Monday, February 27, 2012

Existing-home sales post third gain in 4 months

Good Morning!

This is exactly what we are seeing here in Horseshoe Bay.  The article shows the statistics but the general attitude is that this is a once in a decade opportunity to buy at some of the lowest prices seen in a long time coupled with historic low interest rates.  The combination makes for very good investment timing.  Even buyers that can pay cash are financing because they know that with rates in the 4% range, inflation will make these rates real bargins.  Come see us in Horseshoe Bay.  Roy Busse

 

Existing-home sales post third gain in 4 months

NAR: large-scale REO-to-rental program not needed



<a href="http://www.shutterstock.com/gallery-84025p1.html">Home sales rising image</a> via Shutterstock.com.Home sales rising image via Shutterstock.com.
Increased demand from investors and first-time homebuyers helped boost existing-home sales in January -- the third increase in the past four months, the National Association of Realtors reported.
NAR said total existing-home sales -- including single-family homes, townhomes, condominiums and co-ops -- were up 4.3 percent from December to January, to a seasonally adjusted annual rate of 4.57 million.
While that's essentially unchanged from the same time a year ago, for-sale inventory was down 20.6 percent from a year ago, to 2.31 million homes, a 6.1-month supply of homes at the current pace of sales.
Many housing analysts view a six-month inventory of homes as a good balance between supply and demand -- a larger inventory of homes can indicate an oversupply of homes for sale, which can undermine prices. When inventories drop below six months, the shortage of homes for sale can drive up prices.
"The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers," NAR Chief Economist Lawrence Yun said in a statement.
Yun cited the statistics as evidence that a government proposal to convert bank-owned properties into rentals on a large scale "does not appear to be needed at this time."
"Foreclosure sales are moving swiftly with ready homebuyers and investors competing in nearly all markets," he said.
Merrill Lynch analysts Michelle Meyer and Ethan Harris think part of the drop in inventory is due to delays in the foreclosure process in the aftermath of the so-called "robo-signing" scandal.
With top banks nearing a final settlement with state attorneys general, they expect the foreclosure process to accelerate, and for inventory to swell to eight months later this year.
The first REO-to-rental transactions are weeks away, but the property pools offered this year may be smaller and more manageable for groups of qualified local investors than previously assumed, Ken Harney reports.
NAR said foreclosures and short sales accounted for 35 percent of sales in January, and that the national median existing-home price for all housing types was down 2 percent from a year ago, to $154,700.
Investors purchased 23 percent of homes in January, up from 21 percent in December, while the percentage of first-time homebuyers increased from 31 percent in December to 33 percent in January.
Nearly one in every three January home sales was an all-cash transaction. A survey of NAR members showed more than half had at least one contract canceled or delayed in January, often as a result of a mortgage application being turned down or because appraisals come in below the negotiated price.
Single-family home sales were up 3.8 percent from December to January, to a seasonally adjusted annual rate of 4.05 million. That's a 2.3 percent increase from a year ago. The median existing single-family home price was $154,400 in January, down 2.6 percent from the same time a year ago.
Existing condominium and co-op sales increased 8.3 percent from December to January, to a seasonally adjusted annual rate of 520,000. That's a 10.3 percent decline from a year ago. The median existing condo price was $156,600 in January, up 2 percent from January 2011.
At the regional level, the West saw the biggest jump in sales, an 8.8 percent increase from December to January. Sales were down 3.1 percent from a year ago, however, and the median price was also down 1.8 percent from January 2011, to $187,100.
The Midwest saw the smallest jump in sales, with sales up 1 percent from December to January. Although that was a 3.2 percent increase from a year ago, the median home price fell 3.9 percent from January 2011, to $122,000.
In the South, existing-home sales rose 3.5 percent from December to January but were unchanged from a year ago. The median price in the South was $134,800, down 0.3 percent from a year ago.
Existing home sales were up 3.4 percent from December to January in the Northeast, and up 7.1 percent from a year ago. At $225,700, the median price in the Northeast dropped 4.2 percent from January 2011.

Friday, February 24, 2012

39,000 New Austin Jobs by The End of Next Year!

Austin and the Hill Country are on one of the highest job growth and economic growth trajectory's in the nation.  In fact the time to buy realestate is NOW! We are at an interesting crossroads of low prices and low interest rates.  Inventories are starting to drop quickly and with that will inevitable increases in prices as the availability shrinks. 


