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Denni Kay Scates, PhD
REALTOR®, CLHMS, MCNE, CRS
Broker Associate
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Articles Tagged "Real Estate"

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August
23

Dallas-Fort Worth Only U.S. Market Where Home Sale Prices Dropped Last Month

The North Texas housing market is downshifting quickly, with Dallas-Fort Worth being the only U.S. market to see a decrease in home sale prices last month, according to a report released today.  DFW home prices are down 1.9% year over year in July, according to the latest Re/Max National Housing Report.

 

And what a difference a month makes.  Last month, DFW led the U.S. for home price increases, with June prices up 29.3% over the previous year.   In hard numbers, home sales prices in DFW fell to $413,900 in July from $422,000 in July 2021.   Homes in DFW spend an average of 23 days on the market before selling.

 

Higher interest rates and inflation, as well as record home prices, triggered a sharp drop in demand for housing, said Todd Luong, a realtor with Re/Max DFW Associates:  "Here at our Re/Max office in Dallas-Fort Worth, our listings are currently getting on average 2.7 showings per week," Luong said. "Last year, at this same time, our listings were earning on average 5.9 showings per week. That is a huge drop in buyer demand compared to the previous year. Record home prices and higher mortgage rates have forced many potential buyers out of the market, especially first-time homebuyers."

 

While the latest trends may disappoint some sellers, buyers now have more choices and better opportunities for good deals, Luong said.   Luong said that the DFW housing market has been challenged with low inventory for years and reached an all-time low earlier this year, with only a two-week supply. Now, however, inventory is increasing.  "Although buyers have more choices now, it is still not a balanced market as we only have about a two-month housing supply," Luong said. "In a normal market, you have about a five to six-month supply of housing."

 

A new report from Zillow also found falling home values, although the numbers didn't match Re/Max's precisely because of different study methods and different geographic definitions of DFW as a metro area, among other reasons.  According to Zillow's findings, the Dallas-Fort Worth metro area's typical home value is $396,904, down 1.1% since June, the first month of decline. Values are up 55.4% since July 2019.

 

Zillow also reported that the mortgage payment on a typical home in DFW is $2,633 a month, including taxes and insurance. That's up 77.4% compared to July 2019.

According to Zillow, inventory in DFW has risen 10.2% since June, and the share of listings with a price cut in July was 22%, compared to 15.6% in June.  Nationwide, after two years of unprecedented growth, home values fell for the first time since 2012 as competition for houses eased, according to Zillow's July market report.

 

The slowdown is being driven by decreased competition among buyers. Zillow's analysis says that affordability pressures have pushed many to the sidelines, and buyers are waiting in the wings to resume their search if and when prices relax a bit.  Skylar Olsen, Zillow's chief economist, called the flattening of home values "a badly needed rebalancing.  This slowdown is about discouraged buyers pulling back after the affordability shock from higher rates," Olsen said. "As prices soften, many will renew their interest, and we will continue our progress back to 'normal.'"

 

Luong said he sees positive signs in the market.  The interest rate for a 30-year fixed mortgage dropped below 5% after peaking in June. More than 290,000 new jobs were added in Dallas-Fort Worth last year, so North Texas has one of the strongest labor markets in the country.   "Reasonably priced homes that are in good condition and move-in ready are still selling very fast," he said. "However, the bidding wars have subsided considerably across the board."

  • Dallas Business Journal, August 19, 2022
July
25

Dallas-Fort Worth Home Prices Soared in June More Than Any Other Market

While higher mortgage rates have driven many buyers out of the North Texas housing market, home prices still soared in June more than in other red-hot U.S. metros.  The median home price in Dallas-Fort Worth reached $426,000 in June, up 29.3% from $329,500 in June 2021, according to REMAX's just-released national housing report.  

U.S. home prices were up 11% from a year ago.  D-FW saw the largest year-over-year increase in median sale price among the 53 metro areas analyzed by the brokerage. Some major markets, such as Austin, are not included in the report.  Home sales were down 11.8% in the metro area, with nearly 10,000 transactions, according to RE/MAX. Home inventory has nearly doubled from a year ago to 14,404 properties. Even with the sharp increase year over year, prices were down slightly from May. 

Dallas-Fort Worth home prices still soaring

Of all 53 metro areas RE/MAX analyzed, the company found Dallas-Fort Worth's median home price grew the most from June 2021 to June 2022.

Table with 4 columns and 5 rows. Currently displaying rows 1 to 5.

Market

June 2022

June 2021

% change

1

Dallas-Fort Worth

$426,000

$329,500

29%

2

Tampa, FL

$385,000

$300,990

28%

3

Fayetteville, AR

$343,580

$270,000

27%

4

Las Vegas, NV

$445,000

$365,000

22%

5

Orlando, FL

$395,000

$325,000

22%

Table: Mitchell Parton/DMN  Source: Re/Max National Housing Report  

Mark Wolfe, owner of RE/MAX DFW Associates, said homes are still selling over list price, especially in places like Collin County and Denton County. Some offers will even come in as much as $60,000 over list price when they are the only offer, a carryover from the busier market when buyers had to offer above the asking price if they wanted to get a home.  

People relocating from California have no problem paying $50,000 to $100,000 over list price to make sure they get the home they want, and they will still see it as a good deal, Wolfe said.  "Especially in the northern suburbs, we have a tremendous amount of California homebuyers," he said. "They're flushed with cash." 

Nationally, home sales dropped 17.6% since last June and inventory grew for a third consecutive month, up 34.1% from May.  "The market is moving toward greater balance, especially with inventory gains and the slowing of price appreciation. The past few years have been one of the most competitive times ever for buyers — and we're finally seeing conditions ease up," Nick Bailey, president and CEO of RE/MAX, said in a statement.  

Wolfe said that a quarter of all listings on the market in D-FW are now seeing price reductions, as homes aren't selling as quickly as sellers and agents expect. Homes seeing price drops were likely overpriced to begin with, he said.  The number of showings per listing at Wolfe's offices are down from eight each week last year to an average of three now. Homes are taking weeks instead of days to sell, and more inventory is available.  "But three showings a week is really still a good market," Wolfe said. "It's a little bit more of a normal market than the boom we've had for the last two years."

  • Dallas Morning News, July 18, 2022
June
14

US Home Sellers Cutting Prices Hits Highest Level Since 2019

Nearly one in five sellers dropped prices during the four week period ended May 22, Redfin Corp. said in a report Thursday. Other measures of how hot the market is, including a house's time on market and the percentage of homes selling above listing price, have also plateaued.  Consumers are contending with some of the highest mortgage rates in years, despite the dip in those figures in the past two weeks. Higher rates, coupled with economic uncertainty, are raising questions about whether the US housing boom has met its limit with signs emerging that the once-intense pace of the market could be decelerating.

  • Bloomberg Business Week, May 26, 2022
June
10

Price Drops on Listings

Price drops are "becoming increasingly common" in some of the most popular housing markets across the United States.  According to a new Redfin data. More than 20% of home sellers dropped their price in May in some of the best markets in the nation.   "When mortgage rates were at or belw 3%, both local and out-of-town homebuyers were more than willing to tolerate high prices, but at more than 5%, many are now priced out," redfin chief economist Daryl Fairweather said in a statement.  "A home's price is driven by the balance of supply and demand, and when demand drops off and supply increases like it is now, rapid price increases evaporate quickly."  Areas that saw a huge surge in migration and sharp increases in home prices over the past two years are now seeing "an abrupt drop-off in demand," which is forcing sellers to "drop their prices with increasing frequency," Fairweather said.

  • Fox Business, May 31, 2022
June
5

Home Listings Suddenly Jump as Sellers Worry They May Miss Out on the Red-Hot Market

 

  • The supply of homes for sale jumped 9% last week compared with the same week one year ago, according to Realtor.com.
  • Real estate brokerage Redfin also reported that new listings rose twice as fast in the four weeks ended May 15 as they did during the same period a year ago.
  • Pending home sales, still good, but dropping

Sharply higher mortgage rates have caused a sudden pullback in home sales, and now sellers are rushing to get in before the red-hot market cools off dramatically.   "Rising mortgage rates have caused the housing market to shift, and now home sellers are in a hurry to find a buyer before demand weakens further," said Redfin Chief Economist Daryl Fairweather.

Sellers clearly see the market softening. Pending home sales were down just over 9% from April 2021, according to the National Association of Realtors. May 2022 will see a larger decrease. This index measures signed contracts on existing homes, not closings, so it is perhaps the most timely indicator of how buyers are reacting to higher mortgage rates. It marks the sixth straight month of sales declines and the slowest pace in nearly a decade.

  • CNBC, May 27, 2022
June
4

Dallas-Fort Worth home listings spike as sellers fear market could slow down

Local housing supply is beginning to loosen, Realtor.com indicates

Dallas-Fort Worth is seeing a dramatic increase in homes up for sale over the last few weeks as many sellers look to take advantage of the market while it's still red hot.   The number of active home listings last week spiked 41.6% from a year prior, the fifth consecutive week of gains, according to Realtor.com. Until April, the company posted supply declines in D-FW every week since March 2020.

The region saw the highest annual growth for any week on record since the company began tracking this figure in 2017.

New listings in D-FW rose 32.4% last week, signaling a huge influx of sellers putting homes on the market as summer approaches.  "Sellers have been hearing for about two years what an amazing time it is for them to sell ... and they've seen their equity just grow like crazy," said Mike Reddell, senior executive vice president and managing director for Douglas Elliman Real Estate in Dallas. "With the stock market being wobbly and mortgage rates rising, I think sellers that have been thinking about this for a while, more of them are pulling the trigger and putting the house up for sale."

Reddell said if he were in a position to sell his house, he would do it right now.

Redfin reported May 15 that new listings throughout the U.S. climbed nearly twice as quickly as they did at the same time last year.   "Rising mortgage rates have caused the housing market to shift, and now home sellers are in a hurry to find a buyer before demand weakens further," Daryl Fairweather, chief economist for Redfin, said in a statement.

Mark Wolfe, broker and owner of RE/MAX DFW Associates, said he has seen a significant spike in listings over the past few months. In his home city of Coppell, he said, there would have been only about five or six homes on the market at any one time a few months ago. In just five days last week, he said, 21 homes went up for sale.  "We've been a boom economy, and now with the economy showing signs of trouble, people want to still get the most for their dollar while they can if they think that the prices might go down," Wolfe said. "I don't know if that's going to happen. I doubt that's going to happen."

