongest metro price increase in the region was in Bismarck, N.D., where the median price of $157,800 was 3.5 percent higher than a year ago, followed by Springfield, Ill., at $116,200, also up 3.5 percent, and Topeka, Kan., at $113,300, up 2.7 percent.

In the South, existing-home sales increased 3.9 percent in the second quarter to an annual rate of 1.76 million but are 7.2 percent lower than the second quarter of 2008. The median existing single-family home price in the South was $158,600 in the second quarter, down 10.3 percent from a year earlier. After Cumberland, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with an 11.0 percent gain to $138,600, followed by, Jackson, Miss., at $140,100, up 8.2 percent, and Shreveport-Bossier City, La., at $146,800, up 3.0 percent. Existing-home sales in the West declined 2.3 percent in the second quarter to an annual rate of 1.13 million but are 11.8 percent above a year ago. The median existing single-family home price in the West was $212,600 in the second quarter, which is 26.6 percent below the second quarter of 2008. The best metro price performances in the West were in Kennewick-RichlandPasco area of Washington, where the median price of $163,900 rose 0.3 percent from a year earlier, and Yakima, Wash., at $162,800, also up 0.3 percent. No other areas covered in the region reported increases. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. Copyright National Association of REALTORS. Reprinted with permission.

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COMMERCIAL from Page 5 an end within six months, a recovery in commercial real estate may soon follow,” Yun said. “The office sector requires job growth to fuel the demand for additional space, the industrial sector needs a rise in production and the retail sector is tied to consumer spending. Multifamily housing – the apartment market – often performs in reverse to trends in home sales, but can improve if there is sufficient household growth.” The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 650 local market experts,2 also suggests a lower level of business activity in upcoming quarters. Most respondents are seeing sales prices that are lower than replacement costs, and 96 percent report deep rental discounts and increased tenant concessions. The SIOR index has declined for 10 consecutive quarters and stood at 36.0 in the second quarter, compared with a level of 100 that represents a balanced marketplace. Realtors® Commercial Alliance Committee chair Robert Toothaker said it is crucial to improve the availability of funds for commercial loans. “Properties with positive cash flow have had trouble finding financing to roll over debt, transactions are essentially at a standstill and new development is virtually nonexistent in most areas,” he said. “Commercial loans are mostly short term, and without ready financing even the most experienced commercial players can get into trouble. The Fed's recent decision to extend the TALF program for commercial mortgage backed securities beyond the end of 2009 is highly welcome because the flow of liquidity to commercial real estate will be critical for a sustainable economic recovery,” Toothaker said. “However, unless there is a tremendous short-term recovery in the CRE markets, we expect the Fed will be revisiting the issue of another extension of the TALF program early in 2010.” Bond yields on CMBS rose following the announcement by the Federal Reserve on August 17 that it is

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September 7, 2009

extending TALF lending for existing commercial securities through March 31, 2010, and for newly issued CMBS through June 30. Looking at the broad market, commercial vacancy rates continue to rise while rents decline, according to NAR’s latest COMMERCIAL REAL ESTATE OUTLOOK.3 The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research. Yun projects the unemployment rate to peak around 10.4 percent in the fourth quarter, then gradually improve as 2010 progresses. “We will need sustained economic growth before many employers have enough confidence to expand the job base and create new demand for space,” he said. The gross domestic product should contract 2.9 percent in 2009 before growing 1.5 percent next year. Inflation, as measured by the consumer price index, is forecast to decline 0.5 percent this year before rising 2.0 percent in 2010. Office Market The office sector continues to suffer the most from job losses, which reduces the demand for space. Vacancy rates will probably increase from 15.5 percent in the second quarter to 18.8 percent in the second quarter of 2010. Annual rent in the office sector is projected to fall 14.1 percent this year and 10.0 percent in 2010 after a 0.4 percent decline last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is estimated to be a negative 75.0 million square feet in 2009 and a negative 47.2 million next year.

Industrial Market The contracting global economy has constricted the industrial sector. Vacancy rates are likely to rise from 13.0 percent in the second quarter of this year to 15.0 percent in the second quarter of 2010. Annual industrial rent should fall 11.4 percent this year and another 11.7 percent in 2010, after declining 0.8 percent in 2008. Net absorption of industrial space in 58 markets tracked is seen at a negative 300.0 million square feet this year, and a negative 112.0 million in

2010. Because much construction in recent years was customized to meet specific industrial needs, many obsolete structures remain on the market. Retail Market Given a pattern of weak consumer spending, the retail vacancy rate is forecast to edge up from 11.7 percent in the second quarter to 12.9 percent in the same period of 2010. Average retail rent is likely to fall 6.1 percent in 2009 and 4.9 percent next year; it declined 2.0 percent in 2008. Net absorption of retail space in 53 tracked

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markets is expected to be a negative 25.9 million square feet this year and a negative 3.6 million in 2010. Multifamily Market The apartment rental market – multifamily housing – is facing higher home sales by first-time buyers, but also is experiencing increased demand from families who have lost their homes. Multifamily vacancy rates should slip from 7.4 percent in the second quarter of 2009 to 7.1 percent in the second quarter of next year. Average rent is projected to decline 1.5 percent this year, then rise 0.8 percent in 2010, following a 2.9 percent gain in 2008. Multifamily net absorption is forecast at 168,300 units in 59 tracked metro areas in 2009 and 64,600 next year. The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the commercial community. NAR's Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate. More than 81,000 NAR and institute affiliate members offer commercial brokerage services. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. Copyright National Association of REALTORS. Reprinted with permission.

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Fed’s Beige Book Sees Spotty Signs of a Housing Turnaround Observing that economic decline has recently been moderating in some parts of the country with other areas stabilizing at a low level, the Federal Reserve Board’s Beige Book last week reported that residential real estate remained soft just about everywhere, although there have been signs of improvement. The findings were based on anecdotal information received in comments from businesses and other contacts for the Fed’s 12 districts from roughly June 10, when the last Beige Book report was filed, up to July 20. Where they were occurring, improvements in homes sales tended to be at the low end of the market, where first-time buyers were taking advantage of falling prices and low mortgage interest rates. Contacts in the New York, Kansas City and Dallas districts attributed the relative strength of the entrylevel home market, at least in part, to the first-time home buyer tax credit. As for lending for business, consumers and residential real estate, Philadelphia was the sole district where an increase was seen since the prior report, although it was only “slight.” Banks continued to tighten their credit standards in the Fed’s New York, Philadelphia, Richmond, Va., Chicago, Kansas City, Dallas and San Francisco districts, according to the report. Following are the latest reports by district on residential real estate conditions compiled over the past several weeks: Boston. The housing market remained sluggish in New England into June, although there have been

