Tuesday, June 25, 2013

Surging Interest Rates Will Not Slow Market

Just the Facts

Rates Will Have to Pass 7% Before Housing Slows
The rise in interest rates may only accelerate the market as buyers on the fence begin to buy, feeling the pressure of rising interest rates.  Major economists agree that rates will have to surpass 7% before there is a slow-down in the real estate market.  And even then with the pent-up demand, the market should continue briskly.   History shows that when rates went from 7% to 18% in 1979-1981, the housing market showed no signs of slowdown until about 12%.
-          Dallas Morning News, June 21, 2013 (excerpts)

Surging Interest Rates Will Not Slow Market
Surging mortgage rates may have little effect on the housing market, at least in the near term, housing experts say.  Mortgage rates rose sharply last week following comments from Federal Reserve Chairman Ben Bernanke that the Fed will begin tapering off its assets purchases later this year if incoming data continues to show the economy is on the mend.  The average cost of a 30-year fixed-rate mortgage loan increased to 4.36% on June 21st, from 3.94% on June 14th, and a record low of 3.36% in December according to Bankrate.com.
-          Inman News, June 24, 2013

Which Real Estate Brand Comes to Mind?

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Monday, June 17, 2013

The Texas Boom is Here to Stay!

Just the Facts

The Texas Boom is Here to Stay!
Texas Net Job Gain:  1,068,900
The Other 49 States Net Job Gain:   1,244,700

Photo: Leadership Texas style: A picture worth a million jobs. Hat tip: Texas Public Policy Foundation and Marie McClellan.

The Texas boon has only begun.  Virtually all economists agree that Texas has so many things going for it that the extraordinary growth of Texas will continue for many years.  Our governor touts the Texas story all over the nation, much to the chagrine of numerous other governors.  But the facts are clear.  Low taxes, low regulation and a balance budget brings jobs, not to mention the pro-business, can-do attitude in Texas.   And jobs bring people.
-          Facebook, June 15, 2013

The Texas Housing Rebound to Continue
The Texas housing rebound shows no sign of letting up, but the rapid rise in home prices could taper off, according to a new report by the Federal Reserve Bank of Dallas.  “Stronger-than-average employment growth and consistent in-migration should continue boosting demand for homes,” business economist D’Ann Peterson said in the Dallas Fed’s Southwest Economy quarterly report.
-          Dallas Morning News, June 15, 2013

DFW Area Gains One Million Every 7 Years
The U.S. Census reports that the DFW Metro, now the 4th largest in the nation, is set to have a net gain of over one million people every seven years.   This is expected to continue for the next 25 years.
-          U.S. Census

Wednesday, June 12, 2013

America’s Highest Earning Cities

America’s Highest Earning Cities
Survey of 562 cities, population over 50,000
Congratulations to Flower Mound, Frisco and Allen
There are 16 cities in the United State with populations over 50,000 where more than 50% of the households in the city earn more than $100,000 per year.  California and Texas dominate this list of high-earners.  Most of these cities are well-to-do suburbs of large metro areas, including Dallas-Ft Worth, San Francisco, Atlanta and Chicago.