AUSTIN AREA ACCELERATES JOB GROWTH
AUSTIN (Austin Business Journal) – The Austin area is expected to experience more rapid employment growth over the next couple years, according to economist Angelos Angelou.
Angelou predicts the region will gain 19,000 jobs in 2012 and 20,000 jobs next year, with most of the gains in retail, education, health, hospitality and manufacturing sectors. Austin added about 13,000 jobs in 2011.
While Angelou expects area unemployment to fall below 5 percent within a year, he also clarified that low-wage jobs will make up the bulk of the added employment.
According to Angelou, Austin also has an opportunity to grow the automotive sector with the addition of the Circuit of the Americas, a Formula One racetrack under construction two miles from Austin-Bergstrom International Airport.
With the anticipated job and population growth in the area, Angelou advocates expanded transit options as a key to easing increased traffic congestion.

Monday, February 20, 2012

HOME OWNERSHIP HAS OTHER PERKS

NEW YORK (CNNMoney) -- When it comes to dating, homeownership can be the ultimate aphrodisiac.
In a survey of 1,000 single people, more than a third of women and 18% of men said they would much rather date a homeowner than a renter.
Only 2% of women said they preferred to date a man who rents, while only 3% of men said they would choose a woman who rents over one that owns her home, according to the survey, which was conducted by Harris Interactive for real estate site Trulia.
Both sexes also clearly prefer it when there's no roommate in the picture; 62% of survey respondents, men and women, prefer to date singles who live alone.

I'm home! Adult children move back in with parents

And there was bad news for the growing number of boomerang kids -- the young adults who went off to college, graduated and then wound up back in their old bedrooms. It's going to be hard to find love, except (perhaps) from your parents. Less than 5% of all singles surveyed said they would date someone living in their childhood homes.
"That's a real deal-breaker," said Michael Corbett, a spokesman for Trulia. "If you're still living with your folks, you're dead-on-arrival for dating."
The home they could love
Trulia also asked which home features are the biggest turn-ons. Number one turned out to be a master bath. Men (64%) love that private sanctum almost as much as women (75%) do.

Cool and unusual homes for sale

Walk-in closets were cited by 55% of men and 72% of women and gourmet kitchens got 51% of the male vote and 62% of the female. Hardwood floors, outdoor decks and home theaters also came in high on the list.
Interestingly enough, hot tubs got a lot less love from respondents. Only 26% of men and 22% of women cited the old standby in the science of seduction as an amenity they would truly want. To top of page


THE END IS NEAR!

Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Wednesday, February 15, 2012

Realtors....Are They Really Necessary?

This is a question every buyer and seller must ask themselves at some point in the decision to buy or sell a house. As relative new commer to the professional world of real estate the points made in this article by Realtor.com are right on. The issues are varied, complex, legally binding, and no place for the uninformed. All you have to do is go thru the finance process or sign 20 pages plus at the closing as you hand over your cashiers check to understand the need for a trusted professional to help keep you out of trouble. I have always thought that the best definition of a profession is that thru their education and expiriance they able to anticipate the issue or problem before it occures so that it can be avoided or so that a well thought action plan is already in place. Think of a pilot that must alway know what a plane is going to do before it happens.
This has always been the case with real estate, but in todays very difficult economic climate, a real estate pro is not an option.



Why Consumers Need Proper Representation from Real Estate Professionals | REALTOR.com® Blog



________________________________________
Why Consumers Need Proper Representation from Real Estate Professionals
Posted: 15 Feb 2012 06:00 AM PST
Our belief – one of our CORE beliefs – is that consumers are best served through proper representation from a licensed professional.
For most, buying or selling a home is an infrequent transaction with enormous financial and emotional considerations.
It’s stressful, emotionally-charged and high-stakes. Having a real estate professional central to the process of pricing, listing, selling and purchasing a home is important; real estate is not entertainment, and it’s not a game – bad data, inaccurate “value estimates,” and inflating inventory levels on websites creates confusion about what’s really happening in a market.
We understand that serious consumers want the real facts about a market. And we understand that these consumers also want to find a professional who can clearly articulate what these facts mean to their personal situation.
That’s why REALTOR.com® works tirelessly to be the most accurate site with the largest database of homes for sale. And that’s why we update most listings every 15 minutes.
Consumers know they can trust the data; the quality and accuracy of the listing content is second to none.
But searching for homes and researching the market is just the beginning. Market conditions vary from city-to-city and neighborhood-to-neighborhood. So when consumers move forward and take their search from online to real-life, we help them with the next step:
Connecting with a local real estate professional that can help.
A professional that’s immersed in local trends. Well versed in neighborhood nuances. Someone who can take the science of real data and apply it to the art of local real estate.
For sellers, this professional is someone who can navigate changing markets deftly and help price a home appropriately. Someone that helps ensure a smooth ride all the way from contract acceptance to settlement.
For buyers, this professional is a sounding board during their search, and their advocate during contract negotiations all the way to the first day in a new home.
Ultimately, there is a lot more than search to consider throughout the course of a transaction.
Pricing. Negotiations. Offers. Counter-Offers. Contracts the size of novellas. Addenda. Financing. Contingencies. Walkthroughs. Punch Lists. The list goes on and on and on. Navigating all of this takes skill and determination, and licensed real estate professionals are just the folks that can help.
After all, it’s what they do for a living, 24-7, 365.



