Category: News

Dallas-Fort Worth #2 in Growth

DFW #2 Growth 2010-2016The U.S. Census Bureau estimates that the Dallas-Fort Worth Metroplex has grown by almost 2,500 persons per week since April 2010.

Eleven major metropolitan areas, led by the Texas duo of Houston and Dallas-Fort Worth, are growing at a pace of more than 1,000 persons per week, based on population estimates issued this morning by the U.S. Census Bureau.

See the full story at the Dallas Business Journal.

1/3 of Texas Sales in February were in North Texas

Sold House 2017About a third of all Texas home sales in February took place in North Texas, according to the MetroTex Association of Realtors. Using the dollar volume metric, Dallas-Fort Worth accounts for about 35 percent of total state sales.

For reference, Dallas’ population of just above 7 million represents about 25 percent of state’s population.

There were 6,909 homes sold in Dallas-Fort Worth last month, the report said, a 5-percent increase from last year. Both the average home price and median home price, $285,940 and $235,000, respectively, were up 13 percent from last year.

See the complete article at the Dallas Business Journal.

Austin, TX: Salaries can’t keep up and it’s pushing people out of town.

Austin, TX 2-14-2017AUSTIN – The American dream of owning a home may be slipping even further away for many people in Austin.

KVUE has been investigating the issue and found that while the sky seems to be the limit for home prices in the city; salaries can’t keep up and it’s pushing people out of town.

According to federal housing data housing prices have risen faster in Austin than anywhere else in the country.

But the real issue isn’t just a need for housing. Instead, the salaries that most people in Austin receive is not enough to keep up with the price hikes.

Over the last 26 years in the city, family incomes rose 97 percent. At the same time, median home prices rose 290 percent.

Put another way, a family making $50,000 in Austin would have seen their income rise to $98,500. However, a home that cost $100,000 then would now cost $390,000.

It’s not an isolated trend in Austin, statewide prices are increasing at a rate that wages can’t keep up with, but Austin still far outpaces the larger cities like Dallas, Houston, and San Antonio.

Read the full article at KVUE News

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St. Louis Market Summary

Mobility Magazine of the Worldwide ERC, October 2016

By H. John Neff, SRA

The City of St. Louis and the four surrounding counties of St. Charles, Jefferson, St. Louis and Franklin comprise approximately 75 percent of the entire metropolitan statistical area’s 2.8 million population total and more than 90 percent of the Missouri market area’s population. St. Louis County dominates, with more than 1 million residents and 90 municipalities. Area commerce is led by health and education, trade and transportation, manufacturing, financial services, leisure and hospitality. Professional services account for the majority of employment opportunities in the area. As of May 2016, the unemployment rate was 4.5 percent. Efforts to provide opportunities for technology, bioscience, manufacturing, defense and financial services growth are ongoing in the community.

There’s good news for the St. Louis Housing Market. Late last year Realtor.com predicted St. Louis will be the second hottest major real estate market in 2016, with an estimated 8.6 percent increase in sales activity and a 10 percent increase in the median sale price. Through the first three months of 2016 Multiple Listing Service (MLS) statistics indicate sales activity was up 8.6 percent, but ended up 6 percent overall through the end of June. The average home sale price is up only 4.5 percent year-to-date based on the first six months of 2016 compared to the first 6 months of the prior year, and median home prices are up 6 percent for June  2016 as compared to June 2015.

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While the housing market is trending upwards in many locations and price ranges, at least some of good new depends on which side of the transaction you’re on. Low interest rates continue to keep buyers in the market, but the inventory according to both real estate agents and MLS statistics is well below demand. It’s a seller’s market, especially in active areas such as St. Peters, Webster Groves, Manchester, and Brentwood, where there is a less than 1.5-month inventory as compared to the overall market, which has a 2.9 months’ supply. South St. Louis City neighborhood leads the area in sales activity in 2016 with 1,103 transactions, followed by Mehlville (504), Wentzville (401), Kirkwood (375) and Webster Groves (366). Multiple offers within hours, full price contracts and escalator clauses are the norm in several markets. There were 14.7 percent fewer listings available in the second quarter of 2016 compared to the same quarter in 2015, yet sales activity was 4.3 percent higher in the quarter as compared to the same quarter in 2015. New home construction is steady to up slightly from the previous two years. It took roughly 6 to 8 years for the market to absorb the post-crash inventory of existing lots before raw land was developed for new subdivisions.