some positive signs. In June, Boston area home sales were down only 5% on a year-over-year basis, and sales were flat in New Hampshire from a year earlier. Condo sales remained far below 2008 levels in Massachusetts, Rhode Island and Connecticut. Median home prices fell about 12% year-over-year for most of the states in the region, but dropped 25% in Rhode Island in May. In the greater Boston area, however, prices were down only 2% in June from the same month a year earlier. Distressed properties continued to account for a much larger share of the homes being sold in the region this year than last, especially in Rhode Island, with a negative impact on prices. However, the inventory continued to decline in some areas, reducing excess supply. Several contacts complained about the Home Valuation Code of Conduct, which they said was resulting in under-appraisals by appraisal management companies that lack sufficient experience in local housing markets. New York. The region’s housing markets remained generally weak, although there were signs of stabilization in a number of areas. Contacts in northern New Jersey indicated that the market had a somewhat more positive tone than in recent months — prices, though still down about 15% over the year, appear to have stabilized and volume has picked up moderately. With the exception of some new multifamily construction along the Hudson waterfront, new construction activity was described as moribund. New construction in the Buffalo-Niagara Falls area

picked up in June following a period of exceptional sluggishness in April and May. While the high end of the market has weakened some in this area, sales activity for homes priced at $150,000 and under was fairly brisk, with sellers receiving multiple bids, sometimes above the asking price. This strength was largely attributed to the $8,000 tax credit for firsttime home buyers. Overall, home prices have held relatively steady in western New York. The residential market in New York City has seen further signs of deterioration in both sales and rentals. In the second quarter, the median sales price for existing co-ops and condos in Manhattan reportedly fell 26% from a year earlier, while the number of sales transactions fell 50%. The inventory of units listed was up 9%, although there is reported to be a substantial inventory of “shadow” apartments — condo units that are unsold but not yet listed. Asking rents in the city have slackened further, declining 2% to 12% over the past year, and actual rents are off more than 17% on a per-square-foot basis. Landlords were increasingly offering concessions — such as free rent for one or more months — in slow neighborhoods. Philadelphia. While residential real estate in June and July remained well below the level of a year ago, a noticeable pickup from earlier months of this year was reported. According to real estate agents, that increase is partly seasonal and partly the effect of “pent-up demand” rebounding from the very low sales pace over the past winter. Real estate agents generally See BEIGE BOOK, Page 10

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9


BEIGE BOOK from Page 9 indicated that the improvement in sales has been mainly for relatively low-priced houses, noting that a wider upturn in sales will depend on significant improvement in consumer confidence and employment. Reports indicated that price declines appeared to be easing, although in some parts of the district prices continued to drop substantially compared with a year earlier. Cleveland. Most builders continued to experience a slight increase in sales, but they were less optimistic about the outlook than in the second quarter. Foot and Internet traffic were characterized as stable or declining, and sales were expected to remain at current levels or fall off slightly through the year’s end. Builders reported that a housing recovery was being impeded by financing difficulties for contractors and home buyers, low appraisal values and the limitation of tax credits to first-time home buyers. Discounting has been significantly reduced. There were widespread reports of increased prices for lumber, shingles and concrete, attributable to seasonal factors. General contractors continued to operate with skeleton crews, and subcontractors were readily available at highly competitive prices. Richmond, Va. Reports on housing activity were mixed across the district. In Fairfax, Va., a Realtor® reported that the heart of the market was “hot,” with houses priced in the $400,000 to $1.2 million range selling the fastest. Similarly, contacts in the Washington, D.C. area reported sales increases over

last year, fueled by sales of properties under $1 million. A Realtor® in Greenville, S.C., said that June had been his “best month” and that houses in the low- to middleprice range remained the best sellers. On a less positive note, Realtors® in Richmond and in Greensboro and Asheville, N.C., reported more sluggish home sales. The Realtor® in Richmond called sales “way off the mark” and the contact in Asheville observed that his area was “buckling down and weathering the storm.” House prices either held steady or declined across much of the district. Atlanta. Most home builders and Realtors® in the district indicated that the pace of the decline in home sales continued to moderate. Most Florida contacts said they saw improvements in sales, particularly for existing homes, although partly because of increased foreclosure sales. Foreclosures and short sales, they reported, were continuing to exert downward pressure on home prices. Both Realtors® and home builders noted some increased demand at the low-end of the housing market. New home construction remained at exceedingly low levels. Improving in recent months, expectations in June for activity over the next several months moderated following the end of the spring peak selling season. Chicago. Although residential construction was weak, particularly for apartments and condominiums, several contacts reported a bottoming out or small increase in new single-family home sales. The number of signed contracts was declining at a slower pace, with showroom traffic remaining slow

but steady and cancellations declining. Many more foreclosed homes reached the stage of repossession and sale, putting downward pressure on home prices. Contacts in the mortgage industry reported a small increase in purchase applications. St. Louis. Home sales continued to decline throughout the district. Compared with the same period in 2008, year-to-date home sales in May were down 13% in St. Louis, 22% in Memphis, Tenn.; 32% in Little Rock, Ark.; and 35% in Louisville, Ky. Residential construction also continued to decline. Year-to-date single-family housing permits fell in nearly all of the metro areas in the district compared with the same period in 2008. Permits declined 30% in Little Rock, 37% in St. Louis, 44% in Louisville and 56% in Memphis. Minneapolis. June housing permits were down 25% from a year earlier in Minneapolis-St. Paul and 30% in Fargo, N.D. On the brighter side, sales were up 20% in the Minneapolis market, although the dollar value was flat and the median sales price was down 15%. Realtors® in West Montana reported steady sales for lower-priced homes, but slow sales for high-end properties. Kansas City. Residential real estate firms reported stronger sales volumes in June. Home inventory levels improved further in district states, with strong sales in the lower- and middleprice tiers of the market. Starter home sales remained strong due to the firsttime home buyer tax credit and sales volumes improved for bank-owned and investor properties. Housing prices remained firm in Kansas and

Oklahoma, while foreclosures weighed more heavily on the housing markets in Colorado and New Mexico. Home builders cited unfavorable borrowing terms, mounting foreclosures and a slower-than-expected inventory adjustment as the major obstacles to a rebound in construction. Dallas. Home sales continued to improve in the lower-priced, entrylevel market as buyers moved to take advantage of the first-time home buyer tax credit before it expires at the end of November. Despite that pickup, overall sales were well below year-ago levels and contacts said sales were continuing to decline in higher-priced segments of the market. While sales prices were slightly below year-earlier levels, they were holding up well compared to most other parts of the country. Residential construction activity remained at very low levels, but some contacts expected to see a pickup in entry-level housing starts in the near term. San Francisco. Conditions were extremely weak throughout the district, but there were some signs of improvement. There was “a sustainable pickup in the pace of home sales in many areas” as the result of further declines in sales prices and low mortgage rates. Home construction remained at a notably low level. The Beige Book is published eight times a year. Upcoming reports are scheduled for Sept. 9, Oct. 21 and Dec. 8. The above article has been provided to you compliments of NAHB and Nation’s Builder News.

