Texas Real Estate Market News
The Texas Real Estate Market is Strong. Now is a great time to jumpstart a career in this industry.
We know you are inundated with news on how the National Real Estate Market is faring but we wanted to provide you with some specifics on the Market here in Texas so you can judge for yourself. We hope this provides you, those you work with and those who are thinking about this as a career choice with some valuable insight into just how strong the Texas Real Estate Market is!
Austin Office Market Growing in Suburbs
AUSTIN (REOC Austin) – Job growth continues to translate into new tenant leases and expansions in the local office market, particularly in the suburbs, reports REOC Austin in its recent survey of nearly 41.6 million sf of office space.
The firm found that gross leasing activity generated 303,810 sf of positive net absorption in the third quarter, with activity in suburban areas leading the way.
While office buildings in the CBD had 34,240 sf of positive net absorption, suburban buildings had 269,570 sf. Year-to-date, the greater office market has had a total net absorption of 760,944 sf, with the CBD and suburban markets accounting for 83,685 and 677,259 sf, respectively.
At the close of the third quarter, the citywide vacancy rate tightened to 11.8 percent compared with 12.3 percent last quarter and 14.1 percent recorded in the same quarter last year. The vacancy rate downtown stands at 10.3 percent, while the vacancy in the suburban market stands at 12.2 percent — both improved by two percentage points compared with a year ago.
Dwindling availabilities has rental rates on the rise. At the end of the third quarter, the citywide average quoted full-service rental rate climbed to $25.34 per sf annually, up $0.54 over the quarter and $1.72 or 7.3 percent compared with a year ago. The average rate for Class-A space reached $31.04 compared with Class-B at $23.32.
In all, more than 1.3 million sf of new office product is currently under construction and scheduled to come online over the next 12 months.
Houston Home Sales Approaching Record Highs
HOUSTON (Greater Houston Partnership) – Existing single-family home sales are on a record-setting pace, according to data provided by the Houston Association of Realtors (HAR).
Area real estate agents sold 68,078 homes during the first nine month of this year, 22.1 percent more than the same period last year. If the current pace continues, more than 90,000 homes will be sold this year, making it the best year on record. The previous record was 88,799 homes in 2006.
Home sales are driven by the 300,000 jobs created since the recession ended in January 2010. New residents are moving to the area at a rate of 180 per day. In addition, incomes have increased. Median family household incomes stood at $65,854 in 2012, a 5.2 percent increase from 2009, according to the U.S. Census Bureau.
Active listings have dropped 42.2 percent from the July 2010 peak of 55,247 to 32,457 in September 2013. The city now has a 3.2-month inventory.
The median price of an existing single-family home sold through HAR rose from $164,800 in September 2012 to $181,570 in September 2013 — a 10.1 percent increase.
San Antonio Commercial Markets: Vacancy Down, Rents Up
SAN ANTONIO (San Antonio Express-News) – Vacancies fell and rents increased in the city's commercial markets in third quarter 2013, according to data from industry research firm Xceligent Inc.
The industrial market showed the biggest drop in vacancy rates among commercial markets, falling to 7.3 percent from 11 percent in third quarter 2012. Average rent rose from $7.20 to $7.54.
The retail sector's vacancy rate dropped from 11.4 percent in third quarter 2012 to 10.6 percent last quarter, while average rent went from $15.87 to $16.33.
Meanwhile, office vacancy dropped from 19.9 percent to 19 percent, with average rent increasing from $19.24 to $19.59.
Stream Realty Partners is expected to start construction early next year on a 125,000-sf, five-story office building at the corner of Lockhill Selma Rd. and Loop 1604, company Vice President Ryan Harrison told the San Antonio Express-News. The building should be completed by early 2015. About 20 percent is already pre-leased.
Meanwhile, USAA Real Estate Co. and Patrinely Group are expected to begin construction before year's end on a four-building project called WestRidge at La Cantera.
Texas' Modern-Day Land Rush
NEW YORK (Bloomberg News) – If you live in Texas and are thinking of putting your home on the market, you couldn't have picked a better time, according to an article this week from Bloomberg News.
With housing inventory down, prices up and employment on the rise — which means more people looking for a place to live — the state is experiencing what the news source called a "suburban land rush."
"Existing-home prices in Dallas and Houston are rising faster than at any time since the oil boom of the 1980s," wrote Bloomberg reporter Prashant Gopal. "Home builders, caught off guard by the ferocity of buyer demand, are exhausting construction-ready lots as they struggle to recruit workers to complete houses quickly."
One California-based real estate consultant said, "When the Texas housing market is strong, the home builders usually just build more. But the Texas economy is as strong as it has ever been and the builders can’t keep up."
Real Estate Center Research Economist Dr. Jim Gaines told Bloomberg he projects about 100,000 single-family permits in Texas this year, up 20 percent from a year earlier, but 30,000 short of what it would need to keep up with job and population growth.
Meanwhile, home prices are rising not only in the state's major metros but also in rural areas such as the West Texas oil fields and in South Texas' Eagle Ford Shale region. So much so, Gaines is concerned that the state will lose its reputation for being an affordable place to buy a home.
"Our competitive advantage of relatively low housing costs is going to shrink," he said. "We’re going down the same path as California and Florida if we don’t think of some way not to do it. You can sort of see it coming."
NAHB: Texas Housing Markets Returning to 'Normal'
WASHINGTON, D.C. (NAHB) – Housing markets in 52 out of the roughly 350 metros nationwide have returned to or exceeded their pre-recessionary levels of activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), which was released yesterday. And some of the top-performing markets are in Texas.
At 1.07, Austin had the highest overall score of any major Texas metro. This means the city's housing market was doing 7 percent better than its last normal market level. It ranked fourth nationally behind Baton Rouge, Honolulu and Oklahoma City.
Houston, with a score of 1.03, ranked fifth and was the only other major Texas metro whose LMI score indicated that its housing market now exceeded previous norms.
El Paso ranked seventh with an overall score of 1.00, indicating that the market there had returned to previous norms.
West Texas metros had an especially strong showing, with Odessa ranking first (2.41 LMI) and Midland second (2.00) among small metros. Abilene landed at seventh with a 1.31 score.
“Smaller metros are leading the way to a housing recovery, accounting for 43 of the top 50 markets on the current LMI,” said NAHB Chief Economist David Crowe.
The nationwide score was .85, indicating that, based on current permits, prices and employment data, the nationwide housing market is running at 85 percent of normal activity.
Austin Scores High on Energy Efficiency
AUSTIN (ACEEE) – Austin was the only Texas city to crack the top ten on the American Council for an Energy-Efficient Economy's 2013 City Energy Efficiency Scorecard.
The first edition of the Scorecard ranks 34 of the most populous U.S. cities on their policies and other actions to advance energy efficiency. Cities can earn a maximum of 100 points. They are measured in the following areas:
- Local Government and Operations, 15 points
- Community-Wide Initiatives, 10 points
- Building Policies, 29 points
- Energy and Water Utilities and Pubic Benefits Programs, 18 points
- Transportation Policies, 28 points
With a score of 62, Austin ranked sixth after Boston, Portland, New York City, San Francisco and Seattle. These were the only cities to score higher than 60.
The report singled out Austin as "the city furthest ahead of its state on energy efficiency policy. While Austin led Texas in all policy areas, the difference was most significant on policies regarding building efficiency."
If you're interested in energy-efficient building, you'll want to check out our forthcoming issue of Tierra Grande magazine. It will include articles on how green is gaining ground in commercial developments in Texas and how the manufactured housing industry is incorporating more energy-efficient features. The magazine hits mailboxes and the Real Estate Center's website next month.
Texas Keeps Cranking Out Jobs
COLLEGE STATION (Real Estate Center) – Texas once again created more jobs than the nation, gaining 302,300 nonagricultural jobs from July 2012 to July 2013, an annual growth rate of 2.8 percent. By comparison, the nation’s job growth rate was 1.7 percent.
According to the Real Estate Center’s latest Monthly Review of the Texas Economy, the state’s nongovernment sector added 289,200 jobs, an annual growth rate of 3.2 percent compared with 2.1 percent for the nation’s private sector.
Texas’ seasonally adjusted unemployment rate fell to 6.5 percent in July 2013 from 6.9 percent in July 2012. The nation’s rate decreased from 8.2 to 7.4 percent.
All Texas industries except the transportation, warehousing and utilities industry had more jobs. The state’s construction industry ranked first in job creation, followed by mining and logging, leisure and hospitality services, and professional and business services.
All Texas metro areas except Wichita Falls had more jobs. Midland ranked first in job creation, followed by Odessa, Fort Worth-Arlington, Corpus Christi, Dallas-Plano-Irving, Houston-Sugar Land-Baytown and Austin-Round Rock-San Marcos.
The state’s actual unemployment rate in July 2013 was 6.7 percent. Midland had the lowest unemployment rate followed by Odessa, Amarillo, Abilene and Austin-Round Rock-San Marcos.
Austin Home Sales Up 35 Percent in July
AUSTIN (Austin Board of Realtors) – According to the Multiple Listing Service (MLS) report released today by the Austin Board of Realtors (ABoR), existing single-family home sales were up 35 percent last month over a year ago.
The report showed that 3,135 homes were sold last month. On average, homes spent 41 days on the market, a decrease of 23 days from a year ago.
The median price increased to $228,250 — 8 percent more than a year ago. Additionally, the market had 2.8 months of inventory, 1.5 months less than July 2012.
The total dollar volume of single-family properties sold was $933.2 million, 43 percent higher than the same month last year. The market had 22 percent more new listings, 20 percent fewer active listings and 20 percent more pending sales last month than a year ago.
Colliers: Houston Industrial Market One of Nation's Healthiest
HOUSTON (Colliers International) – The city's industrial market remains one of the top ten healthiest in the country, reports Colliers International in its second quarter 2013 market report.