The market is nowhere near balanced between buyers and sellers. Dallas-Fort Worth had just under a month of home supply in April, according to the Texas Real Estate Research Center at Texas A&M University. A balanced market would have about six months' worth of inventory.   The competitive pressures have sustained high price growth over the past few months. The median home in April sold for $425,576, up 25% from a year earlier. The number of sales in April was down 7% from a year ago, but the dollar volume increased 13% to $4.2 billion.

Rising mortgage rates combined with record-high home prices have drastically increased the monthly cost of buying a home. Homebuilders have also noticed demand cool down through the past few months.  "We've been in an unrealistic market for two years, and we're probably headed back to a normal market," Wolfe said. "It might be nice to just have a healthy even market. I'm hopeful that's what we're going to go into."

  • Dallas Morning News, May 31, 2022
June
3

Texas housing market: Hate to burst your bubble, but we have a problem

Housing Prices in DFW and Austin Have Surged Dramatically

The last time the national housing bubble burst, Dallas-Fort Worth and the state of Texas emerged comparatively unscathed from the massive 2008 home price corrections and foreclosure wave that slammed most of the country, including other Sunbelt markets like San Diego, Miami, Phoenix and Las Vegas.

A big reason was that home prices in the Lone Star State didn't skyrocket in the early 2000s preceding the subprime-mortgage-induced smackdown by nearly as much as prices in California, Florida, Arizona, and Nevada. Texas hadn't partied as hard as its Sunbelt compadres heading into the crash, so its hangover wasn't as bad.

This time, Texas — DFW and Austin especially — may not be so lucky if the national housing boom is a bubble and a popping ensues, a new study suggests.  This time, housing prices in DFW and Austin, and to a lesser degree Houston and San Antonio, have surged, driven in large part by population and jobs growth spurred by companies large and small relocating to the state.

As of April 30, Austin was the second most overpriced housing market in the nation, and DFW was the 18th most overpriced, according to research by Florida Atlantic University.    The recent heavy demand for homes put buyers at a "major disadvantage," said Ken H. Johnson, an economist in FAU's College of Business. To have an offer accepted, buyers had to outbid multiple competitors, he points out.  Soaring prices fueled by the onset of the pandemic in 2020 and near-record-low mortgage rates have pushed the national housing market into a "crisis stage," and a reckoning is due, the Florida Atlantic researchers' latest report says.

On one hand, the reckoning will likely hit the areas of the country with the biggest run-ups the hardest. On the other hand, areas of the country with persistent inventory shortages and increases in population, such as Texas, Florida and parts of the Northwest, likely won't see as steep of declines in home values, the researchers say. 

  • Dallas Business Journal, May 28, 2022

 

June
2

Coppell is 4th Hottest Real Estate Market in Nation

Plano and Prosper also rank in the Top 10 out of over 1,000 cities

Coppell, Plano and Prosper are the most popular housing submarkets in North Texas — and among the tops in the nation — as suburbs shot past major-metro cores nationally and in Dallas-Fort Worth coming out of the worst of the pandemic.

Pricey suburban locales near major cities rose to the top of Zillow's nationwide list of most popular places to buy a home.  In the Dallas-Fort Worth metro, Zillow found Coppell tops the pop chart. The typical home in Coppell is worth $565,930 and has seen 7% price growth in the first quarter of 2022, according to Zillow. Coppell home values are up 24% year over year.  Coppell ranked as the fourth most popular place in the nation to start 2022.

Following Coppell in the North Texas rankings is Plano, where the typical home is worth $513,325 and has seen 10% growth in the first quarter of 2022. Plano home values are up 33% year over year.  Prosper ranked third in the DFW market, with a typical home value of $774,456. That's up 13% in the first quarter of 2022 and 45% year over year.  Frisco ranked fourth and Carrollton fifth in Zillow's popularity contest, with typical home values of $661,460 and $410,270, respectively. Those values are up 13% for Q1 2022 and 39% year over year in Frisco, and up 9% for the quarter and 28% for the year in Carrollton.

  • Dallas Business Journal, May 28, 2022
June
1

New Home Sales Plunge Nationwide

The numbers: Sales of new homes in the U.S. fell in April for the fourth month in a row to the lowest level since the pandemic owing to high prices and soaring mortgage rates.

New sales slowed to a 591,000 annual rate from 709,000 in the prior month, the government said Tuesday. That's how many homes would change hands in a full year if the number of sales were the same in every month as they were in April. 

Big picture: The red-hot housing market was bound to cool off after mortgage rates jumped from just 2.75% in the fall for a 30-year fixed to more than 5.25% in mid-May. Low mortgage rates had made it easier for buyers to purchase a home despite record prices.  Builders, for their part, still aren't producing enough homes to meet demand. High material costs, supply and labor shortages and lack of cheap lots are among the constraints holding back construction.  A slower housing market is also likely to weigh on the broader economy. When people buy homes, they also need to buy lots of stuff to furnish it.

Key details: Sales fell in all four major regions of the country, but the largest decline occurred in the South, where about half of all new homes are built. Sales sank 20% in the South.

reverse the upsurge in prices over the past few years.

  • Market Watch, May 24, 2022
May
30

Inflation Rates – 2012 – 2022

April 2022 Nationwide

27% Decrease in Sales from April 2021

12% Increase in New Listings over April 2021

We are in a Changing Market

 

May
25

With North Texas home appraisals at an all-time high, here's how to protest

Home appraisals are up roughly 25% in Dallas County, 20% in Tarrant County, and more in Collin County and some of the other suburbs of Dallas-Fort Worth. The last day property owners can file to protest their appraisals is May 16, and protests are expected to surge.

After a year of unprecedented price appreciation — with multiple offers the norm and houses selling far over the asking price along with inventory shortages that caused many buyers to waive appraisal contingencies in purchase contracts — the market values that appraisal districts placed on properties for 2022 tax purposes are up sharply across the state. How sharply varies widely from county to county and even neighborhood to neighborhood.

The average increase in home appraisals across Texas is 25%, according to the Texas Association of Appraisal Districts.  Home appraisals are up roughly 25% in Dallas County, 20% in Tarrant County, and more than 50% down in Travis County, where the housing market is even hotter than it is in North Texas. 

Homeowners can apply for a homestead exemption to limit the increase, but the deadline to apply for this year was April 30.  The good news for homeowners who missed the April 30 deadline is that late homestead exemption applications can be filed for up to two years after the tax delinquency date, which is usually Feb. 1. Homeowners who file late are eligible for a new tax bill with a lower amount or a refund if they've already paid.  The next important property tax deadline is fast approaching. The last day property owners can file to protest their appraisals is Monday (May 16).

The higher appraised values mean that if taxing entities such as cities, counties and especially school districts do not cut tax rates, many property owners will pay hundreds of dollars more in property taxes for 2022, if not thousands.  For people who own their home, that means writing a bigger check to their local tax office by the end of the year. For folks with a mortgage, the amount their lender collects in escrow will climb, typically translating into higher monthly house payments.

The number grabbing the attention of property owners when they open their 2022 appraisal envelopes is the market value — the amount the county appraisal district estimates their house would sell for as of January 1 of this year.   But in many cases, property owners won't pay taxes on the full market value because they'll qualify for tax breaks such as the homestead, over-65, and disabled veterans exemptions.  The homestead exemption, for example, puts a 10% cap on the amount the assessed value of a primary residence can go up. A homeowner claiming a homestead exemption whose market value increases from $500,000 to $600,00 would pay property taxes on $550,000.

Meanwhile, Texans who voted on Saturday overwhelmingly approved two amendments to the state constitution concerning property tax relief. One will set a lower property tax rate for over-65 and disabled homeowners starting in 2023. The second will lower independent school district property tax bills by increasing the homestead exemption from $25,000 currently to $40,000, saving an estimated $175 per homestead.  In Dallas County, Proposition 1 passed by 87.2% and Prop 2 passed by 85.4%, both mirroring the statewide passage rate, give or take 1%.

Home-buying clients and other residential property owners are urged to protest their appraisals most years and says this year there's more reason than ever.  Most appraisal districts have online portals that give property owners a way to protest informally. Those who aren't satisfied with the results can then formally protest with their local Appraisal Review Board, which will hold a hearing. Protest hearings began in late April 30 and finish in mid-July.  Homeowners should arm themselves with documentation of recent sales of comparable homes in their neighborhood. Most real estate agents will pull the comps for free.

The process to protest appraisal hikes varies from county to county and has changed substantially from past years due to COVID.  For more information about how individual North Texas counties are handling protests given COVID restrictions, here's how to contact appraisal districts in North Texas:

  • Dallas Business Journal, May 10, 2022
March
24

Builders Forecasting a Slower Second Half of Year

Rising mortgage rates are starting to take their toll on the nation's homebuilders, who are more concerned about affordability heading into the all-important spring housing market as mortgage rates surge.

Builders' sales expectations for the next six months declined a steep 10 points to 70, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The index doesn't often see such large monthly moves. Builders' view of current sales conditions fell 3 points to 86. 

Overall, builder sentiment in the market for single-family homes dropped 2 points to 79 in March. February's read was also revised lower. Last March it stood at 82.  This is the fourth straight monthly decline and the first time the index has slipped below 80 since last September, when the delta variant of Covid-19 was spreading. Anything above 50 is considered positive sentiment.     Overall sentiment is still good, but there are concerns for later this year.

  • Market Watch, March 22, 2022
March
23

Downturn Predicted in Home Sales Later This Year

The popular spring home-buying season is just ramping up. But one analyst is warning that it could be a bust.   Ian Shepherdson, chief economist and founder of research consulting firm Pantheon Macroeconomics, is predicting a dramatic fall in the pace of home sales this year. In a research note, he projected that existing-home sales will drop roughly 25% from the annual pace of 6.02 million set in February to a rate of 4.5 million by the end of summer.  

"The housing market is in the early stages of a substantial downshift in activity, which will trigger a steep decline in the rate of increase of home prices, starting perhaps as soon as the spring," Shepherdson wrote in a research note distributed Sunday.  There has been a drop in mortgage demand which typically predicts a downturn in home sales, since most buyers rely on financing to make sure a large purchase. Issues around affordability are likely to blame for the decline. 

The ripple effects of a shift in existing-home sales would be far-reaching, Shepherdson said, arguing that the pace of rent increases would eventually slow and perhaps even reverse. It also would spread to new-home sales, which he expects will likewise fall. A decrease in new-home sales would represent a downward drag on GDP, since that would implicate less demand for services tied to home-building and less spending on items like building materials and appliances. 

