New Report Shows DFW is a Top Market for Home Sellers

New Report Shows DFW is a Top Market for Home Sellers

Dallas-Fort Worth is ranked as one of the best markets in the country to sell a house, according to a new study. Zillow Inc. said the D-FW area is the fourth best place in the country for home sellers.  “Sellers in the Bay Area, Seattle and Dallas have the most negotiating power, with final sale prices largely at or above asking,” Zillow’s report says.  Zillow said that overall home prices in D-FW were up 5.8 percent in August from a year ago and there were about 5 percent fewer houses on the market.  U.S. home values will continue to rise during the year ahead, but at a slower rate than last year, according to Zillow.  D-FW home prices are forecast to increase by about 4 percent in the next 12 months.

-          Dallas Morning News, September 19, 2014

Dallas No Longer in Top 10 for Traffic Congestion

Dallas No Longer in Top 10 for Traffic Congestion

The nation's worst rush-hour traffic can be found, not surprisingly, in Los Angeles. But the No. 2 city is a surprise.   Each year, three organizations produce traffic congestion reports.   The reports estimate the “excess travel time” lost in traffic congestion during morning and evening weekday rush hours.     This excess time is relative to the travel time that would be expected if traffic were free-flowing and there was no congestion.   The Los Angeles metropolitan area notches the worst traffic congestion in all three reports — 44.4 percent excess travel time. The second worst congestion is in Austin, Texas, with 34.5 percent excess travel time.   San Francisco (34.4 percent) is No. 3 and New York (33.4 percent) is No. 4. Both cities have a high population density.   Seattle is No. 5 at 32.4 percent, due in part to the cancellation of some planned freeways.   Rounding out the worst 10 are San Jose, Calif. (32.2 percent); Washington, D.C. (31.3); Boston (29.7); Houston (28.3); and Portland, Ore. (28.2).

-          Newsmax, July 6, 2014

Plano Approves Legacy West, Toyota, Fed Ex

Dallas Cowboys Development                   Legacy West with Toyota, Fed Ex, Renaissance Hotel

Dallas Cowboys Development Began Wednesday

Work began Wednesday on the future home of the Dallas Cowboys in Frisco, city officials confirmed.   Mass excavation is expected to start the week of July 7.   The city, the Cowboys and Frisco ISD have partnered on the development, which will include the team’s headquarters, outdoor practice fields and a 12,000-seat multi-use event center at the northwest corner of Warren Parkway and Dallas North Tollway.   The city and the school district have pledged $115 million for the public portion of the 91-acre site. Any costs above that will be paid by the Cowboys’ ownership. About 66 acres at the site will be developed separately by the Blue Land companies owned by Cowboys owner Jerry Jones and his family. That acreage will include retail, restaurants, office space and a hotel.  The indoor stadium and training facilities are expected to be completed in late summer 2016. The stadium will be used not only for Cowboys training but for high school football games and other events.   A ceremonial groundbreaking is planned sometime in August.

-          Dallas Morning News, June 24, 2014

Plano Approves Legacy West, Toyota, Fed Ex

The Plano City Council approved a rezoning request Monday that paves the way for a 205-acre mixed-use project near the J.C. Penney headquarters. The council approved the request to rezone the  undeveloped land, located at the southwest corner of State Highway 121 and the Dallas North Tollway, from commercial employment to central business to allow for greater development flexibility.  Developers plan to break ground after the first of the year on the project that’s part of the Legacy West development, which will surround J.C. Penny’s corporate headquarters. Legacy West will also include Toyota’s new North American headquarters and the new FedEx office building.  The development will include hotel, commercial, retail, office buildings and residential.

-          Dallas Morning News, June 24, 2014

More Home Buyers Are Bringing All-Cash Offers to the Table

More Home Buyers Are Bringing All-Cash Offers to the Table

And more of these buyers are individuals, not the institutional investors who plunged into the housing market in 2012 and 2013.   Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.  “It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics.  “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”    But it is a frustrating time for first-time buyers who cannot compete because their offers included financing contingencies, appraisals and inspections.

-          Washington Post, May 26, 2014

Energy Boom in Texas is Strong

Energy Boom in Texas is Strong

In Texas, oil and natural gas are synonymous with boom and bust.   A new field or a new technology brings a drilling rush and spectacular wealth.  Then just when nearly everyone has borrowed to the max, the bottom falls out.  Not this time, says John Auers, an oil analyst with Turner,  Mason & Co. engineering consultants in Dallas.   “This is a more sustainable and potentially longer-lasting boom,” he said.  “The early 80s were great times, but they became bad pretty quick.  That will not happen this time.”