The commercial real estate services firm attributed the local market's success to low vacancy rates, stable rents and positive absorption.
Colliers' latest report showed that the city's industrial market had 336,000 sf of positive net absorption in the second quarter, bringing year-to-date net absorption to 2.6 million sf.
Industrial leasing activity reached 3.3 million sf. The average industrial vacancy rate increased from 5 percent to 5.1 percent between quarters but decreased by 30 basis points over the past year.
The citywide average quoted industrial rental rate increased by one cent to $5.72 per sf triple net between quarters and by 4.2 percent on a year-over-year basis from $5.49 to $5.72 per sf triple net.
Developers currently have 4.3 million sf of new industrial space under construction in the Houston area, Colliers reports.
More Texas Housing Markets Rebounding
NORFOLK, Va. (Homes.com) – More than a third of the nation's top 100 regional housing markets are continuing their "significant" rebound from the recession, Homes.com reports in its latest "Rebound Report." And six of the strongest markets are in Texas.
San Antonio-New Braunfels ranked first on the list with a rebound value of 227.2 percent (a value of 100 percent or higher means the area has fully recovered any price decline from the recession).
Houston-Sugar Land-Baytown ranked second at 217.98 percent, followed by Austin-Round Rock-San Marcos at 214.38 percent.
Dallas-Fort Worth-Arlington landed sixth with 198.81 percent, followed by McAllen-Edinburg-Mission with 179.24 percent. El Paso closed out the top ten at 129.28 percent.
No Texas markets were among the bottom ten.
To compile the rankings for its rebound report, Homes.com used its local market index data back to 2000, focusing on data from 2005 forward to isolate the recession's impact.
Houston Residential Construction Up, Commercial Down
HOUSTON (Houston Business Journal) – A strong local economy and corporate relocations helped boost residential construction in June.
McGraw Hill Construction reported that contracts for future residential construction in the Houston-Sugar Land-Baytown Metropolitan Statistical Area were up 5 percent in June. Contracts were valued at $640 million compared with $610 million last year.
Year-to-date totals for residential construction have increased to $4.1 million this year from $3.4 million last year.
Commercial contracts, meanwhile, didn't make as strong a showing.
Contracts for future commercial construction fell to $246 million in June from $339 million a year ago, a 27 percent drop.
Texas Housing Demand Continues
AUSTIN (Texas Association of Realtors) – Demand for existing homes in Texas surged again in second quarter 2013, and the median price hit another all-time high.
According to the Texas Quarterly Housing Report, released yesterday by the Texas Association of Realtors (TAR), 79,760 single-family homes were sold in the second quarter — 17.8 percent more than the same quarter last year and the most homes sold in a single quarter since TAR began issuing its quarterly housing report four years ago. The surge in demand was widespread, with 43 of the 47 markets included in the report showing an increase in sales compared with last year.
“The first half of the summer selling season has been very busy for Texas real estate,” said TAR Chairman Shad Bogany. “Demand for homes steadily increased throughout the state, which has prompted competition for properties and is boosting prices.”
The median price in the second quarter was $177,300, up about 10 percent from the previous year. The average price increased 10.4 percent from last year to $235,075. Those are the highest figures for median and average price ever seen in Texas real estate, TAR reports.
“Nationally, home values are increasing at around 10 percent, which is similar to Texas," said Real Estate Center Research Economist Dr. Jim Gaines. "However, that national trend is being driven primarily by markets that dropped significantly in value during the downturn, so it’s really an ‘echo-boom.’ We didn’t have those big price drops in Texas, so to see 10 percent price increases on top of properties that held more value in recent years means we’re seeing even more significant growth in Texas.”
In the wake of these increases in demand and price, the inventory of Texas homes continued to shrink. The state had 4.1 months of inventory in the second quarter, 30.5 percent less than the same quarter of last year, when inventory was 5.9 months.
“With inventory shrinking so rapidly for several quarters now, you’d expect to see more dramatic increases in price," Gaines said. "However, I think we may be seeing a situation where Texas has ‘just-in-time’ housing inventory. Competition for properties is so fierce that homes are selling within days, or even hours, so they’re never recorded as ‘inventory’ but rather are immediately recorded as a sale.”
New Beachfront Luxury Homes Planned for Galveston
GALVESTON (Falcon Group, Houston Business Journal) – Houston-based Falcon Group, in partnership with Houston-based Grand Beach Development, is planning a luxury gated community on the eastern end of Galveston.
The development, named the Estates of Grand Beach, features 10 beachfront lots, ranging in size from about two to four acres each. In addition, each lot boasts a minimum of 190 feet of beachfront.
The price point for these luxury homes starts at $1.5 million per lot and offers full-time security and direct beach access and is expected to include usage of a private helipad.
Southwestern to Break Ground in Springwoods Village
HOUSTON (Houston Business Journal) – Houston-based Southwestern Energy Co. (NYSE: SWN) will break ground this week on its new 10-story corporate headquarters campus in Springwoods Village in north Houston.
Located on 25.6 acres near the intersection of Interstate 45 and the planned Grand Parkway, the project will consolidate Southwestern’s more than 1,000 Houston-area employees at one location.
The 515,000-square-foot building is nearby to where Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM) is building a corporate campus to consolidate 10,000 employees from around the U.S.
TREC Meeting Minutes, Now with Video
AUSTIN (Texas Real Estate Commission) – The Texas Real Estate Commission (TREC) and the Texas Appraiser Licensing and Certification Board (TALCB) have launched their new online interactive electronic meeting minutes.
Meeting agendas — annotated with actions taken and including bookmarked video recordings of the meetings — are on the TREC/TALCB website under "video minutes."
TREC's next meeting will be May 6 at 10 a.m. It will be streamed live on TREC's website.
DFW Foreclosures Lowest Since 2010
DALLAS (Dallas Morning News) – The glut of area foreclosures is continuing its downward trend, with the number of homes expected in forced sale this year to be half of 2010 levels.
A total of 1,715 homes in Dallas, Tarrant, Collin and Denton counties are posted for foreclosure this month, down from the more than 6,000 foreclosure postings reported in November 2010. The percentage of mortgages that are at least 90 days behind on payments was also down in January, to 4.28 percent.
Real Estate Center Research Economist Dr. James Gaines said the housing market is showing signs of promise. D’Ann Petersen of the Federal Reserve Bank of Dallas agrees that things are moving in the right direction.
“I think we are through the worst of it,” Petersen said. “Investors are snapping up properties. The condo market is even coming back. And the Realtors I talk to are begging for prospective properties.”
$91 Million Influenz Vaccine Facility Approved
COLLEGE STATION (Texas A&M University) – GlaxoSmithKline plc and The Texas A&M University System have received government approval to establish a $91 million influenza-vaccines manufacturing facility in Bryan-College Station.
The facility will be part of the Center for Innovation in Advanced Development and Manufacturing.
“The Texas A&M Center, anchored by this facility, is expected to bring more than $41 billion in expenditures within the State of Texas over the next 25 years, and will add more than 6,800 direct and related jobs to Texas,” announced Governor Rick Perry earlier today.
Historic Driskill Sold
AUSTIN (REBusinessonline.com) – A 127-year-old Austin hotel has been sold for $85 million.
An affiliate of Hyatt Hotels Corp. has purchased the 189-room Driskill Hotel from an investment fund managed by Lowe Enterprises Investors.
The new owner plans to invest about $8 million renovating the property, which has been a national historic landmark since 1969.
Jones Lang LaSalle's Hotels & Hospitality Group represented the seller.
California Partners Plan Dallas Industrial Park
DALLAS (Commercial Property Executive) – A West Coast partnership has purchased a large tract and is planning an industrial park of up to nine million sf.
California-based CT Realty Investors and Xebec Realty Partners have acquired 530 acres in the South Dallas Intermodal Hub for the development of Southport Logistics Park. It will be adjacent to the Union Pacific Intermodal Yard and a FedEx Ground hub.
The partners expect the complex to serve as a prime distribution center for the industrial market.
CT Realty and Xebec are planning several speculative buildings, each with at least 500,000 sf.
CBRE will lead sales and leasing for Southport.
New Center Videos Better Than Crystal Ball
COLLEGE STATION (Real Estate Center) – Want to know what Real Estate Center researchers think 2013 has in store for us? Check out our four new videos and find out.
First up is Chief Economist Dr. Mark Dotzour. Give him less than three minutes, and he'll give you an overview of the themes supporting the U.S. housing rebound.
Meanwhile, Dr. Jim Gaines discusses factors that will define the state's housing market this year (5 minutes, 6 seconds).
Dr. Harold Hunt talks about why Texas' commercial markets are looking up (3 minutes, 17 seconds), and Dr. Charles Gilliland explains why this could be the year larger land tracts begin to sell again (6 minutes, 41 seconds).
Fewer Delinquent, Foreclosed Homes in Waco
WACO (Waco Tribune-Herald) – The city’s housing market continues to look up as foreclosures and mortgage delinquencies inched downward in November.
According to CoreLogic, Waco’s foreclosure rate is below state and national figures. Just over 1 percent of mortgage loans were in some stage of foreclosure in November, down from 1.23 percent in November 2011. Mortgage delinquencies are also down, with 3.57 percent of owners behind on their mortgage.
Statewide, 1.11 percent of loans were in foreclosure in November, and 4.04 percent were delinquent.
Meanwhile, RealtyTrac announced that 57 percent of U.S. metropolitan areas had an increase in foreclosure activity in 2012. The Waco MSA was included in that list, with 857 foreclosures on properties of all types. That marks a 10 percent increase over 2011.
North Texas Housing Construction's December Spike
FORT WORTH (Fort Worth Business Press) – Regional residential construction contracts rose 44 percent in December.
