Phil Crone dba

by Phil Crone, Executive Officer, Dallas Builder’s Association

What a year it has been! Homes are where the jobs sleep at night, and we have had added plenty of both in 2016. More than 113,000 jobs and nearly 30,000 homes lead most housing economists to rank Dallas-Fort Worth as the nation’s top housing market, snatching that title from Houston in the middle of this (almost past) year.

So with the good times rolling here more than anywhere else, what more could we ask for? Don’t get me wrong, I would gladly take these two issues over the problems we had eight years ago. They are correctable if we take ownership of them. We need to own them or else we are in serious danger of losing the affordability advantages that have been a major factor for our prosperity.

That leads me to my first wish for the Dallas housing market, that we address our labor shortage. (more…)

Tiny homes under construction at The Cottages at Hickory Crossing Photo: Lisa Stewart Photography

Tiny homes under construction at The Cottages at Hickory Crossing Photo: Lisa Stewart Photography

We turned to local experts for guidance on what to expect and enjoy in the home building industry. This is the first in a series of posts we will run in partnership with the Dallas Builders Association, a shining star among professional organizations, whom we are honored to proudly partner with.

By Phil Crone, Executive Officer, Dallas Builders Association

I’m neither a Democrat or Republican, I’m a Houser. Housing affordability and the opportunity of homeownership are what our Association specializes in and the conversations are well received on BOTH sides of the aisle. Our industry has succeeded and struggled under both Democrat and Republican Presidents, and the script for our advocacy efforts is usually a predictable one depending on who occupies the White House. As pollsters and prognosticators now wearing egg on their face found out, past performance is not a predictor of future results. A Trump Presidency will be different, but the questions facing the housing market are the same, and their answers will determine the fate of our economy both here in Dallas and for our nation.

The prospect of a President Trump first entered my mind in August when he addressed our National Association of Home Builders Board in Miami. The vast majority of Trump’s speech focused on his experiences with his dad, who was a home builder, how he would pick up extra materials to use for the next job, how he valued his workers from all backgrounds, who put in a good, long, honest day’s work. He further connected with the audience when he said he knew just how much regulation was having an impact on the industry. He cited the significant increases to the cost of health care they were experiencing as a specific item he would address right away. The audience was captivated. Mr. Trump concluded the speech by accusing Secretary Clinton of being the founder of ISIS.

Guess what part of his speech made the headlines?

The last few years of the Obama administration have been pretty darn good for the Dallas-area housing market. Since homes are where the jobs sleep at night, record job growth in our region has led to a red hot real estate market where demand outpaces supply. Whether that success was because of or in spite of President Obama, I’ll leave for you do decide, but the fact of the matter is, we have a pretty strong tailwind pushing our region’s economy. But we also have several challenges. How President Trump confronts those challenges will have a “yuge” impact on our continued success.

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Millennial Homebuyers

Nationally, about half of American homebuyers are under 36, according to the latest study on consumer trends from Zillow, putting them squarely in the Millennial camp, born from the early 1980s to the early 2000s.

Mail surveys from the National Association of Realtors indicate that first timers account for about 32 percent of all buyers, and Dallas Builders Association member builders ranked Millennials behind Generation X and Baby Boomers as their most common buyer in a recent survey.

The contrasting studies may be related to the methodology, but the Zillow study provides optimism about Millennial homebuyers.

Millennials have been slow to buy their first house—housing economists call this “delayed household formation” and cite it among Millennials as one of the biggest reasons we saw a slow housing recovery nationwide.

According to the National Association of Home Builders, 65 percent of Millennials hope to buy a single-family home. But this age cohort experienced the largest decline in homeownership rates since 2006. In fact, only 34.1 percent of Millennials own a home, down from 39 percent in the second quarter of 2010, according to the most recent U.S. Census Bureau’s Housing Vacancy Survey, which reported data from 2010 to 2016. A recent Pew Research Study further shows 32 percent of Millennials still live with their parents.

How do Millennial homebuyers fare in DFW? We’re experiencing record growth and are on track to add more than 100,000 jobs this year, causing price increases, especially for new homes. The median closing price for a new detached home in the Dallas-Fort Worth region increased 5.4 percent year-over-year to $305,637 in August, compared to the median closing price for an existing detached home, which is now $217,360.

“Market demand, increasing local regulations, and an ongoing labor shortage are all reasons why the average new home is more than $88,000 more expensive than the average existing home,” said Dallas Builders Association Executive Officer Phil Crone. “Obviously, that kind of premium is going to make it difficult for most first-time homebuyers to step into the new home market. We need to ensure our market and our industry meets the needs of Millennials as they hold the key to our region’s continued prosperity.”

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dallas housing market

The Dallas market continues to sizzle, with the median price for single-family homes increasing by about 8 percent in May compared to last year.

To paint a bigger picture, prices in North Texas have increased by about 40 percent since the 2009 economic recession, according to a new report from the Dallas Builders Association (DBA) and Meyers Research for the Dallas-Fort Worth-Arlington Metropolitan Statistical Area.

Earlier this year, Dallas overtook Houston as the leading new home market in the country, and it still keeps that spot. Overall, housing inventory was at a 2.3 months’ supply with certain areas, like Collin County, with even less.

The report says about 29,000 new homes are expected in the North Texas region by the end of 2016. This is due in part to one of the strongest employment markets in the country. But prices are still going up, with labor shortages and more regulation increasing prices as builders still struggle to keep up with demand.

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