The bad news for any Americans who persist in trying to buy a home under these conditions is that it's less clear how this situation will ultimately impact the availability of homes for sale. Part of why home prices have surged is that there is a significant lack of inventory in the housing market, which has fueled competition for what few homes are listed for sale.  A drop in demand would seemingly lead to a boost in the inventory of homes for sale.

  • Market Watch, March 22, 2022
March
12

Redfin Stinks; Stocks Falling

Shares of Redfin were falling sharply Friday after the online real estate brokerage said it expected a first-quarter loss wider than analysts' estimates.  The company said it expects to report a loss in the first quarter of $115 million to $125 million vs. analysts' forecasts that called for a loss of $75 million. For all of 2021, the company lost $109.6 million.  Redfin said it expects first-quarter revenue of $535 million to $560 million. Revenue at the company's properties segment, which including iBuying — a business that rival Zillow (Z) has been exiting — was forecast at between $330 million to $350 million.  For the fourth quarter, Redfin reported a loss of 27 cents a share vs. a profit of 11 cents a year earlier. Analysts expected a fourth-quarter loss of 31 cents. 

Analysts at RBC Capital Markets downgraded their rating on Redfin shares to Sector Perform from Outperform, and lowered their price target on the stock to $23 from $60.  "We throw in the towel on RDFN as the primary points of our thesis appear broken and unlikely to show enough improvement in the coming year to warrant an Outperform rating," RBC analysts wrote in a research note.  They added that share gains at Redfin "are simply not materializing at a fast enough rate," and said "home inventory challenges" and "lack of secular story should make for slower growth."

  • Barrons, March 3, 2022
March
11

IBuyers purchased over 70K homes in 2021, doubling previous record

'IBuyers purchased 70,402 homes in 2021, more than double the previous annual high of 32,726 homes in 2019,' according to Zillow's Q4 iBuyer report.

iBuyers sold homes they bought for a median mark-up of 1.1 percent in the fourth quarter, according to the Zillow report. That's the second-lowest margin on record, down from 8.6 percent in the first three months of 2021.

Companies operating as instant buyers picked up more than 70,000 homes last year, setting a new high water mark for the industry.  A new report from Zillow looking at the final figures from 2021 found that iBuyers more than doubled their previous annual high for homes purchased in the 38 largest markets and also sold more homes. 

However, iBuyers continue to struggle to show profitability at a scale where they're valuating, buying, repairing and selling thousands of homes across the country.  The data also included homes bought and sold by Zillow Offers, which was famously shuttered in the fourth quarter after it failed to correctly valuate and sell homes for enough profit. (The segment lost the company $342 million in the fourth quarter of 2021.)

Opendoor, the largest of the major iBuying companies, bought 9,639 homes in the fourth quarter and sold 9,794. Both were major increases for the company, and it ended the year with 17,009 homes on hand.  In the same timeframe, its losses grew. It lost $191 million, more than triple the $54 million the company lost during the final three months of 2020. Opendoor lost $662 million in total for 2021.

The companies operating in their 38 largest markets picked up 1.9 percent of homes sold in the third quarter of last year, a record high. But as their market share grew, so did the time it took to get rid of the homes.  Hold times for iBuyers rose to 98 days in the fourth quarter, up from 63 days in the middle of the year. To flippers, the time spent holding onto a house is a significant operational cost that has implications for profitability. Investors pay utilities, property taxes, financing (if needed) and other costs while they still own the home.

  • Inman News, March 3, 2022
March
1

A dozen residential developments that will reshape North Texas

Almost 60,000 more single-family homes for the DFW area

Housing starts climbed by more than 20% in 2021 across North Texas, hitting a new record level of over 58,000 units. The developers of the sprawling residential communities that most of those homes are being built in are busy making room for more.  The Dallas Business Journal, with input from Dallas-based housing market analysis firm Residential Strategies Inc., has compiled a list of a dozen of those developments to keep an eye on for the rest of this year and the next decade or so. 

The list is not comprehensive, but the communities selected for this roundup were selected because they stand to have a major impact on their surrounding areas and shape how Dallas-Fort Worth morphs and where its people live for years to come.   Presented in no particular order, the selections were limited to housing developments that are in early stages and phases:

Elevon, Lavon

The Elevon housing development will bring more than 4,500 single-family homes to 1,500 acres north of Wylie and partially within the Collin County city of Lavon.  Work on the projected $2 billion community east of Plano started in early 2021 by Dallas-based MA Partners LLC.  When completed, Elevon is designed for roughly 4,700 single-family homes, about 1,000 multifamily residences, an 80-acre business park and more than 100 acres of mixed-use construction. The 300-acre initial phase will have 1,000 homes.  MA Partners has developed projects in North Texas, Austin and Houston, including communities the company has in progress in Dallas, Fort Worth and Melissa.

Cartwright Ranch, Crandall

Centurion American Development Group is developing Cartwright Ranch on more than 1,300 acres along Interstate 20 in the Kaufman County city of Crandall.  Plans call for roughly 4,000 homes on the site near Terrell.  Industrial and retail uses are also planned along with the single-family residential in the Farmers Branch-based Centurion American Development Group project.  

Painted Tree, McKinney

The new Painted Tree residential community under development in McKinney will include about 3,400 residential homesites at full buildout ranging from detached townhomes and cottages to larger single-family homes and some custom homesites.   Located north of U.S. Highway 380 near Lake Forest Boulevard, Painted Tree is one of the largest residential developments underway in North Texas. It will have 1,200 single-family homes for purchase in its first phase, and 275 built-to-rent homes will be part of the phase.  Tom Woliver, co-president and founder of Dallas-based Oxland Advisors, the developers of Painted Tree, called it a record-breaking phase one delivery.  "This may be the largest phase one in DFW in history," Woliver said. "It's a pretty aggressive phase one."

The homebuilder line-up for Painted Tree includes Trophy Signature Homes, Normandy Homes, CB Jeni Homes, Tri Pointe Homes, David Weekley Homes, Highland Homes and Drees Custom Homes.  The 1,100-acre residential community is projected to open in 2022.  Amenities at Painted Tree will include 25 miles of looped paths and trails, a 20-acre lake, 11.5-acre signature trailhead and community gathering space called "The Outpost," pools, parks, adventure playgrounds and more.

Hunter Ranch, Denton

Hillwood Communities plans to kick off construction later this year on the 3,200-acre Hunter Ranch development on Interstate 35W in Denton, which is master-planned for more than 6,000 houses.  Located at I-35W and Robson Ranch Road in far southwest Denton, the property includes the landmark Pilot Knob rock outcropping, which Hillwood plans to protect with the buildout.  The city of Denton has already zoned Hunter Ranch and the adjoining Cole Ranch to bring thousands of new homes to the area.

Hunter Ranch and Cole Ranch would encompass about 6,400 acres and bring a combined 19,350 new homes to Denton, boosting the city's housing stock by roughly 50 percent. Together, the development would include 12,900 single-family homes and 6,450 multifamily units, according to prior reports to Denton's City Council.  In addition to 6,500 single-family home sites, Hunter Ranch is planned to have 3,500 multifamily units, about 4 million square feet of commercial construction along I-35W and about 1 million square feet of retail.  Phase 1 will deliver some 800 lots in late 2023, according to Hillwood Communities' Fred Balda.

Prairie Ridge, Midlothian

The Prairie Ridge residential community under development near Midlothian will eventually add 4,600 homes to North Texas at full buildout.  The 1,500-acre master-planned community is being developed by Dallas-based Provident Realty Advisors. The site is off U.S. Highway 287 near Midlothian.  The community will have multiple amenity centers, swimming pools, walking trails and fishing ponds.  Provident Realty also developed Paloma Creek off U.S. Highway 380 in Denton County, which now has more than 5,000 homes. Provident is also developing the Tavolo Park community in southwest Fort Worth.

Pecan Square, Northlake

Pecan Square in Northlake, developed by Hillwood Communities, is the youngest and most successful master-plan launch to date for the Dallas-based residential company, according to Fred Balda, president of Hillwood Communities. It continues to draw buyers with its Town Square concept and on-site co-working space, Balda said.  Pecan Square sold 495 homes in 2021 and 509 the year prior, making it one of the top-selling master-planned communities in the nation in both years, according to John Burns Real Estate Consulting.  More than 30,000 square feet of indoor/outdoor amenity space forms the heart of the $1.5 billion community, including a large former horse arena now repurposed as the event and sports hub for residents.

At buildout, the community will consist of more than 3,000 homes. It's being built on 1,157 acres near the southwest intersection of I-35W and FM 407 in Northlake. Builders include Ashton Woods, CalAtlantic Homes, DR Horton, David Weekley Homes, Highland Homes, Perry Homes, Plantation Homes and Pulte Homes.  Hillwood's Union Park community in Little Elm also made the Burns list of top master-planned communities, with 460 homes sold in 2021 and 607 home sales in 2020.

Silo Mills, Godley

A partnership between Southlake-based Terra Manna and Prophet Equity broke ground late last year on the first phase of Silo Mills, an 840-acre master-planned community in Johnson County.   Located on FM 917 and west of Chisholm Trail Parkway, the residential development is within the extraterritorial jurisdiction of Cleburne and Burleson.  Silo Mills will offer 2,500 home sites upon buildout. The first phase will have 262 sites of 50-, 60- and 70-foot lots.   Antares Homes and Bloomfield Homes are the designated homebuilders, and model homes are anticipated for spring 2022. Prices will start in the high $200,000s.  The development will include a resort-style swimming and entertainment complex, parks and playgrounds, trails, water features and preserved green space. The Godley ISD will serve the families in Silo Mills, which will have a new elementary school.

Green Meadows, Celina

Tomlin Investments is building the $2 billion, 1,400-acre Green Meadows master-planned community on Legacy Drive one mile west of the planned Dallas North Tollway extension on the west side of Celina.  Green Meadows will have more than 4,000 home sites at buildout.   The first phase of homes is priced starting in the high $200,000s, and homebuilders on the project include Castlerock Communities, Gehan Homes, Pacesetter Homes and Stonehollow Homes.  Green Meadows, located at Legacy Drive and Punk Carter Parkway, will have a 10,000-square-foot clubhouse with party rooms and a full kitchen, workout facility, a large covered patio, pool with two giant water slides, splash pool, large deck and playground.

