HOUSING METRICS IN NORTH TEXAS – NO SURPRISES HERE
Just when you think housing prices in North Texas can’t get any higher or break any more records, another article comes out in the Dallas Morning News indicating just the opposite. Specifically, the article in question pointed out that, for April 2017, home prices continued to climb ($246,100, a 12% increase year over year), setting another record1.
MONTHLY DECLINES SHOULD NOT CREATE PANIC
March 2017 data released from the U.S. Department of Housing and Urban Development, the U.S. Commerce Department and the U.S. Census Bureau indicated that housing starts dropped in the national housing market. Specifically, the starts fell by 6.8% from February 2017 to a seasonally adjusted 1.22 million units.
Though the metrics dropped, the report suggested that “new housing production in the first quarter of this year is running 8.1% above the pace in 2016.1
THE QUIET SURPRISE: EAST HOUSTON’S ECONOMY
Mention the words “thriving Houston submarket,” and areas that might come to mind are the Energy Corridor on the far west side, the far north Houston towns of Spring and The Woodlands in Montgomery County, and even Fort Bend County, to the south. Probably the last place on the list that anyone would consider “thriving” is East Houston.
AN OVERNIGHT SUCCESS . . . DECADES IN THE MAKING
The majority of the Dallas-Fort Worth media reported the recent news that Boeing would be locating the headquarters for its newly formed global services division in Plano’s Legacy West development, a 250-acre, mixed-use project at Dallas North Tollway and State Highway 1211. It’s safe to say that the local media crowed the news for a couple of reasons.
AFFORDABILITY ISSUES PRESSURE HOME SALES
The National Association of Realtors (NAR) released news that, in February 2017, existing home sales dropped 3.7% year over year to a seasonally adjusted rate of 5.48 million1. Part of the issue was that January 2017’s sales started rapidly out of the gate (at a seasonally adjusted rate of 5.69 million), though the February 2017 closing sales topped February 2016’s figures, as seen below.
DON’T COUNT SOUTH DALLAS OUT
The Dallas Miracle – A North-Side Miracle?
When the “Dallas Miracle” is discussed, the economic focus tends to be on the northern Dallas suburbs. A great deal of development and corporate relocations are taking place in Plano (Legacy West), Richardson (City Line) and Coppell (Cypress Waters).
DALLAS HOUSING MARKET – EQUILIBRIUM? OR NOT?
A recent article in the “Dallas Business Journal” noted that a housing supplier distributor, Building Industry Partners, is betting that nationally, 17 million units of new housing will come to the market within the next decade1. Drilling down to the Dallas-Fort Worth metro, BIP’s bet looks to be a sure thing. In less than 10 years, the DFW housing market has gone from one of too much supply, to one in which demand is far outracing the stock available.
LARGER HOMES, SMALLER BEDROOM NUMBERS
Many of the articles written for this blog focus on houses that average people can own and afford. But it’s occasionally interesting to take a look at more expensive housing, expressly, mansions. In one recent article, we discussed the McMansion trends. Now, it appears that another trend in mansion housing is fewer bedrooms.
About a year ago at this time, it was anticipated that single-family home prices and sales would likely moderate in the Dallas-Fort Worth area, but still be strong. Then 2016 saw single-family industry records shattered, ranging from number of closings, to increasing closing prices.
Will 2017 be a repeat? As of now, most analysts are thinking the housing market should moderate. Metrostudy’s most recent report noted that demand is slowing at certain price points (i.e., homes priced at $400,000 and above)1. Meanwhile, Jonathan Smoke, chief economist with Realtor.com, indicated that the price forecast for Dallas “is moderating right in line with the overall United States.”2
2017 Housing Market Outlook: Single-Family Homes
Look for millennials to start entering the market, and the economy to continue its moderate growth.
The National Association of Realtors (NAR) noted that 2016 was a mixed bag. On the positive side, job creation, low mortgage rates and the expanding economy strengthened interest in home ownership. On the negative side, low supply and high demand pushed prices, meaning some buyers were priced out of the market.