Rank
City/CDP
Larger metro area
Percentage of households making over $100,000
Percentage of households making less than $100,000
Percentage of households making $100,000 to $149,999
Percentage of households making $150,000 to $199,999
Percentage of households making $200,000 or more
1
San Ramon, California
San Francisco
63.50%
36.50%
22.10%
16.40%
25.00%
2
Flower Mound, Texas
Dallas-Fort Worth
62.80%
37.10%
28.30%
15.90%
18.60%
3
Pleasanton, California
San Francisco
59.80%
40.00%
22.80%
14.70%
22.30%
4
Yorba Linda, California
Los Angeles
58.80%
41.20%
23.50%
16.70%
18.60%
5
Carmel, Indiana
Indianapolis
58.40%
41.60%
20.90%
14.30%
23.20%
6
Palo Alto, California
San Francisco
57.80%
42.10%
17.70%
11.90%
28.20%
7
Newton, Massachusetts
Boston
55.40%
44.60%
18.00%
11.70%
25.70%
8
Naperville, Illinois
Chicago
54.80%
45.10%
18.50%
13.50%
22.80%
9
Frisco, Texas
Dallas-Fort Worth
53.70%
46.30%
25.70%
14.70%
13.30%
10
The Woodlands CDP, Texas
Houston
53.40%
46.70%
24.70%
13.40%
15.30%
11
Johns Creek, Georgia
Atlanta
52.10%
48.00%
21.20%
10.40%
20.50%
12
Ellicott City CDP, Maryland
Baltimore
51.70%
48.30%
16.80%
16.40%
18.50%
13
Allen, Texas
Dallas-Fort Worth
51.20%
48.90%
24.50%
16.10%
10.60%
14
Lake Forest, California
Los Angeles
50.70%
49.30%
26.70%
13.70%
10.30%
15
Highlands Ranch CDP, Colorado
Denver
50.50%
49.40%
25.60%
12.70%
12.20%
16
Arlington CDP, Virginia
Washington, DC
50.30%
49.80%
18.10%
12.90%
19.30%
Data was obtained from the U.S. Census. 562 cities were included in this analysis.
-          NerdWallet, April 29, 2013

Benefits of Buying New Construction

Benefits of Buying Now

If you are considering buying a newly constructed home, now is the perfect time. According to data from the Census Bureau and Department of Housing and Urban Development's 2011 American Housing Survey, the National Association of Home Builders (NAHB) found that buyers can purchase a higher-priced, newer home and achieve the same annual operating costs as an older, existing home.
NAHB's study first looked at how utility, maintenance, property tax, and insurance costs vary depending on the age of the structure. It found that homes built before 1960 have average maintenance costs of $564 a year, while a home built after 2008 averages $241. Similarly, operating costs average nearly 5 percent of the home's value for pre-1960 structures, while they average less than 3 percent when the home was built later than 2008.
The study then compared the first-year, after-tax cost of owning a home by the year the house was built, taking into account the purchase price, mortgage payments, annual operating costs, and income tax savings. This data showed that a buyer can afford to pay 23 percent more for a new house than for one built before 1960 and still maintain the same amount of first-year annual costs.
While mortgage payments may be greater with the higher purchase price of a newly built home, the lower operating costs mean the home buyer will have annual costs that are about the same as if they'd bought a lesser-priced, older home with a smaller mortgage payment and higher operating expenses.
Many factors determine the choice between a new or existing home. While newly constructed houses often include open-space floor plans, abundant storage options and home entertainment centers, houses in established neighborhoods may feature mature landscaping and trees, handcrafted built-ins and distinctive exteriors. The decision is unique for each home buyer.

Tuesday, June 11, 2013

DFW Area Home Resales Set All-Time Record

Just the Facts




Area Home Resales Set All-Time Record
The sale of pre-owned homes in North Texas were up 23% in May from 2012 levels.  Real estate agents sold 9,197 pre-owned single family homes in May – the most ever in one month.  The number of new listings rose 8%.  But the total number of houses for sale in the metro area is still down 22% from May 2012.  “With sales remaining strong and inventory remaining very low, I think we will continue to see increasing prices this year,” said David Brown, president of the Metrostudy Inc. Dallas office.  The median price of pre-owned homes sold by Realtors in North Texas rose in May to a record $180,000.   This 11% increase over May 2012 brings the area’s median price of homes to about 16% higher than the peak in mid-2007, before the Great Recession.
-          Dallas Morning News, June 11, 2013

RE/MAX DFW Associates Up 55%
RE/MAX DFW Associates was up 55% in May, which broken down was a 37% increase in closed units and an 18% increase in average sold price.     According to NTREIS, the North Texas area was up a combined 34%, which was a 23% increase in homes closed and a 11% increase in home sale prices.