-          Dallas Morning News. January 18, 2014

Gone to Texas

"Gone to Texas"

“Gone to Texas” was a common statement in the 1800s as people went west.  It is now a common statement again today.   In January, Texas gained 33,900 jobs while California lost 31,500 jobs.  The number one move across the nation is Californians moving to Texas.  It is jobs, it is cost of living, it is no income sales tax.  New home construction is booming across Texas, hence 6,200 of the new 33,900 jobs in December were construction related.   Politically, California is a liberal Democratic state.  Texas is the exact opposite, a conservative Republican state.   The typical Californian moving to Texas is a conservative, making California more liberal and Texas more conservative – day by day.  Two great states, and yet so very different.

-          Dallas Morning News (excerpts), January 15, 2014, January 18, 2014

Can Shadow Inventory Help Relieve Price Pressure?

By Lawrence Yun, Chief Economist, NATIONAL ASSOCIATION OF REALTORS®

Home prices grew at the fastest pace in seven years in 2013. This is good news for property owners, both homeowners and landlords, as they witnessed, on average, a $32,000 gain in housing equity over the past two years.  The equity increase is an immediate financial gain for many.  For others, it marks only a partial recovery.  That is, at the depth of the downturn there were about 12 - 13 million underwater homeowners.  Now, that figure has been essentially slashed in half. 

There is however some bad news along with the quickly rising home values.  Rising home values make it more difficult for first-time homebuyers to make a purchase.  The conditions will be exacerbated by the near-certain case of a rising interest rate environment in the coming years.  In order to lessen the upward price pressure, more inventory is clearly needed.  Homebuilders are raising production, but too late and at too small increments.  Though the most recent housing starts of a 1.1 million annualized pace in November was a solid 30 percent increase from the prior year, the pace is still insufficient.  For all of 2013, housing starts look to finish at 930,000. The long-term, 50-year annual average is 1.5 million housing starts each year.  So the recent past six consecutive years of less than one million new housing units was bound to make an impact on the market.  Existing home inventory is at a 13-year low while newly constructed home inventory is at a 50-year low. 

However, can shadow inventory then save the day in pumping out more homes available for sale?  There are still 2.3 million mortgages that are seriously delinquent (more than 90 days late) or already in the foreclosure process.  This is not counting underwater homeowners, but people who are not paying their mortgage.  Surely, the majority of these distressed mortgages will not ever be made current.  They will instead become REO properties at some point.  Unfortunately, even though 2.3 million seriously delinquent mortgages sound large, they are significantly smaller than what the number had been.  Four years ago, there were 4.3 million in a similar state.  Just one year ago, there were 2.9 million delinquent mortgages.  The bottom line is that we should expect less of an increase in shadow inventory turning into visible inventory. 

Due to differing foreclosure processes, however, some states have a much larger overhang of shadow inventory than others.  In places like Arizona, a homeowner is quickly evicted for being delinquent.  In other places, principally the judicial foreclosure states, the court system has the final say and the overall process tends to drag out for a long time – with a 2 - 3 year time span not uncommon.

What are the judicial states with continuing, plentiful shadow inventory that can hit the market?  Interestingly, they are in states where inventory shortage is not a problem.  Home-price growth has been sluggish and these states still have a shadow looming over their market.  [Price data used is from the NATIONAL ASSOCIATION OF REALTORS®] The following table shows the serious delinquency rates now and at peak (usually in 2008 or 2009, ranked by the latest home price appreciation for each of the 50 states). 

As one can see, where the inventory would be most welcome, there appears just not enough shadow inventory to help relieve home prices.  The top three, fastest-appreciating states of Nevada, California, and Arizona have reduced seriously delinquent mortgages by roughly 60 - 80 percent.   On the opposite end of those states where seriously delinquent mortgages have been cut by only a little (to the tune of 10 percent or so) - namely New Jersey, New York, Vermont, Delaware, Connecticut, and New Mexico – home price growth has been sluggish.  There are few exceptions to the rule.  Washington D.C., for example, has made only slight progress in reducing seriously delinquent mortgages, yet home price growth has been strong, no doubt due to the stronger employment conditions and from the fact that it already had a relatively low delinquency peak figure.

Lawrence Yun is the chief economist for the NATIONAL ASSOCIATION of REALTORS®. He will be sharing his insider insights on the national and regional housing markets in this new, exclusive column for the Power Broker Report.

Texas Market has Massive Influx of New Residents

Texas Market has Massive Influx of New Residents

The Texas housing market is reacting to the massive influx of new residents spurred to move to the Lone Star state in search of high-paying energy and professional service jobs, as well as low cost of living.  As more residents move to Texas from other states with higher median home prices, the housing markets in Dallas, Houston and Austin have been bolstered by rising home prices of double-digit year-over-year growth, according to technology-based real estate brokerage firm Redfin's latest report.  About 2.5 million people relocated to Texas between 2008 and 2012 in search of jobs from more costly regions of the nation, the report stated.  In Dallas, the median list price was $192,500 in October, compared with $389,450 on Long Island and $495,000 in Los Angeles, according to the data.

