Dallas-Area Home Price Still Racing Up
9.8% Increase in January; Economists Predicted 3-4% Increase for DFW
Dallas-area home prices rose by almost 9.8 percent in January, continuing to grow faster than nationwide rates. The analysts had predicted the DFW area would slow to a 3% to 4% increase in 2016, but are now revising – there is simply too many jobs coming to North Texas. Analysts expect that North Texas’ near double-digit home price gains will continue as long as employment growth in the area remains strong. CoreLogic said Tuesday that U.S. home prices were 6.9 percent higher in January than they were at the start of 2015. “Heading into the spring buying season, home prices continue to rise across much of the country,” said Anand Nallathambi, president and CEO of CoreLogic. “With rates staying low for now and continued solid job and income growth, the spring buying season is shaping up to be a good one.” CoreLogic is forecasting that nationwide home prices will rise by 5.5 percent in the year ahead.
– Dallas Morning News, March 1, 2016 (excerpt of article)
Castle Hills Developer Has Bought Singer Ranch; Negotiating with Clem Ranch.
Will Be Larger Than Valley Ranch
About 3,400 houses have been completed in the Castle Hills community. Another 1,500 lots are in development. Now Chris bright has announced the purchase of the Singer Ranch (Old Denton Rd, just south of Windhaven) and negotiations underway for the Clem Ranch (Josey at Parker Rd)
Bright Realty just acquired the next door Singer Ranch, a more than 100-acre property on Old Denton Road. The former horse boarding and riding facility is surrounded to the east on three sides by Castle Hills. Bright Realty CEO Chris Bright said the purchase will give Castle Hills land for more than 300 additional homebuilding sites. “We moved fast to buy it,” Bright said. “We knew the way things are working right now in single-family home development that it would sell fast. Bright Realty is already working with the City of Carrollton to plan and zone the property – much of which is located in a floodplain and is wooded creek area.
Bright said he’s working with the Clem family, which owns about 140 acres north of Castle Hills to expand the project further. “That family has owned that property since 1860,” he said. “We are doing a joint venture with them that will give us another 400 to 500 lots north of Parker Road.”
More than 12,000 people now live in Castle Hills. In addition to the custom home communities, Bright Realty is building shopping apartments and an office park to complement the residential neighborhoods.
– Dallas Morning News, March 2, 2016 (excerpts)
No Dallas Bubble Most Housing Analysts Say in New Poll
North Texas were up 11 percent on 2015. With a year of double-digit home price gains, concerns about housing costs in North Texas are growing. Most housing experts polled for the study by Zillow said Dallas has no significant risk of a housing bubble in the next five years. The rest said Dallas is either already in a bubble or will be in the next few years. That is a better forecast than almost any other major city. “It is very clear that nationally we are not seeing a return of the conditions that caused the last national bubble,” Gudell said. “Tighter lending restrictions today mean we aren’t seeing buyers get loans they realistically can’t pay back, like we did in years past. “It’s significant that some experts are starting to worry about bubble conditions, but in my opinion, there’s no real danger of a severe crash like the one we all remember from the last decade.” But continued employment gains and population increases will keep housing demands strong in Dallas. Some 20 of the analysts saw no risk for Dallas in for more than five years.
– Dallas Morning News, December 9, 2016 (excerpts)
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Locally Researched by: Erin Sood, Dallas Business Journal – Nov 13, 2015
Interest Rates Should Rise in December
You can’t argue with monthly growth of 271,000 jobs and an unemployment rate of five per cent. That was Wall Street’s response to the release, on Friday, of the U.S. employment report for October. The yield on Treasury bonds rose sharply as traders priced in a December rate hike by the Federal Reserve, which would be the first in almost a decade. Indeed, some analysts were speculating about a second quarter-point rise come March or April. That last bit of prognostication was premature, but it does seem highly likely that Fed chair Janet Yellen and her colleagues will act: as recently as Wednesday, Yellen described a December rate hike as “a live possibility.”
– New Yorker Magazine, November 6, 2015
October Job Boom; Unemployment Drops
October hiring burst adds 271,000 jobs, drops Unemployment rate drops to 5-year low
U.S. hiring roared back in October after two weak months, with employers adding a robust 271,000 jobs, the most since December. The unemployment rate dipped to a fresh seven-year low of 5 percent. The burst of hiring across a range of industries came as companies shrugged off slower overseas growth and a weak U.S manufacturing sector. Big job gains occurred in construction, health care and retail. Healthy consumer spending is supporting strong job growth even as factory payrolls were flat last month and oil and gas drillers cut jobs. Any gain above roughly 150,000 was expected to keep Fed policymakers on track to raise interest rates from record lows at their mid-December meeting. A survey by the Institute for Supply Management found that companies in the health care, retail, financial and transportation and warehousing industries all added more jobs in October than in September. Overall, services firms expanded last month at the fastest pace in three months. That’s in sharp contrast to the ISM’s survey of manufacturing firms, which barely grew in October. Chair Janet Yellen and other leading Fed officials have said that the economy is generally healthy and that the December meeting is a “live possibility” for a rate hike.
– Dallas Morning News, November 6, 2015
And Texas Home Prices Keep Going Up
“Unsustainable. Overheated. Overvalued.”