SMALL ROWLETT – BIG NEWS
One piece of interesting news within Dallas-area development community these days consists of a 262-acre, master-planned community dubbed “Bayside.” The $1 billion community will offer 3,445 residential units, a 500-room resort hotel and convention center, and amenities including retail and restaurants1. Also on site will be an eight-acre Crystal Lagoon, a self-cleaning, perpetually blue body of water, complete with a beach. And this all-in-one, town-within-a-town is in Rowlett, TX, a far northeast Dallas suburb, which fronts Lake Ray Hubbard.
MORE 2017 PREDICTIONS
Two recent articles written focused on what’s likely to happen in Texas housing in 2017. Now it’s time to take a broader view, and see some other housing trends to keep an eye on in the coming year1.
Looking to the Sky
Mention “drones” and what might come to mind are surveillance and the NSA. But the unmanned aerial vehicles (UAVs) are elbowing their way into commercial usage. And thanks to the Federal Aviation Administration (FAA), just about anyone in the United States can find a drone, so long as the aircraft meet a certain set of requirements.
ARE HOME SALES SLOWING IN NORTH TEXAS? NOT LIKELY
Conventional wisdom states that home sales, on average, tend to wind down in November and December. The reasons are obvious: Colder weather can deter foot traffic, plus people, for the most part, aren’t interested in undergoing the stress of home-selling and home-buying during the holidays.
PINPOINTING HOUSING TRENDS UNDER A TRUMP PRESIDENCY
The Nov. 8 U.S. presidential election capped off a nasty, volatile and uncertain political cycle. In between the rhetoric, Donald Trump did mention a few policy ideas. Unfortunately, few of those ideas focused on residential housing. As the President-Elect’s administration heads toward the White House, there is a decided lack of clarity on the housing industry.
ARE FIRST-TIMERS RETURNING TO THE HOUSING MARKET?
There is plenty of pent-up demand in the housing market, according to industry experts. Sooner or later, these experts point out, those currently sitting on the fence will climb off the fence, especially those who are looking at houses for the first time. And when that happens . . . watch out!
As we’ve written in previous blogs, millennials are regarded as the next age group to bring a lot of activity to the housing market. Certainly, many in this age group are delaying home-buying; they’re encumbered with high student debt and are putting off getting married and having families. Still, Zillow’s recent “Consumer Housing Trends Report 2016” generated some interesting insights in discussing the population group aged 18-341. Millennial home buyers are already having a great deal of influence on the home-buying process.
THE FRISCO EFFECT
In 1996, Frisco, TX was a quiet suburban town in the far-north Dallas Metro, boasting a population of approximately 10,000. There was no Dallas North Tollway to get folks quickly in to – or out of – town. At one point, when a Frisco resident approached Kroger Inc. about possibly opening a store there, she was told there weren’t enough rooftops to justify doing so.
In a recent article, we reported that Dallas-Fort Worth area home sales skyrocketed in August, with prices not so far behind. We also noted that low inventory and growing demand were driving sales and cost increases.A recent report from the National Association of Realtors (NAR) put a metric to the scarce supply concept, pointing out that 80% of the 171 markets measured demonstrated “inadequate new construction” when it came to housing.1 Going even more deeply into the data provided, the NAR reported that the Dallas-Fort Worth-Arlington TX Metropolitan Statistical Area (MSA) has a shortfall of 132,482 permits necessary to meet the demand (with demand measured as employment figures).2
Dallas and Fort Worth are different cities, with separate cultures, separated by approximately 60 miles. These two cities are, nonetheless linked by infrastructure (rail and roads) into one gigantic region known as the Metroplex. But D-FW might not be the only metroplex in the state. A March 2016 article in the Austin-American Statesman posed the question:“Will Austin-San Antonio become the Next DFW1?” The article quoted Steve Adler, Austin’s mayor and an analyst, who indicated that the long stretches of development along Interstate 35, combined with the rate of growth in Hays County (south of Austin) and Comal County (north of San Antonio) could lead to an eventual megaplex.