DFW Real Estate Status Update on First Quarter 2012: Prognosis Positive, Tread Lightly
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I was treated to Allie Beth Allman’s Monday morning meeting on Monday, and boy, what a treat. Chock full of valuable information — my notebook and head came home loaded. Not one, but two guest speakers: David Fair, and Joseph Pitchford, senior vice president Crescent Real Estate Equities, LLC, aka the folks who own the Residences at the Ritz- Carlton in Uptown. Which is one reason why I went, actually, to hear the latest on Uptown dynamics. (Stay tuned!) Of course, I also went because I have so many buddies at Allie Beth Allman! So imagine my delight when David Fair gives us his first quarter real estate report — jackpot! I’ll have charts and diagrams later in the week.
Jobs, as you know, influence our market. David said job gains have been slow, but steady. In March of 2012, 120,000 total jobs were created, a whopping 240,000 created in February, a killer 275,000 in January in D/FW. Our unemployment rate dropped to 8.4% in February, and job growth is still slow due to uncertaintly by employers about what future fiscal policies will hold. Still, Dallas/Fort Worth is among the top four metro areas with the largest employment growth: NYC, Houston, us, Atlanta. No shocker, but here’s where you probably don’t want to live, where the biggest employment declines are: Fort Smith, Ark., Sacremento, CA and Ithaca, NY. Well, maybe folks will move here from there IF they can unload their homes.
Hot jobs in D/FW in 2011: we saw an 8.1% increase in jobs in leisure and hospitality, David says probably due to our Omni Hotel — and remember everyone who poo pooed the concept? (Nanny nanny boo boo.) We also saw growth in trade, transportation and utilities, professional and business services, financial activities and manufacturing.
NETREIS dollar volume is up and surpassing 2011 thus far, slightly under 2009 figures. March ’12 is up 19% over March ’11. Woo hoo! We’ve seen a 24% increase in median price sales at the $110,000 to $119,000 levels over last year, a 30% increase in the $200 to $249K range, and 15% increase in properties priced over $1,000,000.
Hot ‘hoods: Holy macaroni: McKinney has seen a 39% increase in sales over last year, Northwest Dallas 59% increase, 36% in East Dallas, and 30% in Park Cities. Even Uptown condo sales are up 15%.
Pricing: Leeeeetle appreciation going on, 9% increases in Frisco, 8% in northeast and northwest Dallas, 2% in Park Cities. But Oak Cliff beat the Bubble with a 3% price increase over 2011. Oak Cliff’s hot.
Fewer D/FW homeowners are underwater on their mortgages, but Steve Brown reports that foreclosure activity is actually up as the banks get their house in order, clear out backlogs and are now ready to bring on the shadow foreclosures. Still, say your prayers for this one: only 9.5% of Texans are underwater on their mortgage compared to 58% of Nevadans.
David predicts:
-The 2012 housing market has started strong, second half may more closely resemble Q 3 and 4 of 2011 because of the election, Europe, uncertaintly.
-Interest rates will remain remarkably low this year
-The DFW recoverywill outpace the national average
-Home prices have stabilized in D/FW. And yes, some areas are hotter than hot. Just got an email from a desperate buyer who says everywhere she goes in Lakewood there are multiple offers. You know, we might even see a line or two outside of some open houses. Deja vue 2006!
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finally starting to see clients have confidence in the market…..it's nice!
finally starting to see clients have confidence in the market…..it's nice!
Just opened my inbox to multiple offers on a property. Not the first time this year. Yes 2012 is starting out Good.
Just opened my inbox to multiple offers on a property. Not the first time this year. Yes 2012 is starting out Good.
I don't really recall anyone in the Omni debate being anti-jobs.
I do recall people, including Harlan Crow, being against a taxpayer-owned hotel because it had an inherent advantage over the free market…The hotel pays no property taxes, the federal government is subsidizing the debt, and the project saw improved financing because the taxpayers are backing the debt.
It's fantastic that the hotel is exceeding expectations in the first few months of operation. But the hotel is financed through the year 2042 and the taxpayers on the hook if the debt isn't covered by revenues. The debt service is more than $1 billion over that time.
I don't really recall anyone in the Omni debate being anti-jobs.
I do recall people, including Harlan Crow, being against a taxpayer-owned hotel because it had an inherent advantage over the free market…The hotel pays no property taxes, the federal government is subsidizing the debt, and the project saw improved financing because the taxpayers are backing the debt.
It's fantastic that the hotel is exceeding expectations in the first few months of operation. But the hotel is financed through the year 2042 and the taxpayers on the hook if the debt isn't covered by revenues. The debt service is more than $1 billion over that time.
@BLAKE Yup, right on. I am all about free markets and was initially against this project, then Tom Leppert explained the revenue potential and jobs for the city. So I bought into it, so to speak. I guess it's like anything: when it works, we are happy, when it doesn't, we finger point and complain. Question for you: could the city sell it while everything's hunky-dory?
Sure, the plan all along was to try to sell it. But just because the hotel is exceeding expectations doesn't mean it's even close to being profitable, or a desirable target for purchase. Net operating income is going to have to trend upward at a staggering rate in order to offset the bond debt.
Leppert's track record with explanations has turned out to be a bit suspect don't you think? See WaMu. Also the Trinity River toll way project. Your City Councilman at the time had proven himself to be a reliable voice on these types of projects. And he was quoted at the time as saying that Leppert doesn't care about the citizens of Dallas and that the hotel project was resume builder for whatever he had on his future agenda.
@BLAKE Yup, right on. I am all about free markets and was initially against this project, then Tom Leppert explained the revenue potential and jobs for the city. So I bought into it, so to speak. I guess it's like anything: when it works, we are happy, when it doesn't, we finger point and complain. Question for you: could the city sell it while everything's hunky-dory?
Sure, the plan all along was to try to sell it. But just because the hotel is exceeding expectations doesn't mean it's even close to being profitable, or a desirable target for purchase. Net operating income is going to have to trend upward at a staggering rate in order to offset the bond debt.
Leppert's track record with explanations has turned out to be a bit suspect don't you think? See WaMu. Also the Trinity River toll way project. Your City Councilman at the time had proven himself to be a reliable voice on these types of projects. And he was quoted at the time as saying that Leppert doesn't care about the citizens of Dallas and that the hotel project was resume builder for whatever he had on his future agenda.