Builders Say Ending Tax Credit Could Halt Home Sales Gains Builders Say Ending Tax Credit Could Halt Home Sales Gains

Home builders in hard-hit markets in Arizona and Nevada voiced concern last week that the tentative signs of a housing recovery they have started seeing in recent months may disappear with the expiration of the $8,000 housing tax credit for first-time buyers on Dec. 1. With the tax-credit deadline for home closings only a few months away, the builders said that they don’t expect to receive much additional mileage from the current housing stimulus measure, adding that progress in turning around home sales could come to a halt unless the credit is extended for one more year and expanded to cover all eligible buyers of a principal residence. The builders were participating in an Aug. 13 media teleconference held by NAHB as part of the ongoing “Revive Housing, Restore America” campaign, which is aimed at getting the Congress to focus on housing as a means of creating jobs and pulling the nation’s economy out of a devastating recession. In a major grassroots effort, builders across the country — joined by their business associates, customers and 10

September 7, 2009

members of the public — are carrying their message to members of Congress, who are home for their August recess until they return to Washington on Sept. 8.

a week old, NAHB generated more than 1,300 letters to Capitol Hill and was receiving encouraging reports of upcoming meetings with builders and U.S. representatives. In addition to the extension of the tax credit, builders are focusing attention on the urgent need for correcting a faulty appraisal process, ending the credit crunch for acquisition, development and construction (AD&C) loans and expanding Net Operating Loss (NOL) carryback provisions for businesses. Each of these actions would generate significant job growth. Extension and enhancement of the tax credit would spur 383,000 additional homes sales, including 80,000 housing starts in the near term, and create nearly 350,000 jobs over the coming year.

“It is absolutely critical that every NAHB member lend his or her voice as a constituent in this effort, by personally communicating with their elected officials while they are home this month,” said NAHB Chairman Joe Robson. Last week, with the campaign barely

An Uncertain Outlook Citing “recent signs of economic stabilization,” Bill Hoover, president of Pageantry Homes in Las Vegas and president of the Southern Nevada Home Builders Association, said that “the outlook for a long-term sustainable recovery is at best uncertain. Everyone

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agrees there has been continuous and incredible job loss with no identifiable vehicle for recovery.” Hoover noted that unemployment rates are approaching the double digits, raising prospects for a jobless economic recovery. “Housing, accounting for more than 15% of gross domestic product, is historically the leading sector for reviving a lackluster economy and putting Americans back to work,” he said. The $8,000 tax credit has begun drawing in prospective first-time buyers “and making a difference to our industry,” he said; now it needs more time to gain traction. “Our time frame is virtually over if we want to have the current credit help us,” Hoover said. “We’re in a position where we can’t go out and spec-build homes so that they will be ready in November with the hope that people will be able to buy them with the credit.” He added that the credit has been gaining momentum with its monetization in a growing number of states, allowing See ENDING TAX, Page 11 www.TheShowCaseUSA.com


Realtors Raise Walls on Habitat House for San Diego Area Family ®

The National Association of Realtors® is once again partnering with Habitat for Humanity to help a family achieve its dream of homeownership. Today, Realtors® raised the walls on the future home of Abdi Farah and Amran Abdi at 1441 Harding Ave., in National City, Calif. The couple has three children: sons Mohamed, 5; Masud, 1; and daughter, Mumtaaz, 3. Amran’s 21-year old brother Abdijaber, a college student, will also be living at the home. At the wall raising ceremony, the family was joined by San Diego Habitat for Humanity staff and Realtor leaders from NAR and several local associations. “Realtors® build communities and are proud to be partnering with San Diego Habitat for Humanity to help another family build a safe, decent place to call home,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in DallasFort Worth. “I know this house will make a real difference in the lives of the family and look forward to November, when we’ll hand Abdi and Amran the

keys to their new home.” Abdi and Amran are originally from Somalia and spent their early years in refugee camps. They are now U.S. citizens and are very excited to achieve their American dream of homeownership. The family of six currently lives in a small two-bedroom apartment in a crime-ridden area. The apartment leaks, has poor water quality and is often cold in winter. Their new Habitat house will offer the family more space and a backyard for the children to play. The family will receive the keys to their one story, three-bedroom home when it is dedicated during the REALTORS® Conference & Expo in San Diego, Nov. 13-16. This is the ninth year that NAR has partnered with Habitat for Humanity to sponsor a home in the city hosting NAR’s annual conference. Realtors® have also contributed to Habitat for Humanity abroad and the post-Katrina homebuilding efforts along the Gulf Coast. The mission of San Diego Habitat

for Humanity is to make housing a matter of action and conscience as a means to erase poverty housing from our community and the world. San Diego Habitat for Humanity Inc. is the local affiliate of Habitat for Humanity International. SDHFH welcomes everyone of all faiths or no faith to join the effort in strengthening families, neighborhoods and communities. Donors and volunteers are the foundation of Habitat’s work in San Diego County. San Diego Habitat completed its 99th home and has more than 50 in the pipeline! For more information please visit www.sdhfh.org or call 619-283-HOME. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. Copyright National Association of REALTORS. Reprinted with permission.

Local Builder Inventory? Signup for our e-Blast! GeraldW@theshowcaseusa.com ENDING TAX from Page 10 it to be used for downpayments and other upfront costs. Appraising It ‘Wrong’ In markets such as Las Vegas, where foreclosures and declining home prices have been acute, Hoover said that appraisal issues have become detrimental to builders. He cited one local builder who is losing as much as 30% of his sales due to appraisals coming in as much as 25% below the contract sales price. Another builder, he said, received two appraisals on the same home that varied by 28%. “Somebody was appraising it wrong,” he said. Mick Galatio, owner and president of Desert Wind Homes in Las Vegas, said that getting appraisers to realize the shortcomings of using foreclosed properties as comparables for the new homes he is selling has become a major challenge. Most of the homes that are being sold by banks, Galatio said, “get destroyed or vandalized or deteriorate in the foreclosure process. People take appliances and cabinets when they move out.” Working to rehabilitate these properties, he said he is “seeing first-hand the conditions they’re in and what needs to be done to make them livable again.” On the AD&C front, Galatio said that “lenders are working with us, but www.TheShowCaseUSA.com

we are not able to get funding unless the home is presold.” Not Out of the Woods Yet Randy Agron, vice president and chief of operations at A.F. Sterling Homes in Tucson, Ariz., said that the home buyer tax credit is working and helping to stabilize prices in his market.

