2900 Mckinnon 506 Living Dining

Word comes from Homes.com that Dallas is the second to only Atlanta as one of the best cities for new college graduates to thrive in. Our average starting salary, reasonable rents, low unemployment rate, and higher-than-average number of nearby colleges and universities makes us a great place to live for debt-crippled former students who have developed a taste for ramen noodles and cheap beer.

“In a still-recovering economy, where the job market remains uncertain and the repayment of student loans is a daunting reality for many recent grads, the ideal place for many may be wherever that first job is landed,” according to Homes.com. “Nonetheless, some cities are more promising than others, providing college grads exceptional opportunities for growing careers and affordable housing.”

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Renting Vs. Buying screenshot

A friend of mine has been following our recent analysis of demographic groups more likely to rent or buy, especially this story by Candace Tharp and this breakdown of Census info, and sent me a link to this online lecture from a Khan Academy instructor that dissects the costs associated with renting versus buying a home.

The instructor, who lives in Northern California’s Silicon Valley, attempts to compare the cost of renting versus buying two identical homes. About 40 seconds in, though, my journalist spidey sense went off when the instructor started making generalizations and using absolutes, saying “Well isn’t buying always better than renting?”

Well, isn’t Veuve Clicquot always better than Cook’s? I may think so, but that’s just my opinion. 

That’s where the instructor jumps off into criticizing homeowners for peer pressure, Realtors for, you know, wanting you to buy so they can make a living making sure you get the best deal possible for your new home/home you are selling.

Really, this looks to me like not only an oversimplification of a naturally cyclical market, but a gross oversimplification of a very complicated buying process. Heck, the instructor even admits that he’s oversimplifying things. He’s basically bending his logic to his assumptions.

So, watch the lectures and tell me what you think: Is it always better to buy than rent, and what is up with the ridiculous rents in Silicon Valley? I’d move to Texas instead!

Tumbleweed Tiny Home

We’re seeing Jed Kolko’s name pop up all over the place nowadays. This time it was in this Wall Street Journal piece comparing how the word “cozy” is often used to denote “small” properties in real estate markets.

“Cozy is one of those words that means very different things in different markets. Cozy in Texas is not what’s cozy in San Francisco,” says Jed Kolko, chief economist at TruliaTRLA +0.02% a real-estate website.

Trulia examined for-sale listings, excluding foreclosures, in 100 U.S. metro areas between Jan. 1, 2011, and Nov. 30, 2012. “In every metro area, homes that mention cozy are smaller than listings that do not,” Mr. Kolko says.

Tiny Apartment

I love how the story compares Dallas “cozy” to New York “cozy” (read: claustrophobic). Of course, we get the total cliche out of the way thanks to Briggs Freeman Sotheby’s agent Christy Berry:

“Cozy almost means small, and we don’t have small. Everything is bigger in Texas,” she says.

Maybe it’s true: We do have some gigantic properties in Texas, but really, can Texas do “cozy” justice?

Tumbleweed Tiny Home

We’re seeing Jed Kolko’s name pop up all over the place nowadays. This time it was in this Wall Street Journal piece comparing how the word “cozy” is often used to denote “small” properties in real estate markets.

“Cozy is one of those words that means very different things in different markets. Cozy in Texas is not what’s cozy in San Francisco,” says Jed Kolko, chief economist at TruliaTRLA +0.02% a real-estate website.

Trulia examined for-sale listings, excluding foreclosures, in 100 U.S. metro areas between Jan. 1, 2011, and Nov. 30, 2012. “In every metro area, homes that mention cozy are smaller than listings that do not,” Mr. Kolko says.

Tiny Apartment

I love how the story compares Dallas “cozy” to New York “cozy” (read: claustrophobic). Of course, we get the total cliche out of the way thanks to Briggs Freeman Sotheby’s agent Christy Berry:

“Cozy almost means small, and we don’t have small. Everything is bigger in Texas,” she says.

Maybe it’s true: We do have some gigantic properties in Texas, but really, can Texas do “cozy” justice?

Aside from her vote on Dallas taxes a few years ago, I knew I’d like Angela Hunt. She took the time to write me that her quote made it sound like she was supporting Poo Prints, the dog-poo DNA program in effect at The Ilume and other Dallas apartments. Here is another thing I like about Angela: she didn’t say “I was mis quoted”. Instead, she clarified her quote, which is very important. Too often I think we (me triply included) say things quickly, without measuring the words, and what gurgles out of the boca is not our exact intent. So here, then, is what Angela means. Takeaway: she does NOT support a citywide program to test every Dallas dog’s DNA in order to cure people who don’t clean up after their pups (but for apartments, it’s not a bad idea):

Candy, saw your post and wanted to clarify my thoughts on the ever important issue of dog poop:

Let me clarify my quote that made it sound like I enthusiastically support a taxpayer-funded CSI lab devoted to analyzing canine excrement.

Would something like this be a useful tool for enforcement? Absolutely. Is it practical in Dallas? Not at all.

First, not all dogs in Dallas are registered, so I would venture to guess that most of the tests would be a “waste” of time. Heh. This process works great in apartment complexes and other closed communities because the landlord can trace each dog to its owner. Not practical or effective in a city like Dallas.

