WHAT HOMEBUYERS SHOULD KNOW IN A SELLER’S MARKET
During the past several months, we’ve been writing about huge housing demand in a limited-supply market. This has been driving up housing prices to unprecedented heights, especially in North Texas.
MORE HOUSING SUPPLY IN TEXAS: IT’S ON ITS WAY
For months, it seems as though we’ve been talking about housing supply and demand, not only in the Dallas-Fort Worth area, but also throughout the state of Texas. Specifically, while housing demand has been ramping up, single-family supply hasn’t been keeping pace. We’ve listed the reasons for this gap; they range from lack of labor, to municipal zoning restrictions.
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.
Texas Jobs Numbers
This year marks the 10th anniversary of the start of the last recession. A decade ago, our economy was headed toward an economic meltdown that would eventually be dubbed the “Great Recession” because of its severity. According to the Bureau of Labor Statistics, the economy lost approximately 8.8 million jobs, while the gross domestic product (GDP) contracted by a whopping 5.1%1.
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).
National job growth was somewhat sluggish in December, 2016. Though much of the media noted that the number of jobs added to the economy fell, wages increased. Also the unemployment rate decreased from December, 2015.
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.
Two noteworthy items coming out of the recent Urban Land Institute’s (ULI) Fall 2016 conference in Dallas were that Austin and Dallas were ranked first and second, respectively, in the “Emerging Trends in Real Estate, United States and Canada 2017” survey. The ULI conducts these surveys annually, in conjunction with PwC1. The survey polls those in the commercial real estate industry, asking them where the best investment and development opportunities are.
Beginning in the early 2000s, some residential home builders began mass-producing larger houses. In some areas, developers found plenty of lots on which to build such houses. Nor was it uncommon for a developer to buy two or three smaller older houses, combine the lots, and put a mega-house in its place.
At the beginning of each summer, the Joint Center for Housing Studies of Harvard University (JCHS) issues its “State of the Nation’s Housing.” In the 2016 report, researchers noted that “by many measures, the US housing market has recovered substantially from the crash.” (1)
Despite this, the housing report itself is a mixed bag, something we’ll discuss in future blogs. This particular article deals with the question as to whether millennials will start buying houses.
The homeownership rate remains low, especially in the face of easing credit standards and an improving economy. It’s been commonly acknowledged that several reasons for this trend include the struggle to save for down payments and lower credit scores (mainly due to student debt).
Another important reason could be general ignorance involved with actually applying and being approved for a mortgage.
Starting with the Great Recession and moving through its aftermath, the news each week brought new information about the increase in home foreclosures, short sales and transactions involving distressed assets. Yet these days, amid news of home sales, housing starts and even affordable housing have pushed foreclosure from the headlines. Or so it seems.
In an effort to reel in younger potential homeowners, at least three of the larger banks – JPMorgan Chase, Wells Fargo and Bank of America – are offering fixed-rate mortgages requiring only 3% down. Some offerings are indicated below,,.