Residential contracts in the Dallas-Fort Worth-Arlington metro area climbed from $376.9 million in December 2011 to $542.6 million in December 2012, according to McGraw Hill Construction. The December boost closed 2012 at 28 percent higher than the previous year.
Total construction contracts in 2012, including nonresidential development, totaled $9.06 billion for the region, a 19 percent increase over 2011. Statewide, overall construction was up 10 percent for the year.
Amazon's Texas-Sized Shipment
TEXAS (Fort Worth Business Press) – Amazon has confirmed plans to build three Texas fulfillment centers totaling over three million sf.
Hillwood is developing the one million-sf center in Coppell and the 1.1 million-sf site in Haslet’s AllianceTexas development. USAA Real Estate Company is building the 1.2 million-sf site in Schertz.
Amazon expects to employ over 1,000 workers in its new facilities. For more on this story, listen to "Small Towns, Big Deals" on this week's Real Estate Red Zone podcast.
Where Americans Are Moving
(Forbes) – The red states may have lost the presidential election, but they are winning new residents, largely at the expense of their politically successful blue counterparts. For all the talk of how the Great Recession has driven people -- particularly the “footloose young” -- toward dense urban centers, Census data reveal that Americans are still drawn to the same sprawling Sun Belt regions as before.
An analysis of domestic migration for the nation’s 51 largest metropolitan statistical areas by demographer Wendell Cox shows that the 10 metropolises with the largest net gains from 2000 through 2009 are in the Sun Belt, led by Phoenix, and followed by Riverside-San Bernardino, Calif.; Atlanta; Dallas-Ft. Worth; and Las Vegas.
Migration has slowed from a high of nearly 2 million annually in 2006 to less than 800,000 last year, but the most recent numbers show that the Sun Belt states, though chastened by the recession, are far from dead, as often alleged. This part of America, widely consigned to what the Bolshevik firebrand Leon Trotsky called the “dustbin of history” by Eastern pundits, somehow manages to continue to draw Americans seeking opportunities, in particular from the large coastal metropolitan regions.
S&P INDEX: DALLAS HOME PRICES UP 3.68 PERCENT
DALLAS (Standard & Poor's) – The latest S&P/Case-Shiller Home Price Indices were released today. Dallas — the only Texas city on the index — showed a 3.68 percent increase in prices from June 2011 to June 2012.
Nationally, prices rose 6.9 percent in second quarter 2012, according to S&P, marking the strongest quarter-over-quarter gain since the quarterly index began in 1987.
In June, the monthly ten- and 20-city indices rose 2.2 percent and 2.3 percent, respectively, S&P reported. Prices also improved month-over-month in all 20 cities tracked by Case-Shiller.
FIVE TEXAS CITIES AMONG BEST PLACES TO LIVE
TEXAS (Dallas Business Journal) – Five Texas cities have made CNN Money’s latest list of America’s best small cities in which to live.
McKinney took the number two spot on the top 100 list, just behind top-rated Carmel, Ind. Rounding out the top five were Eden Prairie, Minn., Newton, Mass. and Redmond, Wash.
The other Texas cities making CNN Money’s list include Allen (No. 13), Mansfield (No. 28), Flower Mound (No. 32) and Pflugerville (No. 43).
What qualifies these cities as "best places to live"? According to CNN Money, "these terrific small cities offer what American families care about most: strong job opportunities, great schools, low crime, quality health care, and plenty to do."
HOMEBUILDER CONFIDENCE IN U.S. INCREASES TO FIVE-YEAR HIGH
(Bloomberg) – Confidence among U.S. homebuilders climbed in August to the highest level in more than five years, affirming the improvement in residential construction.
The National Association of Home Builders/Wells Fargo builder confidence index rose to 37, higher than projected and the best showing since February 2007, according to figures from the Washington-based group released today. The median forecast in a Bloomberg survey of economists called for no change from July’s 35. Readings below 50 mean more respondents said conditions were poor.
Builders such as PulteGroup Inc. (PHM) are benefiting as less- expensive properties and record-low mortgage rates entice buyers. At the same time, faster hiring and fewer foreclosures are needed to bring about bigger gains for the industry that precipitated the worst recession in the post-World War II era.
LUBBOCK ADDED TO IMPROVING MARKETS INDEX
WASHINGTON (National Association of Home Builders) – Texas continues to dominate the National Association of Home Builder’s Improving Markets Index, with 12 metropolitan areas showing at least six consecutive months of improvement across the state.
Of the 12 Texas metros on the August IMI, Lubbock is new to the list.
Victoria has shown the greatest improvement in house prices on the 80-area index, posting a 13.5 percent increase in prices since its low in February 2011.
Odessa has seen the largest increase in housing permits on the IMI, with 19.7 percent more permits than its trough in February 2009. Employment growth was also highest in Odessa, 23.9 percent over its August 2009 low.
Falling off the index was Brownsville.
TIGHTEST DFW APARTMENT MARKET IN DECADE
DALLAS-FORT WORTH (Marcus & Millichap) – Dallas-Fort Worth’s robust economy is generating new households, creating the tightest apartment conditions in over a decade and facilitating healthy rent growth.
According to Marcus & Millichap's Apartment Research Market Report for third quarter 2012, employment gains in the Metroplex will approach 3 percent this year, more than the national rate of 1.7 percent.
"With business booming, job seekers will flock to the area from some late-recovery markets in the Midwest and the West Coast," notes the report. "As a result, leverage in lease negotiations will remain firmly on the side of apartment operators through the end of the year, spurring strong revenue gains.
"Some headwinds are forming, however. Year over year, home sales are up 20 percent, an indication that more renters are transitioning into single-family homes. Foreclosure activity, meanwhile, is up more than 10 percent from second quarter 2011, mitigating attrition from apartments to the housing market. As foreclosure activity begins to abate and new construction accelerates next year, apartment operators may have to react quickly with concession offerings to maintain tight occupancies."
COUGARS EYE NEW STADIUM
HOUSTON (Houston Chronicle) – Following the 2012 football season, the University of Houston Cougars will break ground on a new $105 million stadium.
Manhattan Construction Co. has been tabbed to construct the 40,000-seat stadium on the site of Robertson Stadium on campus. Groundbreaking will be in January with the first game there kicking off in 2014.
Plans allow for increasing seating capacity to 60,000.
Among Manhattan's other credits are Reliant Stadium, BBVA Compass Stadium and Cowboys Stadium in Arlington.
HOUSTON HOME SALES HOT
HOUSTON (Houston Chronicle) – Home sales and prices are hot in Houston.
Single-family home sales were up 14.4 percent here in June — the highest in nearly five years, according to the Houston Association of Realtors (HAR). Demand for homes pushed median prices to record highs.
An HAR report released today shows June marked the 13th straight month of positive sales. Houston's housing inventory continued at its lowest level in more than five years.
The single-family home average price rose 4.6 percent from last year to $236,656, the highest ever recorded in the Bayou City.
TEXAS NAMED TOP US STATE FOR BUSINESS 2012
Texas has done it again.
The Lone Star State makes a triumphant return as America’s Top State for Business—its third time at the top of our rankings.
“Listen, there is a reason that Caterpillar moved their hydraulics manufacturing and their engine manufacturing to the state of Texas,” said Gov. Rick Perry in November during the CNBC Republican presidential debate.
We can attest to that.
In our sixth annual study, Texas racked up an impressive 1,604 points out of a possible 2,500, with top-10 finishes in six of our 10 categories of competitiveness. Texas has never finished below second place since we began the study in 2007.
DFW HOME CONSTRUCTION UP 19 PERCENT
DALLAS (Dallas Business Journal) – New home construction is up in Dallas-Fort Worth, signaling a strong housing recovery in the area.
According to Residential Strategies Inc. the Metroplex had 4,538 housing starts during the second quarter, a 19 percent jump from the 3,804 starts during second quarter 2011.
Ted Wilson of Residential Strategies said the growth has been concentrated in the northern suburbs and in higher price brackets.
RENT INCREASES SLOWING DESPITE DEMAND
UNITED STATES (Commercial Property Executive) – Rent prices are showing signs of steadying across the country, while leasing remains strong.
Average apartment rents grew 1.2 percent during the second quarter, compared with the 4.8 percent rise during fourth quarter 2011. Greg Willett, vice president at Carrollton-based MPF Research, believes the loss of momentum is the result of the slowed job market as well as the flood of new apartment properties becoming available soon.
Average apartment occupancies are at 95.2 percent nationally, up from 94.9 percent during the first quarter.
Willett believes that while some areas, such as Washington, D.C., could fall victim to overbuilding of new apartment properties, healthy job growth in Texas will likely mean that the market can support the additional inventory.
TWIN CREEKS APARTMENTS COMING
ALLEN (Dallas Morning News) – Developer PegasusAblon is venturing out of Dallas’ Design District to bring luxury apartments to Allen.
PegasusAblon has purchased a 29-acre site in the established Twin Creeks community where it is planning the 647-unit Ablon at Twin Creeks apartment complex.
The developer purchased the Twin Creeks land from Briar Ridge Investments for an undisclosed sum.
Meanwhile, PegasusAblon has partnered with El Paso-based Hunt Cos. to build the 252-unit Ablon at Frisco Bridges in Frisco, north of Stonebriar Center mall.
CENTURION BUYS ANOTHER STALLED DALLAS COMMUNITY
DALLAS (Dallas Morning News) – A Carrollton-based developer purchased a second stalled master-planned community north of Dallas.
Centurion American Development acquired the 350-acre Cross Oaks Ranch on Highway 380 in Denton County, west of Frisco. Plans are to market the lots to major homebuilders.
The property was originally developed in 2006 and 2007 but was later foreclosed.
REX Real Estate brokered the sale, as well as Centurion’s recent purchase of the Bridges at Preston Crossing in Gunter.