LOOKING BACK

St. Louis rarely experiences meteoric increases or declines in residential home prices compared to many other major home markets around the country. Home values experienced a steady rise from the mid-1990s through 2007, when the average sale price of a single family residence peaked at $190,729. For the two years following the market crash, the average home price declined 18.6 percent to $160,756 by year-end 2009.  Most every location and price range was adversely impacted by the decline in activity and market value.  Tightened lending guidelines made it extremely difficult for entry-level home buyers to qualify for loans, thus preventing the next level of move-up buyers from ascending the home-value ladder. The St. Louis Area had one of the highest foreclosure rates in the county, due primarily to home flipping and fraud activity.

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Areas where average sale prices were lower to begin with for most all city and county locations saw the highest-percentage decreases, again reflecting the adverse impact on entry-level buyers.  For example, the average sale price for a home in either the Hazelwood or Kirkwood School District in 2007 was $129,950 and $337,349, respectively.  In 2010 the average sale prices were $88,127 and $286,303, respectively. The 32 percent decline in Hazelwood was more than twice as great as Kirkwood’s at 15 percent.

Home values saw their first increase since the crash in 2010, but values slipped again slightly in 2011. Since 2011, when the average sale price was $158,675, average sale prices have increased each year through year-end 2015 to $197,288, a 24.3 percent increase. The average sale price of home soared by 15.2 percent from the first to the second quarter of 2016 ($182,100 to $209,700).

Looking Ahead

Most, but not all St. Louis-area markets have rebounded from several years of moderate sales activity and unstable values; but unfortunately, even though sales related to foreclosures and bank-owned properties are well below post-market crash levels, pockets remain in which these types of transactions continue to drive the market. Much of the increased demand for South St. Louis City homes is attributed to Generation X and Millennial buyers seeking affordable housing and conveniences. The number of transaction in this location was double that of the next-closest area.  Sales activity for expensive homes, those over $750,000, is relatively slow. Barring any significant economic, social, or political changes, all indications are that the positive housing trend should continue.

H John Neff, SRA, is president of Mueller & Neff Real Estate Appraisers & Consultants, Inc., in St. Louis and a member of RAC (Relocation Appraisers and Consultants). He is a Certified General Appraiser in Missouri.  He can be reached at +1 314 849 1444 or hjneff@muellerneff.com.

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Delaware Market Summary

Mobility Magazine of Worldwide ERC, August 2016

By Tom Reynolds CRP, SRPA, Louise Jeffers, SRA and John Ciminera, SRA

The Delaware Market is located just south of metropolitan Philadelphia and west of the Delaware River.  Delaware is known as “the First State,” because it was the first to ratify the U.S. Constitution in 1787. The State of Delaware is the corporate home or place of incorporation for more companies than any other state in the country.  The U.S. Office of Management and Budget officially defines the region as the Philadelphia-Camden-Wilmington Metropolitan Statistical Area, and it is the seventh largest metropolitan area in the U.S., with a population of approximately 6 million as of the 2015 U.S. Census Bureau Estimate.

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Industries with the largest increase in jobs in Delaware over the last year, according to the U.S. Bureau of Labor Statistics, were education and health services, followed by government. The largest job growth percentage was seen in professional and business services, and the poorest growth was in chemical and pharmaceutical research-and-development science-industry jobs.  Historically, DuPont Co. was one of the state’s largest employers but the company’s recent merger with Dow Chemical brought substantial layoffs.  This is having an impact on the New Castle County economy and the buyers’ consumer confidence.

The Delaware unemployment rate was 4.2 percent as of April, while the national average was 5.0 percent. The Delaware unemployment rate is down 0.7 percentage points from the previous year, a slight improvement.  Economically, the area is known for its relative stability, average-to-low unemployment rates, and affordable cost of living.

Looking Back

The Delaware real estate market is presently experiencing the same real estate market conditions that are being felt nationwide. Residential inventory levels have started to decline, and new construction has improved slightly.  Foreclosures do not constitute much of the market today.  Many homeowners are concerned about employment stability and consumer confidence in the economy in all price ranges.  Job losses and declining consumer confidence over the last five years have contributed to a general contraction in the Delaware real estate market.

