migration

Photo courtesy Wikimedia Commons

How many people are coming — and leaving — Dallas County? Has there been a local shift to more affordable new homes? What local journalist has been tapped to be a keynote speaker at a financial services conference?

We have all this in this week’s roundup of real estate news.

Dallas County Posts Some of the Highest In-and-Out Migration Numbers

Texas has the second-highest domestic in-and-out migration in the country — and Dallas County and Harris County have some of the biggest influxes of new residents, new U.S. Census data revealed last week.

The 2017 American Community Survey revealed that Dallas and Harris counties had some of the highest inbound migration numbers, with 117,129 moving to Dallas County and 175,286 moving to Harris County. (more…)

Summit

From left, Metrostudy regional director Paige Shipp, Zillow Group Insights Director Mary Kaye O’Brien, and NAHB CEO Jerry Howard will speak at the Dallas Builders Association’s State of the Industry Summit on March 26.

From the Dallas Builders Association

The State of the Industry Summit, presented by Zillow Group, will feature NAHB CEO Jerry Howard, Metrostudy Regional Director Paige Shipp and Zillow Group Insights Director Mary Kaye O’Brien. The Summit, will be held on Tuesday, March 26 from 9 a.m. (doors open at 8:30) until 11:30 a.m. at Venue Forty|50 in Addison.

As the chief executive of NAHB, Jerry Howard’s leadership ensured that housing remained a priority in recent tax legislation. Howard continues to lead NAHB’s advocacy efforts through contentious times on Capitol Hill. NAHB recently scored key victories on regulatory reform, helped reduce the rising cost of lumber and assisted property owners facing regulatory overreach at the U.S. Supreme Court. (more…)

The Margaret Hunt Hill Bridge in Dallas. (Photo: Pixaby)

Metrostudy’s 4Q17 survey ranks Dallas-Fort Worth the top new home market in the nation. According to the report, DFW builders started 33,243 homes in the past twelve months, of which 8,561 started in the fourth quarter. The survey, which compares 4Q17 to 4Q16, reveals new home starts jumped by a whopping 16.9 percent — a major indicator of builders preparing for a strong spring selling season.

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Dallas is still the top location for home building, according to data from Metrostudy.

New data from Metrostudy shows that Dallas is still the top new home market in the country, with builders starting 31,911 homes in the 12 months ending in the third quarter of 2017. Additionally, quarterly new home starts increased 7.6 percent year-over-year, with new homes priced between $200,000 and $350,0000 seeing the greatest buyer demand. Shockingly, new home starts in the luxury range — starting at $750,000 — overran third quarter 2016 numbers by more than 60 percent. 

Price increases are getting pushback from buyers, according to Metrostudy’s research. The median new home price seems to be stagnating around $321,000. That’s good news for homebuyers still hoping to snag a new build without breaking the bank.  This, however, highlights the affordable housing crisis in Dallas-Fort Worth, Metrostudy notes. “In order to satisfy the greatest buyer demand, builders and developers must work together with municipalities to deliver attainably priced new homes or D/FW could be on the declining end of the cycle sooner rather than later,” the report stated.

Jump for the full report:

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Even as the price of new-builds in Dallas remains largely stagnant, a report last month suggests that housing affordability will remain a primary concern for the foreseeable future. According to Metrostudy, the area’s low housing inventory streak continues unabated, and the median home price inches ever upward, reaching $320,600 last quarter. Resale prices of homes show no signs of slowing and new home starts in the $200,000 or under price range have become relics of the past.

“New homebuyers are stretched to the limit of what they can afford,” said Paige Shipp, Director of Metrostudy’s Dallas-Ft Worth market. Tell us about it.

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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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New housing starts have grown the most in the $300,000 to $400,000 price ranges. (chart: Metrostudy)

 

More confirmation that Dallas has pricey dirt in this latest report from Metrostudy: While housing starts are up to the tune of 12.4 percent year-over-year and 8.3 percent over last month, few of those have been in more affordable price ranges. More people who would have preferred to buy new construction have turned to the existing home market, and those unable to find an affordable home in the market have turned to renting in droves.

“New home starts below $200,000 dropped as starts between $250,000 and $400,000 surged,” said Paige Shipp, Regional Director of Metrostudy’s Dallas Office. “Although starts between $200,000 and $250,000 increased, a diminishing supply of homes at that price point is a concern. Buyers seeking affordable housing near employment and urban core are forced to buy from the limited resale market or into the rental market. Starts during the third quarter surged 38.9% and 74.5% higher than the second quarter for homes priced $250,000 to $750,000. The most notable increase in starts was in the $300,000 to $350,000 range, which is quickly becoming DFW’s new “affordable” price point.”

That’s exactly what we heard from the Real Estate Center at Texas A&M University last month, as economist Dr. Jim Gaines noted the gap in the less-than-$200,000 bracket:

“For years in Texas, we have had the most affordable housing for a major metro area,” said Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University. “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.”

So what fallout could we expect from that? What is the increased demand for leases in Dallas-Forth Worth doing to rents?

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Sold and Sales Pending signs 002This is one of the reasons why agents are risking the wrath of MLS and advertising properties before they even come on the market: lack of inventory. Dallas-Fort Worth builders are working their butts off to build, but still the finished inventory of vacant homes in North Texas is at a 20-year low. All that is pushing lot prices up up and away.

“The low lot inventory is continuing to push lot prices in the high demand locations,” said David Brown, regional director of Metrostudy, now a Hanley Wood company that analyzes real estate 24/7. Metrostudy released its third-quarter housing report for 2013 on Wednesday.

If we don’t see more lot deliveries in the top submarkets this quarter and first half of next year,  housing starts may slow due to supply constraints, he says.

This year, builders are expected to build the most new home starts since 2007 and the depths of the Recession: 22,000 new homes. I know the Dallas Builders Association is revved up.

But even though DFW builders started 19 percent more homes in the third quarter of 2013 (compared with 2012), there is still 5 percent less inventory in North Texas, according to Metrostudy.

That’s because people are still moving into the area like crazy, ditching homes in other parts of the country. Down in Austin, sources tell me Californians are killing that market by shedding pricey homes in Cali and paying full price cash for homes they snap up in Travis County. To a lesser extent, that is happening in Dallas. There is only a 1.5-month supply of homes in North Texas, 6 months is the usual norm.

I know what you are thinking, and Brown confirmed it: this lack of inventory will likely lead to higher prices for homes into next year’s spring selling season.