LONG LOST LAND RETURNS TO SCHOOL
HOUSTON (Houston Chronicle) – A southwest Houston school has bought back a piece of property it lost over 40 years ago.
The Strake Jesuit College Preparatory acquired 7.55 acres on South Gessner Rd. adjacent to the existing school building after losing it in 1971 when they filed for bankruptcy protection.
An apartment complex currently stands on the property but, after honoring the current leases, the school plans to demolish the buildings and use the land for parking, athletics and possibly a new building.
CONDOS REPLACING WATER PARK
EDINBURG (The Monitor) – An abandoned water park in Edinburg will soon get refreshed, but this time it won’t be home to a water slide or lazy river.
McAllen-based developer Brookstone Synergy LLC acquired the 42-acre relic at Freddy Gonzales Dr. and Raul Longoria Rd. from Bethel Missionary Baptist Church and plans to build a luxury condominium community there within the next year.
The first phase will include 30 units, which will sell for between $500,000 and $600,000 each.
The Super Splash water park first opened in 1998 but closed after just three seasons when investors defaulted on bond payments.
NO SHORTAGE OF LONGVIEW SALES
LONGVIEW (Longview News-Journal) – Longview’s housing market is surging.
Home sales in the Longview area are up 23.2 percent over last year, according to the Longview Area Board of Realtors. From January to June, 483 homes have sold, compared with 392 in the first half of 2011.
Home prices are also up in Gregg County, although at a more modest 2 percent. The average sale price through June was $164,785.
PARTNERSHIP TAKES UP COLLECTION
CARROLLTON (Dallas Business Journal) – A New York investment firm and San Antonio real estate company have teamed up to purchase a Carrollton multifamily property.
The Praedium Group and Internacional Realty have acquired the newly built 312-unit Residences at the Collection, located at 4025 Huffines Blvd.
The complex features one- and two-bedroom apartments as well as 48 townhomes. Terms of the sale were not disclosed.
BOXER BUYS LAS COLINAS OFFICE BUILDING
LAS COLINAS (Dallas Morning News) – A Houston-based investor has picked up an eight-story office building in Las Colinas.
Boxer Property Co. acquired the 208,000-sf One Panorama building on Las Colinas Ridge Dr. The 13-year-old building is about 91 percent leased.
Transwestern brokered the deal for Boxer, which now owns over a dozen properties in North Texas.
TIERRA GRANDE ON PRESS AND ONLINE
COLLEGE STATION (Real Estate Center) – Presses roll this week for the July issue of Tierra Grande magazine, and 134,000 copies will be mailed soon thereafter. For those who can't wait, the digital edition is already online.
In this issue:
- "State of Affordability" examines how much house Texans can afford. Hint: it's way more than residents of other states.
- "Self-Proving Wills" covers details of this easier-to-probate document.
- "Land Watch" is a region-by-region look at what rural land is selling and what's not.
- "Buying on Time" is all about commercial installment sales and the upside they offer.
- "Reining in POAs" delves into new legislation mandating ways property owners' associations can and cannot restrict property use.
- "Rent or Own?" Other than the obvious, what factors influence this key real estate decision?
- "Texas First-Time Homebuyer Program" is a heads up for first-time buyers.
- "Through the Roof" explains how fast penalties and interest mount on delinquent property taxes.
COMMERCIAL GROWTH CONTINUES IN AUSTIN
AUSTIN (Marcus & Millichap) – Austin’s commercial real estate sector continues its upward trend, according to a recent report by Marcus & Millichap Real Estate Investment Services Inc.
Some report highlights:
- Employment growth here will reach 27,000 jobs this year, expanding payrolls by 3.6 percent, one of the strongest growth rates in the country. The market’s ties to technology will generate over 5,000 professional and business services jobs and nearly 1,000 manufacturing jobs.
- Builders will complete 930,000 sf of retail space this year, expanding inventory by 1.7 percent. Besides new developments within the metro, operators will compete with the two million sf of new space under construction adjacent to the metro.
- This year, retail vacancy will fall to 8.4 percent, an annual decrease of 50 basis points. Retailers will absorb 1.1 million sf of space, the largest annual figure since 2007.
- Owners will regain some leverage during lease negotiations this year, facilitating a 1.1 percent rise in asking rents to $19.69 per square foot. Effective rents will tick up 1.6 percent to $17.73 per sf, pulling concessions down to 10 percent of asking rents.
DOWNTOWN AUSTIN CONDO SALES RISING
AUSTIN (Austin American-Statesman) – Austin’s downtown condominium market is gaining momentum, with 17 sales recorded in March among just four condo towers.
The recent hike in condo sales — up from six units in January and nine in February—has brought first-quarter sales to 32, with a total value of about $30.5 million, according to Capitol Market Research.
The average sale price was $952,800. Per-sf costs ranged from $553 to $664.
Units at the Austonian, Four Seasons Residences, Spring condominiums, and the W Residences are about 71 percent sold, collectively.
Charles Heimsath, president of Capitol Market Research, believes the market for downtown condominiums is strong. And, with the difficulty in securing financing for developing high-rise condos, he believes future supply will be scarce when these towers sell out.
TEXAS DOMINATES IN JOB GROWTH . . . AGAIN
FORT WORTH (Fort Worth Star-Telegram) – Texas cities once again rank among the strongest in the country when it comes to job growth.
Even the dullest minds on the East Coast are beginning to realize that Texas is doing something right, as much as they hate to say it," said demographer Joel Kotkin, executive editor of NewGeography, which compiled the list.
In the large cities division, Austin-Round Rock-San Marcos ranked first, Houston-Sugar Land-Baytown second, Fort Worth-Arlington fourth and Dallas-Plano-Irving sixth.
Among medium-size cities, Corpus Christi was second, McAllen-Edinburg-Mission third and El Paso fourth.
Small cities fared well, too, with Odessa ranked first, Midland second and San Angelo fifth.
Rankings were based on employment data from the Bureau of Labor Statistics from November 2000 through January 2012. Cities are ranked based on recent, midterm and long-term growth.
UNEMPLOYMENT FALLS ACROSS TEXAS
COLLEGE STATION (Real Estate Center) – Texas unemployment remains lower than the national rate, with some cities faring especially well.
The Austin Business Journal reported a slight drop in Austin’s unemployment rate to 6 percent, down one-tenth of a percent from February. Despite losing jobs in the construction sector, the region added 1,800 jobs overall.
Adding 1,500 jobs, Corpus Christi’s unemployment dropped from 6.8 percent in February to 6.5 percent in March, according to the Corpus Christi Caller-Times. Improvements in leisure and hospitality are credited for the boost in job growth there.
After cresting into double-digit unemployment territory in late 2009, Midland now boasts the state’s lowest unemployment rate at 3.7 percent, based on reports from the Midland Reporter-Telegram. Odessa’s 4.4 percent unemployment rate is the second lowest.
The San Antonio Business Journal reported the addition of 9,100 jobs in March, bringing San Antonio’s unemployment rate down to 6.6 percent from 6.8 percent in February. The financial sector added the most jobs in the region.
Waco’s jobless rate fell 0.2 percent over last month, according to the Waco Tribune-Herald. Adding 1,400 jobs, the city’s unemployment rate now sits at 6.7 percent.
Texas unemployment stood at 7 percent in March; nationally, the rate is 8.2 percent.
Latest USA Economic News
Based on 2011 third qtr:
Business investments 15.7+
Residential Construction 1.3+
Gross Domestic Purchases (GDP) 1.8+
Personal Savings Rate 3.9+
Productivity of Non-farm 2.3+
Productivity of Manufacturing 5.0+
Housing starts: from 585 in 2010 to 685 in 2011
Mortgage rate for 30 year fixed – 3.96%
2010-2030 – 13 million new residents to Texas within the Tex-a-Plex including Dallas – Ft. Worth – Austin – San Antonio – Houston
Houston: Eight Months Straight of Increased Home Sales
The Houston housing market held to positive territory as 2012 began, with January marking the eighth consecutive month of increased home sales. The year also opened with a continued decline in active property listings and growth in pending sales—a combination that signals a healthy market with a balanced supply of housing inventory, and that puts Houston on enviable footing compared to many other markets around the U.S. that are slowly recovering from the housing downturn.
January sales of single-family homes climbed 9.2 percent versus one year earlier, according to the latest monthly data prepared by the Houston Association of REALTORS® (HAR). All segments of the housing market grew except the luxury segment—those homes priced from $500,000 and above—whose decline flattened the overall average price.
Austin Existing Home Sales Up 10 Percent
AUSTIN (Austin Board of Realtors) – Sales of existing single-family homes in Austin last month were up 10 percent over January 2011, according to the MLS report released today by the Austin Board of Realtors (ABoR).
Data showed 1,051 existing homes were sold in the area in January 2012. During the same period, the median price was $176,550, 7 percent less than a year ago.
The Austin market had 4.1 months of inventory last month, or 1.4 months less than the previous year. The figure, unchanged from December 2011, marks the lowest inventory level the Austin market has seen since the organization began tracking the statistic in January 2009.
"It is encouraging to see last year’s momentum continue into the new year," said ABoR Chairman Leonard Guerrero. "January marks the eighth straight month in which the volume of home sales in Austin has outpaced the previous year and the inventory of homes has decreased.”
Texas Property Values Up
AUSTIN (Austin American-Statesman) – The state comptroller's estimate of statewide property values showed an increase from $1.67 trillion in 2010 to $1.69 trillion in 2011 — a 1.3 percent difference.
According to the Austin American-Statesman, state budget writers had expected property values to drop 1 percent last year.
Property values affect how much funding schools receive, and although Joe Wisnoski of Moak Casey & Associates, a school financing consulting firm, said the increase will likely make "very, very little difference in the bottom line of school districts," others say it could still be a positive sign for Texas.
