14,109 Houses Sold Yesterday! Did Yours?

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There are some homeowners that have been waiting for months to get a price they hoped for when they originally listed their house for sale. The only thing they might want to consider is… If it hasn’t sold over the summer, maybe it’s not priced properly.

After all 14,109 houses sold yesterday, 14,109 will sell today and 14,109 will sell tomorrow. 14,109!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales are at an annual rate of 5.15 million. Divide that number by 365 (days in a year) and we can see that, on average, over 14,000 homes sell every day. Sales are at the highest pace of 2014 and have risen for four consecutive months.

We realize that you want to get the fair market value for your home. However, if it hasn’t sold in today’s active real estate market, perhaps you should reconsider your current asking price.


Don’t Get Caught in the ‘Renter’s Trap’

In a recent press release, Zillow stated that the affordability of the nation’s rental inventory is currently much worse than affordability of the country’s home sale inventory. The release revealed two things:

  1. Nationally, renters signing a lease at the end of the second quarter paid 29.5% of their income to rent
  2. U.S. home buyers at the end of the second quarter could expect to pay 15.3% of their incomes to a mortgage on the typical home

Furthermore, renters pay more than the average of 24.9% that was paid in the pre-bubble period while buyers actually pay far less than the 22.1% share homeowners devoted to mortgages in the pre-bubble days.

Don’t Become Trapped

If you are currently renting you could get caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment. Zillow Chief Economist Dr. Stan Humphries explains:

“The affordability of for-sale homes remains strong, which is encouraging for those buyers that can save for a down payment and capitalize on low mortgage interest rates… As rents keep rising, along with interest rates and home values, saving for a down payment and attaining homeownership becomes that much more difficult for millions of current renters.”

Know Your Options

Perhaps you already have saved enough to buy your first home. HousingWire recently reported that analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Freddie Mac came out with some comments on this exact issue:

  1. A person “can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets)”.
  2. Freddie Mac’s purchase of mortgages with down payments under 10 percent more than quadrupled between 2009 and 2013.
  3. More than one in five borrowers who took out conforming, conventional mortgages in 2014 put down 10 percent or less.

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.


5 Reasons You Shouldn’t For Sale by Owner

5 Reasons You Should Not For Sale By Owner
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Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of our reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value
  • Your bank in the case of a short sale

2. Exposure to Prospective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?

3.  Actual Results also come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the same commission.

Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.


3 Companies Announce Relocation to Allen

3 Companies Announce Relocation to Allen

With increased business moves to North Texas, Allen a city of more than 90,000, is appearing more often on corporate radar screens.   In fact three businesses have announced relocations to the city – coming from California, New Jersey and Illinois – all looking for lower taxes and a can-do business climate in Texas.

·        CVE Technology Group Inc., a New Jersey-based electronics company, has just announced relocation of its headquarters to Allen’s Enterprise Business Park.    By next year, CVE plans to have 1,200 workers in Allen, making it the city’s largest employer. 

·        Kone Americas’ is consolidating its regional operations in Allen.   Work is starting on a new office and research facility for Kone on the east side of U.S. 75. The company will be lead tenant in a 102,000-square-foot office building.   As part of the new project in Allen, a seven-story test facility will be built.

·        MonkeySports, Inc in Corona, Caifornia announced in May that it was relocating to Allen.    The online retailer of hockey equipment also plans to open a sporting goods superstore. MonkeySports said it’s trading California for Texas in a search for a more favorable business climate.  The sporting goods firm plans to hire an additional 150 workers in Allen this year.

–          Dallas Morning News

DFW Home Prices Up 5.2%

Dallas-Fort Worth home prices were up 5.2 percent in the second quarter from a year ago, according to the latest Realtor survey.   Nationwide, prices were up 4.4 percent, the smallest increase since 2012, according to the National Association of Realtors.  Analysts have been forecasting a slower rate of home price growth this year.  DFW home prices have cooled dramatically from the 9 percent rise in the first quarter.