when we are working on such skinny margins, or no margins.” In some cases, he said, where his company is having to pay $20,000 to make up for a low appraisal, “it doesn’t make sense even to build these homes.” The comparables that are being used, he said, typically are homes that are seven or eight years old, are less

...“We likely will see a tempering in housing starts as we go into the next several months,”... “Stopping it now could throw a monkey wrench into the whole improvement we’re seeing signs of. We can still see the economy is not out of the woods yet, and not extending the credit could have a major impact.” With the tax credit set to expire, when “someone comes into the model center now, we cannot deliver a new home by Nov. 30 to meet the deadline,” he said. “For us, it’s almost ending right now, and we have seen a decrease in sales in the past few weeks.” Appraisals are also making it difficult for builders to recover in the Tucson market, Agron said. “There are errors in them and they really do harm us

energy-efficient than new homes, were built under a less stringent building code and “have a lot less value.” He added that it has been “extremely hard to talk to appraisers and get feedback to them.” And he shared the concern of other participants on the teleconference panel over the scarcity of financing for builders. “We are seeing significant constriction in banks’ willingness to lend,” Agron said. “We rely on this construction financing to build homes, even if we can sell homes. We need to get the pendulum back to a fair place in the risk tolerance” of lenders. The housing industry currently is

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seeing “a very low, temporary kind of recovery,” said NAHB Chief Economist David Crowe. “We are very worried that the positive housing news over the past couple of months could be curtailed when the credit is over.” “We likely will see a tempering in housing starts as we go into the next several months,” he predicted. Housing “has built momentum, but won’t get us past the hurdle. We really need this credit to push us past the goal line.” “Builders depend on banks to purchase and improve the property and build the house,” Crowe added. “Banks have been unreasonably reluctant to lend to home builders, even those in relatively safe markets who have sales under their belts. This will eventually lead to a housing shortage, and we won’t be able to produce the homes that will be needed to meet pent-up demand coming onto the marketplace.” Builders from around the country will continue to report conditions in their markets in more than a dozen NAHB state and regional teleconferences slated for the next several weeks. Members Urged to Participate NAHB is urging its members to participate in the campaign. Information can be found at: www. nahb.org/ReviveHousingNow. For further information on supporting this effort, e-mail Molly Murray at mmurray@nahb.com, or call her at 800-368-5242 x8282. September 7, 2009

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SOCIAL from Page 1 experts who work in the building industry, will discuss several of the most popular social media sites — such as Facebook, LinkedIn, YouTube, Twitter and blogs — and point out how they can be used effectively. The series will culminate with case studies providing building industry examples of how these social media sites can be incorporated into an effective social media campaign. To begin the series and familiarize builders with the most popular social media sites and tools, the following is a quick overview of the sites that will be discussed in the series: Facebook — A Social Site for Making Connections If you have a teenage son or daughter, you’re probably familiar with Facebook because the site is almost certainly their social media site of choice. Like its cousin, Myspace, just about anyone with an e-mail address can establish an online social network by first creating a profile and then making connections by inviting friends to join. The idea behind the site is that friends can update friends on what they are doing and what they find interesting. It’s simply a way of keeping in touch and you can see how this might appeal to teens who want to stay in touch with their friends. What you may not see, however, is the potential Facebook has for networking and relationship building for builders. “Facebook is a very powerful tool for creating communities,” explains Forrest. “Not only are most of our employees active Facebook users, but most of our customers are active, too, as are many of our Realtors®.” Forrest says that her company does not use Facebook to “promote” particular products. Instead, she says, the site is used “for building long-term relationships and social communities.” As NAHB and some of its affiliates have learned, Facebook is also an effective way to inform particular or targeted constituencies. For example, NAHB has created a Facebook network to update and inform potential consumers about the federal first-time home buyer tax credit that is now in effect. “Several times a week, we receive feedback from a ‘fan’ — a Facebook subscriber who visits our site and supports our issue — who is able to claim the federal housing tax credit based on information that was provided to them from NAHB,” says NAHB's Brooke Fishel, who monitors and maintains the federation’s Facebook tax credit site. “The immediate feedback we get shows us how people react to the tax credit news and information that we are providing, and it enables us to adjust our focus and messaging accordingly.” When creating a Facebook site, builders must remember that, first and foremost, Facebook is a social site. Too much focus on business can be boring — and get your site revoked. “I use Facebook to promote my professional services and to offer value to my followers,” says Paul Montelongo of San Antonio-based Paul Montelongo International, a speaker, syndicated columnist and entrepreneurial consultant. 12

September 7, 2009

“My formula is 90/10. Ninety percent of my Facebook site is devoted to my professional presence with 10% is targeted to add personality to my presence.” Kimberly Mackey, of Creative Sales Solutions in Tampa, Fla., warns that Facebook is not the place to focus solely on your company’s message. “One company I know who is adopting a ‘do-it-yourself’ approach rather than hiring a social media manager [to maintain Facebook guidelines]. Mackey said they actually had their Facebook accounts revoked several times because they only posted businessrelated information rather than social networking aspects to their site. “You have to thoroughly understand the rules and the culture of each site so that you work within the spirit of that site,” Mackey said. LinkedIn — Geared Toward Business Professionals As many in the business world know, LinkedInis,essentially,aprofessionalversion of Facebook. The site is geared specifically toward making work-related connections with colleagues and other professionals. It is designed to enable business professionals to network — without the awkward silences that can crop up in many happy hour networking conversations. “We use LinkedIn because we’ve found it to be the most business-oriented site,” says Kim Beales, marketing manager for MotivationalSystems,Inc.,whichspecializes in design, marketing and other services for residential and commercial builders and developers. “We’ve experimented with the other social media sites, but haven’t found them to be as good of a fit.” Like Facebook, builders can create a profile, join groups and post links. An added bonus is that you can ask your “connections” to introduce you to one of their connections — a feature that can help uncover potential business opportunities and expand your reach, all from the comfort of your desk. The group feature is especially handy for common professional interests or organizations, such as NAHB’s National Sales and Marketing Council (NSMC). “LinkedIn allows me to update NSMC members who are on LinkedIn that a new story has been added to NSMC’s online Sales and Marketing Channel,” says Anne Ladewig, NSMC’s marketing manager. “LinkedIn puts this in their newsfeeds, and members can add it to their professionalreading list.” For business-to-business marketing, LinkedIn also provides a forum that enables business professionals to establish relationships. “LinkedIn works because of the business nature of LinkedIn and the common interests of the people in LinkedIn groups,” says Beales. “It’s important to build your network on LinkedIn and teach your sales team how to use it as a networking opportunity. Think of LinkedIn as a virtual cocktail party where you can spend 15 minutes each day networking with other professionals in the industry.” YouTube — Connecting Through Videos When you think of YouTube, odds are you also think of the latest video everyone is forwarding across the Internet. But despite its often recreational appeal,