Thursday, February 9, 2012

Buyer and Seller Hints from Trulial.com

The following is from a Trulia newsletter written by TAra-Nicholle Nelson a broker in San Francisco.

I while I may not totally agree 100% with everything written, she does hit some very important areas. Buyers need space to take ownership and discuss the pros and cons of any house. People tend to buy emotionally and justify logically. The emotional side needs time to see themselves in the home and imagine their furnishing.

Messy doesn't just mean that our Lab Dutch created a mess or licked the sliding door. Messy can just mean too much stuff! Make sure they can see the beauty of the home. They may be cross state rivals and don't like all your alma mater "stuff".

Today it is still a buyer market. Make sure your home is competitively priced, not necessarily what you would like to sell it for. The highest selling prices are achieved in the first couple of months. Pricing high and thinking you can always reduce the price is not a good proven strategy.

Finally, make sure your agent is knowledgeable and proficient with the internet. 80% plus buyers start by viewing property on line.

Talk to you soon. Roy




6 Ways to Turn Off Your Home's Buyer (or Seller!)


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Posted under: Home Buying, Home Selling, Financing | February 8, 2012 1:32 PM | 44,999 views | 84 comments
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In the wild world of dating, when you encounter a “turn-off,” you can just pack it in and not to go on another date with that guy or gal again. But turnoffs can be much more detrimental when they come up in the realm of your real estate goals. Indeed, turn a buyer off, dear sellers, and you risk not selling your home - period - or getting a lower price than you might have otherwise.

And, contrary to what you might assume, the same goes for buyers. Even in today’s ‘buyer’s markets,’ multiple offers do happen. And even in cases when you’re the only buyer on the scene, having a cooperative seller goes a long way toward everything from getting access to the place for inspections to getting a price reduction when the appraisal comes in low. Thus, the potential still exists for buyers to turn sellers off, and risk having their dream home slip right through their fingers.

As you proceed on your quest for drama-free real estate, factor in these frequently occurring gaffes that turn off buyers and sellers, and my tips for avoiding them.

Top 3 Ways to Turn a Buyer Off: If you’re a seller courting buyers, here are 3 faux-pas to avoid:

1. Hanging out when buyers are viewing your home: Buyers stalk properties online and off, checking obsessively for price reductions and the like. But buyer-side home stalking is unobtrusive to sellers. On the other hand, buyers can feel personally stalked and stifled in their ability to fully explore or verbally process their impressions of a home when you, seller, hang out inside your home while it’s being shown.

As soon as a buyer sees you in the house, it instantly becomes much more difficult for them to”
(a) envision themselves living there (it’s your house, after all),
(b) be comfortable opening up drawers, closet doors, etc., and
(c) express their thoughts about how this house might be exactly what they’re looking for, if they can knock out that wall and get rid of those cukoo murals you so lovingly painted in your children’s rooms.

Sellers: If you want to sell your home, it’s best to not be around when buyers are looking. Give them some breathing space and a chance to truly walk around and consider what they like and/or dislike about your home without lurking and looming (and, let’s be real - eavesdropping) nearby.

2. Showing a messy house: Life gets hectic, and it’s easy for things like laundry, dishes and other house cleaning tasks to fall by the wayside. It’s also difficult to keep the home in which you and your 4 kids, 3 gerbils and 2 Labrador Retrievers live perfectly spotless for months at a time, while you’re waiting for an offer. But when you decide that you’re going to sell your home, it’s imperative that you make a pact and a plan with yourself and your family that the place will be in tip-top shape when buyers come knocking.

Remember: your home is competing with dozens of others, as well as with buyer’s HGTV-infused visions of what their next home should look like, so first impressions really count.

Sellers: Stuffing the closet is not the answer. (Buyers will be opening that closet door, after all.) Pack up your personals like you were moving (best case: you are), and put all but the essentials in storage, if needed. Get the carpets cleaned, do the dishes, make the beds, mow the lawn, dust, sweep and mop. Ask your agent to give you a gut check on whether your idea of clean is clean enough (better yet - ask them for the number of a house cleaner who you can engage to get the job done to showable standards).

