The Wall Street Journal reports a proposed measure in Congress would offer visas to any foreigner making a cash investment of at least $500,000 on residential real-estate—that’s for a single-family house, condo or townhouse. Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, second homes or investment real estate to be rented out. 

The idea: this would help boost the struggling US real estate market and speed our recovery.

According to an article in the October issue of Tierra Grande, Real Estate Journal at Texas A&M University, Gen Y (those born from about 1977 to 1982) are the second (or maybe even first!) most important age demographic in real estate, because they are the up and coming buyers. This is the internet generation, plugged-in, mobile, and ethnically diverse. Texas is about the only state with a growing population of Gen Yers, and 46% of this group is Hispanic, 37% Anglo, and 13 % black and 4% mainly Asian. Comparing that to the rest of the US, 56% of Gen Y is Anglo, 19 % Hispanic, 14% Black and 5% Asian. Clearly, we can bring some ethnicites into the housing market.

What do you think?

Please note: I am curbing my use of the phrase “on fire” these days, when it pertains to homes. Should I slip, please catch me.

August home sales in North Texas surged by 27 percent last month, the biggest gain in more than a year. According to NTREIS,  more than 6,800 pre-owned single-family homes sold last month. That’s just awesome. It was one of the highest totals recorded since those (cough cough) federal homebuying incentives ended in early 2010.

And August was the second month in a row that North Texas has seen double-digit home sales increases from a year earlier. Even condominium and townhouse sales were up in August, by 34 percent from a year earlier. I know Bobby Dhillon sold three units at The House, and Kyle Crews is on fire (no reference to a house) over at The Ritz.

What gripes me is housing analysts saying “oh yes, we knew this was coming.” Quit lying — you did not. Home sales fell for a full year after the buying crush created by the first time homebuyer’s credit. Thing was a disaster except that it was probably the only way I got my kids to move out of my house. At least James Gaines, an economist with the Real Estate Center at Texas A&M, is honest. He says he was surprised. Dallas is doing better than the rest of the country in terms of employment and job creation, but people moving here still have to sell their homes. And we are seeing a whole lot more rentals.

“If the pattern continues, we could be up 10 percent or more for the year,” Gaines told Steve Brown at the Dallas Morning News. Overall, however, inventory is down.

Here’s where the biggest sales increases were: Carrollton-Farmers Branch (60 percent), northeast Dallas (59 percent) and the Park Cities (49 percent).

August median sales prices were up 54 percent from a year earlier in Oak Cliff , 26 percent in Cedar Hill and 25 percent in Fairview.

I’ve told you about Cedar Hill. Next I’ll tell you about southwest Fort Worth. It’s on fire — hopping!

Your home value could be 4.3 % lower today than it was last year if you follow the guys over at Standard & Poor’s/Case-Shiller, which released their Home Price Index this week. That means home prices have been falling for an entire year in the 20 major U.S. cities that create this way over-quoted housing market indicator. Case-Shiller tracks only previously owned home sales, not new construction. Of course, new construction across the U.S. is the lowest it’s been in 50 years.

No one metropolis was spared: all the 20 major U.S. markets in Case-Shiller’s survey for June saw home-price declines from mid-2010, even Washington D.C.

Nationwide, home prices shot down 4.5 percent from June 2010.

But Dallas was singled out, along with Denver, the major Cali cities, and D.C. as having bottomed in 2009 and kept their (our) heads above the water.

“Relatively strong markets,” Standard & Poor’s David Blitzer said in the report.

Prices in most markets — including Dallas’ 1.4 percent blip — were up in June from May, to expected in the buying season.

Steve Brown says that if you count 2007 as the peak year of pricing, Dallas-area home prices are down about 9% from that Rocky Mountain High.

My favorite economist at the Real Estate Center at Texas A&M University, Dr. James Gaines, says what we all know: the short sales and foreclosures dragged pricing down and will continue to do so until we clear them out in 12 to 18 months.

The good news there: Dallas foreclosure rates are diminishing.

The cities that took the biggest hits were (ouch) Minneapolis (10.8 percent), Portland, Ore. (9.6 percent) and Phoenix (9.3 percent).

The smallest price drops happeend in, no surprise, government-employee rich Washington, D.C. (1.2 percent) and Boston (2.1 percent). Watch for those market to go up first.

But it’s all local. Ted Wilson of Residential Strategies says the foreclosures depend on what part of town you live in. In affluent neighborhoods with few distressed sales, such as the Park Cities or Preston Hollow, prices recently have been flat or are actually higher. Many gargantuan homes that have languished for years have sold.