don’t underestimate YouTube’s potential to help your business. “We are a highly visual society and anytime a salesperson can display a product and add the element of their personality to the video, it is only good for their business,” says Montelongo. “A bona fide salesperson should be posting YouTube videos at least once a week about some element of their product or service.” To post videos, make sure you have an account set up and a video camera that can easily upload to your computer. “Interestingly enough, the video doesn’t have to be of the highest artistic quality,” says Montelongo. “You just have to have good information presented in an authentic manner.” Even NAHB has a YouTube account (www.YouTube.com/NAHBTV). Through it, NAHB features information critical to the home building industry ranging from tax credit materials, to building concrete homes and green building, just to name a few. Montelongo recommends that those in the home building industry post videos of their projects — works in progress, before and after transformations, explaining warranties, etc.— as well as interview testimonials of happy customers, demonstrations of processes such as filling out a contract and sending “thank you's.” These videos are opportunities to establish personal relationships with your target audience, he says. Matt Morrow, CEO of the Home Builders Association of Greater Springfield in Missouri, is able to connect directly to his members — who are constantly on their cell phones — with just a few videos. “YouTube has been great for sharing original video on things like home tours for our parade of homes event and also for re-publishing video — with permission, of course — from local news stories that feature the HBA and/or HBA members,” says Morrow. “We can embed that on our site and e-mail it to members and consumers.” Twitter — Encouraging Two-Way Conversations “Tweeting” may seem like a foreign language, but Twitter is emerging as one of the most useful tools in your social media arsenal. This site only allows 140 characters per update — which may be an obstacle for some wordy marketers — but is also a great conduit for encouraging immediate twoway communication. “A great aspect of Twitter is the real-time conversations that occur, and the ability to solve potential customers’ problems within seconds of inquiry,” says Frank O’BrienBernini, chief sustainability officer for Owens Corning. “We have experienced new business as a result of being ‘first to respond’ to problems posed on Twitter.” Another difference between Twitter and other sites is how you are connected to others. “Following” someone means that you will get all of their updates on your feed, but for your updates to show up on their feed, that person has to choose to follow you. Twitter does not have the automatic reciprocity that exists on Facebook and LinkedIn, which means it is necessary to work hard at keeping your tweets relevant and interesting to attract and retain your followers.

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“The challenge is getting your message down to the 140-word restriction while still getting your message across,” says NAHB’s Fishel. “However, by linking to something from the ‘tweet,’ we are able to drive followers to wherever we want them to go, whether it is to the first-time home buyer Facebook page, the NAHB Web site or some other resource on the tax credit.” This challenge can also be an advantage, especially in reaching those who frequent the Web via their cell phones, like Morrow’s members. “Twitter seems to me to be the ideal fit for sharing information with HBA members. It is short and can be set up to come to and from their cell phones via text messaging,” says Morrow. “We’ve only been utilizing Twitter for a few months, but it matches up well with our members. They live and die by their cell phones, and they want their information short and sweet.” Blogging — Adding Credibility and Expertise to Your Web Site If you don’t already have one attached to your Web site, you should consider getting your own blog. A “blog,” short for weblog, is an interactive online journal, making it a great forum for alerting customers and colleagues to your company’s news and events, as well as for positioning yourself as an expert in your field. You can easily set up a blog on free blogging sites such as wordpress.com, tumblr.com or blogger.com. Blogs are also great for strengthening your Web presence by helping your company stand out in a search. “When blogs are properly constructed and have great SEO (search engine optimization), they are amazing at attracting the search engines,” says Carol Flammer of Flammer Public Relations and mRelevance. Having an effective SEO means that your blog could be one of the first links to pop up when someone searches the Web for new homes in your area. Blogging can do more than create a strong position for you on the Web; it can also position yourself as a leader in your field. “Blogging allows you to post videos, photos, articles and resources to position yourself as a bona fide expert in your industry,” says Montelongo. “It is a direct resource for you to point prospects and customers to for specific answers to their buying questions.” This form of social media also provides customers with a way to reach out to you directly, by commenting on posts or even using your blog to refer friends and family. What Will Work for You? Each of these components has a place in an overall social media marketing campaign. Depending on your marketing strategy, you may not want to use all of these sites, but you should definitely consider incorporating at least a few of them into your marketing strategy. Many marketers using social media are new to the game, but the more you know about it, the more you will get out of it. Learn all you can before you dive in headfirst. The above article has been provided to you compliments of NAHB and Nation’s Builder News. www.TheShowCaseUSA.com


How and Why to Make Lasting Impressions With Realtors® Why are Realtors® ignoring you? They do have buyers, even in today’s market. And you do have houses to sell. This should be a good fit for everyone involved. So, what’s missing? Let’s assume that your houses are marketable and priced for your local market conditions. Let’s also assume that you are paying a market-rate commission. If not, then increase your commission to the market rate. This is a necessary step if you are to build stronger Realtor® relationships. Realtor® commissions have been much-discussed over the years. But, there’s no denying the market conditions today. It’s a buyer’s market for those who can get mortgages. And if you’re not offering a market-rate commission, you’ll get caught in the wash and be forgotten. A second point to consider is that every salesperson, not just Realtors®, sell what they know. So, if you already have sent a mass mailing or mass fax to every real estate office in your area about your product, market-rate commission structure and sales office hours times or available appointment times for the Realtors® to bring their clients to see your product — that’s great. Unfortunately, that’s not enough. You’re competing against other builders in your market who have done the same thing, so don’t expect to see any immediate results. Which brings me to a point that should

be the crux of your entire marketing plan to Realtors® — and what could be the biggest secret about building stronger Realtor® relationships. You must reach “top-of-mind” status with your brokers and agents. What that means is, if a Realtor® is ready to show a buyer a house, the first house that comes to their mind is yours. You’ve become the “go to guy” for their clients’ new home. Make 10 Memorable Impressions in Eight Weeks Reaching “top-of-mind” status with the Realtors® in your market generally requires that you make at least 10 positive impressions with them. Why 10? In general, Realtors® won’t even remember you before you’ve made at least four memorable contacts. Then it takes another six memorable impressions before you come to mind when they are talking with potential buyers about your product type. That said, the following is a shortterm marketing plan that will help you achieve “top-of-mind” status with your Realtors® in just eight weeks: Impression 1 — Feed Them Take pizza or some other type of lunch — as well as all your pertinent sales information — to all the agents at a brokerage firm. Theme the lunch appropriately, with a little bit of fun, i.e. “Get your piece of the pie!” if you’re bringing pizza. Then, distribute your

information while everyone is eating and give a less than five-minute talk about your homes and community. If you call the broker ahead of time and explain what you plan to do, much more often than not, the broker will allow you to make your presentation — and the attendance will be worth your efforts. After all, if you feed them, they will come. Impression 2 — Call Them to Thank Them You will receive “thank you” cards or notes from those agents who appreciated the luncheon or were interested in your presentation. Follow up on the correspondence by calling all the Realtors® who have contacted you within a week. Thank them for taking the time to review the information on your homes and community and invite them for a site visit and tour. You might also ask them to bring along any potential home buyers who might be a good fit for your product, but if they don’t have a prospect in mind, let them know you still look forward to showing them what you have to offer.