The Housing Boom is Nationwide
-          65% - percentage of sales in Miami close with all cash, no financing
-          50 offers  – the average number of offers per new listing in San Francisco
-          $100,000 cash – the amount over list in Boston for numerous home sales
It is unprecented in U.S. history.   The housing recovery continues unabated across the nation, and the pent-up demand could last for three years.   What is unique to this housing boom is that it is nationwide – all areas of the nation are seeing rapid home price increases and a dwindling available inventory.
-          New York Times, June 9, 2013

Housing Prices Nationwide Rise 12.1% in April
The housing boom is nationwide.  The monumental change represents the biggest year-over-year increase since February 2006 and the 14thconsecutive monthly increase in prices nationally.  And on a month-to-month bases, home prices increased 3.2% in April over March.  The western states are averaging 20% or more annually in home price increases, with 24.6% increase in Nevada, 19.4% increase in California and 17.3% in Arizona.
-          RISMedia, June 7, 2013

Are We Headed For Another Bubble?
In Texas, absolutely not.   The home prices in Texas average about 20% less than nationwide due to our expanse of available land.  This housing recovery is sorely needed for Texas and other middle America states so that home prices can rise to appropriate levels.  However, East Coast and West Coast may be a different story.   West Coast has a history of rapidly escalating home prices, and then a free fall when the economy or housing market change.    California seems to be known for the “bubble.”
-          Inman News, May 2013 (excerpts)

Friday, June 7, 2013

DFW Average Sold Prices are Up

Just the Facts

AVERAGE SOLD PRICE CHANGE
MAY 2013 vs. MAY 2012
CITY
% CHANGE
May-13
May-12
ALLEN
7.10%
$272,120
$254,053
CARROLLTON/FB
6.50%
$201,460
$189,043
COLLEYVILLE
-2.50%
$486,743
$489,984
COPPELL
9.60%
$345,917
$315,563
FAR NORTH DALLAS
1.00%
$307,353
$304,958
FLOWER MOU / LV
5.50%
$254,027
$240,764
FRISCO
6.70%
$327,312
$306,663
GRAPEVINE
-3.70%
$258,273
$268,143
IRVING
3.50%
$232,701
$224,770
KELLER
3.90%
$353,187
$340,076
McKINNEY
13.60%
$248,823
$218,728
PLANO
14.20%
$315,097
$275,998
PROSPER
13.60%
$337,328
$296,962
RICHARDSON
8.20%
$192,250
$177,758
SOUTHLAKE
8.40%
$603,996
$556,993
THE COLONY
26.30%
$176,098
$139,399
TROPHY CLUB/WESTLAKE
2.80%
$433,150
$422,294

Buying beats Renting in 6% of Metro Areas

MAY 17, 2013

Monday, June 3, 2013



AVERAGE LIST TO SALE RATIO - MAY 2013
Plano is First City to go over 100% Ratio
CITY
LIST TO SALE
LIST PRICE
SALES PRICE
ALLEN
98.20%
$276,986
$272,120
CARROLLTON/FB
97.90%
$205,886
$201,460
COLLEYVILLE
97.50%
$499,472
$486,743
COPPELL
98.30%
$351,840
$345,917
FAR NORTH DALLAS
96.80%
$317,647
$307,353
FLOWER/LVILLE
98.00%
$259,243
$254,027
FRISCO
97.30%
$336,449
$327,312
GRAPEVINE
98.30%
$262,787
$258,273
IRVING
97.50%
$238,633
$232,701
KELLER
97.50%
$362,125
$353,187
McKINNEY
98.10%
$253,755
$248,823
PLANO
104.50%
$301,300
$315,097
PROSPER
96.60%
$349,100
$337,328
RICHARDSON
98.80%
$194,860
$192,250
SOUTHLAKE
96.90%
$623,325
$603,996
THE COLONY
98.80%
$178,212
$176,098
TROPHY CLUB/WLAKE
92.70%
$467,365
$433,150
-          NTREIS Stats – May 2013 as of June 2, 2013