Best real estate markets 2016

Nearly a decade after the housing crisis that sent the U.S. economy into freefall, housing is most certainly back—just look at our DFW market. Citing U.S. Census Bureau data, the New York Times recently reported that sales of new single-family homes nationwide were higher this past July than in nearly 10 years.

Nationwide, a company that tracks the health of U.S. real estate, reported at the end of quarter two that “the overall U.S. housing market is sustainable,” adding that “few regional housing markets are vulnerable to a housing downturn.”

In a new study, financial services site WalletHub compared 300 U.S. cities across 16 key metrics to help prospective home buyers find the most attractive real-estate markets. Their data set ranges from “median home-price appreciation” to “housing affordability” to “job growth.”

North Texas cities scored big: Frisco, McKinney, Richardson, Allen, and Plano made their top-ten list of best real estate markets nationwide in 2016. Denton, Carrollton, Fort Worth, Irving, Grand Prairie, and Dallas scored in the top 50.

So what made DFW cities score so high?

“North Texas cities have healthy and sustainable real estate markets,” said WalletHub analyst Jill Gonzalez. “Very few homes have negative equity, home appreciation in the past seven years has continued to increase, and foreclosure rates are extremely low. In addition to having a healthy real estate market, these cities are affordable with low maintenance costs and cost of living. Not to mention, the economic environment in North Texas is thriving, boasting some of the lowest unemployment rates in the country (under 3 percent across the board).”

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La Casa del Viento (the Wind House), built in 2013 near Jalisco, Mexico, by Carlos Avila, with architect Ricardo Agraz, and plastic arts by Adrián Guerrero. All photos by Mito Covarrubias, except where noted.

Modern architecture in the North Texas area has lots of fans, but the range of houses offered can be limited. Often, they are custom-build or luxury only.

Cavso Homes is aiming to change that with their unique style of planning and building homes. They plan to offer eco-friendly, modern houses all over DFW, ranging from affordable to luxury.

“We plan keep doing single houses and townhouses, but in about two years, we are planning to build a complete complex,” said one of Cavso’s owners Carlos Avila. “We could talk about tons of statistics explaining why Dallas is the best place for Cavso Homes to start [in the U.S., but really], the Dallas Metroplex chose us!”

Cavso homes

Fabricio Solorio, Alberto Casillas, and Carlos Avila on site at a local Cavso home. Photo courtesy of Carlos Avila

The name Cavso Homes comes from the last names of its three owners, builder Alberto Casillas, project manager Carlos Avila, and business manager Fabricio Solorio. They are based out of Guadalajara, Mexico, and now call DFW home as they offer houses for sale (they have two completed houses in Irving and five future projects planned), custom homes, and their services as builders.

“The owners of Cavso Homes came together to create a different company with an integrated view of a home, and the goal of offering clients better living,” Casillas said. “We listen what clients have to say about their new house, analyze that, and take all of it into consideration for future designs. There is also a person who follows all the steps during the life of a project in order to understand a house like the unique project it is.”

Vivo Realty agent Kimberly Mitchell is working exclusively with Cavso Homes these days, and Vivo is doing all the marketing for the homes.

“Cavso Homes has a wonderful vision for bringing affordable modern homes to Dallas and not sacrificing quality and craftsmanship,” Mitchell said. “We think this is great because modern homes are generally thought of as a high-end product. We think this will be superb for Dallas!”

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employment growth

In Texas, it’s all about jobs, jobs, jobs.

A new report from the Real Estate Center at Texas A&M University says that the Texas economy gained 276,400 nonagricultural jobs from June 2014 to June 2015, an annual growth rate of 2.4 percent, compared with 2.1 percent for the United States. Many of the major metropolitan areas in the state saw much bigger gains, like North Texas.

The Dallas-Plano-Irving metro area ranked No. 2 in job creation in the state (Midland was No. 1), followed by Odessa, Beaumont-Port Arthur, Austin-Round Rock, and San Antonio-New Braunfels. Fort Worth-Arlington ranked No. 7, with 2.7 percent job growth.