Legacy Hills, Celina

The massive Legacy Hills community along the future extension of the Dallas North Tollway through Celina is expected to include 7,000 single-family homes.  The development, spanning 3,200 acres, is also planned for 4,100 apartment units, 100 acres of commercial space, a 27-acre sports park, two Celina Independent School District schools, an extensive network of walking trails, seven amenity centers and a championship golf course.  Centurion American Development Group out of Farmers Branch is tackling the project.  Homebuilders committed to the Legacy Hills development include Ashton Woods, Beazer Homes, DR Horton, First Texas Homes, Lennar Homes, M/I Homes and Mattamy Homes.

Celina and Frisco, Prosper, Forney and Little Elm were some of the hottest markets in North Texas and the nation for new home construction last year.  Last year, Celina, the top residential construction market in North Texas, issued 2,516 building permits in 2021, up 35% from the 1,862 issued in 2020, which was up 49% from the 1,862 permits in 2019.

Mosaic, Celina

Prosper-based Tellus Group has purchased 686 acres in Celina for a new $1.5 billion master-planned community called Mosaic, which will have roughly 3,000 higher-end homes.  The Mosaic property is immediately north of Windsong Ranch in Denton County, just off Frontier Parkway. It's nine miles southwest of downtown Celina and roughly one mile from the Dallas North Tollway.

The community will have a nature-inspired lifestyle theme to encourage residents to connect with the world around them, said Craig Martin, president and founding partner of Prosper-based Tellus Group LLC.  "We have a long track record for developing residential communities of the highest quality while maintaining a commitment to environmental stewardship, value investing and thoughtful land planning," Martin said.  Tellus is perhaps best known for developing Windsong Ranch in Prosper, which boasts a large freshwater lagoon surrounded by white sandy beach as an amenity.

Rolling V Ranch, Rhome

The sprawling Rolling V Ranch residential development northwest of Fort Worth will accommodate 12,500 homes.   Dallas-based PMB Capital Investments has acquired more than 3,400 acres of land for the project near the intersections of State Highway 114 and U.S. 287 in Wise County, with sections of the property in the towns of Rhome and Newark.  In addition to the homes, the project includes over 300 acres of commercial property. The development is estimated to take 30-plus years to build out fully.

Monterra, Fate

Monterra is a 231-acre master-planned residential community in Fate, one of the fastest-growing cities in Rockwall County and the state.  The property, purchased by Dallas-based Wynne/Jackson real estate development firm in the third quarter of 2021, is located on Ben Payne Road, which runs perpendicular to Interstate 30 and provides direct access to the I-30 frontage road. The total project will consist of about 650 lots ranging in size from 50-feet wide to 70-feet wide.   Development began in late 2021 on the project's initial phase, which includes about 250 lots and the amenity center and the initial trail system.  Homebuilders in the project include K.Hovnanian Homes, Grand Homes, Highland Homes and David Weekley Homes, according to Wynne/Jackson.

  • Dallas Business Journal, February 25, 2022
February
25

Inflation Runs Hot Sending Rents Soaring Across the Country

First gas, then heating and now rents. Runaway inflation is driving rents skywards across America, delivering an average of a 20 percent increase in the U.S.'s biggest 50 cities over the past 12 months, a study details.  The rent spike has stung wallets nowhere more than in the Miami metro area, where the median rent surged to an eyewatering $2,850, 49.8 percent higher than the previous year.  Other cities across Florida — Tampa, Orlando and Jacksonville — and the Sun Belt destinations of Texas and Tennessee, all saw spikes of more than 25 percent in some cities during that time period. Rising rents and high inflation are moving hand-in-hand to become one of the nation's top economic problems.  Economists worry about the impact of rent increases on inflation because the big jumps in new leases feed into the U.S. consumer price index, which is used to measure inflation.

  • Breitbart, February 21, 2022
February
24

But Building Permits Boom in Far-Out Exurbs

Go further North young family, go further North!  The building permit decline didn't occur across the board.   January building permits jumped 87% in Anna.  Permits in Melissa also rose, from 59 in January 2021 to 89 in January of this year, which is a 51% increase.  Denton new home permits jumped 171%, from 77 in January 2021 to 209 in January 2022.  Sherman rose 69%, from 32 in January 2021 to 54 in January 2022.

  • Dallas Business Journal, February 16, 2022
February
23

January homebuilding permits plunge in Celina, Frisco, Little Elm, Prosper

Building permits fell sharply in January in Celina, Frisco, Prosper and Little Elm — some of the hottest markets in North Texas and the nation for new home construction last year.  Celina, the top residential construction market in North Texas last year, dropped 51% in the number of homebuilding permits issued in January compared to the same month last year.  Frisco's building permits fell 48% year over year in January.   Prosper dropped 44% in homebuilding permits issued in January.  The January permit plunge was similar in Little Elm which fell 56%. Homebuilding permits also fell in McKinney, which posted a 22% year-over-year decline in January.

The downturn in some of North Texas' hottest homebuilding markets isn't a sign of diminished demand as much as it is a reflection of higher construction costs. The costs of construction nationwide are the highest seen in 50 years with contractors and homebuilders feeling the effects.    Homebuilding costs jumped by 17.5% year-over-year from 2020 to 2021, the largest spike in this data from year to year since 1970, recent data from the U.S. Census shows.  Homebuilders in North Texas last year were hit by an unprecedented swell of housing demand that prompted the industry to boost its production pace, said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies Inc.  But a shortage of labor and materials has driven up costs and stretched out average building timelines, according to Residential Strategies' most recent quarterly market update.

  • Dallas Business Journal, February 16, 2022
February
10

U.S. Housing Costs Surge, No End in Sight

The U.S. housing market shifted into overdrive during the pandemic, with more than 6 million homes selling in 2021 despite skyrocketing prices in many cities.    The median selling price for a home in November, $416,900, was nearly 25% more than it was in February 2020.   In the early weeks of 2022, there's no sign that cutthroat bidding and rising prices won't continue. The total inventory of homes on the market dipped below 300,000 nationwide in early January — less than half of the inventory available before the pandemic.   "It's uniquely challenging for first-time buyers, since they're not benefitting from the increase in home prices," said Realtor.com chief economist Danielle Hale, who predicts more record-high home prices this year. "We don't have prices decreasing in any area of our housing forecast, calling into attention that many of these issues are nationwide." 

  • Bloomberg, February 6, 2022
February
9

Spring 2022 – Expect the Most Competitive in History

Homebuyers got crushed last year as home prices soared at their highest clip on record. Housing economists saw that price growth—which peaked at a year-over-year rate of 20% last year—as simply unsustainable. Their economic models agreed: Among the seven forecast models reviewed by Fortune heading into 2022, every single one predicted home price growth would slow significantly this year.

But over the past few weeks, that consensus is no longer so unified. Now, more industry insiders are throwing out their previous forecasts and replacing them with more bullish short-term outlooks. Indeed, some experts say the 2022 spring housing market might go down as one of the most competitive on record.

Look no further than Zillow. Back in December, the home listing site predicted that U.S. home values would climb 11% this year. Economists at Zillow now say that forecast is too conservative. Their latest forecast finds home prices are set to spike 16.4% between December 2021 and December 2022. If it comes to fruition, it would mark another brutal year for home shoppers.

  • Fortune, February 7, 2022
February
8

ShowingTime Reports – Only 610 Active Listings in the Metroplex

When North Texas homes hit the market, they're getting plenty of attention from potential buyers. The number of showings per home listing is among the highest in the nation.  That's according to the latest data from ShowingTime, a home-showing management and market stats firm.   But the bigger news is the declining available inventory.  As of this past weekend according to a broker report there were only 610 active listings in the Dallas Fort-Worth area, down from over 13,000 active listings at the same time period some five years ago.

  • Dallas Business Journal, February 7, 2022
February
6

When will it be a buyer's market?

Rates are rising, inventory remains historically low and prices are sky high. Is a buyer's market on the horizon? Even as forecasters predict an uptick in homes hitting the market early this year, the most homes under construction since before the Great Recession, and more buyers to be priced out due to already high prices and rising mortgage rates, economists told Inman they don't foresee a return to what has traditionally been known as a buyer's market any time soon.  Sellers remain in the driver's seat, and economists told Inman the country still has a long way to go to settle into potentially new ways of thinking about just what is a normal housing market in the modern age.  So while December 2021 saw more new homes hit the market than at any other time, the country is working its way through a supply backlog that is helping to keep sellers in control.  If you look at demographics, you can say that the current level of construction is pretty close to normal. But what that doesn't tell you is how much behind that total supply is.   "It's still going to take a really, really long time to make up for the last 15 years of a lack of supply coming in," said Nicole Bachaud, economist for Zillow.

  • Inman News, February 1, 2022
February
5

IBuyers flipped 1 in 5 homes to institutional investors in 2021

Image by: Flo Pappert.

One in five homes resold by iBuyers Zillow, Opendoor and Offerpad in 2021 ended up being flipped to institutional investors and other private entities, "a secret pipeline" with the potential to exacerbate inventory shortages in markets where iBuyers are active, according to a Bloomberg analysis.  Bloomberg's analysis of 100,000 property records compiled by Attom Data Solutions found that iBuyers were 60 percent more likely to flip homes to investors in predominantly non-white areas, with thousands of homes sold to landlords backed by KKR & Co., Cerberus Capital Management, Blackstone Inc., and other private ventures.  "These companies go around saying, 'We're going to help mom and pop and inject liquidity into the market,'" Inman contributor Mike DelPrete told Bloomberg. "They don't say, 'We're going to suck up houses from the ordinary market and sell them to Wall Street.' "

  • Inman News, January 10, 2022
February
2

Five to Seven Interest Rate Hikes in 2022

In recent days, investment bank after investment bank has published revised forecasts, and they all predict the same thing: That the Federal Reserve will raise interest rates at a quicker pace this year than anybody would have anticipated just a week ago.  The latest is from Goldman Sachs, which now sees five rate hikes this year, joining Deutsche Bank at that number. Bank of America thinks the central bank will be even more aggressive. It predicts seven 25-basis-point hikes this year, one for each of the remaining FOMC meetings. That would bring the federal funds rate to 1.75%-2% by year-end, essentially hiking up borrowing costs for Americans after years of rock-bottom lending rates.   At last week's meeting, Fed Chairman Jerome Powell gave a clear signal that the central bank will move to raise interest rates as often as needed to tame run-away inflation. "The striking thing about Chair Powell's press conference this week was that he in effect made a compelling case that the Fed should have already hiked rates in the second half of last year," said Ethan Harris, global economist at Bank of America, in noting tell-tale signs of a slowing economy, a turbulent labor market and rising prices. "The only thing missing from the narrative was: 'and so, we are behind the curve and are hiking today.'"