This might all seem obvious, but agents and buyers alike are constantly amazed at the condition of some of the homes they walk into. Take my word for it; I’ll spare you the ‘ewww’-inducing stories.

3. Overpricing your home: Buyers already have lots to do before making the largest purchase of their lives. They have to wrangle their finances into order, jump hoops to qualify for a loan, collect the cash for down payment and closing costs, and invest sometimes hundreds of hours into market research and house hunting. With all of this already on their plates, the prospect of trying to negotiate down a crazily high asking price is just too much work (and too outside their comfort zones) for most buyers to deal with. The average buyer won’t even bother looking at your home if the asking price is clearly high and off base compared with other similar, nearby homes for sale; they’d rather sit tight and wait .

Sellers: Price to sell from the beginning. Work with your agent to determine a price that is supported by the data on how much nearby homes have recently sold for. You’ll save yourself a lot of time and anguish and get a lot more legitimate bites from serious, qualified buyers.

Top 3 Ways to Turn a Seller Off: Buyers, if you want a home’s seller to play ball, best practice is to avoid these 3 pitfalls:

1. Unjustified, extreme lowball offers: It’s no secret that buyers have the upper hand in many markets right now. (To be clear, I said ‘many’ - not ‘every’ - your agent can help you understand what the dynamics are in your market.) But let’s be realistic, here. No seller can afford to give away their home at a price far below what it’s worth on today’s market. Lowballing a seller at a price far below the recent sales prices of similar homes in the neighborhood on the ‘let’s-take-a-stab’ plan, is highly likely to turn them off. And that, in turn, will cause the seller to view your offer - and you - as disrespectful and wasteful of their time.

Not only will they turn down your offer, but they may not even bother with a counteroffer, rendering your efforts at securing that particular home dead in the water.

Buyers: Review the recent sale prices of similar homes in the neighborhood (aka “comps”) with your agent before you make your offer. Also, ask them to help you factor in other market data, like the average list price-to-sale price ratio and the average number of days neighborhood homes stay on the market. It’s all right to come in lower than asking, if the market data supports such an offer; just be sure your offer is based on reality - and not your fantastical hallucination about scoring the bargain of the millennium.

2. Buyer-side mortgage fails: Plenty of employed buyers with decent credit and cash in the bank have been turned down for a mortgage these past few years. That means buyers can’t assume (a) that they’ll be approved for the amount of loan they need to buy the house they want, or (b) that they’ll be approved for a loan at all. Your inability to get approved for a home loan can create all sorts of problems not just for you, but also for your home’s seller. The average seller’s worst case scenario is that they accept your offer only to find out a few weeks, or months, later that you can’t get the loan you need to close the deal.

Buyers: It’s not overkill to start working with a mortgage professional as far as six months or a year in advance of starting your house hunt to get pre-approved for a loan. Make sure you get a clear understanding of the amount you qualify for, then work with your real estate agent from there to determine the price range you should house hunt in. And whatever you do - don’t buy a new car, open new credit cards or even change your line of work before your escrow closes, unless you consult closely with your mortgage professional before you make that move.

Tip for Sellers: Work with your agent to vet buyers before you sign a contract. Factor in their down payment and earnest money deposit, and feel free to counteroffer these items, not just the offer price. It’s not overkill to have your agent contact the buyer’s mortgage broker to see how reliable the buyer’s pre-approval really is.

3. Bashing the seller’s home: Home bashing happens when buyers start bad-mouthing (aka “trash talking”) the place and/or the neighborhood in hopes of getting a lower asking price. Examples: pointing out all the foreclosures in the area, saying the house down the street just sold for much lower than the asking price on this house, saying you’ll need to rip out the entire kitchen before you even consider moving in - saying any of these things to a seller who happens to be at home during the showing or the inspection is probably one of the fastest ways to turn them all the way off.

Buyers: Bad-mouthing a house or neighborhood won’t work to get you a lower price. Instead, it only serves to irritate the seller and motivate them to come up with all sorts of reasons why they shouldn’t sell their home to you! Remember: homes hold incredible emotional experiences for owners. Make an offer you’re comfortable with and keep the negative comments to yourself.

If there are legitimate, factual reasons underlying your decision to make an offer at a price the seller might see as a lowball, ask your agent to respectfully communicate those facts to the seller’s agent.

Wednesday, February 8, 2012

The Basis of a Sucessful Business

Roy here. The basic foundation of any business is the relationships built with clients. The type of business does not matter. The trust that is developed with a client is a combination of a number of elements, but until the relationship reaches a point that honest dialog can be accepted and trusted, the expansion of the business will be a long and difficult process. People know when they deal with anyone who is trying to sell something there are multiple agendas. That is why Google and many others enable people to see the expiriance others have had with the business.