on Site Meet each of them individually at your home and community and educate them on why your product is different. This is your opportunity to show and tell each of the agents what you have to offer. This is important because, even if they don’t have a client match now, they might have one in the near future or hear other Realtors® in their office talking about the clients they have. This is your opportunity to cultivate an advocate for your product. Impressions 5 and 6 — Keep Them Informed Keep them informed — and keep yourself on their radar screens — by sending them flyers or e-mail blasts that provide them with the latest, valuable information about your product, such as recent sales, your current model hours, updated pricing and new available options. Now that the agents are familiar with you and your products, here is where it gets critical.

Impression 3 — Mail Them a Confirmation Card Follow up the phone calls with a “thank you” card that confirms the agreed upon meeting time.

Impression 7 — Schedule a ‘Bring-aFriend’ Event Now that you have informed Realtors® who are advocates, schedule a “bring-a-friend” networking event at your model. This is an invitation-only tour of your model, and the entry fee is that attending Realtors® have to bring a

Impression 4 — Meet Them Individually

See IMPRESSIONS, Page 15

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ECONOMY from Page 1 the monthly data, and the second quarter’s average monthly job loss (at a seasonally adjusted annual rate) of 436,000 shows a lessening of job losses from the first quarter’s average monthly loss of 691,000. Since employment, as a lagging indicator, is always last to respond, job losses are likely to continue through the end of this year — though we hope the losses will prove to be smaller and smaller as the year progresses. The unemployment rate is now at 9.4% and likely to head higher, reaching 10% by late this year or early next year. Not Only Is the Pain Lessening, Housing Is Showing Improvement Housing has clearly been one sector where the economic news has been a little happier. Singlefamily housing permits now have increased for the third consecutive month and starts have increased for four months in a row. The NAHB/Wells Fargo Housing Market Index (HMI), after bumping along at historic lows in single digits for five months beginning late last year, has been in double digits for the past four

"Single-family housing permits now have increased for the third consecutive month" months. The July reading of 17 was up from 15 in June. Both new and existing home sales also have been up in each of the last three months and builders continue to make good progress in reducing their inventories of new homes. As of June, inventories of new single-family homes for sale stood at 281,000, their lowest level in 11 years. Meanwhile, the months’ supply — answering the question, “How long would it take to sell the current inventory of homes based on this month’s sales rate?” — fell from 10.2 months in May to 8.8 months in June. The seasonally adjusted S&P/Case-Shiller 20City and 10-City Home Price Indices were down in

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May over April, but the decrease was miniscule compared to past double-digit declines. Home prices for eight of the 20 cities were up for the month — though again, all cities’ home prices were down from the previous year. This is an indication that supply and demand have come, or are coming, into balance and that demand for housing is improving. Several factors have contributed to the improvement in housing. The first-time home buyer tax credit seems to have taken hold, encouraging many to take the plunge and purchase a house. This tax credit of up to $8,000 is available to first-time home buyers — individuals who have not owned a home in the previous three years — who close on a new or existing home no later than Nov. 30 of this year, subject to income restrictions (visit www. federalhousingtaxcredit.com/2009/index.html for more information on the tax credit). Interest rates remain at historically low levels, improving the affordability of houses. Lower house prices have also improved affordability. Many measures of affordability, including the NAHB/Wells Fargo Housing Opportunity Index (HOI), indicate that housing is at or near the most affordable level it has been since the inception of each index.

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Every Silver Lining Has a Cloud Behind It — And Challenges Remain Lest the prospect of less pain lull us into a sense of complacency, it is worth noting that even as things improve (or, more properly, deteriorate more slowly) concerns remain, especially for housing. Clearly the financial markets and the various financial institutions that lend to businesses and consumers are on the mend. Nonetheless, they are often reticent to lend. Potential home buyers need large downpayments and excellent credit scores to obtain a mortgage. Home builders are facing increasing demands on the loans they have and new loans they seek. Requirements for obtaining new AD&C (acquisition, development and construction) loans have grown increasingly restrictive. Some lenders are requiring increased equity and/or accelerated payments on outstanding loans. In some cases, this is turning a performing loan into a nonperforming loan. Even as builders of single-family houses have made some progress against the strong headwinds of stringent loan conditions, multifamily builders have found it more and more difficult to find financing. As a result, multifamily housing starts have slowed to a snail’s pace. Multifamily starts varied roughly between 325,000 and 350,000 from 1996 through 2006 on an annual basis. Quarterly averages have fluctuated over a wider range during this same period — between 290,000 and 390,000. However, in the last three quarters, multifamily starts have fallen below 200,000. In the second quarter of this year, they fell to 118,000, the lowest quarter on record since the Census Bureau started collecting these data in 1959. No significant improvement for the multifamily sector is on the horizon. Another drag on the housing market has been low appraisals. Excessive caution by some appraisers and lack of experience with the local real estate conditions by others has led to many cases of appraisals significantly below the agreed See ECONOMY, Page 15 www.TheShowCaseUSA.com


ECONOMY from Page 14 upon sales price, in some instances even below the builder’s cost of construction. A July NAHB survey found that one-quarter of builders reported losing a sale because the appraisal was below the selling price. Some appraisers are using short sales (sales below the amount of the outstanding debt on a house) and sales of foreclosed properties as comparables without making an adjustment for the quality of these properties that may not have been

properly maintained and may be in need of significant repairs.