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While the national housing inventory hit a new low in January of 2013, market activity has gradually improved since then, and inventory levels started to decline. The last 12 months, the average sale price of homes and the number of closed sales has increased slightly. The inventory levels range from four to eight months’ supply, depending on the specific location and price range. The average days on market for New Castle County have held steady, with a comfortable 63 DOM, and Kent and Sussex Counties have had 90 DOM for the last 12 months. The suburban counties just north of Delaware in Pennsylvania (Delaware and Chester) have all experienced more market activity and a lower inventory of homes for sale.  These counties in Pennsylvania draw some families who work in Delaware but prefer a short commute in order to have better schools.

Consumer confidence and job security remain low. The historically low mortgage rates, however, have created a market favorable to buyers with good jobs and good credit.

Looking Ahead

A slight oversupply in the marketplace, low consumer confidence, and low interest rates are expected to continue through the rest of 2016. Employment remains the key factor affecting the local housing market.  This will be remembered as a year that marked the beginning of the changes for the State of Delaware that came along with the newly merged DowDuPont and the new Chemours Company, spun off from DuPont in 2015.

The residential real estate market will start to improve as economic indicators for both the regional and national economies demonstrate positive improvement. It is anticipated that for the next year the State of Delaware will remain a buyer’s market.

R.Tom Reynolds, SRPA, CRP, is with Reynolds Appraisal Company, and is the 2016 President of RAC (Relocation Appraisers and Consultants). He can be reached at +1 302 575-0955, or TomReynolds@RAC.net. Other local members of RAC who assisted are Louise Jeffers, SRA is with Reape Jeffers & Assoc. She can be reached at 610-527-7540, or LJeffers@ReapeJeffers.com. John Ciminara, SRA, He can be reached at 610-891-0673, or JBCiminera@comcast.net .

 

California loses another company to North Texas

C-130North Texas says “Thank you”

Another company has decided to move its corporate headquarters to Fort Worth to take advantage of the Lone Star state’s business friendly environment and the city’s longtime history in the aerospace industry.

The move is historic for Burbank, California-based C&S Propeller — an FAA and EASA certified repair station for propeller and airplane maintenance — which has been in California for nearly five decades.

See the full story in the Dallas Business Journal.

Customary and Reasonable Fees: The Elephant in the Room

Appraisal Buzz, Spring 2016Ernie Durbin

By Ernie Durbin, SRA, CRP, RAC Member

Wikipedia describes the metaphor “the elephant in the room” as, “an obvious truth that is either being ignored or going unaddressed. The idiomatic expression also applies to an obvious problem or risk no one wants to discuss.”

Somehow, recent events in the valuation space have deflected attention away from the elephant in the room, customary and reasonable fees. Real estate appraisers are resilient folks. They can adapt to change as well as any other professional. But like everyone else, they don’t want to do more work for less pay. Most of the issues facing the valuation space today point to one simple problem- customary and reasonable fees. It’s time to address this obvious problem and the risks that it poses to our industry.

Enjoy the full article here.

 

“Jamba Whirl’d Center” – Coming to North Texas

jambaJuiceLogoEmeryville, California-based Jamba Inc. — which owns and franchises Jamba Juice stores — plans to relocate its headquarters to Frisco’s Hall Office Park, which will bring 100 corporate jobs to North Texas.

Jamba has signed a lease for about 25,000 square feet of office space at 3001 Dallas Parkway in Hall Office Park, which will include about 19,000 square feet of office and meeting space, as well as about 6,000-square-foot test kitchen and retail store front.

Read the entire story at the Dallas Business Journal.

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Salt Lake City Market Summary

Mobility Magazine of Worldwide ERC, April 2016

By Don Mueller, CRP, RAC Member

Northern Utah, aka the Wasatch Front, is a metropolitan region in the north-central part of the state, consisting of a chain of cities and towns stretched along the Wasatch Range from approximately Nephi in the south to Brigham City in the north.  Roughly 80 percent of Utah’s population resides in this region, as it contains the major cities of Salt Lake City, Provo-Orem, West Valley City, West Jordan, and Ogden.

The Wasatch Front is long and narrow.  To the east, the Wasatch Mountains rise abruptly several thousand feet above the valley floor, climbing to their highest elevation of 11,928 feet (3,620 m) at Mount Nebo.  The area’s western boundary is formed by Utah Lake in Utah County, the Oquirrh Mountains in Salt Lake County, and the Great Salt Lake in northwestern Salt Lake, Davis, Weber and southeastern Box Elder counties.  The combined population of the five Wasatch Front counties totals approximately 2,125,000 according to the 2008 census estimate.