“We wanted the peace of mind of buying new or near new construction in a tough market with a thin inventory of newer homes available in our price bracket. Jan showed us the options available in the immediate HSB area and then widened her search to the greater Highland Lakes area. Since we could only travel to Central Texas on occasional weekends to actually visit properties, Jan made excellent use of modern Internet technology to help us screen properties so that our buying trips were the most productive possible. After we focused on a property to purchase, Jan’s persistence with the sellers and patience with us – coupled with her attention to detail and great local contacts for inspectors and tradesmen – made us proud buyers of a new home, with a happy seller on the other side of the deal too!”

-- Russ & Beth Mortenson, Spicewood

Monday, February 6, 2012

Lake LBJ...One of the happiest places on earth

Roy here.  Here is some information and a link for Lake LBJ.  Many of us know how beautiful the "Hill Country" of central Texas is.  The rolling terrain and evergreen vegetation is very special in area that is warm most of the year.  When Jan and I came to the Texas she wanted to be in the Hill Country and I wanted to be near or on the water.  Horseshoe Bay and Lake LBJ were the perfect combination.  LBJ is a spectacular lake with great boating , fishing, jet skiing, moonlit cruises, fireworks, lake shore homes, and the list goes on.  Water is very special in many ways, but to me the water is therapeutic.  Just sitting on the shore and watching the waves or people having fun makes me feel good.  And when you have children and grand children swimming, being towed on an inflatables laughing and enjoying the water, we are reminded again why we love Horseshoe Bay and Lake LBJ.


Lake LBJ Visitors & Tourist Guide

Lake LBJ in central Texas
In the Highland Lakes of Central Texas
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Lake LBJ boating and fishing are very popular.

Lake LBJ, named after President Lyndon B. Johnson, is part of the Highland Lakes chain of six lakes starting in Austin and going northwest for over 85 miles. Lake LBJ starts at Kingsland and goes all of the way to Horseshoe Bay, 45 miles northwest of Austin. The lakes include Lake Buchanan, Inks Lake, Lake LBJ, Lake Marble Falls, Lake Travis and Lake Austin. A seventh lake, which is not considered a part of the Highland Lakes chain, is Lady Bird Lake in Austin.
Sailing on Lake LBJ
Sailing on Lake LBJ
Lake LBJ is one of the largest normally a constant level lake in the United States, and is just over 21 miles long with a maximum width of 10,800 feet. Lake LBJ is perfect for sailing, boating, waterskiing, jetskiing, and all water related activities. Lake LBJ is one of the most popular lakes in Texas.
Relaxing by Lake LBJ at Sandyland
Relaxing by Lake LBJ
Lake LBJ is a very popular lake for boating, waterskiing and jet skiing. Tourists are attracted from all over Texas and the U.S. to take advantage of this big beautiful lake. Many people in Austin, Houston, San Antonio, Dallas and west Texas own weekend lake homes on Lake LBJ. Many of these people also retire in the area around Lake LBJ.
Shore at Sandyland
The shores of Lake LBJ are dotted with nice homes with boat houses and automatic boat lifts. There are several communities along Lake LBJ: Kingsland, Highland Haven, Granite Shoals, Sunrise Beach, Deer Haven, Blue Lake and Horseshoe Bay. Lake LBJ is a great retirement area as well as a recreational area. This area has been rated in the top three areas of the U.S. for retirement.
Lake LBJ is a great place to rent lake rental houses, cabins, or condos near the water. All are open year round. RV Parks located on the waterfront of Lake LBJ in Kingsland, allow you to enjoy watching all of the boating activity on the lake. The sunsets and sunrises are absolutely beautiful over the lake. The lake rental homes along Lake LBJ are popular with people who want family reunions or gatherings of friends at the lake.

waterpark at Lake LBJ Yacht Club and Marina
Kids love the Water Park at the
Lake LBJ Yacht Club and Marina

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View from Sandyland
The lake is perfect for boating and
is not usually overcrowded
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If you do not see a list of over 40 links to click on in a frame
at the left - click here for a lot more information about Lake LBJ.

Saturday, February 4, 2012

New Horseshoe Bay West Low Water Crossing Bridge



Horseshoe Bay West is replacing a "low water" crossing with a new bridge that will enable golfers to travel under the bridge to the next hole.  More important, the bridge will enable larger trucks and trailers to move across the creek safely without the problem of getting stuck with a heavy load because of the incline and wet tires.  In addition, it should enable residents of HSB West to continue to use the HSB Boulevard entrance during sever storms.  Either way it is a much needed and appreciated addition to Horseshoe Bay. 