"We're certainly above the trend line across the board, but it's still early," said Dale Craymer, president of the business-backed Texas Taxpayers and Research Association. "If current trends hold, we will be in relatively good shape."
Bidding Wars Erupt as U.S. Supply of Homes for Sale Falls
Matthew and Carina Hensley offered $10,000 more than the asking price for a three-bedroom house in suburban Seattle, then lost out to one of seven other bidders.
Their $270,000 proposal last month came with a family portrait and a letter introducing the couple, their eight-month- old daughter, Harper, and their desire to build a family in the Renton, Washington, house with a yard backing onto a woody hillside.
Bidding wars, absent from most parts of the U.S. residential market since its peak in 2006, are erupting from Seattle and Silicon Valley to Miami and Washington, D.C. The inventory of homes hovers close to a six-year low, while an increase in jobs and record affordability are tempting more buyers. The number of contracts to buy previously owned homes jumped 14 percent in February from a year earlier, the National Association of Realtors reported yesterday.
New Texaplex Video
ALAMO CITY RETAIL MARKET'S SIGNS OF RECOVERY
SAN ANTONIO (NAI REOC) – Leasing velocity and demand for retail space this year are steadily moving the San Antonio retail market along the road to recovery, according to NAI REOC's third quarter 2011 report of the city's retail market.
“Despite challenges, the San Antonio retail market continues to show general improvement, thanks in large part to a stable economy that is reportedly one of the strongest in the nation,” said Kim Gatley, NAI senior vice president and director of research, citing the city's top ranking on Forbes' list of “Best Cities for Jobs Right Now.”
The firm surveyed nearly 45.6 million sf of area retail space and found the citywide vacancy rate was at 12.8 percent. The rate was 13 percent last quarter and 13.3 percent a year ago. The city had a total of 315,819 sf of positive net absorption year-to-date.
Meanwhile, the citywide average quoted triple-net rental rate remained relatively stable at $18.17 per sf annually, down four cents from last quarter but up 25 cents compared with the same quarter last year, marking a 1.4 percent annual increase.
While demand for anchor space has not yet returned in full force, small and mid-sized transactions continue to fuel healthy activity, according to the report.
Austin job market among strongest in U.S.
Employers in the Austin-Round Rock area expect slightly stronger hiring levels this fall, according to a Manpower Employment Outlook Survey.
Austin was ranked fifth on a list of U.S. cities with the most healthy employment outlooks.
Among the companies surveyed, 71 percent will maintain headcount, 19 percent plan to increase staff levels, while eight percent will reduce workforce.
Interview with Houston Real Estate Legend – Rita Santamaria
It’s been said that people change careers frequently, as many as 10 times between the ages of 18 and 38.
Not Rita Santamaria.
Instead of changing careers, she found a way to marry her two favorite industries, resulting in one, big, successful venture – Champions School of Real Estate.
"It’s not an easy career," Santamaria said. "But it’s a long lasting career."
Indeed, that was almost 30 years ago, and she’s still going strong.
Gathering Strength: The Healthiest Markets for 2011
When we created the Builder Healthy Markets Index several years ago, there were few classically healthy markets to speak of. With nearly every economic metric falling--home prices, employment, household formation, and incomes--only one or two markets managed to score higher than 50, the barometer for a truly healthy market.
Today, thanks to an improving U.S. economy, which has finally started to lift employment and incomes, nearly half the top 100 MSAs on our list could be considered healthy. But even though incomes are rising and employment prospects have improved, there's still one metric weighing on home building activity--home prices are projected to decline this year in virtually every major housing market.
HOUSTON OFFICE MARKET PICKING UP SPEED?
HOUSTON (Grubb & Ellis) – According to Grubb & Ellis' fourth quarter 2010 Houston office trends report, the Bayou City's office leasing market ended 2010 on a positive note with 551,655 sf of net absorption, pushing the year-end growth total back into positive territory at 92,652 sf.
The report called this "an encouraging sign heading into 2011 that companies are starting to ramp back up and take advantage of reduced rents and attractive concessions offered by landlords."
In addition, the report forecasts:
- Many of the recent lease signings will not immediately counter the run-up in vacancy as most of the larger tenants will not occupy their space until the second half of 2011 and into 2012.
- Asking and effective rental rates are expected to start stabilizing sometime early to mid-year 2011.
- Houston’s office investment market will see an uptick in transaction volume with continued resurgence of lender activities and allocations for new loans, interest rates at or near all-time lows and the buy-sell gap narrowing.
- The office market appears to have already reached bottom as many submarkets have started to see an uptick in leasing activity, but a quick bounce-back is unlikely with modest job growth expected in 2011.
THINGS THAT GO BOOM: TEXAS' POPULATION
COLLEGE STATION (Real Estate Center) – The Texas economy gained 231,700 jobs from December 2009 to December 2010, an annual growth rate of 2.3 percent, according to the Real Estate Center's latest Monthly Review of the Texas Economy.
U.S. nonfarm employment rose 0.8 percent over the same period.
The state's private sector posted an annual employment growth rate of 2.7 percent compared with 1.2 percent for the U.S. private sector from December 2009 to December 2010.
Texas’ seasonally adjusted unemployment rate was 8.3 percent in December 2010, up from 8.2 percent in December 2009, while the nation’s rate decreased from 9.9 to 9.4 percent over the same period.
All Texas industries except trade and information had more jobs in December 2010 than in December 2009.
All Texas metro areas had more jobs in December 2010 than in December 2009. Odessa ranked first in job creation followed by Brownsville-Harlingen, Waco, Longview, and Killeen-Temple-Fort Hood.
he state's actual unemployment rate in December 2010 was 8 percent. Midland had the lowest unemployment rate followed by Amarillo, Lubbock, College Station-Bryan and Abilene.
One of 12 Americans lives in Texas (and other 2010 census findings)
TEXAS (San Antonio Express-News) – Real Estate Center economists have been saying it for the past few years, and now the latest census data are supporting it: Texas is on the verge of a population boom.
"Today, one out of 12 Americans lives in Texas — the same proportion that lived in New York City in 1930," wrote Michael Barone recently in the Wall Street Journal.
"Metropolitan Dallas and metropolitan Houston, with about six million people each, threaten to overtake our fourth-largest metro area, San Francisco Bay (population about seven million), in the next decade," he said.
Barone, a resident fellow at the American Enterprise Institute, was comparing census data from the past eight decades.
According to the San Antonio Express-News, initial census numbers last month were necessary so states could know how many congressional districts they would have. Texas picked up four additional districts.
Look for more 2010 census data to be released as the year progresses.
Austin 10th-Strongest Commercial Real Estate Market, Report Says
Austin is forecast to have the 10th strongest commercial real estate market nationally for the next four years, according to a new Grubb & Ellis Co. report.
The real estate services and investment firm Monday released its "2011 Real Estate Forecast," which foresees the start of a slow recovery in the leasing market for all property types in the coming year.
America's Best And Worst Job Markets
Washington, D.C., is hot, and so is Austin. Miami and Southern California lag badly.
WASHINGTON, D.C. -- As 2011 gets underway, Washington, D.C.--flush with government and government-supporting jobs--has the healthiest labor market among major U.S. metro areas. By one estimate, there's roughly one advertised job opening for every unemployed worker in the D.C. region, which includes parts of Maryland and Virginia. The nation's capital has an unemployment rate of just 6%, according to the latest data. That's the lowest among the country's largest 50 metros, and 3.8 percentage points below the national average.
Young People Are Heeding Austin’s Call, Data Shows
WASHINGTON — Austin, Tex., drew the largest numbers of young Americans from 2007 through 2009, according to an analysis by a senior demographer at the Brookings Institution, replacing Riverside, Calif., which was the most popular destination for young people in the middle of the decade.
Migration slowed greatly during the recession, and rates have continued to remain low. But in an analysis of migration still occurring among some of the country’s most mobile citizens — people ages 25 to 34 — the cities at the top of the list were those that had remained economically vibrant, like Dallas, and those that were considered hip destinations, like Austin and Seattle, the demographer, William H. Frey, found.
Austin Named Best All-around City
MSNBC Real Estate – Last decade's bipolar housing market is over. The ups, the downs, the thrills, the spills — largely behind us. Yes, prices and sales are stuck in neutral in large swaths of the country.
But let's ring in the new decade optimistically, with Walletpop's Top 10 List of the Best Places to Buy a Home in 2011. This mostly unscientific and partially biased list is based on a grab-bag of lifestyle priorities and, yes, thorough reporting.
Austin a Top Spot for Young Entrepreneurs
Austin Business Journal – Austin was one of the top 10 cities for young entrepreneurs last year, according to Under30CEO.
The website’s list was compiled from surveys to readers asking everything from resources and schools to social scenes for young entrepreneurs. New York came in No. 1 on the list, citing its position as the country’s largest city, “which gives it just about anything a business or young person would want.”
Fast-Growing Katy Places First
KATY (KATY EDC) – Gadberry’s “10 from 2010” has chosen Katy as the most dynamic high-growth suburban area in the United States.
The rapidly growing suburban city just west of Houston has added 17,641 households since 2000. The number of households increased by 8.7 percent from 2009 to 2010. Overall, Katy was the fourth fastest-growing area since 2000 among the ten cities listed, with a 267 percent growth rate.
The average household income in Katy has risen more than 21 percent since 2000 while the average length of residency was 4.7 years in 2010.
Three other Texas cities made this year’s list, all in North Texas. Haslet placed second with Keller right behind at third. Frisco ranked sixth on the list.
The Top 10 Places in America Poised For Recovery
HOUSTON (Newsweek – THE TEXAPLEX)
For sheer economic promise, no place beats Texas. Though the Lone Star State’s growth slowed during the recession, it didn’t suffer nearly as dramatically as the rest of the country. Businesses have been flocking to Texas for a generation, and that trend is unlikely to slow soon. Texas now has more Fortune 500 companies—58—than any other state, including longtime corporate powerhouse New York.