Those aren’t the usual descriptions used for the Dallas housing market. But that was before local home prices started jumping more than 10 percent a year and before buyers were bidding up the cost of putting a roof over their heads. The Dallas area now leads the nation in home price gains, according to analysts at Core Logic Inc. And it’s not just Dallas that’s seeing higher prices. Costs are soaring in Austin and San Antonio, too. Even in Houston, where the economy’s been slapped around by oil and gas industry layoffs, home prices are rising more than 6 percent a year. The cover of the latest issue of Texas Monthly magazine calls it “The Great Texas Housing Boom.” In Texas, the home price binge is being fueled by pure demand from the people moving here every year. “We have thousands of people moving to this state, and we are not building enough places for them to live,” said Texas economist Mark Dotzour. “That’s what is driving up prices. “Our housing inventory is ridiculously low, and that’s what’s causing these spiky prices.” Dotzour doesn’t see a cool-down in Texas home price gains as long as the flow of people from California, Illinois and elsewhere continues. “This is going to go on as long as jobs keep coming into the state,” he said. “As long as we have a shortage of home supply, I don’t know why prices won’t continue to go up. That’s just how it works.”
– Dallas Morning News, November 5, 2015
Dallas ‘Housing Bubble 2’ Has Bloomed Into Full Magnificence
The current housing boom has Dallas solidly in its grip. As in many cities around the US, prices are soaring, buyers are going nuts, sellers run the show, realtors are laughing all the way to the bank, and the media are having a field day. Nationwide, the median price of existing homes, at $236,400, as the National Association of Realtors sees it, is now 2.7% higher than it was even in July 2006, the insane peak of the crazy housing bubble that blew up with such spectacular results. Housing Bubble 2 has bloomed into full magnificence: In many cities, the median price today is far higher, not just a little higher, than it was during the prior housing bubble, and excitement is once again palpable. Buy now, or miss out forever! A buying panic has set in. And so the July edition of D Magazine – “Making Dallas Even Better,” is its motto – had this enticing cover titled, “The Great Dallas Land Rush”: “Dallas Real Estate 2015: The Hottest Market Ever,” the subtitle says. But despite the current “buying panic,” the soaring prices, and all the hoopla round them, there is a fly in the ointment: overall homeownership is plunging. The homeownership rate dropped to 63.4% in the second quarter, not seasonally adjusted, according to a new report by the Census Bureau, down 1.3 percentage points from a year ago. The lowest since 1967!
– Wolf Street Article, July 30, 2015
Dallas Still Top U.S. Market For Home Price Gains
The Dallas area at midyear was still leading the country in home price gains, according to a new report by CoreLogic. Dallas-area home sales prices were 8.6 percent higher in June than in the same month in 2014, according to a just-released report. Nationwide home prices were 6.5 percent higher year-over-year. “The stronger appreciation was registered in cities with limited inventory and strong homebuyer activity,” Frank Nothaft, chief economist for CoreLogic, said in a statement. Houston was second among the top cities with a 7.4 percent annual price gain, followed by New York at 6.2 percent. The Dallas area has been topping the country in home price increases for several months in CoreLogic’s surveys. North Texas home prices are now at record levels and the annual price increases are more than twice long term average appreciation.
– Dallas Morning News, August 4, 2015
No Housing Bubble in Sight
Surging home sales and prices raise affordability questions. Statistically speaking, housing is on a roll. Year-to-date home sales are up 6.3 percent and prices in May were 7.9 percent higher than a year earlier. The trends are expected to stay positive and are likely to boost business dollar volume by as much as 15 percent in 2015. These statistics don’t even include new-home construction, which is growing at a strong clip as well. But this rosy picture does raise concerns about affordability. After all, wages are rising by only 2 percent annually and renters are getting squeezed, having to endure 4 percent rate hikes while home prices accelerate more quickly. In addition, mortgage rates have notched their highest level of the year, reaching about 4 percent in June, and should continue to rise well into next year. Some armchair analysts have suggested that we’re entering a new housing market bubble. But hard facts suggest otherwise. Underlying conditions today are fundamentally different from the bubble of a decade ago. Back then, credit was easy to obtain and home sales were running at more than 8.5 million a year (existing and new homes combined). New-home construction volume topped 2 million annually.
By comparison, credit today is extremely tight, which has led to an unusually high level of all-cash sales. Home sales are barely over 5 million and new-home construction is barely scratching 1 million units. Meanwhile, for the past eight years, total mortgage balances have fallen. The reasons show what’s changed from 10 years ago: Home owners are paying their mortgages on time and few are seeking cash-out refinances. It’s fair to ask, though, whether at some point affordability problems will choke off home buying. That’s possible. But here’s my thinking about what could neutralize those fears. After running various scenarios, I expect home prices to rise continuously as long as mortgage rates remain under 6 percent. Early in the summer, the average rate was 4 percent. It may rise to 5.5 percent by the end of next year. Should mortgage rates cross the 6 percent mark, maybe two years down the road, then either home prices will be flat or other forces will be evident. Going forward, keep in mind that robust job creation and meaningful increases in income levels will help propel home prices. For now, though, no bubble or impending crash is in sight.
– Lawrence Yen, NAR, July 2015