Wednesday, February 1, 2012

LCRA Announces New Lake LBJ Power Plant

Ferguson Replacement Project is underway!  This is a critical and important project for Horseshoe Bay.  Not only is safe, reliable, cost effective power a critical service for the area in it's future growth, the plant is reason that lake LBJ is a constant level lake.  To appreciate the importance of that statement, go on line and look at photos of Lake Travis which is now down over 40 feet from it's normal level.  The constant level enables building permanent docs. It enables recreation 365 days per year. The water support the 5 golf courses in the area and the list goes on.  There is no single event that has a more fundamental impact on the area.  This investment by the LCRA guarantees the HSB way of life for years to come.
LCRA plans to replace its Thomas C. Ferguson Power Plant near Marble Falls with a new natural gas-fired power plant that will be one of the most efficient, reliable and environmentally responsible electric generating facilities operating in Texas.
The project involves building an approximately 540-megawatt (MW), combined-cycle power facility to replace the aging 420-MW Ferguson Power Plant, which was built in 1974. The LCRA Board of Directors in April 2011 authorized staff to move forward with the project, and in August, approved a contract to build the new plant with Fluor Corporation. Once LCRA receives the required air permits, LCRA will issue a Notice to Proceed to Fluor. Fluor will then finalize the project schedule, which likely will include a two-year construction phase to bring the new power plant on-line in 2014.

LCRA will build the new unit at the Ferguson site on Lake LBJ. The existing power plant will be retired following completion of the new facility. Replacing Ferguson will help LCRA provide its wholesale electric customers with more competitively priced power over the long term because a combined-cycle power plant will be more efficient, more cost-effective and more reliable than Ferguson.