But good news: the number of foreclosures has dropped in the northern burbs, and price declines are softening. For the first time in eleven years, year-to-date residential postings declined. Here are the facts from Roddy’s Foreclosure Listing Service Inc:

  • “D/FW quarterly residential foreclosure posting activity has dropped to its lowest level in eleven quarters.”
  • “With just 12,876 foreclosure postings on D/FW homes in the third quarter of this year, quarterly postings fell below 13,500 for the second quarter consecutive quarter.”
  • “Over the last year, third quarter home postings plunged downward 21%.  
  •  “On a quarter-to-quarter comparison, third quarter’s posting level was down 3% from the 13,310 notices filed for the second quarter of this year.”
  • “All four counties within the D/FW Metroplex had a decline in third quarter’s posting activity compared to one year earlier; and, in all four counties, quarterly postings dropped to their lowest level in two years or more.”
  • “Among the four counties, the deepest decline was a 25% fall in homes posted for foreclosure in Dallas County, which most often ranks with the highest volume of home postings among the four counties in the Metro.”

 

 

 

That’s what I’m hearing about Dallas Real Estate and working to confirm. Washington D.C., and I guess President Obama, are getting their wish. The U.S. is turning into a nation of renters.

Home leasing is up in Dallas by 13%. I WAS TOLD that 2000 of 6000 RE transactions in the first quarter were leases, or about one third, working to confirm with North Texas Real Estate Information Systems. If so, that’s huge for an affordable real estate market like Dallas. Betty Misko at Ebby Halliday says many buyers rent because have no choice: they transfer in to Dallas with homes languishing on the market in other cities, begging for buyers.

And Steve Brown is on this, too. He reports (sub required) that real estate agents are even reporting a shortage of quality lease homes. I am also told by agents there is an overall shortage of inventory — Lakewood’s Scott Carlson is asking for listings. This is gettng to be the story: one M streets-area home was on the home for about a year, which is twice as long as the normal 6 months. But as soon as the “for lease” sign went up out front,  the agent says showings almost tripled.

“There is definitely a shortage of good, quality lease homes,” (real estate agent Darren) Dattalo said. “People that should be buying are leasing instead, but they still want something nice and in the location they would eventually buy in.”

While home sales in North Texas are down about 10 percent so far this year, prices off by 1%, the number of home rentals is up 13 percent, according to statistics from the Real Estate Center at Texas A&M University and NTREIS (North Texas Real Estate Information Systems).

There are only about 4,000 rentals listed with property agents — 10 percent fewer than a year ago, another sign of dwindling inventory.

It is hard to lease a home in Dallas, and getting harder. As one reader emailed recently, why is there not a central site for leases? (One is coming, stay tuned.) Brown says “it takes six weeks to rent a house in North Texas, compared with almost three months to find a buyer.”

I don’t know where he’s getting that three months figure — a healthy market takes six months to move a listing, and we are slightly above that benchmark in Dallas.

It’s true: more high-end properties are now accepting tenants over buyers, since buyers are few and far-between. Many have multiple offers and some are over asking price:

“We had three lease offers on one house in 48 hours,” said Player, who is with Virginia Cook Realtors. “In the past month, I’ve leased three high-end properties.

Experts blame the economy. There’s a lot of uncertainty, says Misko, and with uncertainty comes a lack of desire to commit. Besides, says she, many young people who would be buying first time homes now as they did in 2006 or 2007 don’t have jobs and may be living with their parents. Because of these changes, Misko says all Ebby agents are being trained to handle leases, a less profitable transaction for them than selling a home. Typically,  a lease commission is equal to about one month of the rent, and split between the agents. So even a $9000 lease would net each agent $4500, far less than the 1.5% commission split on the sale of a $1,00,000 home. In California, for example, few real estate agents handle leases. In New York City, apartment leasing agents are considered the dregs of the real estate hierarchy.

Even more shocking: some renters are finding it more expensive to lease than it would cost in mortgage payments to buy a house. But here, too, they are stuck, so they do it.

“If their home has not sold in the city they just came from, they have nothing for a down payment,” says Misko. “And the down payment requirements in general are much larger.”

Stiffer down payment requirements and appraisals — the whole process is so much more cumbersome than it once was. Often getting into a lease home for a couple years is faster than buying.

Here’s the irony: the cost of buying a home in North Texas is at the lowest point in almost a decade, and mortgage rates are so cheap they are practically free. Trulia recently lauded Dallas as one of the cheapest U.S, cities for homes. It costs significantly less to buy a house here than to rent, says Trulia, which, duh, most of us have known for a long time. Remember the guy who bought a home in East Dallas for $12,500? In fact, Trulia found that buying is cheaper than leasing in almost three quarters of the largest U.S. cities. Renters always think that they are free from taxes and home maintenance when they lease, not realizing those costs are covered in their rent and if they increase, so will their monthly rental output. Few landlords are in the business of losing money.

