Photo courtesy of Robert Hensley via a Creative Commons license

Photo courtesy of Robert Hensley via a Creative Commons license

Dallas is one of 15 top markets poised to attract baby boomer homebuyers because of an affordable cost of living, sunny weather, and friendly business climate, according to new research by the National Association of Realtors (NAR).

NAR looked at 100 metro areas with lower state taxes (or none at all, as is the case in Texas), stable job market conditions, and strong migration patterns of “leading-edge baby boomers” (those 60-69) moving to that area. By doing this, they predicted which housing markets are likely to see a boost from baby boomers. Cost of living, housing affordability, and housing inventory availability were also factors in their rankings.

For these reasons, Dallas was identified as one of five markets with strong potential for attracting baby boomer homebuyers.

“It comes down to housing affordability, and lower tax rates in the Dallas area and the state as a whole,” said Adam DeSanctis, NAR economic issues media manager. “More boomers after 65 are working, some because they have to, or feel like they have to, but also those that are healthier and want to maintain an active lifestyle. Those [baby boomer] business owners come to Dallas for its dynamic local economy.”

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David Woo The Dallas Morning News

David Woo The Dallas Morning News

I mean, dang! Dallas home prices are up 7.1% from last year overall. Is that not great to hear? Prices of pre-owned homes scooted up a whopping 7.1 percent in February from February 2012, a record increase. Like, the biggest increase since Case Shiller has been keeping records. Talk to the agents, they say North Texas home prices are up about 8 percent over the first three months of 2012, according to the MLS. And many sales are being made outside of the MLS.

But like Steve Brown points out, that is a bit lower than the magic some other cities did: Home price gains here are less than half what they are in places like Phoenix, San Francisco and even Detroit, at least according to Case-Shiller. Case Shiller tracks only home re-sales, not new homes, not condos or townhomes.

But that’s OK. Doesn’t bother me one bit. Not losing sleep. Phoenix real estate was in the pits, Detroit still is to a certain extent, and San Francisco is just an anomaly of a highly desirable location coupled with a whole lot of rich young people. Rich old people, too, and tech. My son just bought a home in Redwood City and it was seriously a battle. Paid more than asking.

By the way, this DMN photo by David Woo is of a house I saw Saturday in Hollywood Heights where my daughter just bought. It had a “coming soon” sign on it then — our market is so hot, we are selling off the “coming soon” signs in many neighborhoods!

Our market’s health is starting to get notice from others. When the whole country lost mega real estate value, we in Dallas lost only about 11 to 12%. We had our foreclosures,  but we were not drowning in them. You know I credit our state’s home equity lending regulations for that.  In some parts of the country? Folks lost 40, even 50% in price valuation drops.

Values in San Francisco don’t ever go down, even if there is an earthquake.

Here is how David Blitzer, chairman of S&P’s index committee, put it:

“In the last 10 years, when most of the country was going berserk with housing, you guys managed to keep your heads on your shoulders,” he said.

So no duh, we lost less, we will rebound at lower rates than the sink hole markets.

Let’s look back at the early and mid-2000s: home prices in many coastal and Southwestern cities exploded by double-digit annual increases. Personally, I never got why Phoenix was so hot. Phoenix is hot, but where’s the employment? Where are the jobs? Phoenix got hot because of California. It was seen as an affordable alternative once someone tripled their investment in San Diego. Make no mistake, some of our pace, too, is fueled by Californians moving to Dallas.

Since North Texas wasn’t a “bubble” market, prices here fell a lot less than in other U.S. cities when the poop hit the fan. Some no-so-brights even suggested that it was bad we missed the bubble — I disagree wholeheartedly.

Nationwide, home price values are still down about 30% from the hot tamale years of 2006, according to Case Shiller. At their worst, they were down 40%. Baby steps, OK? But this is why we need to thank Jesus (or Allah) for the hum in our market. Other markets are still not so hot. Basically, real estate is like weight gain. You know how bad it is for you to gain then lose? You are always running to the tailor, you feel bloated, etc.

“Dallas benefits in that you have less ups and downs,” said Blitzer.

Like a model’s bod.