What is the Ferguson Replacement Project?
LCRA plans to replace its natural gas-fired Thomas C. Ferguson Power Plant near Marble Falls. The project involves building an approximate 540-megawatt (MW), combined-cycle power plant to replace the aging 420-MW Ferguson unit, which was built in 1974. The new plant will be fueled by natural gas. It also will be more efficient, more reliable and it will have the latest environmental controls. The LCRA Board approved the project at its April 2011 meeting, and in August, selected Fluor Corporation to construct the plant following receipt by LCRA of required air permits. The decision follows a year-long evaluation of the costs and benefits of the project, which included soliciting bids from potential contractors, gathering input from LCRA’s wholesale electric customers, and hosting several open houses to inform neighboring communities about the project.
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Why is LCRA replacing Ferguson?
Replacing Ferguson will help LCRA provide its wholesale electric customers with more competitively priced power over the long term because a combined-cycle power plant will be more efficient, more cost-effective and more reliable than Ferguson. For example, a combined-cycle power plant uses about 30 to 40 percent less fuel than a traditional natural gas-fired plant like Ferguson to produce the same amount of electric power. This results in lower fuel costs and fewer emissions per unit of power produced. In addition, a new power facility will be more reliable and cost-effective because it will require less maintenance.
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What is the project timeline?
LCRA issued a Notice to Proceed with Fluor on Nov. 11, 2011. LCRA will work with Fluor to develop a project schedule, which likely will include a two-year construction phase to bring the new power plant on-line in 2014.
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What are the benefits of LCRA moving forward with this project now?
The Ferguson Power Plant, which is 37 years old, provides diminishing value to LCRA and its wholesale electric customers. In the long term, the costs of continuing to operate Ferguson are higher than investing in a new, more efficient power plant. LCRA is moving forward with this project now because the new power plant will help LCRA provide its customers with more competitively priced power over the long term.
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Can LCRA just continue to upgrade the existing Ferguson unit instead?
Yes, LCRA could continue to maintain the Ferguson Power Plant. However, investing in a newer, more efficient power plant will be more cost-effective than continuing to upgrade and maintain the existing unit.
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Did LCRA consider other locations for this replacement project?
Yes, LCRA considered other locations. However, building a power plant on a new site would cost an additional $50 million to $70 million, and would have a greater overall impact on the environment. It makes sense to reuse the existing Ferguson site because there is room for a new power plant (the site was originally designed to accommodate additional generating units) and the fuel, water and transmission infrastructure is already in place.
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How can I get additional information about this project?
After LCRA and the selected contractor develop a project schedule, LCRA will host open houses and community meetings to inform area residents about the construction project. To sign up for enewsletter updates, see the subscribe box at the top right of this webpage. Also, here are the primary contacts for this project:
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How much will the project cost?
This project is expected to cost between $520 million and $550 million.
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I buy power from one of LCRA’s wholesale electric customers. Will this project affect my electric bill?
LCRA will recover capital costs through the cost-based rates it charges its wholesale electric customers. However, as a wholesale power provider, LCRA does not set rates at the retail level. Investing now in a more efficient power plant will help LCRA keep wholesale power costs stable and competitively priced over the long term.
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How will this project benefit LCRA’s wholesale electric customers?
Here are reasons why replacing Ferguson with a more efficient power plant will help LCRA provide more competitively priced power:
  • More efficient – A combined-cycle power plant is a highly efficient way to produce power, which results in lower fuel costs and fewer emissions per unit of power produced.
  • Lower fuel costs – The new power plant will use 30 to 40 percent less fuel per unit of power produced than Ferguson does today.
  • More reliable – The new power plant’s state-of-the-art technology and design will be more reliable than the 37-year-old Ferguson unit, which requires frequent maintenance.
  • More valuable – A more efficient power plant at the Ferguson site will be more valuable in the Texas electric market because it will respond more quickly to demand for power, reduce transmission congestion costs at its location in the ERCOT Nodal Market, and help maintain reliable electric service to the rural Texas Hill Country, a region with limited generation resources.
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What is a combined-cycle power plant?
This type of power plant combines a gas turbine system and a steam cycle system to generate electricity. The combination of the cycles creates a highly efficient power plant that uses 30 to 40 percent less fuel and produces fewer emissions per unit of power produced than traditional gas-fired power plants like the Ferguson Power Plant.
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What will happen to the existing Ferguson unit?
When construction of the new power plant is complete, LCRA will retire the existing Ferguson unit. LCRA will work with the Electric Reliability Council of Texas (ERCOT) and the Texas Commission on Environmental Quality (TCEQ) on the decommissioning process, which is expected to take two years.
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Does LCRA currently own or operate a combined-cycle power plant?
Yes, the Lost Pines 1 Power Project in Bastrop County is operated by LCRA and owned by GenTex Power Corporation, an LCRA affiliate. Since it began operations in 2001, Lost Pines 1 has been a very efficient, cost-effective resource for LCRA’s electric customers. In fact, a recent worldwide benchmarking study shows that the Lost Pines 1 facility scores in the top quartile among its peers for performance in efficiency, reliability, safety and manageable expenses.
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Would the new power plant be louder or quieter than Ferguson?
As part of the project specifications, LCRA will require the contractor to build a power plant that does not exceed current operational sound levels of the Ferguson facility. However, the new power plant will operate more often than Ferguson does today.
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Will the new power plant be properly equipped to withstand extreme weather conditions?
LCRA included general weatherization specifications in its project proposal. It will work with the selected contractor to develop more detailed weatherization efforts when the power plant design is chosen. As a general practice, LCRA plans and prepares for extreme weather events at each of its power plants.
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What environmental permits are required?
  • Air permits
    LCRA had to obtain two air quality permits before construction can begin on the new power plant. In September 2011 LCRA received from the Texas Commission on Environmental Quality (TCEQ) an air permit for the emissions regulated by TCEQ. In addition, new regulations by the U.S. Environmental Protection Agency (EPA) required LCRA to obtain a permit from EPA for greenhouse gas emissions from the new power plant. In November 2011, LCRA received from EPA a green house gas emissions preconstruction permit.
  • Wastewater discharge permit
    LCRA is working with TCEQ to amend Ferguson's existing wastewater discharge permit to authorize discharges from the new power plant, which will use the same cooling water source (Lake LBJ).