Second, we have more pressing issues to deal with at our city, and not enough code enforcement officers (not to mention Animal Control personnel) to deal with them.

Third, the guy speaking on behalf of the poop analysis company actually claimed that the city could reap anywhere from $40m – $100m in revenue as a result. That is so ridiculous I had to laugh at him. No, sir, that is not realistic.

I respectfully asked him to provide us with more information and show us how this has worked in other cities. I am open to being proved wrong on this, and I don’t think the concept is bad. I just don’t think it could work for Dallas, I don’t think it’s a burning priority, and I don’t see how we have the personnel or funding to enforce it.

With high occupancy rates and increasing rents, it's a good time to be a landlord.

Looks like developers are working hard to keep up with demand as new apartment high- and mid-rises are going up across the region.

StreetLights Residential, a boutique development company, is building its first high-rise dubbed The Taylor, set to open in 2014. The uptown apartment building, which has rents in the $1,000-and-up range, is just one of the many rental properties planned, in construction, or opening soon.

And according to a study from Axiometrics, average rents are on the rise, too. For Dallas, occupancy is tight at a little more than 94 percent, and average rents are at $879, which is a 12.7 percent increase over 2009. To get a taste of the upscale rental market, check out the Oak Lawn area: rents have increased 19 percent since 2009, with average rents at more than $1,500.

So, are we becoming a nation of renters? And, is that a bad thing?

As Candy mentioned, restrictive lending practices and tight-fisted banks despite historically low interest rates. So, more mortgage restrictions means fewer homeowners means more renters, right?

This story from MarketWatch says increased rental occupancy and prices can really be traced to the slow recovery from the recession and high unemployment:

The unemployment rate remains stubbornly high at 8.2%, and incomes have stagnated. Fewer Americans can afford to buy a home or qualify for a mortgage, especially given tighter lending standards. As a result, home ownership declined again. It fell to 65.4% from 66% in the fourth quarter, putting it at the lowest level since 1996.

Well, what do you think? Is it a renter’s market? And is that a bad thing in our economy?

Valets at the W Hotel were scrambling this morning at 7:30 a.m. when a rush of sleek cars and black suited commercial real estate types descended. The Urban Land Institute, a Washington, D.C.-based commercial real estate development, planning and research group was in town talking about the markets and what we can expect in the future. When it comes to housing, smaller homes closer to urban areas will be hot for new construction, as post-bubble buyers seek smaller mortgage payments and shortened commutes to relieve them from what we are going to see very soon: $5 a gallon gas.

Keynote speaker Maureen McAvey, executive vice president of policy & practice for U.L.I, says urban appeal may temper suburban sprawl because of the burst of mixed-use and rental properties going up near the urban core, something we are seeing a lot of in Dallas. Apartments, she said, are on the rise and home ownership is falling. We are becoming a nation of renters, in more than just our homes. The glamour of living in an urban center draws the “tribe” and cuts down commute time to work and play, making it entirely possible to live New York City-style and shed a car. McAvey said the burgeoning Gen Y will be increasingly drawn to urban areas and smaller homes. As Lucy Billingsley put it later in a break-out session, “they don’t want the silver.”

Home sales will be tempered by dwindling mobility when couples have a tough time, for example, finding two jobs in the same city. This group will stay in their homes for a longer period of time. We will see many changes in the way we live outside of the box of the two parent, two child one-generational family: homes are becoming multigenerational to accommodate aging parents or adult children who have not yet left the nest. Think about that the next time you see a home with two master suites. Meantime, the average size of homes is predicted to shrink by 20% in coming years because of increased maintenance costs.

One thing we can count on: taxes and energy costs will go up up up.

The biggest take-aways from a great morning:

-  The current world market change is different from any other. We are not going back to the old ways.

- Watch these two demographics — Gen Y at 85 million strong, and Boomers at 81 million strong. Both are changing attitudes towards home ownership.

-In 1945 there were 42 workers for every retiree

-In 2009 there are 3 workers for every retiree

-Boomers are re-planning their second phase of life right about now and experiencing second adulthoods

-The shift to a global economy is as significant and dramatic as the shift from agrarian to industrialization.

-This is not just a business cycle, it’s a major reset of the world economy.

-Demands and desires for all kinds of real estate have changed and the industry must adapt.

- It may no longer be location, location, location but who has the very best internet connection for your iPhone from the office to the elevator.

- (Hint, W folks: I couldn’t get a signal to Tweet!)

- Workers and residents are as concerned about the style and layout of the property as they are where it is located.

- We are down to 66% home ownership and shrinking to 63%, U.L.I. predicts. There are over 4.3 million turning 21 every year

-Homes will be smaller and more multi- generational, also more conveniently hooked to transit

-This generation of kids likes being close to their parents!

-Housing demand will be up increasingly for rentals

-For every car you do not need to own you save $8000 to $10000 a year, maybe can put that back into housing?

-Smaller is beautiful: we will see new homes averaging 2100 square feet and getting more modest

-Office space per employee will shrink considerably

-Retail: internet sales will dominate while the middle is cut out. It’s all about bricks and clicks.