          Dallas Morning News

 


DFW Home Prices Expected to Rise Into 2015

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DFW Home Prices Expected to Rise Into 2015

​Dallas-Fort Worth home prices have continued to rise year-over-year by 8 percent in June, with forecasts expecting the trend to continue into next year.  From the previous month, North Texas home prices rose 1.6 percent, according to the Home Price Index report released Tuesday by Irvine, Calif.-based CoreLogic.   Nationally, home prices increased 7.5 percent year-over-year in June, with prices increasing 1 percent from May to June.  “Home price appreciation continued moderating in June with its slight month-over-month increase,” said Mark Fleming, chief economic for CoreLogic, in a statement.  The return to moderation is expected to continue throughout the United States and Fleming said it could alleviate concerns over diminishing affordability of homes and the risk of another asset bubble.  Even with the moderation, CoreLogic forecasts home prices will to continue to rise in the future, with projections estimating national home prices will increase 5.7 percent from June 2014 to June 2015.  The Dallas area should expect slightly greater than a 6 percent increase in the same period.

          Dallas Business Journal

Texas Ranks as Fastest-Growing State for Tech Jobs in 2014

Texas is the fastest-growing state for technology jobs, beating out New York, Florida, Massachusetts and Washington.  The Lone Star state’s 5.99 percent increase in tech jobs leads the nation in the first half of 2014, according to a report by Dice.com, a career website for IT and engineering professionals. The report studied the highest percentage of growth and the most new positions added, using U.S. Bureau of Labor Statistics data.  Texas has added 8,100 positions this year as the state continues to look for employees in mobile, big data and software development in cities including Dallas, Austin and Houston, according to the report. The state now ranks as the second-largest workforce in technology, following California.

          Dallas Business Journal

 


Dallas-Ft Worth’s Economic Growth Outpaces Texas

Dallas-Ft Worth’s Economic Growth Outpaces Texas

The Dallas-Fort Worth economy has grown faster than the state average and its employment has increased faster than any other Texas major metro area in the first half of the year, according to a report issued yesterday by the federal reserve Bank of Dallas.  DFW employment has grown 4.5 percent this year through June, compared with 3.5 percent growth with Texas.  Local job creation in the second quarter (5.5 percent or 42,600 jobs) outpaced first quarter growth (3.4 percent or 26,500 jobs).  Most of the region’s employment gains have come from fast growth of the Dallas economy, which has added jobs at a 5.4 percent pace in the first half of the year.  The professional and business service sector saw the most growth.  Manufacturing is the only local industry to lose jobs (-700) in the first six months of the year.

          Dallas Business Journal

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Housing Buoyed by 20-Year High for Vet’s Loans: Mortgages

America’s fragile housing recovery is getting a boost from military buyers using VA mortgages as the U.S. draws down troops after more than a decade of combat in Iraq and Afghanistan. About 4.7 million full-time troops and reservists served during the wars and many are now able to take advantage of one of the easiest and cheapest paths to homeownership. The program’s share of new mortgages, at a 20-year high, is also increasing as other types of government-backed loans have grown more costly.  “The reduction in uncertainty for the returning vets allows them the freedom to spend more, including buying housing,” said Sam Khater, deputy chief economist at CoreLogic Inc., an Irvine, California-based property-data firm. “VA buyers are coming into the market in higher and higher proportions and tend to be first-time buyers, one of the missing drivers in the recovery in housing demand.”  VA loans accounted for 8.1 percent, or $19.5 billion, of mortgages made in the first quarter, up from 6.9 percent in 2013 and less than 2 percent a decade ago, according to newsletter Inside Mortgage Finance.

          Bloomberg

 


Influx of Professionals to DFW Raising Home Prices

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Influx of Professionals to DFW Raising Home Prices

Along with the lean inventory of houses for sale in the area, the factor that’s most fueling home price increases in North Texas is the large migration of professional workers to the area. “All these companies relocating to the Dallas-Fort Worth area – that will continue to put pressure on housing prices,” said Bernard Weinstein, economist at SMU. “As long as we have people moving here who have built up a lot of equity in another state, we will continue to see price inflation.” Thousands of jobs coming from California and the Midwest are a significant contributor to the recent gains in home prices, agents and analysts say. For these buyers, Texas prices are still on the cheap side.