“The North Texas economy is more dependent on the U.S. economy, so it’s not energy-based, compared to the Houston or Midland-Odessa economy, where energy has a bigger weight,” said Real Estate Center research economist Luis Torres. “Because the U.S. economy is growing and doing better, you’re seeing that reflected in the Dallas economy.”

In fact, every single Texas metro areas except Wichita Falls had more jobs in June 2015 than a year ago.

Big sectors for job growth were:

  1. Leisure and Hospitality: 5.05 percent growth
  2. Education and health services: 3.87 percent growth
  3. Professional and business services: 3.54 percent growth
  4. Transportation, warehousing and utilities: 3.52 percent growth
  5. Construction: 3.34 percent growth

“The correlation between the Dallas economy and the U.S. economy is very high, and the main reason is because Dallas is a transportation hub and all the goods and services that pass in the state use Dallas transportation systems,” said Real Estate Center research economist Ali Anari.

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Photo: Lisa Long

Photo: Lisa Long

Lisa Long is a single mother and pottery teacher in Richardson ISD who recently decided to sell her three-bedroom Irving house after five years and move closer to work.

Long found herself in a situation emblematic of the fast-and-furious pace of the North Texas real estate market: Her house was on the market for 52 hours and in that time, she got 14 offers, ultimately selling for almost $10,000 above list, plus closing costs.

Great news, right? But Long was thinking the sale would take longer, and give her more time to decide where she and her five-year-old son Luke want to live. Long loves Dallas, but looking at the drive to Richardson, maybe something closer would make more sense. Also, she’s looking at a max budget of $150,000, which somewhat restricts her choices. Finally, properties are selling so fast, she’s got to move quickly if she wants to buy.

“There’s not a lot out there—it’s such a sellers market,” she said. “My dream house would be something small, not more than 1,300 square feet, because I don’t want to have to clean a lot. I’d also like two to three bedrooms, and I need a place to do pottery, like a garage, or studio outside that I could get dirty.”

Also on her wishlist:

  • A yard or community space for Luke
  • Good neighborhood where Luke can play with other children
  • Nearby park

Schools aren’t an issue, since Luke will be able to attend RISD (an awesome perk for teachers there).

We went virtual house hunting with Long and looked at what’s available in her price range that fits her needs and wants. We found four properties that seem to fit the bill.

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6822 Oeste A

The Dallas Cowboys may be bidding farewell to Las Colinas, but homebuyers can’t get enough of this master-planned community in Irving. It’s a clean, attractive suburb with more than 190 acres of parks and greenbelts, 17 miles of canal waterways, and 10 miles of riverside hiking and biking trails.

More than 33,000 call Las Colinas home, and the average house price in the community is $566,417, according to Realtor.com. That makes today’s Tuesday Two Hundred a real find: the townhome at 6822 Oeste Dr. is newly listed by Leslie Knutson at RE/MAX Premier Group for $275,000. The price-per-square-foot of $155 is less than the Las Colinas average of $167 per square foot, and this townhome has hardwood floors, stainless steel appliances, and granite countertops.

This Mediterranean-style property has stucco exterior walls, red roof tiles, and is part of the La Villita Townhomes. It has two bedrooms and 2.5 bathrooms on two stories in 1,772 square feet built in 2007 and is walking distance to the Lago de Claire and the Gran Via canal, a meandering waterway near jogging trails.

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4459 Lena extI don’t know if thinking about how big and scary Igor Olshansky looked when he played for the Dallas Cowboys, with those tattoos and all, can make us feel any better about last night’s tragic game. Oh. My. God. 20 to 17 in OVERTIME!

Igor is selling his Irving home in Fairway Vista. Maybe if you buy it, it will bring some magic football fairy dust to the Dallas Cowboys this Sunday. (more…)

Property For Rent

We wanted to get some boots-on-the-ground perspective from North Texas Realtors after Forbes named Fort Worth-Arlington and Dallas-Plano-Irving as the top two “best buy cities,” or areas in the U.S. where buying a home is a good investment. Forbes teamed up with Local Market Monitor to measure the “equilibrium home price,” which strips away several layers of market influence such as speculation and the cyclical boom-bust nature of housing.