IMPRESSIONS from Page 13

about your homes and sales. Remind them again that you would like to meet with them and any clients they may be considering for your homes.

guest with them. Invite community residents as well, and ask them to invite their friends, too. Serve hors d’oeuvres, have your model in peak condition and display your information throughout the house. Shake hands, get and give out business cards — and set up appointments. Impression 8 — Thank Everyone for Attending Follow up on the event by sending everyone a “thank you” card. Include an open invitation to meet with you at anytime to discuss your homes and community. Impression 9 — Send Updated Information About Your Community Send the Realtors® another product reminder with the latest information

Regardless, foreclosures will continue to weigh on the housing market over the next several months. Finally, although we are hopeful the first-time home buyer tax credit has primed the pump and we will see home sales continue to rise into 2010 and beyond, it is not a foregone conclusion. In order to take advantage of the

Impression 10 — Follow Up With Phone Calls Follow up on the latest product update with a phone call asking if they have any questions on your product. Be sure to ask them if they know of anyone who might be a good fit for your product now or in the near future. Now that you have spent the last eight weeks building your relationships with your Realtors®, don’t stop there. Keep following up and building on the relationships you’ve established. This will produce results — as well as provide you with honest feedback about your product if you ask for it. So ask. Realtors® are in houses every day. Ask them for honest feedback about

tax credit, qualifying first-time home buyers must to close on their home purchase by Nov. 30. To have a new home ready for sale and occupancy by that deadline, most construction must have been started by now. Thus, the economic and job stimulus from this measure will begin to abate over the next month or so. To the extent that other home purchasers step forward and fill the gap after the tax credit expires, home sales and residential construction should continue to rise. But an extension or expansion of the

expiring program will help move housing to firmer ground. NAHB Chief Economist David Crowe analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Aug. 5 edition. To subscribe to “Eye on the Economy,” click here.

how your product compares to your competition. This will garner you some solid market research. I also have held several other successful promotionally-themed events for Realtors® that have brought results. All they take is a little imagination. My “Have your cake and eat it, too” event in which Realtors® were invited to my model for desert and some talk about a new promotion I was offering featured a sheet cake that had a commission check for the amount of 3% airbrushed on the icing. For this particular promotion, Realtors® received their full commission at the first draw of the job, rather than waiting until the construction was completed. My 10 impressions are a guide. When planning your campaign, remember to have fun and be creative. The more creative you are, the better your chances

of being remembered. Brent Forsberg, MIRM, CMP, CSP, of Forsberg Real Estate Company in Okemos, Mich., is a licensed real estate and oversees sales in three new home communities. He has specialized in new home sales since 2001 and has led discussion groups on "Market Research," "Getting Along with Realtors®" and "How to Get Rid of an Existing Home to Make a Sale" at the three most recent International Builders’ Shows. For more information, e-mail Forsberg, call him at 517-202-7572 or visit the Forsberg Real Estate Company at www. forsbergrealty.net. This article originally appeared on the NAHB Sales and Marketing Channel.

The above article has been provided to you compliments of NAHB and Nation’s Builder News.

The above article has been provided to you compliments of NAHB and Nation’s Builder News.

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Sales Pep Talk By Paul Montelongo

No, your eyes aren't deceiving you. This segment is not about a beer commercial. It is about how to get the edge by using a few select words that will influence the thinking of your prospect. A recent survey concluded that restaurant servers received an average of 13% more gratuities from patrons when they included in their language the simple phrase, "for you". "For You", it seems, makes restaurant patrons feel more special, more cared for and more comfortable with their dining experience. When a server delivers coffee, the menu or even the check, the patron is more apt to increase the gratuity when the service is personalized. The more often this phrase is used, the greater the increase in gratuity. What would happen if you received a 13% increase in your contracts from your clients? That would just make your year, wouldn't it? You could buy that extra house on the beach or even retire. Well maybe not, but you would be a whole lot more profitable. People buy products and services for one main reason. The perception of what is in it for them. Once you discover what is in it for your prospect, you are rounding third base and headed to home plate for the score. Start by using words and phrases

This Bid Is For "YOU"

that set you up for a successful sale. Here are a few words that you should include in every conversation that you have with your customers. YOU. "This is all for YOU, Mrs. Customer." "I am preparing these plans and specifications for YOU, Mr. Buyer." "I will deliver samples for YOU, Ms. Homeowner." YOUR. A first cousin to "you", YOUR is equally as important. "YOUR project is exciting and challenging, Mr. Buyer." "YOUR samples will be arriving soon, Ms. Homeowner." "I'm sure that YOUR family will love this fireplace, Mrs. Customer." NEW. Most everyone I know likes new things. NEW is refreshing, and NEW is‌well, NEW. "I have a NEW set of specifications for you Mr. Buyer." "I have a NEW set of samples for you, Ms. Homeowner." "I thought of you first when these NEW products arrived, Mrs. Customer." HOW. Along with the benefits, customers want to know HOW they are going to benefit. "These specifications will show you HOW to maximize your living space, Mr. Buyer." "The design samples demonstrate HOW the colors and textures coordinate with each other, Ms. Homeowner." "Mrs. Customer, your manual illustrates HOW to utilize the system." NOW. We live in a fast-food society.

Everyone wants it now, or at least they think they do. "NOW is a good time for us to discuss your specifications, Mr. Buyer." "I couldn't think of a better time than NOW to deliver the samples, Ms. Homeowner." "You can have your design work started NOW, Mrs. Customer." FREE. Need I say more? But just because this article is for YOU, here are some examples. "Mrs. Customer, the design consultation is FREE when you invest with our company." "Those are FREE samples for you to choose from, Mr. Buyer." "Your new blueprints allow you to FREE up more space in your kitchen, Ms. Homeowner." Integrating these words into your sales vocabulary will increase your closing ratios and build better relationships with your customers. That all translates into profits for YOU. You probably noticed, Mr. or Ms. Article Reader, that in each example above, I used the personal name of the prospect. Dale Carnegie said, "The sweetest sound to a person's ear is the sound of their own name." Using your customer's name frequently and with genuine interest will only add to your credibility. Your customer will understand that you have their best interest in mind and that you care about them. Imagine a world where all business people only cared

about their customer. What a concept! Are you going to get a 13% raise on all of your contracts because you incorporate these words into your sales vocabulary? Let's dream a little here. You might get more. It certainly can't hurt your sales by using these words. What have you got to lose, other than that extra house on the beach or that early retirement money? Paul Montelongo, is an international authority on sales motivation. He conducts corporate sales training programs, delivers inspirational keynote addresses and offers retreats for sales and management teams worldwide. Get free weekly electronic tips and learn more about Paul and his resources for sales professionals, at www.PaulMontelongo.com.

2009 Realty Round Up

Growing a Greener Austin Turn over a new, energy-efficient leaf at Realty Round Up 2009: Growing a Greener Austin. The Austin Board of REALTORSÂŽ will showcase ways to conserve energy and preserve resources in style. Hop in your hybrid, grab a few friends and get ready to go green!