Although most residents of the area live between Ogden and Provo – a distance of 80 miles – which includes Salt Lake City proper, the fullest built-out extend of the Wasatch Front is 120 miles long and an average of five miles wide.  Along its length, the Wasatch Front never exceeds a width of approximately 18 miles because of the natural barriers of lakes and mountains.

The region on the other side of the Wasatch Range, including cities such as Park City, Morgan, Heber City, and Midway, sometimes referred to as the Wasatch Back, has recently shared in the rapid growth of the region.

Utah’s first settlers of European decent were the Mormon pioneers, who migrated from the Midwest in 1847, led by Brigham Young, the prophet and president of the Church of Jesus Christ of Latter-Day-Saints.  Upon entering the Salt Lake Valley, Young made this declaration:  “This is the place.” (Some say he said, “This is the right place.”) The famous statement still holds true today in regard to real estate values and investment in the Wasatch Front.

LOOKING BACK

The trends noted here are for Salt Lake County but also reflect the adjoining Wasatch Front area.  A report in February by the Salt Lake Board of Realtors notes that real estate agents in Salt Lake County sold 13,323 existing single-family homes last year.  This is a nine-year high surpassed only before the Great Recession with 15,317 homes sold in 2005 and 15,283 the following year.  The combined value of single-family homes sold in 2015 rose 22 percent over the previous year, to $4.1 billion.   The upward trend in housing prices persisted last year, logging an increase of almost 7 percent over 2014 for a single-family home, to a $272,000 median sales price, and 8 percent for a multifamily unit, to $189,000.market-at-a-glance

“There is still room for moderate house-price increases, provided mortgage rate increases are gradual,” says Cheryl Acker, president of the Salt Lake Board of Realtors.  The board report characterizes real estate in Salt Lake County as “still relatively affordable” for qualified buyers, as a family earning the median household income and devoting 30 percent of its income to a mortgage payment could afford 56 percent of the homes sold in the county in 2015.

LOOKING FORWARD

The Salt Lake Board of Realtors expects an 11 percent gain in total residential home sales of all types this year in Salt Lake County, to more than 19,000 units.  An increase of 5 to 7 percent in the median single-family home price, to $290,000, is predicted as housing demand continues to exceed available inventory.statistical-snapshot

The number of homeowners with negative equity has now dropped to 2.5 percent of all mortgages.  In previous years, homeowners were locked in to their current home and could not move up.  Hence, in 2015 the move-up market was again supporting higher levels of sales, which put upward pressure on prices.

Another benefit of improving market conditions is the huge reduction in the sale of distressed homes (short sales and foreclosed properties).  For five years, the “fire sale” prices of distressed homes dragged down overall housing prices.  In 2011, one-third of all homes sold in Salt Lake County were distressed properties; it’s no coincidence that 2011 was the year of the largest decline in prices, 9.5 percent.  The near elimination of short sales and REO sales by 2015 was also a contributing factor to the acceleration of price increases in 2015.

There is no sign of a bubble – both prices and sales are sustainable.  There is very little inventory, and prices are increasing.  The market is free of REO and short sales.  From a market perspective, Utah and Salt Lake County seems to be “the right place” to buy and invest in a single family home.

Don N. Mueller, CRP, is a professional appraiser and real estate consultant based in Ogden, Utah, and a member of RAC (Relocation Appraisers and Consultants). He can be reached at +1 801 479 6123 or donm@mstar.net.

“It was really about affordable housing.”

Toyota LogoSure, the low taxes, relaxed regulatory environment and Central Time Zone are nice. But none of those factors tops the list of reasons Toyota decided to plant its North American headquarters in Plano, bringing in more than 3,000 jobs, mostly from California.

The main driver of Toyota’s move from Torrance, California, was housing costs, according to Albert Niemi Jr., dean of the Cox School of Business at Southern Methodist University, who has inside knowledge about the move. Niemi shared the anecdote at an SMU Cox Economic Outlook Panel on Friday morning.

“It wasn’t so much that we don’t tax income,” he said. “It was really about affordable housing. That’s what started the conversation. They had focus groups with their employees. Their people said, ‘We’re willing to move. We just want to live the American Dream.’”

Toyota did the math and found that housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth.

“They’re paying the same salary,” Niemi said. “So in real terms, they’re going to triple the affordability of housing they can buy if they move to Texas.”

Read the entire article at the Dallas Business Journal.

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