Blitzer said that home price increases in the total Case-Shiller report are now at the highest level since May 2006. He says housing continues to be one of the brighter spots in the economy. But a couple of things to watch:

– Price increases are being fueled by low housing inventories: “Slim Pickins” reports the Wall Street Journal in Dallas, Atlanta, Los Angeles, San Francisco, Phoenix, Detroit, Seattle and Washington, D.C. See any cities on this list with price escalation?

– Overall home ownership rates are down, according to the US Census Bureau: The Census Bureau reported Tuesday that the nation’s homeownership rate slipped to 65 percent in the three months that ended in March, a decline from 65.4 percent posted in both the first and last quarters of 2012. A blip, perhaps, but home ownership rates have been declining since 2007.

Let’s see what Washington is going to do with the home mortgage deduction!

-Home appraisals. Need I say more?

 

 

David Woo The Dallas Morning News

David Woo The Dallas Morning News

I mean, dang! Dallas home prices are up 7.1% from last year overall. Is that not great to hear? Prices of pre-owned homes scooted up a whopping 7.1 percent in February from February 2012, a record increase. Like, the biggest increase since Case Shiller has been keeping records. Talk to the agents, they say North Texas home prices are up about 8 percent over the first three months of 2012, according to the MLS. And many sales are being made outside of the MLS.

But like Steve Brown points out, that is a bit lower than the magic some other cities did: Home price gains here are less than half what they are in places like Phoenix, San Francisco and even Detroit, at least according to Case-Shiller. Case Shiller tracks only home re-sales, not new homes, not condos or townhomes.

But that’s OK. Doesn’t bother me one bit. Not losing sleep. Phoenix real estate was in the pits, Detroit still is to a certain extent, and San Francisco is just an anomaly of a highly desirable location coupled with a whole lot of rich young people. Rich old people, too, and tech. My son just bought a home in Redwood City and it was seriously a battle. Paid more than asking.

By the way, this DMN photo by David Woo is of a house I saw Saturday in Hollywood Heights where my daughter just bought. It had a “coming soon” sign on it then — our market is so hot, we are selling off the “coming soon” signs in many neighborhoods!

Our market’s health is starting to get notice from others. When the whole country lost mega real estate value, we in Dallas lost only about 11 to 12%. We had our foreclosures,  but we were not drowning in them. You know I credit our state’s home equity lending regulations for that.  In some parts of the country? Folks lost 40, even 50% in price valuation drops.

Values in San Francisco don’t ever go down, even if there is an earthquake.

Here is how David Blitzer, chairman of S&P’s index committee, put it:

“In the last 10 years, when most of the country was going berserk with housing, you guys managed to keep your heads on your shoulders,” he said.

So no duh, we lost less, we will rebound at lower rates than the sink hole markets.

Let’s look back at the early and mid-2000s: home prices in many coastal and Southwestern cities exploded by double-digit annual increases. Personally, I never got why Phoenix was so hot. Phoenix is hot, but where’s the employment? Where are the jobs? Phoenix got hot because of California. It was seen as an affordable alternative once someone tripled their investment in San Diego. Make no mistake, some of our pace, too, is fueled by Californians moving to Dallas.

Since North Texas wasn’t a “bubble” market, prices here fell a lot less than in other U.S. cities when the poop hit the fan. Some no-so-brights even suggested that it was bad we missed the bubble — I disagree wholeheartedly.

Nationwide, home price values are still down about 30% from the hot tamale years of 2006, according to Case Shiller. At their worst, they were down 40%. Baby steps, OK? But this is why we need to thank Jesus (or Allah) for the hum in our market. Other markets are still not so hot. Basically, real estate is like weight gain. You know how bad it is for you to gain then lose? You are always running to the tailor, you feel bloated, etc.

“Dallas benefits in that you have less ups and downs,” said Blitzer.

Like a model’s bod.

Blitzer said that home price increases in the total Case-Shiller report are now at the highest level since May 2006. He says housing continues to be one of the brighter spots in the economy. But a couple of things to watch:

– Price increases are being fueled by low housing inventories: “Slim Pickins” reports the Wall Street Journal in Dallas, Atlanta, Los Angeles, San Francisco, Phoenix, Detroit, Seattle and Washington, D.C. See any cities on this list with price escalation?

– Overall home ownership rates are down, according to the US Census Bureau: The Census Bureau reported Tuesday that the nation’s homeownership rate slipped to 65 percent in the three months that ended in March, a decline from 65.4 percent posted in both the first and last quarters of 2012. A blip, perhaps, but home ownership rates have been declining since 2007.