– Dallas Morning News

Home Price Increases Throughout Metroplex

Local home prices are more than 45 percent above where they were at the worst of the recession in early 2010.   North Dallas and North Dallas suburbs have had steady price increase for the past three years.  Now the increase in home prices have spread to Northeast Tarrant County and in southern Dallas County.    The median prices in home prices increased 19 percent in Southlake this past year, 15 percent in Colleyville and 12 percent in Keller.   But it was southern Dallas that has had the largest increase in the past 12 months:  Lancaster, 24 percent, Oak Cliff, 22 percent, Cedar Hill 20 percent, Mesquite, 17 percent and Duncanville 16 percent.

          Dallas Morning News

California Developer Comes to North Texas

A California-based developer that does large residential communities all over the country has opened a new Dallas office.  Newland Communities, which bills itself as the largest private developer of planned residential and urban mixed communities, said it plans to use the Dallas office operation to acquire land and build projects throughout North Texas.   Newland previously worked on the Stonebridge Ranch community in McKinney which it completed in 2008.  Since then the company has had no major projects in the Dallas area.  The developer has six communities in the works in the Houston and Austin area.  Newland, which is based in San Diego, has 40 projects currently underway in 14 states.  They plan major investment in the Dallas area.

          Dallas Morning News


Top 5 States From Which People Move to Texas

Texas has a net gain of 701 people daily from the other 49 states, most notably from five states:  California, Louisiana, Illinois, New York and Michigan.  This does not include from immigration or growth by natural causes.   In fact, in the last few years Texas has gained $27.34 billion in wealth migration within the United States, with a significant chunk of that coming from California.    Below is the breakdown of personal income wealth transfer from the five most significant states.

Gained Wealth From:

$6.40 billion

California

$3.45 billion

Louisiana

$2.40 billion

Illinois

$1.76 billion

New York

$1.44 billion

Michigan

–          CNN, May 202, 2014

 

Frisco & McKinney Ranked Among Fastest Growing Cities in Nation

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The new Dallas Cowboys headquarters in Frisco

The adage “everything is bigger in Texas” is holding true as populations swell and towns grow with new residents.  Data released by the U.S. Census Bureau shows that Texas is home to seven of the 15 fastest-growing cities in the nation between 2012 and 2013. Frisco ranked second with a 6.5 percent population increase, and McKinney ranked 13th with a 3.9 percent increase.   The report also highlighted Grapevine as the only Texas to grow to larger than 50,000 residents between 2012 and 2013.  Other Texas cities making the fastest-growing list include San Marcos (ranked first), Cedar Park (fourth), Georgetown (seventh), Odessa (11th) and Pearland (15th).

–          Dallas Business Journal, May 22, 2014

 

Editorial: California Bad For Business; Texas Great for Business

CEOs ranked California last in survey 10 years in a row, Texas 1st for 10 years.

For the past 10 years, Chief Executive magazine has surveyed hundreds of CEOs across the country about their experiences conducting business in various states.

It has used these surveys to rank the states’ business climates based on tax and regulatory regime, quality of workforce and quality of life. And for the tenth year in a row, California has come in dead last in the rankings.

 

On the other end of the spectrum, Texas topped the list, also for the tenth straight year. The best states for business were dominated by those in the South. Rounding out the top five states for business were Florida, Tennessee, North Carolina and South Carolina. Two of California’s neighboring states, Arizona and Nevada, also performed well, ranking seventh and eighth, respectively.

 

The worst states for business were high-tax states with powerful union interests. Besides California, the bottom five included New York, Illinois, New Jersey and Massachusetts.

 

Some of the CEOs’ comments about California’s business climate were quite telling – and sobering:

• “California goes out of its way to be anti-business, and particularly where one might put manufacturing and/or distribution operations.”

• “We relocated our corporate office from Los Angeles to Atlanta in 2006 largely because of the regulatory and unfriendly tax environment in the state of California. . . . Would make the same decision if I had to do it all over again.”

• “California could hardly do more to discourage business if that was the goal. The regulatory, tax and political environment are crushing.”