  • Fox Business, January 31, 2022
February
1

Rents Were Up 29% in the DFW Metroplex in 2021

Rising rents are expected to be a driving force in inflation this year

Average rents rose 14 percent last year nationwide with cities like Austin, New York and Miami notching increases of as much as 40 percent, according to real estate firm Redfin. The DFW Metroplex increased 29 percent.  And Americans expect rents will continue to rise — by about 10 percent this year — according to a report released this month by the Federal Reserve Bank of New York.  "Rents really shot up in the second half of 2021," said Daryl Fairweather, chief economist at Redfin. "The pandemic was kind of a pause on the economy and now that things are reopening, inflation is picking up, rents are going up and people are realizing they don't have as much disposable income as they might have thought they had."  Higher rent prices are also expected to be a key driver of inflation in coming months.   The share of first-time home buyers has dropped to its lowest level in eight years, according to the National Association of Realtors. The group estimates that nearly 1 million renters were priced out of the housing market last year because of rising real estate prices and increased competition from wealthier, all-cash buyers.

  • Washington Post, January 30, 2022
January
20

10 Housing Market Records Broken in 2021

The word "unprecedented" may have been a bit overused during the months since the pandemic began, but it definitely applies to the housing market across the United States.

A confluence of factors such as low mortgage rates, remote work, shortages of homes and building materials, along with wealth inequality exacerbated by the economic fallout from the pandemic led to a wild housing market in 2021, according to Redfin real estate brokerage's chief economist Daryl Fairweather.    Redfin's real estate analysts reviewed housing statistics for 2021 and found the following 10 records that were broken:

 

  • 1. Median sales price: The national median sales price reached a record high of nearly $400,000 at $386,000 in June. That median sales price was up 24.4 percent compared to the previous June.

 

  • 2. Supply of homes: Also in June, there were only 1.38 million homes for sale, which was a record low and down 23 percent over June 2020. Low mortgage rates contribute to the shortage of homes because they increase buyer demand and encourage homeowners to refinance and possibly renovate rather than sell. In addition, construction of new homes has lagged behind demand for several years.

 

  • 3. Speed of home sales: The typical home sold in 15 days in both June and July, the lowest median days on the market in history. In comparison, homes sold in a median of 39 days in June 2020.

 

  • 4. Most homes sold in two weeks or less: In March, 61.4 percent of homes that went under contract had an accepted offer within two weeks of being listed for sale.

 

  • 5. Most homes sold for more than their asking price: In June, 56.5 percent of homes sold for more than their list price, which was a record high. In addition, the average home sold for 2.6 percent more than the asking price, another record high. Bidding wars were a big contributor to that record.

 

  • 6. Mortgage rates hit an all-time low: During the week ending Jan. 7, 2021, the average 30-year fixed-rate was 2.65 percent, the lowest in history.

 

  • 7. A record-high share of homes was bought by investors: During the third quarter of 2021, investors bought 18.2 percent of all the homes that were purchased in that period in the United States. That's up from 11.2 percent during the third quarter of 2020.

 

  • 8. Second home demand nearly doubled: Home buyer demand for second homes was up 91 percent in January 2021 compared to January 2020.

 

  • 9. More people looked to move to a different metro area: Nearly one-third (31.5 percent) of Redfin users searched for a home in a different metro area during the first quarter of 2021, up from 26 percent during the first quarter of 2020.

 

  • 10. Luxury home prices jumped: The median sales price of luxury homes rose to a median of $1.025 million in the second quarter of 2021, an increase of 25.8 percent compared to that quarter in 2020.

 

    • Washington Post, January 18, 2022

Click here to view full article - https://www.redfin.com/news/housing-market-predictions-2022/ 

December
26

It seems like all of California is moving to Texas. Is that true?

Data source: U.S. Census Bureau

Texas is clearly having a moment — especially in comparison to California. During the pandemic, California has been shut down while Texas has remained partly open. Several major California companies — among them Oracle, Tesla, Hewlett Packard Enterprise, CBRE and Charles Schwab — have all moved to Texas from California. Texas' population continues to grow, while California's population growth has stopped for the first time in almost two centuries. And, in the popular imagination at least, everyone in California is moving to Texas — drawn by low taxes, cheap houses and a low-regulation lifestyle.
 
But is this last point really true? Is everybody moving from California to Texas?
 
Well, no. California still has 40 million residents, compared to Texas' 30 million. (The two states have way more people than any other state.) It is true that population flow from California to Texas has picked up considerably in the past two years.   The number of Californians moving to Texas minus the number of Texans moving to California. So, it might not pick up the real size of the California migration, right?  Figure above shows the gross migration in each direction. And this chart shows something really interesting: the number of Californians moving to Texas has gone up a lot in the past few years, but the number of Texans moving to California has stayed about the same — not just in the last two years, but over the past 15 years.

·         Urban Edge

December
24

Higher mortgage rates are coming. What could it mean for homebuyers?

The Federal Reserve's announcement this past week  that it will fight inflation by phasing out a bond-buying program and preparing for faster interest-rate hikes will have far-reaching consequences for home prices and affordability, experts say.  The Fed expects to raise rates three times next year to make borrowing more expensive for individuals and businesses, aiming to cool demand and soaring prices. It also expects more hikes in the following two years. 
  • USA Today, December 19, 2021
December
23

Home Inventory Hits All-Time Low

Fewer homes were available in November than in any period on record, driving prices 15% higher than last year, Redfin reports.   Home inventory has grown even more scarce as the number of houses on the market reached an all-time low last month, Redfin reports.
The seasonally adjusted number of homes for sale was 18 percent lower in November than it was at the same time last year, according to a new report from Redfin's data team.  "I wish I had better news for homebuyers this holiday season, but in many ways the housing market is more challenging than ever," Redfin Chief Economist Daryl Fairweather said in the report. "At least buyers have the benefit of low mortgage rates.  But by next year, inflation may spread to more consumer goods." 
  • Inman News, December 20, 2021
December
2

Texas "Housing Frenzy" Declared Dead

The pandemic-fueled Texas house-buying "frenzy" is in the rearview mirror, but it's being replaced by more long-run, sustainable rates of growth on the road ahead, according to a research economist for the Texas Real Estate Research Center at Texas A&M University.  Housing sales growth and price growth have peaked and are slowing, the center's Luis Torres said. In addition, months of inventory, listings and days on market have bottomed and are beginning to rise.  "Texas housing sales accelerated after the pandemic shut down the economy in March and April of 2020," Torres said. "This caused the already depleted inventory of homes for sale to reach historic low levels and led to exuberant home price growth."  Texas Real Estate Research Center forecasts for 2021 and 2022 include expectations for strong demand, improving inventories, moderate price growth, and slowly rising mortgage rates.

  • Dallas Business Journal, November 10, 2021
October
14

Dallas-Fort Worth housing market 'definitely cooling down' — but still simmering

Dallas-Fort Worth is cooking up a record year for home sales and prices, but there are signs that the residential market is cooling from a boil to a simmer.  "On a macro level, the market is definitely cooling down, but we're talking about going from extreme hotness to, like, still hotness," DFW Opendoor General Manager Sharon Brown said in an interview with the Dallas Business Journal.   "Relative to last the last few months, the market is cooler," Brown said. "But relative to last year, the year before and the years before that, it's still super hot. Even though it's cooling down, that doesn't mean that it's a cool market."

The DFW market is cooling because more inventory is coming on the market and the volume of homes sold has decreased over the last three months, Brown said. Sales prices are also declining a tad, she said.  "It's still pricey," she said. "It's still a seller's market, but because of the inventory lift, because there's more supply on the market, the price is slowly coming down — not tremendously, but slightly.

Home prices in DFW have risen roughly 17% in 2021, and they're likely to rise another 4% to 5% in 2022, James Gaines, economist for the Texas Real Estate Research Center at Texas A&M University, said in a virtual meeting of the MetroTex Association of Realtors.   Gaines forecast total existing home sales for DFW to increase by 3% in 2022.

  • Dallas Business Journal, October 8, 2021
September
16

Is a Home Foreclosure Tsunami Ahead for Dallas-Fort Worth

Major Economists do not see a big wave of foreclosures

Millions of homeowners have been sheltered from foreclosures since the start of the COVID-19 pandemic.  But with mortgage forbearance programs and foreclosure moratoriums winding down, is there going to be a surge in home foreclosures?  While some investors are hoping to see a rise in problem properties, top real estate market economists don't anticipate a huge number of forced home sales by lenders.  "We don't think we are going to see a tsunami of foreclosures occurring," said Dr. James Gaines, the longtime economist with the Texas Real Estate Research Center at Texas A&M University. "I don't think we will start seeing anything until the first half of next year.  "It's a relatively small number of homes still getting mortgage forbearance.

 

At the end of August, only about 3% U.S. home loans were in forbearance plans, according to the latest estimate from the Mortgage Bankers Association of America. That adds up to about 1.6 million homeowners.  The share of home mortgages in payment forbearance is less than half what it was a year ago.  Home foreclosures have been almost nonexistent in the last year, with most lenders holding back from forcing property sales.  Any rise in home foreclosures won't compare with previous down cycles, Gaines said.  "There will be nothing on the scale we saw back in 2008 and 2009," he said. "We don't see it happening — particularly in Texas."  Because of big increases in home values in D-FW and other Texas markets in the last few years, most homeowners have large amounts of equity in their houses.

Dallas Morning News, September 10, 2021

September
15

Homebuyer Bidding Wars Hit a New Low in August

The competition to snag a home continues to ease, with August seeing the fewest competing offers so far this year.   About 58.8% of the home offers by Redfin agents faced competition, a new low for 2021, according to the technology-powered real estate brokerage.   This is a decrease from the revised bidding-war rate of 62.1% a month prior and it's well below the "peak of 74.3% in April," according to Redfin.  

The August rate is also lower than the bidding-war rate of 59.4% reported a year ago.    "While sellers continue to have the upper hand, buying a home has become slightly easier this summer as the country's acute shortage of homes for sale is no longer intensifying and the market has undergone its typical seasonal slowdown," Redfin said.    Although sellers are still pricing their homes "very high," not all buyers aren't biting. 