Let’s see what Washington is going to do with the home mortgage deduction!

-Home appraisals. Need I say more?

 

 

Clear Capital, a California-based housing and finance analyst, says we can be downright proud of our market: Dallas-Fort Worth home prices will rise by another 1 percent during the next six months.

The good news: more markets are improving than not, should sustain the slow winter and come out with a roar come spring. In fact, Clear Capital says home prices are increasing in most major U.S. markets.

The Dallas forecast — the whole area — is a little less than a 3 percent gain seen in some other markets. But I never fret about this for several reasons:

One, real estate is such a local story it isn’t even funny. Values can differ on the same street! Our Park Cities and Preston Hollow markets are sizzling — talked to Dave Perry Miller this morning, he sold a Dilbeck on Strait Lane before it even came on the market. I’m having lunch with Brian Hagan, so stay tuned.

Clear Capital figures D/FW home prices have risen just over 2 percent in the last year, which is less than a nationwide average of 4.74 percent.

But if you look at Phoenix, where home prices are up 27.7 percent, you are not talking apples to apples. Phoenix prices more than plunged — I mean they were in the gutter! — and many homeowners are still underwater out there. Poor Providence and Atlanta — Rhode Island’s capital is down by 5.2 percent, and Atlanta is down 1.2%. Reason? No jobs.

Still, if you bought low in Phoenix, this may be a good time to sell. Which brings me to my next point: don’t get all giddy and break open the Veuve Cliquot just yet. One of the reasons our markets are doing so well is tightness from the banks and a piddly inventory. What’s going to happen? As news like this comes out, more folks will pop their homes on the market and inventory will puff up — once again tempering prices.

What about low mortgage rates, surely those are helping? Economists at Capital Economics even envision a possible decline to 3.3 percent, which could bring out even more home buyers. Still, these guys say “the bottom line is that housing is unlikely to become a significant driver of GDP growth.”

Why not? Housing makes up too small a portion of GDP to have a major impact. Residential real estate investment made up only 2.4 percent of GDP in the second quarter of this year. That’s just half the long-term average, and well below the 6.3 percent peak recorded at the end of 2005. I mean, people will invest in modest homes, if they can obtain financing. But most of the sales volume is coming from the affluent communities.

“The cumulative effect of the past five consecutive quarters of residential investment growth has been a 0.2 percentage point rise in annualized GDP growth.”

And then there’s the big fat elephant in the room, unemployment above 8 percent. Middle class folks cannot buy homes without jobs, steady jobs. The banks right now don’t like the self-employed.

Don’t get me wrong — I’m happy everyone’s happy and homes are moving at long last. Moving vans are happy, Realtors are happy, even the Home Depot is happy because no one spends money quite like a family who has just moved into a new home.

But keep the good champagne on ice until we see job growth and a serious dip in the unemployment rate.

 

 

According to giant Moving.com, an online source for moving-related services, millennials love Dallas. Like, a whole lot.

Seems that with the job market so tight and everything pretty sucky once they graduate from college, millennials are shunning NYC and the We$t Coa$t for cities with job growth and affordable housing. And guess what, we have both. The cities topping the millenial-friendly list include number one Dallas; Tallahassee; Athens, Ga.; Phoenix; and Pittsburgh.

This was all based on local unemployment rates, affordable rents and home prices and the presence of communities that appeal to Generation Y.

Not sure if that would be the Arts District or the new breweries going up in Trinity Groves.

Dallas’ unemployment rate is well below the national average at 6.5%, and our average monthly rents don’t kill you at $1,314. And this is preaching to the choir: I know what great values our homes are and preach it: median home listing price of $204,900, likely a three bedroom, two bath that is not falling apart.

Tallahassee has cheaper rents at $787 a month, and real estate is cheaper with the median list price holding steady at $159,000. Unemployment in Tallahassee is also low at 6.7%.

But Tallahassee sure has more bugs than we do.

Phoenix rents are cheaper than in Dallas, $828 per month, but I’ll bet the A/C bills more than make up for that. I still do not get Phoenix — all you have is golf, palm trees and pretty mountains. More suitable for Baby Boomers, I would think, who golfs any more? Still, Phoenix holds a 6.6% unemployment rate. Home prices also are a steal but that’s because they went nuts during the boom. Median value home is holding at $185,500.  And that probably was a $500,000 at the height of the boom.

