Unless you’ve been on a “cut the cord” vacation, you’ve seen last week’s headlines warning that an inversion in the bond market has folks worried we’ll be entering a recession soon. About a third of economists think we’re likely on that road. Remembering the Great Recession, should we shun the real estate market?

No.

As the New York Times points out, the last two big recessions occurred because something was in a bubble. In the early 2000s, it was the tech bubble and resulting crash made worse by September 11. The Great Recession began in the housing market that exposed shady lending and rippled into the global financial crisis.

At the moment there is no similar bubble out there. There are trade wars and tariffs. There are diplomacy stand-offs and a global rise in nationalism and populism that are fraying the stability of historic global ties. These governmental policy issues largely affect the business world and cause uncertainty which leads to conservative spending. Consumer spending is still chugging along fine.

But let’s say that business decides to pullback in a real way which starts the domino effect of lost jobs, lower wages that then do impact consumer spending (two-thirds of spending). Then we may see real estate prices impacted.

But again, learn from history.

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PlanoPlano hits the top 20 when it comes to best places to rent, we have a look at June’s single-family and multi-family housing starts, and homeownership is up for one key age group. We have all this and more in this week’s roundup of real estate news.

Best Places to Rent? In North Texas, Start in Plano

Source: WalletHub

If you want to look for the best places to rent in North Texas, you’re going to need to head to Plano, where the city came in 19th out of 180 cities in a new report on the best and worst places to rent by personal-finance website WalletHub. (more…)

affordable home

Photo courtesy Flickr/Woodleywonderworks

It’s official — the likelihood of finding an affordable home for less than $200,000 in Dallas-Fort Worth is slim to none, economists with Metrostudy said last week.

“While DFW’s strongest price point during the last cycle, below $200,000, is no longer viable, the “new affordable” price bracket, $200,000 to $300,000 grows,” Paige Shipp, regional director of Metrostudy’s Dallas-Fort Worth market said. (more…)

real

Texas schools aren’t failing, but they’re close, Education Week’s annual report card revealed. The biggest mark against the state seems to be no surprise — school finance (we talked more about how school finance affects the real estate world here). (more…)

housing starts

It used to be fairly easy to find a new home for under $200K in North Texas. But according to a recently released report from Metrostudy, first quarter 2016 data shows a “new normal,” reflecting a meteoric rise in starts above $200,000, meaning it’s harder than ever to find a new home in the sub-$200K price range.

“When comparing the increase in starts and closings year-over-year, starts between $250,000 and $299,999 are nearly three times the closings increase,” said Paige Shipp, Regional Director of Metrostudy’s Dallas office. “Starts between $300,000 and $349,999 jumped 81.2 percent, which is almost twice the increase in closings. Conversely, starts below $200,000 have dropped 14.6 percent and closings plummeted 31 percent.”

With rapidly rising land and development costs, developers tell Metrotex there is not much hope for the revival of the sub-$200,000 new home market in North Texas. This will remain an issue until cities, developers, and builders understand and deliver higher-density lots and smaller homes to the market, Sharp explained.

Metrotex isn’t the only one ringing this bell — for some time, other experts have said the same thing. We wrote a piece in November of last year where Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University, explained:

“For years in Texas, we have had the most affordable housing for a major metro area,” he said. “Affordability and workforce housing are going to be a major issue — we are not building enough houses in the $150,000 to $200,000 bracket.”

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Brad Hunter MetrostudyThe big takeaway from this morning’s homebuilding panel at the National Association of Real Estate Editors spring conference is that land — more specifically, the lack thereof — is responsible for our lagging new home inventory and the dearth of new home starts in the nation. And while the pool of potential homebuyers is relatively large and stable, low inventory is driving prices up, making starter homes out of reach for many first-time homebuyers.

“Housing starts are down because land is not available where builders want to build,” said Metrostudy’s chief economist, Brad Hunter. “Builders are plowing golf courses under and building houses.”

According to Hunter, the new home market is no longer suffering from distressed properties and demand is improving, but tight inventory is a huge problem. According to his figures, the Dallas/Fort Worth region has just less than 3,000 units of available housing inventory, which is approximately seven weeks of supply. Yikes!

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