Fox Business, September 14, 2021

May
4

Housing Could be a Leader in the Post-Pandemic Economy

Heading into the pandemic, North Texas' housing market was seeing record sales and rising prices.  And when the worst of the COVID-19 economic downturn is past, the home market could be one of the best parts of the Dallas-Fort Worth and statewide economy, a top real estate economist predicts.

"Housing could be well be the leader in bringing the rest of the economy up out of the doldrums," Dr. James Gaines, chief economist at the Real Estate Center at Texas A&M University said. "We are going to have historically low interest rates that could boost the market.  Housing could well be one of the leading industry sectors that gets us out. Home construction will come back - I think it will be prime recovery activity."

"We expected 2020 to be a good year but now all bets are off," he said. "March is probably going to be the last good month for housing for a while. April and May are probably going to be way down.   It will now be July, August and September will be our best months of the year.

-  Dallas Morning News, May 1, 2020

October
18

Forecasters – What to Expect Over Next 12 Months

Paige Shipp, regional director with housing analyst MetroStudy Inc. fears home sales might slow next year in the ramp up to presidential and congressional elections.  "We typically have much slower selling seasons right before an election," she said. "After that happens, the flood gates open and people come out. It's not a matter of who wins."   Worries about a recession may also impact the home market.  "We spent the better part of the last decade still looking over our shoulder," said George Ratiu, senior economist with Realtor.com.  "The last recession was so bad that we are still carrying some of the scars from that."   However, Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University states that Texas economy is still expanding.  "And we are extremely unlikely to be in a recession by the end of this calendar year," he said. "We are probably pretty safe through the first six months of next year."

  • Dallas Morning News, October 14, 2019

 

April
27

Boom: Hispanics Lead Housing, Income Surge, Poverty at Record Low

Hispanic Population Growth By 2060Latinos are finding their economic legs under the Trump administration, leading the surge in home ownership and income growth and record low poverty rates, according to two comprehensive new surveys.  While they remain far behind whites in income, they have seen their third consecutive year of income growth and have a higher workplace participation rate, according to the National Association of Hispanic Real Estate Professionals and the Hispanic Wealth Project. 

 

In two studies just released, the groups also provided revealing details about Latinos and their growth in America. For example, by 2060, nearly one of every three in the U.S. will identify as Latino.  The reports detailed Hispanic housing and economic trends and found most signs rapidly improving.  What's more, the group's goal of nudging overall Hispanic income up is showing signs of success. The group said that within the next five years, Hispanic median income will triple.Hispanic Homeownership rate

 

The group listed the positive trends in its income report:

  • For the fourth consecutive year, Hispanics increased their rate of home ownership, reaching a rate of 47.1%. In 2018, Latinos added 362,000 homeowners which is the highest number of owner households added for Latinos since 2005.
  • In 2017, Hispanics saw the third consecutive year of income growth and the highest of any demographic.
  • Between 2016 and 2017, Hispanics increased their real median income by 3.7%. Latino families making an annual income over $200,000 increased from 2.1% in 2011 to 3.8% in 2017, and the percentage of Latino millionaires more than doubled between 2013 and 2016.
  • Poverty rates reached a historic low for Latinos. Simultaneous to median income growth, Hispanics have lowered their poverty rate for three consecutive years. With a poverty rate of 18.3% in 2017, Hispanics reached their lowest level since poverty estimates for Hispanics were first published by the U.S. Census Bureau in 1972.

Hispanic Income Growth

  • Latinos have significantly higher labor force participation rates. Hispanics are employed at a rate of 66.1%, compared to 62.9% of the general population. The Hispanic unemployment rate was reduced by over 7 percentage points between 2009 and 2018, from 12.1% to 4.7%, respectively.
  • Latinos continue to drive small business growth. Between 2014 and 2016, the number of Latino-owned employer firms increased by 13.1%, accounting for 23.8% of the net growth of all employer firms during that period.
  • Participation in retirement accounts for Latinos is increasing. Between 2013 and 2016, Hispanics increased their rate of retirement account ownership from 25.1% to 29.7%, and the value of their retirement accounts increased by roughly 40.4%.
  • Washington Examiner, April 23, 2019
March
31

Dallas Home Price Hikes Are Turning Buyers Into Renters

 

Should you buy or rent?

Dallas is one of the U.S. metro areas where rising home prices have hurt homeownership the most. Dallas, Denver and Houston were identified as the markets where there is the most downward pressure on homeownership, according to a new report by Florida Atlantic University and Florida International University faculty. The study ranked areas where the markets have tilted in favor of renting over buying homes. Researchers traced housing conditions in 23 markets for the report. Dallas was the most unfavorable for homeownership among the cities surveyed. "Of the metros in our index, Dallas is the highest and exhibiting the greatest downward pressure on the demand for homeownership," said Ken Johnson, real estate economist in FAU's College of Business. "The extraordinary appreciation in the area is a major driver of this score."  Dallas' housing market has taken off since the Great Recession, with soaring prices.

  • Dallas Morning News, March 20, 2019
March
30

Dallas Ranks #1 For Millennials Nationwide

 

Meyers Millennial Desirability Index (MDI)

        SOURCE: Meyers Research

 

Dallas and Houston are the hottest spots in the country for millennial homebuyers. That's what analysts at California-based Meyers Research found in their annual "millennial desirability index" that rated the country's largest housing markets. Austin ranked third on the same list, which compared data on housing affordability, job growth, cost of living and other factors for major metro areas across the country. Meyers Research's director of research, Ali Wolf, said factors such as Texas' relatively low new home prices, strong economy and high quality of life push the state's major cities to the top of the list. Job opportunities, affordability and lifestyle were key factors millennials said they would consider in moving to a new city. Meyers' study is one of two recent studies that give North Texas high marks for first-time homebuyers.

  • Dallas Morning News, March 24, 2019
February
19

DFW Area Home Sales Listings Explode in January

An increase in Home Listings in JanuaryA flood of North Texas houses hitting the market in January means it will take longer to sell a Dallas-Fort Worth home. The number of houses up for sale in Dallas County rose more than 43 percent in January compared with a year earlier, according to the latest numbers from the MetroTex Association of Realtors. Home listings were also up by more than 42 percent in Denton County and were 37 percent higher than a year ago in Collin County.

The wave of properties hitting the market comes at a time when home sales in the area are declining and price increases have evaporated. At the end of last month, there were almost 22,000 houses listed for sale with North Texas real estate agents — the largest January inventory in six years. More than 10,000 additional home listings hit the market in January alone. Real estate agents are warning sellers not to expect a quick sale like the market was seeing few years ago. "You can't expect to get 30 offers in 30 minutes," said Cathy Mitchell, 2019 president of the MetroTex Association of Realtors. "It's a market correction — we couldn't be sustainable the way the market was."

  • Dallas Morning News, February 16,2019
February
11

Keller Williams Orders Purge of Thousands of

Haunted by rosters of inactive, unlicensed and deceased agents, KW President Josh Team confirmed the company will purge names nationwide

Real estate franchise Keller Williams has been growth-obsessed over the past decade, but according to multiple sources, its 190,000-plus associates ranks are filled with former agents and, in at least one instance, even deceased agents.  Multiple sources told Inman that it's been an unspoken company policy at Keller Williams to keep agents on the roster — long after they are no longer associated with the company.  Keller Williams President Josh Team confirmed to Inman Monday that the rosters of market centers — what Keller Williams calls franchises — across the country are partially populated by agents no longer with the company.  Multiple sources cited that they believe as many as 30 percent of Keller Williams' current agents — roughly 55,000 agents — are what is known as "ghost agents," meaning they're on the roster but no longer licensed Keller Williams agents.

"It's been rumored by many, and known by some, that most of the rosters have what everyone refers to as 'ghost agents' on them," a source with direct knowledge of some of the inner-workings of Keller Williams told Inman. "It was something that nobody was allowed to talk to, and people were encouraged not to remove them, or if they were going to remove them, just remove a few a month so it doesn't look like you're not growing."  "I wouldn't be surprised if after January and February when they remove them, there are at least 30 percent fewer agents," the source told Inman in a later phone call. A former franchise owner at Keller Williams told Inman the practice of inflating agent count by leaving "ghost agents" on the rolls was rampant and persistent. "The entire push from the company had been around agent count, obviously everybody knows that," the former franchise owner said.

  • Inman News, February 5, 2019
January
30

Dallas, Texas Housing Market Forecast: One of the 'Hottest' in 2019?

 

Dallas, Texas Housing Market Forecast: One of the 'Hottest' in 2019?

 

By Brandon Cornett | January 18, 2019 | © HBI,

 

Recent forecasts for the real estate market in Dallas, Texas suggest that home prices in the area could rise faster than the national average in 2019. A separate forecast from Zillow ranked Dallas as one of the top ten "hottest" housing markets of 2019.

Bold Outlook for Dallas Housing Market in 2019

At the start of 2019, the median home value for Dallas, Texas was around $201,000. (The median for the broader DFW metro area was a bit higher.) That was a gain of more than 13% from a year earlier, according to data collected by Zillow.

Predictions from housing analysts point to continued home-price growth throughout 2019. In fact, the Dallas real estate market is expected to outperform the nation this year, in terms of annual home-value appreciation.  Given the current rate of appreciation, it would not be surprising to see the median house price in Dallas rise somewhere between 7% and 10% over the next year.

Zillow's research team recently predicted that the median value in Dallas would climb by 11.2% over the next 12 months. That was a much bolder forecast than the one they issued for the nation as a whole, which predicted 6.4% growth.

Housing Supply on the Rise

Inventory is another important trend that could shape the Dallas-area housing market in 2019. This year, home buyers across the metro area could have more properties to choose from.  At the end of 2018, the Dallas real estate market had more than a 4-month supply of homes for sale. That was a higher level of inventory than most metro areas across the U.S., and also higher than the national average during that same timeframe.

The key takeaway here is that housing inventory in Dallas (i.e., the number of homes listed for sale) increased during the latter part of 2018. As a result, buyers who enter the market this year should have more options when it comes to choosing a property.

Dallas Makes Zillow's "Hottest" List

In January, Zillow published a forecast that included what they felt would be the ten "hottest U.S. housing markets for 2019." Dallas was ranked at number seven on that list.  To create their "hot list," Zillow examined a number of factors for the nation's 50 largest metro areas. They then combined these variables to create a "hotness" score. They looked for metro areas with strong income growth, growing populations, and low unemployment — among other factors.

A Cooling Trend Could Prevent Affordability Issues

The Dallas real estate market is something of a paradox right now, as we move into 2019. Home prices in the area continue to rise faster than the national average. At the same, however, there is clearly a cooling trend taking place.