Fort Worth-Arlington, Tex., and Dallas-Plano-Irving, Tex., top the list of our Best Buy Cities, at No. 1 and No. 2, respectively. Both cities offer homes that would be within reach for middle-class Americans, at $168,383 in Fort Worth-Arlington and $180,645 in greater Dallas. Prices in greater Fort Worth are considered 20% below their actual value, according to Local Market Monitor. Homes in the greater Dallas region are 12% down, so less off, but they are expected to rise more–29%–over the next three years.

For buyers who intend to rent out their homes, the populations in these cities are growing at a healthy clip: from 2009 to 2012, at 4.9% in Fort Worth and 6.1% in Dallas. At that rate, Dallas is tied for the fastest-growing city on the Best Buy Cities list. It’s ranked fifth in terms of job growth, at 3% as of the latest Bureau of Labor Statistics stats.

 

While we do like our reports from Local Market Monitor, which give clear investment outlooks, our major sticking point with broad surveys such as this one is that real estate markets are hyper-local, meaning that West Plano could be having an outstanding year, with tons of price increases and new development, but on the other side of U.S. 75, growth may not be as great. The same holds true for neighborhoods such as Berkeley Place in Fort Worth, where some homes are reaching price peaks never seen before, while northern Fort Worth suburbs may be struggling to break even.

Still, Realtors remain optimistic, pointing to growth across all price points and through many different developments. Condos are up, single-family homes are up, new homes are up, and investment buyers are out of control.

“The fact that Dallas, Plano, and Irving are named as the No. 2 metro area to buy a home for investment in the U.S. is no surprise at all,” says Vivo Realty founder David Maez, who is based in Plano. “Our job market is, and always has been one of the best in the nation. That together with low cost of living, a high percentage of renters, and good schools, it’s an investor’s dream.”

Maez specializes in the northern suburbs of Dallas, where you’ll see tons of single family homes for sale and for rent, in his area, Realtors are noticing tons of activity on MLS for buyers and for renters. Maez is currently working with many investors, both local and out-of-state, all of which are looking to capitalize on the North Texas market.

“In the field we are seeing no more than 10 to 15 days on the market for a good lease, sometimes leasing on the same day. Supplement to that, home prices are also very affordable — you can find an amazing home here for $160K to $200K,” Maez added. “So whether you’re looking to purchase your first home or are a first-time investor looking to pick-up a rental, this is an amazing market to do so.”

 

CoreLogic HPI Jan 14

CoreLogic’s newest HPI report released today showed that Texas real estate professionals have good reason to blame their busy days on the hot market. Home prices in Texas are at new highs (yes, higher than pre-bubble manic market highs!), with January 2014 up 10.1 percent over a year ago, and home prices up 1.2 percent from Dec. 2013 (numbers include distressed sales).

In the Dallas-Plano-Irving MSA, home prices are up 12.2 percent year-over-year including distressed sales, and up 10.4 percent excluding distressed sales. National numbers show home prices up 12 percent year over year for January. This is the 23rd consecutive month that home prices have increased, and Texas is one of only three states that has reached a new peak in home prices after the housing bust. And despite near-record appreciation, Nevada is still 40.1 percent below peak prices, CoreLogic’s report showed. Incredible.

“Polar vortices and a string of snow storms did not manage to weaken house price appreciation in January,” said CoreLogic chief economist Mark Fleming. “The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.”

So, winter didn’t slow Dallas down, and we’re looking at a brisk spring selling season ahead. Still, real estate prices are a hyper-local economy, and while some areas are seeing hand-over-fist sales and appreciation (we’re looking at you, Lake Highlands and University Park) some areas will only see more modest gains. The key, of course, is pricing a home correctly and being flexible.

Where are you seeing break-neck appreciation and sales pace?