Austin boasted the strongest job growth in NEWSWEEK’s Top 10, both last year and over the decade. Home to the state capital and the ever-expanding University of Texas, the city is arguably the best-positioned of the nation’s emerging tech centers. It enjoys good private-sector growth, both from an expanding roster of homegrown firms and outside companies, including an increasing array of multinationals such as Samsung, Nokia, Siemens, and Fujitsu.
Metrostudy: Houston Pointing Toward Economic Recovery
The annual 2009 Census Household survey showed that the Houston-Sugar Land-Baytown area added over 140,000 to its total population, a 2.5 percent increase over one year.
“The continued arrival of people in Texas fuels demand for housing markets,” said David Jarvis, director of Metrostudy’s Houston division. “This, coupled with a more optimistic employment outlook, signals continued stability in the Houston housing market.”
For the 12 months ending in June 2010, the Houston region lost 17,100 jobs. As recently as December, the 12-month loss exceeded 100,000 jobs. By year’s end, year-over-year comparisons are expected to show moderate gains.
Houston ranked tenth among major U.S. metros for high-salary jobs, according to employment website TheLadders.com.
“We’re seeing hiring in the energy (oil and gas) sector,” said TheLadders.com Editor-in-Chief Matthew Rothenberg. “Considering the makeup of the local economy, it is not a surprise that there are a large number of engineering and consulting positions opening in Houston as well."
The Houston housing market has continued to show stability through 2nd quarter 2010. Home starts for the quarter were at 5,942, a more than 12 percent increase over the first quarter. And home closings have outpaced new supply, indicating a higher housing demand and reducing total inventories of homes. At current absorption rates, the level of housing supply stands at 6.1 months.
However, the New Home Buyer Tax Credit should be taken into consideration (see "Weak Home Sales Numbers Not Whole Story" in today's RECON).
Weak Home Sales Numbers Not Whole Story
COLLEGE STATION (Real Estate Center) – Home sales statistics are likely to paint a picture of a weakening market through the end of 2010 and the first half of 2011. While it’s tempting to attribute the bleak numbers to a deteriorating housing market, an economist with the Real Estate Center at Texas &M University said that doesn’t tell the whole story.
"The year-over-year decline in existing home sales will be the result of comparing months when there was no tax credit with those from a year earlier, when the tax credit was artificially increasing sales," said Dr. Mark Dotzour, the Center’s chief economist.
The $8,000 tax credit for first-time homebuyers went into effect in January 2009 and was planned to expire in November 2009. Home sales gradually started to increase after the tax credit was announced, after bottoming out in January at an annual rate just above 4.5 million sales.
Existing home sales gradually increased in 2009 as buyers and real estate agents became more familiar with the program. Sales topped an annual rate of five million in July 2009 for the first time since September 2008.
As the tax credit deadline approached, home sales spiked in September, October and November 2009. November 2009 was the peak at an annual rate of almost 6.5 million.
The tax credit was extended late in 2009 to include sales with contracts written until April 30, 2010, and closed by June 30 (extended to September 30). Initial homebuyer response to this extension was tepid, but sales picked up substantially in March, April and May 2010, when sales were up 18 percent, 28 percent and 18 percent, respectively, over the same months in 2009.
Then the process reversed itself. Pending home sales fell dramatically in May 2010, the month after the tax credits expired. This was followed by a significant drop in home sales in June and July. In Texas, July 2010 sales were down approximately 25 percent from July 2009.
Dotzour said August figures may not be much better since many buyers purchased homes before the tax incentive expired.
"When you 'bring forward' sales through tax incentives, sales will be lower after the tax credit ends," he said.
Unless Congress creates a new tax credit this fall, Dotzour said monthly sales for 2010 will likely exhibit significant variance from 2009, and a true reading of housing market conditions may not be possible until June or July 2011.
Texas One, Recession Zero
TEXAS (The Atlantic) – Even in the middle of the Great Recession, Texas is faring well compared with the rest of the nation, racking up an ever-growing list of accomplishments.
In addition to ranking fourth in the country with the least amount of state debt, Texas has four cities in the Milken Institute’s Top Five Best Performing Cities Index, four among Forbes' list of top ten “Cities Where the Recession is Easing,” and four in last year’s Top Ten in Homebuilding.
Texas is home to three of the top five most resilient major metro areas for employment, with McAllen first, Austin third, San Antonio fifth and El Paso and Houston not far behind in the top 15.
The Lone Star State also claims 64 Fortune 500 companies — more than any other state — in addition to being dubbed Top State for Business for the second time in three years by CNBC.
The Atlantic says these accomplishments are because Texas' major cities have chosen comparatively stable industries — Houston is the nation’s energy hub, Austin leads in education and technology, and San Antonio dominates the health care and education sector in addition to military spending.
"Our research shows that the more tax incentives and less regulation you have, and the less likely businesses are to get sued, the more likely it is they'll want to come and prosper in your state," said Brooke Rollins, president of the Texas Public Policy Foundation.
These factors support Texas’ position as a global economic leader, having the 15th largest economy in the world.
Texas Leads Economic Recovery
COLLEGE STATION -- Texas is leading the United States in the current U-shaped economic recovery. The state’s economy experienced its second month of positive annual employment growth after 16 months of job losses.
Texas’ annual employment growth rate was 0.9 percent from June 2009 to June 2010 compared with a negative rate of 0.1 percent for the nation. After 17 months of job losses, the state’s private sector posted a positive annual employment growth rate of 0.4 percent.
The state’s seasonally adjusted unemployment rate rose from 7.8 percent in June 2009 to 8.2 percent in June 2010, while the U.S. rate in June was 9.5 percent, the same as in June 2009.
Six Texas industries — education and health services; mining and logging; professional and business services; leisure and hospitality; manufacturing; and transportation, warehousing, utilities — and the government sector had more jobs in June 2010 than in June 2009. Five other industries experienced net job losses over the same period.
Sixteen Texas metro areas experienced positive employment growth rates from June 2009 to June 2010, up from 13 for the period from May 2009 to May 2010. College Station-Bryan ranked first in job creation followed by San Angelo, McAllen-Edinburg-Mission, Killeen-Temple-Fort Hood and Waco.
The state’s actual unemployment rate in June 2010 was 8.5 percent. Midland had the lowest unemployment rate followed by Amarillo, Lubbock, San Angelo, Abilene and College Station-Bryan.
The Real Estate Center's complete economic review is available on the Center's website.
Dallas Property Values Higher than Expected
Dallas Morning News -- Dallas city officials learned Wednesday that the city will receive about $20 million more in property tax revenue next year than was recently projected.
According to City Manager Mary Suhm, property values dropped by about $3.6 billion, or 4.3 percent, compared with 2009. The city had anticipated an 8.5 percent decline in taxable value.
According to figures provided to the city by the Dallas Central Appraisal District, the certified property tax value for the city this year will be $78.8 billion.
America's most recession-proof cities
CNNMoney -- The "Keep Austin Weird" campaign must have worked, because the Texas capital is among the country's oddball cities that bucked the downturn.
In fact, Texas cities starred on the new list of recession-proof metro areas, with six of 21 spots, according to MetroMonitor, a quarterly report released by Brookings Institute's Metropolitan Policy Program.
20 Cities Surviving the Recession (Hint: Texas has six of them)
MainStreet -- This recession has been a brutal one for many job-seekers. The job market has deteriorated in many parts of the country, but some cities were harder hit than others, and some cities are starting to emerge from the recession, offering new job opportunities.
Job reports show signs of growth
NEW YORK (CNNMoney.com) -- TPrivate-sector employers added jobs in April for the third consecutive month, a signal that the nation's employment picture may be brightening, according to a report released Wednesday.
In a separate report, an outplacement firm said planned job cuts dropped to the lowest level in nearly four years in April.
Houston Retail Vacancy Falls
HOUSTON (Houston Business Journal) – About 8.5 percent of local retail space was vacant at the end of the first quarter, the lowest amount of empty space since third quarter 2008, according to Bethesda, Md.-based Costar Group Inc.
That translates to 25.9 million sf of vacant retail space out of Houston’s rentable inventory of 305.6 million sf.
This is an improvement from fourth quarter 2009, when vacant space claimed 8.7 percent of the market’s 305.4 million sf.
The first quarter also reported a net absorption of approximately 863,700 sf of retail space, according to Costar, as well as a delivery of 207,000 sf. An additional 308,000 sf is now under construction in Houston.
Overall quoted rental rates fell to $14.64 per sf last quarter from $15.01 a year earlier.
Economy grows for third straight quarter
NEW YORK (CNNMoney.com) -- The U.S. economy kept growing in the first three months of this year but at a much slower pace than at the end of 2009, according to a government report Friday.
Gross domestic product, the broadest measure of the nation's economic activity, rose at a 3.2% annual rate in the quarter, the Commerce Department said.
New-home sales rise fastest in 47 years
NEW YORK (CNNMoney.com) -- New home sales improved in March at the fastest single-month rate in 47 years, according to a government report released Friday, as buyers snatched up properties ahead of the tax credit that's set to expire.
New-home sales rose 26.9% to a seasonally adjusted annual rate of 411,000 last month, compared to an upwardly revised annual rate of 324,000 in February, the Census Bureau said. The gain snapped a four-month streak of declines.
Austin, San Antonio Receive Green Grant Money
AUSTIN (Austin Business Journal, San Antonio Business Journal) – The Department of Energy has granted $10 million in stimulus money to Austin and San Antonio to improve commercial and residential building efficiency.
Austin will use the funding to expand an Austin Energy program that pays property owners to make efficiency upgrades and install solar panels and other renewable energy systems. The utility will work with federal officials over the next few months to develop a project plan for the money, which will be spread out over three years.
