1024px-Neiman_Marcus_flagship_store_-_sign

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…)

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Yes, folks are about to sound a lot like “Zoltar” as they polish their crystal ball and look into the future to see what 2016 holds. We’re no exception. (Photo via flickr)

It’s the end of December, so brace yourself for the onslaught of crystal ball-wielding, looking-forward-looking-back pieces from just about every blog and website out there.

Of course, CandysDirt.com is no exception. We looked at the latest reports, and it looks like the housing market in December has been slower than molasses in January, perpetuating the cooling we’ve been seeing since October.

And next year? Look forward to higher interest rates that could scare off some buyers, and existing home sales will slow as a result. Of course, everyone’s still optimistic on jobs, so at least we have that? Some think that this signals a stabilizing of the market in most areas that have returned to pre-economic downturn levels.

Jump for more:

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Paul Volcker

Get ready for the media freak out. Besides a re-hash of last night’s Republican debates — the most substantive thus far, in my opinion — everyone is talking about an expected interest rate hike today from the Fed. I had two media calls yesterday asking me if I thought a rise in interest rates might hurt or slow our blazing Dallas real estate market.

Nearly everyone believes the Fed is going to raise interest rates for the first time since June 2006. If so, the federal funds rate — which is the wholesale rate banks charge each other for overnight loans — will tick up a quarter percentage point from near zero.

Only one-quarter of a point. But experts say that may begin a chain reaction that leads to higher rates in 2016.

Jonathan Miller

My favorite New York-based Real Estate guru Jonathan Miller looks at why have rates been so low for so long — basically a cruddy economy and slow job growth? And he asks, is it really time to raise them?

Looking at the charts it seems like no, though it would be nice to have banks pay us some money for keeping our money in their banks. Right now, the rates banks pay savers are so insignificant, it almost makes no financial sense to have large sums in the bank. That’s one reason why real estate investment has been so strong.

Secondly, a quarter of a percent is nothing. I remember Paul Volker’s days of 18% interest rates. It was like paying an HOA fee on top of your mortgage. He was trying to wrestle inflation, which was feverish. Then, people were buying houses to make money on them. Today, they are buying houses (or investing in the stock market) because you cannot make money saving it in the bank.

Which makes me wonder if a more significant rate hike would cool the market a bit.

Also, I wonder if Millennials, who have no experience with higher interest rates, might be scared off by a significant rate increase. Remember, this is the generation that, like their grandparents, doesn’t like debt.

What do you think? Would an interest rate hike hurt your real estate search or your business if you are in the business?

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Yes, it’s that time of year again. CoreLogic has come in at the head of the pack for 2016 predictions, issuing its forecast and data brief today. And while we’ve heard a bit of “doom and gloom” from Steve Brown, CoreLogic’s report says that not only will we see more home sales and more demand, but rents will continue to tick upward as well. Read the full list of predictions after the jump.

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Texas Quarterly Housing Report Graphic DFWA

It may not be as frenetic as it was during the spring and summer, but 2015 is still posting some serious numbers.

According to the Texas Association of Realtors Quarterly Housing Report for the third quarter of 2015, home sales and prices throughout the state are on track to break records. Low inventory is mostly the reason why we’re still seeing some outstanding price growth in sought-after areas, and a healthy job market is continuing to bring in more and more homebuyers.

 

“At this current pace, 2015 could very well surpass 2007 as a record year for Texas home sales,” said Scott Kesner, chairman of the Texas Association of Realtors.

In the Dallas-Fort Worth-Arlington MSA, the median home price is $215,000, up 10.3 percent compared to third quarter 2014. Likewise, active listings are up 4.7 percent, and single-family home sales are up 8.9 percent.

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Dallas Breakdown for Diff Family Types

Breakdown of Monthly Income Required to Live as a Human in Dallas According to the Economic Policy Institute

By Jon Anderson
Columnist

Candy and I have been opinionating back and forth on low-income citizens and how their access to safe and affordable housing is a means to promote economic upwards mobility. After all, if the poor are less poor, they will live richer lives (by any definition) and contribute more to society.

Unlike the rich who sequester money in intangible investments or various savings schemes, when the poor have more money, they spend it – because they need to. This creates a cycle that reverberates throughout the larger economy. If the poor buy more, manufacturers must make more which means hiring more people which in turn creates more people with money to spend, and so on, and so on. It’s exactly like the recession when governments were screaming for money because tax revenues took such a hit. Once people were put back to work, tax revenues rose, and in some states like Texas, overflowed.

In fact, recessions in general would be rarer and less dramatic if companies were forced to keep workers on the payroll or if unemployment benefits paid close to salary levels. As it is, recessions create a domino effect where one company dumps workers and then its suppliers dump workers because they’re not getting orders – and on and on. Call it trickle-back economics.

Personally, I spent nearly three years unemployed during the telecom meltdown that sent 500,000 skilled workers out on the streets early in the millennium. Desperate, I was open to anything and willing to uproot my life and leave my partner for any job. In the end, I was required to move to another state which led to the dissolution of my relationship. And compared to many, I was lucky.

For part of that time, I collected unemployment benefits that paid me the maximum $1,600 per month, a tiny fraction of my former salary. (Let me tell you, swallowing my pride and taking unemployment was one of the hardest things I’ve done – even though I’d paid into it for years. It felt like a stigmatizing failure.) All that check did was slow the eventual evaporation of a three-year “emergency fund.” I tell you this because $1,600 per month is more than the minimum wage in America and it was crippling even with a free place to live and extensive savings. Before you groan, this column isn’t about the battle for living wages, it’s about documenting and understanding how much it takes to live as a human being in Dallas. (Spoiler alert: it’s not the current minimum wage.)

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