-          Dallas Business Journal, November 28, 2013

Texas Growth Accelerates

Texas Growth Accelerates

Texas, known for its open spaces and cheap property, is experiencing the types of real estate bidding frenzies seen in tightly built markets from New York to San Franciscoas job gains generate a suburban land rush.  Existing-home prices in Dallas and Houston are rising faster than at any time since the oil boom of the 1980s. Homebuilders, caught off guard by the ferocity of buyer demand, are exhausting construction-ready lots as they struggle to recruit workers to complete houses quickly.  Texas, which largely avoided the collapse, is benefiting from employment growth and an expanding population, the more traditional forces of housing demand.   The job market is driving demand. Texas had a 6.4 percent unemployment rate in August, almost a percentage point below the U.S. rate.  The pace of job growth in Dallas was the greatest of the 12 largest U.S. metropolitan areas, followed by Houston, according to the Bureau of Labor Statistics.   “A lot of good things happen when you have jobs,” said Mark Zandi, chief economist for Moody’s Analytics Inc.  “Hopefully what happens in Texas spreads to rest of the country, because it feels real good.”

- Bloomberg News, October 9, 2013

DFW pre-owned home sales up 20 percent in 2013

DFW pre-owned home sales up 20 percent in 2013

Through the third quarter, pre-owned home sales in North Texas are up 20 percent from 2012 levels. And median sales prices are 10 percent higher than they were in the first nine months of last year.  This year’s increase in home sales and prices has propelled the Dallas-Fort Worth pre-owned home market to above where it was before the recession.  But with mortgage rates rising, analysts wonder how much longer the large double-digit gains will continue.  “I keep thinking it’s going to slow down, but it hasn’t so far,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “Yes, the rates are higher and the builders may be feeling it a little, but really, the rates are still very good and don’t seem to be hindering sales much.  “Also, if people expect the rates to continue to increase, they’ll buy now rather than wait.”

- Dallas Morning News, October 8, 2013

 The largest real estate company in the world goes public--

RE/MAX set to go public Wednesday

All eyes in the world of real estate world will be watching Wednesday as franchisor Re/Max Holdings Inc. goes public, an event that expected to shed light on investor sentiment about the housing recovery.  “We know that the real estate market has cooled off since the spike in rates, and while Lennar just told us that the home building business is doing much better than we thought, this may not be the ideal moment for a real estate brokerage play like RE/MAX to be coming public,” Mad Money host Jim Cramer said today.  “I do think Re/Max is worth watching, if only to see which way the market jumps — it could be an important tell for everything associated with residential real estate.”

According to Nasdaq.com, shares in Re/Max will begin trading on Wednesday, Oct. 2, sharing the limelight with Burlington Coat Factory.  Re/Max has said it expects to net at least $177 million from the initial public offering.

The franchise network serves more than 90,000 agents in 6,300 offices and 90 countries. The IPO of 10 million shares is expected to be priced at between $19 and $21 per share.  Re/Max will also grant underwriters of the IPO a 30-day option to buy up to 1.5 million additional shares.  If underwriters fully exercise their option to purchase additional shares, the net proceeds will total $205.2 million, the company said in an amendment to its S-1 registration statement with the Securities and Exchange Commission.

-         Inman News, September 26,2013

Obama Administration to “Social Engineer” Neighborhoods

Obama Administration to “Social Engineer” Neighborhoods

In a move some claim is tantamount to social engineering, the Department of Housing and Urban Development is imposing a new rule that would allow the feds to track diversity in America’s neighborhoods and then push policies to change those it deems discriminatory.   The policy is called, "Affirmatively Furthering Fair Housing."  It will require HUD to gather data on segregation and discrimination in every single neighborhood and try to remedy it.  HUD Secretary Shaun Donovan unveiled the federal rule at the NAACP convention in July.   "This is just the latest of a series of attempts by HUD to social engineer the American people," said Ed Pinto, of the American Enterprise Institute. "It started with public housing and urban renewal, which failed spectacularly back in the 50's and 60's. They tried it again in the 90's when they wanted to transform house finance, do away with down payments, and the result was millions of foreclosures and financial collapse.”

-          Fox News, August 7, 2013

20 City Case/Shiller report

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 21^st, from 3.94% on June 14^th, 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?

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

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 4^th 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

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.

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 14^thconsecutive 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)