In fact, in a recent Wall Street Journal report, a Sacremento real estate agent spent $500,000 buying four foreclosed homes in California that he has turned to rentals. Investors can cover their monthly costs and are making an average of 8% to 12% profit. I’ll take that over the stock market any day. This has also given rise to real estate investment advisory companies like Cash Cow Investments, which I need to write up one of these days.

Trulia’s Ken Shuman says that homeowners remain on the fence today about renting and buying. For many, there is no choice: home financing is difficult to obtain despite the lowest interest rates in history, larger down payments are demanded, and the nation is in a fog about the housing market. Will prices fall even more? Will the economy ever stabilize? I’ve said it before, I’ll say it again: Mark Dotzour at Texas A&M’s Real Estate Center needs to run for the Oval office, or at least advice the next pres. Here’s his recipe for getting the economy moving:

We are creating such a hostile environment for businesses that we could be in for a long period of economic stagnation in America. What would a business-friendly agenda look like? Well here it is.

Imagine if the President and Congress came out with a bi-partisan plan to:

  1. Repeal the health-care nightmare.
  2. Repeal Dodd-Frank, and come up with 15 pages of meaningful bank reforms.
  3. Tell China to stop manipulating their currency and buy something produced by Americans.
  4. Roll back EPA regulations to 1999 levels.
  5. Roll back all other business regulations to 1999 levels.
  6. Announce an airtight plan to reduce the deficit to zero in seven years.
  7. Lower corporate tax rates to stop companies from fleeing America.
  8. Foreclose on four million homes and sell them to private sector investors.

Dodd-Frank is only going to get worse as regulators come up with 400 new rules. Foreclosures are being held up by fearful banks who do not want to cut the umbilical cord. Those properties could be sold to create much-needed housing for our new renter nation.

I’m not going to say Dallas Real Estate is a hoppin’, but we are really hanging in there. Really. As I mentioned yesterday, I was in Southlake on Saturday, and I went to that adorable Southlake Town Center. Met a cute couple who were building a home in Colleyville because they had just sold their home in Keller in 6 days. Wow!¬† I got nosy and said, so how much did you reduce it by? Was it a fire sale? Only $2000 under asking, they said. You live out here, I asked? Nope, both work in downtown Dallas. They are in Colleyville for a new home, schools and safety.

Welcome to the suburbs, which are not as dead as the media might have you believe. Over on YouPlusMedia, my good friend and super respected home builder Brad Holden says the Frisco new home market is “experiencing a growth that has builders scrambling to get permits for new lots in their communities. This increase in new contracts over the past couple months shows me signs of buyer confidence and the fact of low interest rates slowly rising.” Case in point: Meritage Homes, he said, had 649 closings last year, so Brad wonders where Steve Brown gets his info on home starts plummeting.

Case-Shiller spoke this week, and we all grabbed our Depends. CS says Dallas-area pre-owned home prices dropped just 1.2 percent in February 2011 from a year earlier. That’s really not bad. Not trying to be Susie Sunshine, but I’d almost say they just held steady.

In fact, the decline in the LOCAL Standard & Poor‚Äôs/Case-Shiller Home Price Index was a lot better than what we’ve been hearing, especially when prices were about 3 percent or 4 percent lower than last year.

There are two ways to look at this. One, is to be Steve Brown and note that Dallas-area home prices have been down for eight consecutive months. Well, he has a point.

Or we could note, as Dr. James Gaines over at the Real Estate Center at Texas A&M University, that the diminishing is getting better.

“It could indicate a trend toward being back to even or perhaps even start a trend toward positive increases,” Gaines said Tuesday.

Did he say positive increases?

Case-Shiller said our price decline was less than half of what the rest of the nation suffered, which was about 3.3 percent. Prices were down in all of the 20 major Case Shiller markets with the exception of Washington, D.C.

Nice to know our tax dollars are helping lift that market.

‚ÄúThere is very little, if any, good news about housing,‚Äù Standard & Poor‚Äôs David Blitzer said. ‚ÄúPrices continue to weaken, while trends in sales and construction are disappointing.”

You talk to these guys, it seems that the economic recovery is moving about as fast as a slug.

Steve says Dallas-area home prices are now about 10 percent below the Case-Shiller mid-2007 peak in the Case-Shiller index. Could we be coming out of the tunnel? David Brown at Metrostudy says maybe. Brown  also thinks that the dearth of housing inventory could bring on inflation in home prices.

“For-sale housing inventory is not growing, even with sales at a low for this housing cycle,” Brown said. “Demand is likely to grow.”