 

Chief Executive magazine Editor-in-Chief J.P. Donlon illustrated how California’s tangle of red tape has led to its shameful performance in the survey. “The Economist reports that it takes two years to open a new restaurant in the Golden State compared to six to eight weeks in Texas,” he wrote. “The task of unraveling the byzantine layers of regulations seems insurmountable. The jungle is too thick to be pruned. That’s why Carpenteria California CKE Restaurants (owner of Carl’s Jr.) is committed to opening 300 restaurants in Texas, but has no plans for new restaurants in California.”

The lesson in all this is that greater economic freedom leads to an improved business climate and greater prosperity. “If there is a pattern in the survey,” Donlon wrote, “it is that states have diverged in recent years in their experimentation with economic freedom. Those lightening the burden of government have generally improved economic growth over those insisting that state-directed spending and governance is best.”

Though the temptation to dictate others’ affairs is strong, especially when politics and powerful special interests are involved, putting one’s nose in another’s business is not good for business.

If the Golden State is to regain its luster, it need only remove the shackles it has placed on people to start businesses or work in the occupation of their choosing, and to generally pursue any interests they have that do not violate the rights of others.

–          Orange County Register, May 14, 2014


Future House Prices: A Look into the Crystal Ball

Are you waiting to sell?  Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

§Home values will appreciate by 4.4% in 2014.

§The cumulative appreciation will be 19.5% by 2018.

§That means the average annual appreciation will be 3.6% over the next 5 years.

§Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 9.4% by 2018.

 

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.


North Texas home sales down 5 percent in April from year ago

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A constrained local housing market caused another drop in home sales in April.

Sales of preowned single-family homes in North Texas by real estate agents fell 5 percent last month from April 2013.

And the rate of home price increases slowed dramatically, just 4 percent higher year-over-year. Home prices have previously been rising at a double-digit rate.

Housing analysts say the smaller price hikes are good for the market.

“We are clearly this spring not seeing prices move up quite as fast as last year,” said David Brown, who heads the Dallas office of housing analyst Metrostudy Inc. “We don’t want to let the market get ahead of what buyers can afford to pay.”

North Texas home prices are now almost 30 percent ahead of where they were in 2011.

Median sales prices of homes sold by real estate agents rose by 10 percent in North Texas last year. That’s around twice the average, long-term appreciation rate.

“The pace of appreciation wasn’t sustainable,” Brown said.

Neither was last year’s 17 percent rise in preowned home purchases.

North Texas home sales have been down slightly in three of the last four months, according to data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.

So far in 2014, sales are off 3 percent from the first four months of 2013.

Supply is tight

Real estate agents say they could sell more houses if the inventory of properties on the market increased.

The number of houses listed for sale with real estate agents in the area was 8 percent less in April than a year earlier.

On average it took 53 days to sell a house, but much faster home sales are reported in many neighborhoods.

With pending sales down in April, North Texas is unlikely to see a rebound in home sales until more properties are on the market.

There’s less than a three-month supply of houses available for purchase.

While home purchase price gains are moderating, Dallas-Fort Worth home prices grew faster than the nationwide rate in a new survey by the National Association of Realtors.

During the first quarter, D-FW home prices were up 9 percent from a year earlier, the Realtors said Monday. That’s slightly better than the 8.6 percent national home price gain.

Big gains elsewhere

In the survey of 170 U.S. home markets, the biggest price increases were in South Bend, Ind., up 26.8 percent, and Naples, Fla., up 26.6 percent. Thirty-seven cities had double-digit percentage price gains.

The greatest home price declines from first quarter 2013 were in Cumberland, W.Va., down 18.6 percent, and Springfield, Ill., down 15.1 percent.

All of Texas’ big-city home markets had strong first-quarter price gains. The largest was in the Houston area — up 12.8 percent from a year ago.

While tight housing markets in many parts of the country are driving prices, there’s been a slowing in the rate of home appreciation, according to Realtors’ chief economist Lawrence Yun.

“The cooling rate of price growth is needed to preserve favorable housing affordability conditions in the future, but we still need more new home construction to fully alleviate the inventory shortages in much of the country,” Yun said in a statement.

“Limited inventory is creating unsustainable and unhealthy price growth in some large markets, notably on the West Coast,” he said.