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What emissions improvements are expected?
The new power plant will be will be among the most efficient, reliable and environmentally responsible power plants in Texas. It will produce 30 to 40 percent fewer emissions per unit of power produced than the existing plant. Proposed emissions limits for the new plant are more restrictive than the permit limits for the existing plant.
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What other environmental improvements are expected?
The new power plant will use less water per unit of power produced than a traditional gas-fired plant like Ferguson because a combined-cycle power plant's steam turbine is much smaller. In addition, LCRA has removed the fuel oil tanks that it has maintained on the Ferguson site as a backup fuel supply for periods when natural gas is scarce or expensive. The new power plant will not be designed to burn fuel oil, and removing the tanks will eliminate the risks associated with storing fuel oil onsite.
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When will construction begin?
LCRA is working with Fluor to develop a project schedule, which likely will include a two-year construction phase to bring the new power plant on-line in 2014.
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What will happen to Ferguson’s current employees? Can I get a job at the new power plant?
LCRA anticipates that combined-cycle power plant operations will not require more than Ferguson’s existing 40 staff positions. LCRA will first seek opportunities to train existing staff to operate the new power plant.
Will the project use local contractors?
LCRA will encourage Fluor to involve as many local businesses as possible for work that is subcontracted to qualified and cost-effective vendors.
How can local businesses get involved in the construction of the new plant?
LCRA is working with Fluor to host vendor forums in January or February to provide local suppliers and contractors an opportunity to hear about potential business opportunities.
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Why did some contractor candidates already contact community businesses?
The vendors that bid on this project may have solicited specific information, such as the availability and cost of local equipment rentals, to help capture more accurate costs and information in their proposals.
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What will LCRA do to minimize impact to the community during construction?
LCRA and the contractor will coordinate closely with local law enforcement, city and county leaders, and other public safety officials to minimize impacts to neighbors during construction. LCRA has asked Fluor to work within the noise levels and work hours defined in local ordinances.
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What are the expected economic advantages of this project to nearby communities?
In general, construction projects of this size typically bring hundreds of millions of dollars in revenue for neighboring communities through local purchases of goods and services such as supplies, rent, groceries, gas, dining and more.
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What impacts, if any, will the new power plant have on lakes LBJ and Buchanan?
LCRA does not anticipate any impacts to lakes LBJ and Buchanan. Lake LBJ currently provides cooling water for Ferguson and will serve the same purpose for the new power plant. LCRA expects that the new power plant will require the same lake levels as Ferguson Power Plant does today.
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Will LCRA need to lower Lake LBJ during construction of the power plant?
At this time, LCRA does not anticipate lowering Lake LBJ during construction. However, LCRA will have more information after it selects the design specifications for the new plant. LCRA will be working very closely with the selected contractor throughout all phases of the project.
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What will be done to protect Lake LBJ during construction?
Fluor must comply with LCRA’s Highland Lakes Watershed Ordinance, which includes the requirement to build a retention pond to manage stormwater runoff from the construction site.
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Will the new power plant raise the temperature of Lake LBJ?
No. LCRA likely will run the new power plant more often than Ferguson, but LCRA does not expect increased operations to adversely affect the temperature of Lake LBJ.
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Will LCRA use the existing intake structure?
It appears that LCRA will be able to modify the existing lake intake structure; however, we will know more after we have selected a power plant design.
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Can LCRA replace Ferguson with renewable energy resources or through energy conservation?
No, it is not feasible to replace Ferguson, a 420-megawatt plant, with generation from renewable sources or through conservation. A renewable power source like wind, for example, is intermittent and LCRA relies on a diverse power supply mix to provide reliable power when it’s needed. Also, while LCRA is working with its electric customers to determine how conservation and demand management efforts can help reduce future power needs, these efforts cannot replace the current need for power that is met by the existing Ferguson unit or its future replacement.
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Will this project require new transmission lines or towers?
Based on initial studies, LCRA expects that Ferguson's existing transmission infrastructure is adequate to support a new, combined-cycle unit at the same site. ERCOT may determine that existing transmission facilities need to be upgraded to support the new power plant; however, this would not require new transmission pathways.
Area residents also may notice activity related to electric transmission upgrades near the plant and Wirtz Dam. These projects will increase capacity of the lines to address growing electric demand in the region and are not related to the new plant. Crews will begin foundation work to add three transmission towers and swap existing transmission lines near Wirtz Dam. In the fall of 2011 another project started foundation work to upgrade the conductor on transmission lines near the power plant. The conductor capacity will be increased without any additional lines being added.
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What is an EPC contractor?
Under an engineering, procurement, construction contract, or EPC contract, LCRA hired a single contractor to design the new power plant, procure all necessary equipment and materials, and build the power plant to LCRA's specifications. This type of contract streamlines the design and construction processes and reduces LCRA's risks of cost and schedule overruns.
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I heard LCRA is building another facility in the Marble Falls area. Is it related to this project?
LCRA is building the new Western Maintenance Facility on the LCRA Wirtz Dam property. It is not related to the Ferguson Replacement Project. The maintenance facility will consolidate departments of employees currently located at various sites in the western part of LCRA’s service territory.
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LATEST PROJECT NEWS
Click here for more about the March 1 vendor forum or to register.
Vendor Forum Registration/Info
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Community Open Houses
About 70 people attended four open houses hosted by LCRA in May and June 2010 to inform the public about the possibility of replacing the Thomas C. Ferguson Power Plant near Marble Falls.
Contacts
Community and Public Affairs:
Steve Dyer, (512) 940-4132
Business opportunities:
Mark Provenzano or Glenda Champagne
General Questions: Ask LCRA
Media Inquiries:
Clara