Immigrant

Second only to California, Texas hosts largest immigrant population in the United States. And in Dallas-Fort Worth alone, more than 1.2 million immigrants make their homes, hold jobs, attend schools, and participate in local communities. An integral part of the DFW economy, immigrants contributed $8.4 billion in taxes and over $25 billion in spending power in 2014 alone, according to a recent study.

But action of late by the Trump Administration, including discriminatory travel bans, ramped-up deportation raids, and even wall-related rhetoric are forcing many to reassess their places here, particularly when it comes to buying property.

An article published last month in The Guardian cited a 2013 study which put, in stark terms, the potential national impact anti-immigrant action could have on real estate.

[Dowell Myers, director of the Population Dynamics Research Group at the University of California] estimated that in this decade, immigrants nationwide will account for 32.2% of the growth in all households, 35.7% of growth in homeowners and 26.4% of growth in renter households.

The study found that the volume of growth in foreign-born homeowners has increased each decade, rising from 0.8 million added immigrant homeowners in the United States during the period from 1980–1990 to 2.8 million in the current decade.

“It’s pretty clear what will happen,” warns Myers. “One way that people afford houses is by pooling incomes. So if you were to deport one of the three mortgage payers, that can destabilize the whole rest of the household. Immigrants are so interwoven into many communities that when you unravel one thread, you can destabilize it entirely.”

Could DFW experience that kind of destabilization? Possibly.

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dallas-fortworth-cities-map

We talk about the impact of rising home prices all the time, but that’s only half the affordable housing story. Across the country, rents in suburban areas also show dramatic increases over the last year, with no signs of stopping.

A recent study from RentCafe shows that while urban Dallas continued to post fairly consistent rent increases in 2016 (5.9 percent), the farther you travel away from the city, the greater the hikes renters experienced. In Dallas proper, rental housing remains relatively affordable when compared to the rest of the Metroplex (and the country, as a whole). We have all that apartment construction to thank for that. More than 6,000 new apartment units became available in 2016, alone.

But in Fort Worth, where apartment inventory has stagnated, rents grew 6.3 percent over 12 months. And that’s nothing compared to areas like Weatherford and Midlothian where rent skyrocketed over 10 percent in 2016.

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If you feel like everyone you know has gotten into the flipping game, your instincts are correct. According to 2016 Year-End U.S. Home Flipping Report by ATTOM Data Solutions, the number of folks making a living from house flipping reached a nine-year high last year. Data shows that in 2016, 126,256 individuals and corporate entities flipped homes — the highest number since 2007.

Low housing inventory and an influx of capital meant the number of properties flipped in 2016 reached peaks not seen since 2006. And the report shows profits from house flipping are also at an all-time high, with the average return on investment hovering at 49.2 percent.

Interestingly, the study lists 39 zip codes where at least 20 percent of all home sales during the year were home flips – including zip codes in Texas.

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Courtesy: Joint Center for Housing Studies of Harvard University

Baby Boomers dominate renovation spending. Courtesy: Joint Center for Housing Studies of Harvard University

Don’t be misguided by what you see on HGTV. The renovation market is not being driven by young couples out to feather their first nests. According to a report released by Harvard Joint Center for Housing Studies, Baby Boomers, motivated by changing accessibility needs, currently spend more money than any other generation on housing renovations – and will continue to do so over the next several years.

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recession

Minorities were hit the hardest by the housing crisis, and show lower levels of homeownership today.

The economic recession of 2007-2009 affected most Americans in depressingly real and tangible ways. Two groups of Americans are disproportionately affected, still, by the downturn.

A new study by Apartment List shows that the economic downturn had the greatest impact on homeownership among minorities and young Americans aged 18-45, particularly those in the 35-44 age range.

Analysts at Apartment List, an apartment location website, looked at Census data and reported U.S. homeownership rates in general have fallen steadily, recently dropping to their lowest levels since 1965.