Paige Shipp, regional director at MetroStudy, recently told The Dallas Morning News: "Dallas-Fort Worth, the nation's top new home market, is slowing from a frenzied, overheated pace to a more stable, normalized market. Builders and developers are hard at work delivering product to meet the strong demand for affordable new homes."

Dallas currently leads the nation in terms of new-home construction, according to MetroStudy and other sources. There were nearly 35,000 housing starts in the DFW area during the third quarter of 2018, more than any other metro. (A "housing start" is the beginning of construction for a house.)

If inventory continues to grow in this market — as expected — it will likely lead to smaller home-price gains in the future. And that's probably a good thing. When house prices rise at a much faster pace than local wages and income, it can create affordability problems. So a cooling trend could actually be beneficial at this point.

Disclaimer: This article includes housing market predictions for the Dallas-Forth Worth metro area in 2019. They were provided by third parties not associated with the Home Buying Institute. Real estate forecasts are the equivalent of an educated and are far from certain.

 

January
22

And Another Reason to Own a Home in Texas

2019 Real Estate Transfer Tax

No Real Estate Transfer Tax

Texas is one of a handful of states that does not have a transfer tax when a seller sells their home. Dallas is one of the few cities in the nation that does not have a city transfer tax. Several years ago the voters in the state of Texas passed a constitutional amendment that disallowed any such taxes in the future. So not only do some 40 states have a transfer tax, the cities as well have an additional transfer tax. Another reason so many are moving to Texas. See below the city and state transfer tax on a home sale of $500,000 in selected northern cities.

2019 - Real Estate Transfer Tax

Based on a $500,000 Sales Price

CITY

 

STATE TRANSFER TAX

 

CITY TRANSFER TAX

 

TOTAL TAX

                 

Boston, MA

$2,280.00

   

$0.00

   

$2,280.00

Chicago, IL

$750.00

   

$3,750.00

   

$4,500.00

Los Angeles, CA

$550.00

   

$550.00

   

$1,100.00

New York City, NY

$2,000.00

   

$7,125.00

   

$9,125.00

Philadelphia, PA

$5,000.00

   

$15,000.00

   

$20,000.00

San Francisco, CA

$550.00

   

$3,400.00

   

$3,950.00

Seattle, WA

$6,400.00

   

$2,500.00

   

$8,900.00

 

January
19

Dallas is in Top 10 Markets for 2019

Dallas is in Top 10 Markets for 2019

January
11

Flattening Home Market May Make it Feel Worse Than It Is – Because the Market is Still Good

Flattening Home Market May Make it Feel Worse Than It Is But the Market is Still Good!

2018 was the year of the housing slowdown in Dallas.  After seven years of rising home purchases in North Texas, the speeding home market hit a speed bump in 2018. The decline wasn't much — only about 1 percent fewer homes sold than 2017's record sales. But the new wind blowing through residential neighborhoods freaked out many home sellers who were hoping they could keep asking the moon for the roofs over their heads. "The sky is not falling" on D-FW's housing market, insists Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University. "You're just getting back to normal." Gaines is forecasting a flat to slightly lower home sales volume in North Texas next year. And he's expecting year-over-year home price increases to moderate to mid-single-digit percentages. Most national forecasts call for D-FW home prices to rise 4 percent to 5 percent in 2019. That's about the long-term norm for North Texas housing value growth.  But after several years of runaway home price gains, that could seem like a downer to home sellers looking to cash in on their properties.

  • Dallas Morning News, December 28, 2019
January
10

North Texas Home Prices Stumbled in December

Home Prices Stumbled in December

Local real estate agents sold 9 percent fewer homes in December than they did a year earlier — the fifth month in a row of year-over-year declines in home purchases.  Last month 7,786 homes were sold through the agents' multiple listing service, according to data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information System. Last year's slight decline in home purchases in the area followed almost eight years of increases.  "It's still the second-best year ever," said Dr. James Gaines, chief economist with the Real Estate Center. "The whole state is reverting to a more normal market.  "We've been going really, really strong for years, and ultimately that slows down." Higher mortgage rates and record home prices in the Dallas-Fort Worth area have caused some prospective buyers to pull back from the market.

 

The number of homes for sale in the almost two dozen North Texas counties included in the report was 22 percent higher than a year earlier, with more than 21,000 preowned single-family homes listed for sale with real estate agents. On average it took 57 days to sell a property -- 8 percent longer than a year earlier. Even with the increase in inventory, there was only about a 2.4-month supply of houses listed for sale in the area at the end of December.

  • Dallas Morning News, January 8, 2019

 

January
9

Dallas Home Prices Up 5% in 2018

Home Prices have risen over 40% in the last five years

Dallas-area home price gains slightly outperformed the national average in 2018.Dallas home prices rose 5.3 percent from 2017 levels while the U.S. price increase was 5.1 percent, CoreLogic reports. CoreLogic is forecasting that nationwide home prices will grow less than 5 percent in the year ahead."The rise in mortgage rates has dampened buyer demand and slowed home-price growth," Dr. Frank Nothaft, chief economist for CoreLogic, said in the report. "These higher rates and home prices have reduced buyer affordability," he said. "Home sellers are responding by lowering their asking price, which is reflected in the slowing growth of the CoreLogic Home Price Index." Along with Dallas' 5.3 percent year-over-year home price gain, CoreLogic found that prices were up 6.9 percent annually in the Fort Worth area and were 5.8 percent higher in San Antonio. Houston prices rose by just under 4 percent from a year ago. And prices in the Austin area were only 3.4 percent higher than in November 2017. 

Homeowners that CoreLogic surveyed attributed the growing home values as part of a strong national and local economy. "A strong economy helps homeowners feel confident about the value of their property," said Frank Martell, president and CEO of CoreLogic. "If recent declines in the stock market shake consumer confidence in the national economy, we may see homeowners' perception of home values change and a subsequent buyers' market emerge in 2019." Even with the declines in the rate of home appreciation, Dallas-Fort Worth home prices are at record levels and have risen more than 40 percent in the last five years.

  • Dallas Morning News, January 2, 2019
December
14

Dallas – One of Top 10 Cities With Market Change

It's no secret that Dallas' home market has a winter chill.Home sales have slowed, along with the rate of home price increase in North Texas.The market changes have put Dallas on Realtor.com's list of the 10 cities hit hardest by a housing slowdown."In the last few months, the real estate market has actually begun slowing down. including in some of the big cities that have been leading the go-go post-recession housing boom," according to a report on the website. "To be clear, prices aren't always dropping in these places, which are predominantly located on the West Coast."Mostly, they're decelerating, coming back down to earth."

Realtor.com based its rankings on a year-over-year rise in home price markdowns, increases in listings and changes in overall list prices."There's a rebalancing that needs to happen," Len Kiefer, deputy chief economist at Freddie Mac, told Realtor.com. "Prices have risen so high in some of these markets that it's very tough from an affordability perspective [for buyers]. ... It's not surprising to me that we're seeing a little bit of a leveling off."

Median home prices in North Texas are still up about 5 percent compared with 2017 levels. But that's a much smaller number than the double-digit annual gains seen in recent years. Home list prices in the Dallas area are down 1.4 percent from a year ago, and the number of listings has grown 15 percent year over year, according to Realtor.com

  • Dallas Morning News, December 11, 2018
December
13

Buyer Perceptions in this Changing Market

Buyer Perceptions in this Changing MarketThe declines in D-FW home sales and slower price appreciation are having a bigger impact on consumers' attitudes than their pocketbooks, analysts said.  "I am more concerned about the psychological impact of not-so-rosy housing news than I am about the actual underlying fundamentals of the housing market in the Dallas-Fort Worth market," said Daren Blomquist, top economist with Attom Data Solutions. "Certainly the data shows that the market has gotten somewhat overheated and is due for a slowdown, but that slowdown should just be a chance for the market to catch its breath rather than a trigger a panic attack.  "Jobs and people are still moving to the Dallas-Fort Worth area in large numbers, which ultimately should keep demand for housing solid," Blomquist said. "But the psychology of the market is more of a wild card and could result in a bigger slowdown or correction."

North Texas home sales would be higher if there were more moderately priced properties up for grabs, Paige Shipp of housing analyst Metrostudy Inc. said. "I believe the 1 percent decrease in sales this year is due to the lack of homes on the market below $200,000, not a lack of buyers," Shipp said. "D-FW has strong job and population growth, which equates to demand for homes.  "However, the increasing interest rates have exposed the fact that D-FW buyers cannot all afford homes priced above $400,000, she said.

  • Dallas Morning News, December 11, 2018
December
12

New Forecast: Dallas' Home Market Will Outperform U.S. in 2019 Even as Growth Slows

New Forecast: Dallas' Home Market Will Outperform U.S. in 2019 Even as Growth SlowsNot so fast with the gloomy forecasts for Dallas' housing economy. Yes, the local home market appears to be cooling after years of scorching hot sales. And some analysts have suggested there's a Dallas home price bubble getting ready to burst.  But a new forecast by Zillow says the market is likely to outperform the rest of the country in 2019 when it comes to home price gains and housing market health.

Zillow surveyed more than 100 real estate economists and investment experts for their take on the U.S. housing market and future home value growth.  According to Zillow's research, markets in Denver; Washington, D.C.; Atlanta; Dallas; Las Vegas; Phoenix; and San Jose, Calif., are likely to outperform the rest of America in 2019.  The economists on Zillow's panel said they expected U.S. home value to grow an average of 3.8 percent in 2019.

North Texas home prices are about 5 percent higher in 2018 after several years of double-digit annual appreciation. D-FW home prices were forecast to grow 4.3 percent next year in a recent Realtor.com report. Local analysts don't expect declines in home values in 2019. Instead, they say the rate of home price gains and overall home sales are likely to moderate.

  • Dallas Morning News, December 7, 2018
November
20

Why the Housing Market Is Slumping Despite a Booming Economy

Home prices are out of reach relative to incomes and mortgage rates. The big question for the economy is how the imbalance adjusts.

These should be happy times for the housing sector. The economy is booming, with more people working at higher pay, and with the sizable millennial generation reaching prime home buying age.  Instead, the housing market has gone soft, acting as a drag on the overall economy rather than as a force propelling it forward.

Sales of new single-family homes were down 22 percent in September from their recent high in November 2017, and existing home sales in September were down 10 percent. This tepid residential investment subtracted from G.D.P. growth in each of the first three quarters of 2018.