About 2,500 customers per year have participated in the Austin Energy program since its inception.
The San Antonio Green Retrofit Initiative will receive Alamo City’s full $10 million award. The program will be the area’s single-point-of-service energy efficiency delivery program. It will target residential, commercial, institutional, industrial and public buildings.
San Antonio Retrofits will include comprehensive audits, identification of appropriate technology changes and modifications of energy systems.
Austin and San Antonio were the only two Texas cities of the 25 nationwide given "Retrofit Ramp-Up" grants.
Cautious Optimism: Bexar County Foreclosures down
SAN ANTONIO (Foreclosure Listing Service Inc.) – Bexar County foreclosure posting activity has dropped 20 percent over the past month, from 1,654 to 1,328 postings, according to Foreclosure Listing Service (FLS).
FLS President George Roddy Sr. was cautiously optimistic, calling it "welcomed news," but warning that foreclosure postings have been on the high end for a while. He also reminded that posting activity naturally fluctuates from month to month.
"For the upcoming May auctions," he said, "posting activity was down 20 percent from April. Last month's (April's) posting activity pushed foreclosure notices in Bexar County up 20 percent from the previous month. March's postings were up 7 percent compared to one month earlier. But February's postings were down 24 percent from those filed for January. So over the last four months, month-to-month foreclosure posting activity has been down in two months and up in two months."
Also, because foreclosure posting activity in Bexar County has been less in May than in April six of the last eight years, Roddy suspects some families have applied I.R.S. tax refunds toward their delinquent mortgages.
He said same-month comparison from one year to the next is more telling than month-to-month activity.
"Over the last year, May's foreclosure posting activity in Bexar County dropped 8 percent," he said.
Austin Foreclosure Filings Down, Market Expert Cautious
AUSTIN (Foreclosure Listing Service Inc.) – Foreclosure filings in the Austin area fell 22 percent over the past month, dropping from 1,451 to 1,139, according to Foreclosure Listing Service Inc. (FLS).
"This decline is welcomed news, but I must warn that one month's activity does not change a long-established trend," said George Roddy Sr., FLS president. "Foreclosure postings have been on the high end for some time now. In fact, for the past 16 consecutive months, posting activity has topped 1,000 each month in the Austin metro."
Roddy added that Uncle Sam might have played a role in the drop in filings.
"In six of the last ten years, Travis County foreclosure posting activity for May has been less than in April," he said. "I suspect that as some families have received an IRS tax refund, they have applied that toward their delinquent mortgages to save their homes."
Roddy said a more important factor to watch than month-to-month activity is the same month comparison from one year to the next.
"Over the last year, May's foreclosure posting activity in the Austin Metro dropped 11 percent," he said. "This was the first time in 28 successive months that same-month-to-same-month posting activity declined. Now, this is definitely welcomed news, but even it does not warrant a happy dance. I will be looking for declines for six months in a row for the long-term trend to truly change.”
Austin remained at number 24, and robust employment growth kept Houston at number four. Meanwhile DFW moved up three places to number 27.
By the Numbers: Bayou City Growth
HOUSTON (Houston Business Journal) – The Institute for Regional Forecasting (IRF) predicts that 3.7 million people and 1.5 million jobs will be added to the eight-county Houston MSA over the next 25 years.
Additionally, Houston will experience a growth at 2.5 percent per year between now and 2020, increasing the population from its current 5.1 million to 7.4 million. At the same time, about 700,000 jobs will be created in the area, according to the IRF annual long-term forecast.
By 2035, IRF estimates that the area will include four million jobs and 9.5 million people.
Houston will also continue to follow a decentralization trend, with suburban counties receiving a growing number of new jobs and population growth. These counties have recently captured about 44 percent of all employment growth and 51 percent of all population growth.
Austin Office Market Turnaround Expected
AUSTIN (Marcus & Milllichap) – Austin led the nation in economic growth in 2009, a trend that should continue this year as the venture capital markets begin to thaw, helping to support a turnaround in the local office market in late 2010, according to the 2010 National Office Report by Marcus & Millichap.
Following are some of the most significant aspects of the Austin Office Research Report:
- Payrolls are anticipated to expand by 2.5 percent in 2010 with the addition of 19,100 positions. Of those, 4,700 jobs are expected in office-using sectors, a 2.6 percent gain.
- Development will slow to 330,000 sf of competitive office stock this year, a 0.8 percent increase to inventory.
- Demand growth will be outpaced by new construction, resulting in a 50 basis point rise in vacancy to 20.6 percent by year-end 2010.
- Asking rents will retreat 4.1 percent this year to $24.65 per sf, while effective rents will slide 5.9 percent to $19.75 per sf, the lowest rate since 2006.
Also included in the report is the firm’s annual National Office Index (NOPI), a snapshot analysis that ranks 44 markets based on a series of 12-month forward-looking supply and demand indicators.
Austin remained at number 24, and robust employment growth kept Houston at number four. Meanwhile DFW moved up three places to number 27.
Austin Best Economic Recovery In U.S.
The Austin-Round Rock area tied for first on a list of large metros where the recession is easing. Central Texas tied Washington D.C. in the Forbes.com ranking that compiles job growth and real estate industry improvement, among other indicators.
Austin Home Sales Up 5 Percent Last Month
AUSTIN (Austin Board of Realtors) – Area home sales in January 2010 were at 884, up 5 percent from the same month in 2009, according to the Multiple Listing Service report by the Austin Board of Realtors.
The median price remained stable in the same period, up 1 percent to $179,250.
"At this point, we can look back and see that January 2009 was the low point of this cycle. With steady improvement throughout 2009 that continued in January 2010, we can see that we’re one year into the recovery in Austin," said John Horton, chairman of the Austin Board of Realtors.
Throughout 2009, the volume of single-family home sales in Austin improved steadily. In the first half of the year, the gap in year-over-year sales volume closed consistently, reaching levels similar to 2008 during the summer peak, with the exception of a dip in August.
In fall 2009, sales volume began outperforming 2008 and surged in October and November, spurred by the original deadline for the first-time homebuyer tax credit. In December 2009, sales volume returned to a modest increase of 5 percent compared with December 2008, a growth rate that was maintained in January 2010.
Foreclosures: How Texas Compares
HOUSTON (Houston Chronicle) – Texas ranked 29th in state foreclosure rates for 2009, with 1.06 percent of the state’s total housing units receiving at least one foreclosure filing, according to a report by RealtyTrac.
That calculation includes default notices, scheduled foreclosure auctions and bank repossessions.
Overall, 100,045 housing units received foreclosure filings in Texas last year, up 4 percent from 2008 and up 18 percent from 2007.
In comparison, Nevada posted the highest foreclosure rate in 2009, with over 10 percent of its housing units receiving foreclosure filings. Colorado was tenth in the nation, with 2.37 percent of its units receiving foreclosure filings.
2010 Outlook: El Paso Jobs, Economy, Housing Growth to Return
EL PASO (El Paso Times) – Boston-based HIS Global Insight projects the city’s economy to grow 4.7 percent this year, more than its 3 percent projection for Texas, which may be nudged by increased home construction projections.
After declines for the last four consecutive years, single-family homes starts are expected to climb 9.9 percent in 2010 to 3,019, according to a forecast by the University of Texas at El Paso. Last year’s 2,747 home starts were down 8.3 percent from the 2,995 that were begun in 2008.
The projection for 2010 is still well below the 4,472 home starts in 2005.
Overall, the influx of soldiers at Fort Bliss, the transition of Texas Tech University’s medical campus into a full university campus and the national economic recovery are expected to improve the outlook in El Paso in 2010.
Austin Housing Market Braces for Recovery
AUSTIN (Home Builders Association of Greater Austin) – The Austin area's new home market could be headed toward a recovery, experts said Wednesday at the 2010 Economic Housing Forecast.
"The resiliency of the job market and relatively stable home prices will translate to a more positive consumer confidence level locally,” said Eldon Rude, Austin director of Metrostudy, which tracks the new home market in Austin and 30 other markets across the country. “Consumer confidence is an important driver of home sales."
Rude said builders in the Austin area cut new home production by approximately 19 percent in the last year, resulting in 6,490 new home starts in 2009.
"Starts have stabilized in recent quarters, builders have closed more homes than they have started for the last three years. This strategy has resulted in far fewer inventory issues in the Austin new home market compared to the more challenged markets across the United States," he said.
Metrostudy anticipates that new home starts in the five-county Austin region will be maintained at 2009 levels because of the expected lack of job growth through at least the first half of 2010 and the continued capital constraints facing builders.
Experts believe the region is at or near bottom with respect to housing starts and starts will begin to increase toward the end of 2010 and into 2011.
The conference was sponsored by the Home Builders Association of Greater Austin and the Austin Board of Realtors.
Fed: Regional Economy has Firmed Up a Bit
The Texas economy showed signs of improvement in the past six weeks through November, according to the Federal Reserve Bank of Dallas’ Beige Book survey.
Industries looking up include high-tech manufacturing, paper, petrochemicals, staffing, housing and energy.
New and existing home sales improved over the six-week period, but the level of activity remains weak.
Universal City becomes Texas first Green Power Community
This city east of San Antonio is the first in Texas to receive the Green Power Community distinction from the Environmental Protection Agency.
Universal City buys over 3.6 million kilowatt hours of wind energy from CPS Energy annually through the company’s Windricity program. The program allows customers to choose wind as their power source.
McGraw-Hill: D-FW New Home Contracts Rise 1% in October
Future residential construction is looking up, but nonresidential construction is not faring as well, according to McGraw-Hill Construction.
Total construction contract values for residential properties in October were $434 million, up 1 percent from $429 million in October 2008.