In Dallas, the homeownership rate fell from 60.9 percent to 58.7 percent from 2007-2016. The drops were biggest among African Americans, where homeownership fell by 6.1 percent.

“African Americans were highly affected [by the recession], said said Andrew Woo, director of data science and growth at Apartment List. “In Dallas, it is a large drop [in homeownership], larger than the nation average, which is 5.3 percent. What we notice is that it’s very much tied to employment and socioeconomic trends.”

During this same time period, rents increased by 4.2 percent in Dallas, even as owner costs (mortgage, maintenance, etc.) fell by 11.8 percent. So the people least able to afford it were paying more (in rent), less able to save toward a down payment, and therefore less likely to buy a home.

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Their clothing and shoes (and jewelry! yes jewelry!) make us happy, but a little doom and gloom is hanging over Neiman Marcus after the retailer’s Tuesday morning earnings call this week. And if you are in the business of pushing luxury products, like million dollar homes or vacation homes, you pay attention. The take-aways: it’s been a challenging Q2, lowest oil prices in a decade definitely impacted Texas, home to Neiman’s largest volume stores, and more of their customers are turning to the internet to shop. Other factors that kept people from spending and challenged holidays sales were the skiddish stock market and strong U.S. dollar limiting international tourists in key store markets.

First of all, Neiman’s fiscal year ends in July. The company has been struggling. In October, Neimans announced layoffs for 500 employees, or 3 percent of its workforce.

Also in October, Neimans said it would delay the initial public offering it filed for in August, 2015.

For the all important 13 week period that ended Jan. 30, which includes the shop-rich cha-ching Christmas shopping season, Neimans experienced a 2.3 percent dip in revenue. Cyber Monday shopping on November 30, their highest volume day, was 9% higher than 2014. And when comparing fiscal 2015 to recent sales for the first half of this fiscal year, things are looking down. The company reported total revenues of $2.65 billion for the 26 weeks ended Jan. 30,  a 2.1 percent decrease over fiscal 2015. Clearly, low oil prices are taking their toll on the luxury shopper’s paradise. (more…)

dallas housing prices

Could rising housing prices in Dallas-Fort Worth indicate another bubble?

There’s no doubt that Dallas-Fort Worth is one of the hottest real estate markets in the U.S.

dallas housing prices

Aaron Terrazas, senior economist at Zillow. Photo: Zillow

Zillow recently named it No. 3 in the country, noting a 4 percent unemployment rate and solid income growth. Additionally, the Zillow Home Value Forecast predicts the Dallas-Fort Worth median home value will go up by 5.6 percent in 2016.

But some housing analysts and mortgage insurance companies fret over the 6 percent increase in North Texas home prices over the past six years. They wonder, could this be another bubble?

Probably not, according to Zillow senior economist Aaron Terrazas.

“Dallas looks pretty good compared to so many other parts of the country,” Terrazas told the Dallas Morning News‘ Steve Brown. “We don’t have anything artificial right now inflating the housing market—the lending standards remain fairly tight.”

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Treasury_Department_rear_view

The story broke in The New York Times today, and it only affects Manhattan and Miami real estate right now... but get ready. The Feds are tired of cash buyers who hide their identities in “shell ownership” of luxury real estate. I, for one, am happy as it is so hard to chase down ownership of a property when it is in an LLC. But this could be a real game changer in those markets, and I will bet you a bottle of Veuve San Francisco is next: The Times also reports that 48% of the buyers in the Bay area used shell companies, whereas only 37% did in Miami, where the new rules will be effective beginning this March through August.

Treasury is essentially running a field test to see if they can capture scofflaws or major money stashing, and they plan to use title companies and mortgage companies to do so.

Since 2000, 44% of real estate sales over $5 million in the United States were to shell companies or, as I prefer to call them, LLCs. That came from what must have been a laborious investigative report by The New York Times. And that report may have influenced the folks in D.C. to implement this legislation — (more…)