Home prices have not declined nationally, at least according to the most widely followed indexes. But their rate of increase has declined, and more and more home sellers are finding they must reduce asking prices to find a buyer.  Given how central housing is to the broader economy — it is the biggest driver of both wealth and indebtedness for most families, and its fluctuations have frequently been major factors in past booms and busts — this slump isn't something to be taken lightly for anyone hoping the good times will last.

So what's going on?

When you look closely at the data, it appears this paradox of a strong economy and a weak housing market is, at its core, an illustration of a fundamental rule in economics: If something can't go on forever, it won't.  Home prices in a given location are ultimately tethered to the incomes of the people who either live there or want to. But for much of the last six years, that relationship has come undone.  Nationally, personal income per capita has risen 25 percent since the end of 2011, while the S&P/Case-Shiller national home price index is up 48 percent (neither figure is adjusted for inflation).

The gap is even larger in the big coastal cities with high wages and booming job markets, but where legal and other barriers make it hard for builders to add to the supply of homes. In the San Francisco metro area, per capita personal income rose 40 percent from 2011 to 2017, while home prices rose 96 percent. Similar patterns are evident in Los Angeles, Seattle, Boston, New York and Washington.  In less high-flying markets, there was still a disconnect. In the Minneapolis area, for example, incomes rose 22 percent while home prices rose 46 percent.

Those rising home prices got help from years of very low mortgage rates, which put more expensive homes within reach for people at a given income level. Activity was also probably boosted by some bounce-back effect after the housing market crash of 2007-09, a result of pent-up demand for homes that were not bought while the market was collapsing.

Rates bottomed out in late 2012 at 3.31 percent for a 30-year fixed-rate mortgage. They have been moving upward in fits and starts since, including a full percentage point in the last year alone to nearly 5 percent — still low by historical standards, but high compared with the ultralow levels that had enabled these huge price gains.

There's no doubt that demographics are favorable for housing demand. The peak birth year for millennials was 1990; it's a group that is turning 28 this year and thus entering prime years for home buying. As it happens, 28 is exactly the median response in a Bankrate survey that asked adults for the ideal age to buy a home.

But that doesn't matter if prices are out of reach relative to incomes. Moreover, lending standards have remained more rigorous than they were during the last housing boom, so it has been harder for people to stretch to buy a home. The inability of people to buy homes they can't really afford is great news in terms of avoiding another crisis, but not so great for the near-term outlook for housing.

"Buyers can only stomach so many price increases until it gets unsustainable," said Daryl Fairweather, the chief economist at the online brokerage Redfin. "Prices reached a breaking point where buyers were fed up and started to consider other options," she said, including renting and moving away from the expensive coastal markets where prices are most out of whack with incomes. 

As Economics 101 teaches, price movements are the way that supply and demand match up with each other. But in the housing sector especially, that adjustment can take a while.  In contrast with the stock market, where relatively unemotional traders are buying and selling shares every day and the market stays liquid, home purchase and sales decisions can take months and are deeply emotional for the participants.

What seems to be happening is that sellers are trying to cling to the spring 2018 prices that their neighbors received, while there aren't enough buyers in late 2018 willing or able to pay those prices.  In a Fannie Mae survey of home purchase sentiment, the proportion of people who think it is a good time to buy a home has decreased significantly since the spring, to a net 21 percent from 29 percent. But so has the proportion who think it is a good time to sell, which has dropped to 35 percent from 45 percent.

You would expect, in a zero-sum transaction like a home sale, for those numbers to move in opposite directions. Instead, it seems that sellers are unhappily realizing that they aren't going to get what they thought their house was worth six months ago, and buyers still think homes are too expensive.  That helps explain why transaction volume, especially for new houses, has fallen substantially while prices haven't (at least yet). It's a standoff. And the outcome of the standoff will, in the aggregate, play a role in shaping the future of the economy.

There is precedent for this, and it isn't a happy one. In the last housing boom, new home sales peaked in July 2005, and home prices didn't start declining until May 2006. It didn't start to hurt the overall economy until December 2007, when the damage had spread through an overleveraged global financial system.

But that doesn't mean this episode has to end in tears. Home prices are not nearly as out of line with incomes as they were then; speculative activity hasn't been nearly as frothy; and consumer debt levels are considerably more measured.   "I think income growth will help us get out of this period," said Robert Dietz, the chief economist at the National Association of Home Builders. "We're probably looking at a period where existing home sales volume is flat to declining, and it now looks like 2017 was the peak year for transaction volume."

A strong (nonhousing) economy makes it more likely that this housing slump will end without a steep 2008-style downturn. So does the basic reality that young adults are forming families and need a place to house them.

But in the meantime, it could be a soft few months or even years of standoffs between buyers and sellers, with the big question of which comes first: sellers who settle for less after recognizing that the price they thought they would get is beyond the reach of buyers, or incomes that catch up with a housing market that got a little ahead of itself.

 

  • Neil Irwin, New York Times, November 15, 2018
October
11

DFW Area Has One of the Biggest Gain in Home Listings

The number of "For Sale" signs is growing in North Texas' housing market.  The Dallas-Fort Worth area has had one of the biggest increases in the country in the number of homes listed for sale, according to Realtor.com. D-FW ranked eighth among the 10 major U.S. markets with the greatest increase in home listings in September, up 14 percent from the same period a year ago, according to Realtor.com.  Local real estate market numbers show that almost 26,000 preowned single-family homes were listed for sale in August with North Texas real estate agents. That's the highest volume in six years.  Nationwide, home inventories are at a 5-year high, according to Realtor.com.  "After years of record-breaking inventory declines, September's almost flat inventory signals a big change in the real estate market," Danielle Hale, chief economist for Realtor.com, said in the report. "Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize.

  • Dallas Morning News, October 3, 2018
October
10

DFW Area Home Sales Drop 7% in September

North Texas Home Sales Drop

North Texas home sales dropped in September by the largest percentage in more than seven years. Preowned home sales in the area fell by 7 percent from September 2017. That was the biggest year-over-year sales decline since early 2011, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.  Home sales by real estate agents have been down in three of the last four months. Higher mortgage costs and years of rising home prices have caused some buyers to pull back from the market.  Mortgage rates on average are currently about 4.7 percent — the highest level in seven years — and are expected to go higher in 2019.  With September's sales decline, preowned home sales by real estate agents in North Texas are now flat with the same period of 2017. A record of more than 106,000 homes sold in the area last year.  "We think things are going to be flat," said Dr James Gaines, chief economist for the Real Estate Center. The Dallas-Fort Worth housing market has cooled significantly since early in the year when sales were still up by double-digit percentage rates from 2017 levels.

Home price growth has also slowed.  Median home sales prices rose by 4 percent in September from a year earlier to $251,000.  For the first nine months of 2018, prices are up 5 percent from the sale period in 2017. With sales declining, the number of houses on the market in North Texas has growth to 25,895 preowned single-family homes listed with real estate agents at the end of last month. That's 16 percent more homes for sale in the area than a year ago.  On average it took 44 days to sell the houses that trade in September — up 5 percent from a year earlier. Currently there is about a 3-month supply of homes available for purchase in the more than two dozen North Texas counties included in the survey.

  • Dallas Morning News, October 9, 2018
September
21

Money Magazine Rates Frisco #1 in USA

Frisco Voted Best Places to Live NOTES: Median home price is based on Q1 2018. Home price to income is calculated using median home price and median family income. SOURCES: Synergos Technologies, Realtor.com, Moody's Analytics, NOAA, Ed.gov. Illustrations  by Martin Laksman. For full Best Places to Live methodology, see money.com/BPLmethodology.                                                                                                                                                                                    

Money is the latest national publication to sing the praises of Frisco, listing the North Texas suburb as No. 1 in its 2018 best places to live report. After compiling data on everything from school graduation rates to median home prices, the fast-growing community north of Dallas beat out 582 other communities -- many of them suburbs -- to claim the top spot.  One of the highest grades in the report went to Frisco's education system.  "With more than 70 campuses, the Frisco Independent School District has the highest graduation rate of all the cities and towns Money evaluated this year," the report said. Frisco's graduation rate is 98 percent.

It lists Frisco's population as about 179,000, its median family income as $129,118 and its median home price as $349,000. In explaining its methodology, the finance-focused publication looked only at places with populations of 50,000 or greater. "We eliminated any place that had more than double the national crime risk, less than 85 percent of its state's median household income, or a lack of ethnic diversity. This gave us 583 places," Money said."We put the greatest weight on economic health, public school performance, and local amenities. Housing, cost of living, and diversity were also critical components," it said. The methodology information listed online did not say how the study's authors defined "lack of ethnic diversity." Frisco's population is 75 percent white, according to Frisco.com

Money also lauded Frisco for it public-private partnerships -- particularly the Ford Center at The Star. That athletic facility, built as part of a partnership with schools, the city and the Dallas Cowboys, doubles as a place for school football games and a practice field for the NFL team.   The Star also serves as the Cowboys' headquarters.

Frisco, Allen and McKinney routinely show up on "best of" lists. In 2016, career expert website Zippia named Frisco as the most successful city in America.The only other Texas city in Money's top 25 was Flower Mound, which ranked 16th.

  • Dallas Morning News, September 17, 2018

 

September
15

Texas Home Sales Are Slowing as Prices Are Rising

Texas Home Sales Update

Texas has been one of the fastest growing housing markets in the country in the last few years. The state has led the nation in homebuilding and Texas' major metros - Houston, Dallas-Fort Worth, San Antonio, Austin - have had big increases in the number of preowned home sales. But the latest snapshot of the Lone Star State's hot housing market is a mixed bag. While statewide home sales rose almost 3 percent in the second quarter from 2017 levels, sales in the D-FW area slowed for the first time in years.  And sales barely rose in the Austin area, according to the latest data from the Texas Association of Realtors.

"The demand for housing remains at an all-time high, but statewide we're seeing a slower rate of increase in sales compared to previous quarters due to the lack of inventory of properties for sale," Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University said. Rising prices and higher mortgage rates have also dampened buying in some neighborhoods. Even with the dip in sales, the D-FW led the state in second quarter home sales by real estate agents with 28,934 properties changing hands.

D-FW home sales were 0.8 percent lower than in second quarter 2017. Statewide median home sales prices rose by 4.4 percent in the period ending with June. D-FW had the biggest jump in the number of homes for sale in the second quarter of any major Texas metro area. The number of homes on the market in North Texas grew by 14 percent, according to the Realtors.

  • Dallas Morning News, September 13, 2018 (online)
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