For some reason, Pittsburgh is on this list. OK, it has a 6.3% unemployment rate, average rents in the $1,074 per month range and a median home list price of approximately $143,250. Also snow, sludge, and it’s in Pennsylvania. Aside from Carnegie Mellon University and Chatham College, I don’t get it.

You must have heard by now that we here in Dallas are not living in sync with the rest of the nation. I had to make a quick trip to Rockford, Ill. over the weekend and was that an eye-opener real estate wise: things just are not moving, values just stuck. So it did not shock me at all that Standard & Poor’s/Case-Shiller Home Price Index came out Tuesday and Dallas is one of seven cities where prices are improving. Like, inching upwards. That would be us, Charlotte, Denver, Detroit, Miami, Minneapolis and Phoenix, the ONLY cities in the 20-city metro composite where the annual rates of return, or home prices, are getting better.

Detroit, I get. When you can buy a $500,000 home for $49,000, folks go shopping. Ditto Phoenix, though I think that market still needs vitamins and then still has a way to go. What can you do in Phoenix besides wear a lot of sunscreen and golf, which is a dying game? Miami? Easy, water. Lots of foreign buyers sweeping in to buy up deals, and the deals are there. I’d buy in Miami in a heartbeat. A high-end agent I met a few weeks ago, Eloy Carmenate, tells me Miami luxury properties are selling like hotcakes.

And now, Dallas-area home prices are up 1.5% in March from a year ago, up for the first time in more than 20 months. We are obviously doing something right.

Nationwide, home prices continued to fall — down 2.6 percent from March 2011, according to Case-Shiller. The last time the Dallas Case-Shiller index showed an increase was in June 2010, when prices were 1.2 percent higher than a year earlier and following the “First-Time Homebuyer’s Credit” deal that accelerated a lot of purchases. The price index then fell for 20 straight months. Kaput.

Dr. James Gaines with the Real Estate Center at Texas A&M University has good vibes about the market this year. Good — not great. We may start seeing some fairly significant percentage increases during the next couple of months or so, he says, in some coveted areas, but his projection for the year as a whole is conservative.

I’m impressed: local reports show that pre-owned home sales prices in North Texas are up 6 percent so far this year compared with the same period of 2011. Pre-owned home sales were up 14 percent in the first four months of this year.

I just don’t understand Atlanta, where home sales prices fell 17.7 percent in March, according to Case-Shiller. Or Las Vegas, where prices were down 7.5 percent. Chicago, and really most of northern Illinois are hurting down 7.1 percent in Chicago from a year earlier. And that’s Obama territory.

Keep in mind Case-Shiller tracks single-family homes, no condominium and townhouse sales, and no new construction sales are included in the index. Knowing what’s happening development-wise in Frisco and McKinney, I would call our Case-Shiller numbers conservative.

But why are we doing so well? I know that some parts of town are still sluggish, while others are experiencing multiple offers and a one-month supply of inventory. Park Cities and parts of Lakewood are now a seller’s market. Sunnyvale doing well, too. In fact, lack of housing stock seems to be our biggest concern right now. In fact, I am starting to write about homes not in MLS, on the market, that are selling without ever touching MLS. Example: 4001 Turtle Creek.

I dialed up David Brown at MetroStudy and hope to hear from him soon. Meantime, please tell me what you think. Why is the Dallas market doing better than so many others — and why is Houston not up here with us? And why is Atlanta tanking? Does it have anything to do with how the Dallas-Fort Worth metropolitan area adds another person every four minutes and 10 seconds, making us the fastest-growing metropolitan area in America?

Dallas-Fort Worth swelled with 126,037 residents between July 1, 2010, and the same date last year, according to newly released population estimates from the U.S. Census Bureau . So I guess everyone’s moving here, and working, and buying homes. Is there anything else we do right?

Boarded up brownstones in Cicero
Boarded up brownstones in Cicero

I never thought I’d see the city of my birth blow out Miami and Phoenix when it comes to having the most foreclosures in the nation right now, but Chicago takes the cake. Almost 119,000 homes in foreclosure. The problem: those stubborn banks are not letting go. This, of course, in President Obama’s home town, too…