2009 Best-Performing Cities / 200 Largest Metros
- Several Texas metro areas have been ranked in the top spots of the 2009 Milken Institute/Greenstreet Real Estate Partners Best Performing Cities Index. The Lone Star State claimed four of the top five spots, including No. 1, and nine of the top 16 spots.
- The Austin-Round Rock area was named the No. 1 Best Performing City, with Killeen-Fort Hood-Temple, Mc Allen-Edinburg-Mission and Houston-Sugar Land-Baytown claiming the second, fourth and fifth spots, respectively. Additionally, Houston-Sugar Land-Baytown was named one of the top five largest cities, and Midland was named the No. 1 small metro.
- The index ranks U.S. metro areas based on their ability to create and sustain jobs, and includes long-term (five years) and short-term (one year) measurements of employment and salary growth, and four measurements of technology output growth. The report credits Texas’ favorable business climate and ability to attract jobs and corporations away from higher-cost states with propelling metropolitan areas to the top of the index.
Analyst: Dallas-Fort Worth home prices to turn positive next summer
The long run of declines in Dallas-Fort Worth home prices should turn positive next summer, an industry analyst said Thursday.
First American CoreLogic, a California-based housing and finance information firm, is forecasting that home prices around the country will bottom out by spring.
RealtyTrac: Not as many Houston-area foreclosures in third quarter
The number of foreclosures in the Houston-Sugar Land-Baytown metropolitan area increased just 1.5 percent between the second and third quarters, according to figures released Wednesday by RealtyTrac.
Now's the Time to Buy, If...
COLLEGE STATION- "It appears we are at the bottom of the housing market in most Texas cities," said Real Estate Center Chief Economist Mark Dotzour after reviewing the state's latest home sale numbers.
Dotzour mentioned two years ago that new home construction needed to fall dramatically to avoid the level of overbuilding that could damage Texas housing markets. He even picked summer 2009 as the bottom of the housing cycle because bankers would constrain credit to homebuilders and developers.
More Great News About Texas!
According to Forbes, Best Cities to Buy a Home:
- #1 Houston
- #2 Austin
- #5 San Antonio
- #6 Dallas
Round Rock Texas named second fastest growing city in the country
Annual census report shows Round Rock, Texas as #2 of the top 10 fastest growing cities in the nation.
Austin Will be 5th Fastest Growing U.S. Metro in Coming Years
The population of the Austin metro area will grow to more than 2.7 million by the year 2025, according to an analysis of government data by bizjournals.
The projected growth rate of Austin and its suburbs ranks 5th among 250 U.S. metropolitan areas studied in the report.
Texas Real Estate Texaplex
With national headlines looking down see why Texas is looking up.
10 of the Top 25 Fastest Growing Counties are in Texas!
Ten of the top 25 fastest growing counties in the country between July 2007 and July 2008 are in Texas, according to a Capital Area Council of Governments analysis of the most-recent U.S. Census report.
RREEF Report: Recession Fails to Diminish Demand for Green Real Estate
In Downturn, Owners Eye Existing Buildings for Sustainability, Energy Efficiency Measures.
The fundamental shift in real estate markets toward sustainable buildings will experience only a mild disruption from the global recession and credit crunch, according to research published last month by RREEF, the investment management business of Deutsche Bank's Asset Management division.
Positive Houston & Dallas News
- While other cities are struggling to create growth, Houston is maintaining its reputation as a bustling area with boundless economic growth possibilities according to Site Selection magazine. The 2009 "Top Metro" rankings have been released and Greater Houston tops the list as the No. 1 metro area in the nation for corporate location and expansion activity. This is a key factor for job growth and retention in Houston, which will ultimately lead to increased residential and commercial real estate activity.
- This is the first time the Houston Metropolitan Statistical Area (MSA) has taken the number one spot. The announcement was made by Site Selection in its 30th anniversary "Governor's Cup" issue.
- Dallas followed at number two and Chicago, which has won the title the last six out of seven years, came in third place.
2008 Total Building Permits: 42,697
"They like to do things big in Houston. Now the metro area, home to nearly 5.8 million people, can lay claim to being the largest home building market in the country, with 42,697 building permits. The market is still benefiting from an influx of population and jobs and rebuilding in the wake of Hurricane Ike. Employment rose 2.2 percent last year, representing the addition of an incredible 57,000 jobs. Home building activity in Houston has only fallen 31 percent since 2005. Also, existing home prices actually rose in Houston last year, 2.8 percent, to $160,200, still a very affordable level. Roughly one third of the home building action is in Harris County, followed by Houston proper and Fort Bend County."
Have You Heard the Good News? Houston Leads Nation in Job Growth.
Houston had the best year of any market, picking up an additional 57,300 jobs, according to a new bizjournals analysis.
The study focused on the 88 U.S. markets that have at least 250,000 nonfarm jobs. Collectively, the nation's major labor markets lost nearly 1.2 million jobs last year, according to the analysis.
Texas dominated the small list of markets that added jobs last year, nailing down the top three positions, and four of the top five.
Bizjournals compared nonfarm employment totals for the final month of the past two years, based on the latest figures released by the U.S. Bureau of Labor Statistics.
Positive Houston & Dallas News
- The Association of Foreign Investors in Real Estate just ranked Houston as the 8th best investment market in the world!
- Texas has taken its place as the No. 1 destination state for residential relocations for the fourth year in a row, according to Allied Van Lines' 41st Annual Magnet States Report.
- Even as more corporations announce coming layoffs, including Home Depot, BBVA Compass Bank, Caterpillar and others, the Texas Workforce Commission reported that Houston added 57,300 jobs in 2008, a gain of 2.2 percent
Good News about Houston
- NAR Chief Economist Dr. Lawrence Yun was in Houston on Friday speaking at an event. While he was here, HAR set up some interviews for him with local media.
- Each of the outlets has run his interviews, including Channels 2, 11 and 13, and the Houston Business Journal and Houston Chronicle.
- During his interviews, he cited Houston and Denver as the top markets to watch next year and predicted a 5%+ rise in pricing for the Houstonmarket in 2009.
- He also said that Houston's real estate market is undervalued by any measure and that the expected job growth in our area will help maintainHouston's better performance relative to the nation.
- You may also view a quick interview with Dr. Yun conducted by HAR Chairman Michael Levitin here: http://www.har.com/hartv/?v=454.
Texas Metros are Top Performers
SANTA MONICA, CA (Milken Institute) - Texas made a strong showing in "America's Best-Performing Cities," the Milken Institute's annual ranking of metros based on economic growth.
Although Provo-Orem, Utah, came out the winner among the 200 large metros that were studied, six major Texas metros made the top 25. Austin, Round Rock was ranked fourth, McAllen-Edinburg-Mission seventh, Killeen,Temple, Fort Hood 13th, San Antonio 15th, Houston, Sugar Land, Baytown 16th and Dallas-Plano-Irving 23rd.
Within the small metros division, which included 124 areas, Texas dominated. Midland ranked first in the nation. Longview and Odessa came in at seventh and tenth, respectively. At 37th, El Paso showed the biggest gain among small metros, jumping 85 spots from its 2007 position.
Historical Low Rates
Rates are near an historic 40-year low. Even one/half of one percentage point difference means a buyer could save more than $1,000 per year on a median-priced home.
The state's annual job growth rate leads the nation's by a ratio of more than 2-1.
Texas Economy Remains Strong
Texas Ranked No. 1 in Economic Development.
Texas is headquarters to 45 Fortune 500
Companies and home to 14 of the 100 Fastest Growing Businesses in America.
Texas Ranked No. 1 in Economic Development
Based on a state-by-state survey of economic development deals over the last 12 months, Business Facilities magazine named Texas, with a total of $15.4 billion in investment and 9,335 jobs to be created from new projects, its State of the Year for 2007.
While a housing downturn continues in other areas of the country, particularly in California and Florida, and a current threat of a recession is in the air, Texas' economy remains relatively healthy, (Dr. James P. Gaines, research economist, Real Estate Center at Texas A & M University) said. Affordable housing, a lower cost of living and cost of doing business, rising employment opportunities and attractive lifestyle are drawing more people than ever to Texas. These and other circumstance point toward a Texas-sized boom over the next 25 years, he said.
Stable Home Market
There is a less than 1 percent chance that home prices will fall in San Antonio, Austin, Houston, Dallas or Fort Worth during the next two years, according to the most recent Winter 2008 U.S. Market Risk Index. The index is released by PMI Mortgage Insurance Co. and looks at the measures including price appreciation, affordability, unemployment, foreclosures and unsold inventory to predict volatility in home prices in the largest 50 cities.
"While nationwide home prices are down almost 2 percent this year, many areas of the country, including North Texas, are holding up well. The job markets in Texas are the strongest in the country."
Still a Great Investment
Over the past five years, the average homeowner has seen an increase of 50 percent in value.
Over the long-term, real estate has consistently appreciated. On a national level, home appreciation has historically increased 5-6 percent annually.
A recent PMI Group study reported that the risk of U.S. housing price declines remained low in many areas of the South, Midwest and Northwest. Among the 50 largest metropolitan statistical areas, Texas cities were the lowest and most stable in risk outlook during 2007.
"Despite the national slowdown, Texas is still strong. There's no reason prices shouldn't continue to rise despite the increase in foreclosures and the slowdown in transactions, construction and new home starts."
Benefits of Home Ownership Ownership trumps renting. Consider these financial benefits:
- Deductions on your annual income tax return
- Locked-in payment with a fixed rate mortgage
- Home price appreciation if you plan to live there for a few years
- Monthly mortgage payment comparable to rent payments.
"Owning a home is one of the best builders of wealth," says Todd Nordstrom, a sales associate with Esslinger Wooten Maxwell. "There is a huge difference in net worth between renters and owners." In fact, the most recent Federal Reserve Survey of Consumer Finances shows the median net wealth of a homeowner household is $171,700 compared with just $4,800 for a renter household.