October 7, 2009 Austin Convention Center Tickets $10 Purchase at the door or online at https://www.abor.com/events/roundup.cfm For more information roundup@abor.com

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Industry News & Events WCAOR Announcements Do You Have Friends Or Colleagues Interested In Becoming Members Of WCAOR? For new member inquiries contact: Linda Hall Director of Membership Services Telephone: 512-255-6211 x 112 E-mail: Linda@wcaor.org

20th Annual WCAOR Golf Tournament

Location: Twin Creeks Golf Club, 3201 Twin Creeks Club Drive, Cedar Park, TX Time: 11:30am - 6:00pm Price: $150 per player, $600 per team Contact: (512) 255-6211 for more information Participate in the 20th Annual WCAOR Golf Tournament and play again for FREE! Join us for golf on the 12th and come back with 4 of your clients! You only pay the fee's.

WCAOR Education Schedule For September 2009

9/1 & 2- Accredited Buyer’s Representative (ABR) $275 16 Hours MCE (Course #- 16-00-030-6855) 8:30 - 5:00 WCAOR· 9/3· ABR E1ective: Harnessing the Power: Skills Based Management $100 - 8 Hours MCE (Course 07-00-010-5657) 8:30 - 5:00 @ WCAOR 9/10 & 11 - CRS 10 - Building an Exceptional Customer Service Referral Business $275 (Members) $300 (Nonmembers) 15 hours MCE - (Course #15-00-081-8193) 8:30 - 5:00 WCAOR 9/14 - How to Stand Out in a Crowd $25 -3 Hours MCE (03-00-051-8235) 1:00-4:00 @ WCAOR 9/15- Residential service Contracts· HWA Free - 3 Hours MCE (Course #: 03-00·120·7516) 2:00-5:00 @ WCAOR 9/17, 18, 21 & 22 - GRI Real Estate Finance

San Antonio

$275 (WCAOR Members): 300 (non-Members) 9 Hours MCE or 30 Hours SAE (#0444) 8:30-5:30 WCAOR 9/18· Fundamentals of Foreclosure Auctions $30 - 4 Hours MCE (Course #: 04-00-061- 8324) 1:00-5:00 @ WCAOR 9/24 - Enhance Your Skillset - Improve Your Income Free - No MCE 1:00-4:00 @ WCAOR 9/25· TREC Ethics $25 (Members): 30 (Nonmembers) 3Hrs MCE (Course #: 03-03-129-6497) 9:00-12:00 @ WCAOR

ABoR NEWS YOU CAN USE Date: Wednesday, October 7 Time: 10:00 am - 4:00 pm Location: Austin Convention Center As the largest real estate trade show in Central Texas, the Austin Board of REALTORS®’ Realty Round Up offers you a great opportunity to connect with industry experts and share your services with thousands of local real estate professionals. This year’s trade show emphasizes energy conservation, sustainable building and all things green. Early bird prices through June 30, booth prices are as follows: • $350 for a 10’ x 10’ booth • $650 for a 10’ x 20’ booth • $950 for a 20’ x 20’ booth • $1,200 for a 20’ x 30’ booth All booth fees include: • One skirted table and two chairs for each 10’ x 10’ booth • Two skirted tables and four chairs for each 10’ x 20’ booth • One skirted table and two chairs for each 20’ x 20’ booth • One skirted table and two chairs for each 20’ x 30’ booth

Austin

One 7” x 44” identification sign for each booth After June 30, all booth prices will increase by $50. Realty Round Up 2009 also provides a variety of sponsorship opportunities, ranging from $300 to $2,500. Don’t miss the opportunity to grow your client base – secure your Realty Round Up booth today!

CALENDAR OF EVENTS September:

3rd ABoR's Wine Tasting Fundraiser

9/25· TREC Legal $25 (Members): $30 (Nonmembers) 3Hours MCE (Course #: 03 -03-129-6496) 9:00-12:00 @ WCAOR

Plant Your Booth for Realty Round Up 2009

6:00pm-8:00pm @ Uncorked, 900 East 7th St. in Tasting Room Tickets are $35 each Contact: Emily Chenevert at echenevert@abor.com or Phone: (512) 454-7636, ext. 1501

10th TAR Annual Business Meetings/ BOD TAR Annual Convention & Trade Expo All day @ Dallas, TX Contact: Emily Chenevert E-mail: echenevert@abor.com Phone: (512) 454-7636

16th Nahrep Austin Monthly Luncheon 11:30am-1:00pm @ Cool River Cafe Contact: rurias@farmersagent.com Phone: (512) 448-0844

17th WCAOR Cheeseburgers in paradise 4:00pm - 8:00pm @ Rabb House 2009 E. Palm Valley Blvd. Round Rock 78665 $35 per ticket, Will also have silent and live auctions and cooking contest!

Managing Partner Cara Diaz | CaraD@theshowcaseusa.com

Sales: 210-722-9650 | Design: 210-488-7307 Office: (210) 493-5554

Newspaper Designer Gerald Wright | GeraldW@theshowcaseusa.com

We proudly support the following organizations

The ShowCase is published once a month. We are a non subscription for the members of the WCR, ABOR, WCAOR, NAHREP, AYREP, NAPMW and Industry Professionals. The ShowCase is not responsible for opinions or facts expressed by non-staff writers or for errors and any by products in advertising or editorial copy. REALTOR® is a registered trademark. The word REALTOR® sometimes appears without the registered trademark symbol (®), for the purpose of saving space. Wherever the word REALTOR appears in this paper, the registered trademark should be assumed. We welcome submissions of photos, Press releases or articles to be sent to Geraldw@theshowcaseusa.com.

www.TheShowCaseUSA.com

The ShowCase USA

September 7, 2009

19


we’ve

saved the best

for last

FINAL

21 HOMESITES

Senna Hills Spacious Homesites with Endless Views Taylor Morrison’s Senna Hills Community is the last place to buy a Lake Travis

newly constructed home in the prestigious Westlake area. Twenty-one homesites have just been released with spectacular views of the surrounding hill country. With its close proximity to downtown Austin

620 LOOP 360

and award-winning Eanes School District, Senna Hills is a beautiful and enchanting neighborhood. Don’t miss out on the dream of owning a new home in Westlake!

• Estate-sized Homesites • Pricing starts in the $500,000s

71

1705 Milagro | Austin, TX 78733

Call us at 512-263-2655

• Eanes School District • Impressive views of the beautiful Hill Country • Nine spacious floorplans ranging in size from 3,163 sq. ft. to 4,683 sq. ft.

taylormorrison.com All lots subject to prior sale. Taylor Morrison reserved the right to change the terms of the offer at any time. Please see a Taylor Morrison Sales Representative for more details. All rights reserved. TM Homes of Texas, Inc.


AU, Sept 7th Issue  

Austin Real Estate News

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