Get Cozy in this Hampton Hills Cottage, Minutes from Bishop Arts | CandysDirt.com

Institutional investors are buying up properties in bulk through iBuyer programs, a new report shows.

New data from Attom Data Solutions shows that one in 10 homes purchased by the two leading iBuyer programs — Opendoor and Offerpad — were purchased by institutional buyers. Those particular buyers were buying at least 10 homes at a time. In recent months, iBuyer programs have gathered a lot of attention and added to their ranks, with Coldwell Banker launching their own “cataLIST” iBuyer program and Zillow “Instant Offers” becoming quite profligate. Offerpad just moved into North Texas, too, with plans to move into Houston and San Antonio in 2019.

So, just how many investors are buying up homes using iBuyer programs to make all-cash offers so they can turn around and lease these properties? 

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KESSLER PLAZA 2510 W 10th Street Front

It’s rare to find an adorable home at an affordable price in a North Oak Cliff neighborhood that is seeing dramatic price increases and appreciation. I mean, this area of Dallas is growing like gangbusters, attracting more and more Millennials, so prices are increasing along with gentrification.

But this home just west of Hampton Road in Kessler Plaza is not only a cutie from the curb, but it’s a tremendous value considering that in this area, similar homes are being marketed for much more — nearly $50,000 in some cases!

KESSLER PLAZA 2510 W 10th Street porch

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Zip Code 75235

West Love: Inwood, Harry Hines and Denton Drive

Let’s get our noses out of house porn for a minute to wander through an up and coming neighborhood. DCAD calls it Lovedale 2 (or unappetizingly Slaughters Brookdale), but as far as I know, it has no fancy name to woo buyers to its hipness. It’s pre-hip. If other hip locales cool, maybe this area becomes a hip replacement (boooo, bad pun, bad Jon).

I’ll call it West Love Field or West Love … hmmm, I like that … West Love … and homes are selling FAST! In the hours it took to write this, two of the properties featured below went under contract.

East of Love Field has been in full-on gentrification mode for a while now, only pausing for the recession (as did we all), but West Love hasn’t really gotten any lovin’. It’s loosely bounded by Denton Drive, Harry Hines and Inwood. There are plenty of warehouses on Denton Drive, but there are also a lot of smaller cute starter homes that are a hop from downtown, UTSW and the monkeyshines of the Gayborhood … oh, and Love Field. Perfect for medical folks or air mattresses, trolley dollies in-flight personnel.

Speaking of the airport … I said, SPEAKING OF THE AIRPORT … Oaklawnians have lived cheek by jowl with Love Field since the beginning (well, since 1917 when it opened as an army pilot training facility). The “Oaklawn Pause” is what happens when a plane flies over during a conversation; it pauses. Homes east and west of Love Field are somewhat better off. Planes take-off and land from the north-south, meaning these east and west areas are not being directly flown over – but what a cool place for a roof deck.

For many years when homes hit the market, they were in somewhat calamitous condition. That’s changing, but things are still wonderfully affordable here and sure to rise. How wonderfully affordable? Try $125,000 to $135,000 for 1,100 to 2,031 square feet, many on pretty sizeable lots 50-foot lots!

Here’s a smattering of what’s available and going gone fast.

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Curbless shower master bath Graf Developments

Bruce Graf says that aging-in-place can be stylish with key updates in often-used rooms, such as master suites.

A survey recently released by the Global Social Enterprise Initiative at Georgetown University’s McDonough School of Business polled 1,000 people ages 50 to 80 years old. Only about 1 in 5 respondents to the survey had any plan to remodel their homes or incorporate technology to help them as they age, and yet, the vast majority (96 percent) of respondents said they want to remain independent while they grow older, and 91 percent said they wanted to stay in their own home, commonly referred to as ‘aging-in-place.’

Bruce Graf, a nationwide renovation consultant with over 32 years of experience and a Baby Boomer himself, scoffs at these survey results.

“It’s funny, people will spend $50,000 for a car. This is something with a relatively short life and depreciates the very second it’s driven off the car lot,” Graf said. “However, they think twice about spending that amount on their home, a place they could spend the next 30 years in easily, and it appreciates greatly.”

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Val Haskell and Jenni Stolarski are moving into a box down by the river, and they couldn't be more happy about it.

Val Haskell and Jenni Stolarski are moving into a box down by the river, and they couldn’t be more happy about it.

Even though the Dallas real estate market is scorching hot, Jenni Stolarski and her wife, Val Haskell, are soon going to be living in a box down by the river.

And it’s entirely by choice, too.

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9046 Guildhall Front

There are a lot of homes that, when you get a glance at them, you can tell they’ve been flipped. They typically have some of the same tile throughout the home, there’s no furniture, and the paint is fresh inside and out. Some of them are boring (like, pass-the-smelling-salts boring) but sometimes you come across an exceptionally well-done flip, like this one in Lake Ridge Estates.

This neighborhood is gaining steam in a big way, thanks to being located inside Richardson ISD. This particular home at 9046 Guildhall feeds into Lake Highlands Elementary School, and is located on a large corner lot. While the outside of this home says “traditional,” the insides are a perfect marriage of both familiar and modern elements, increasing the overall appeal.

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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.”

 

  • 543,000 vacation homes were sold in 2010, ten less than in 2009.
  • 867,000 investment homes were sold in 2010
  • 940,000 investment homes were sold in 2009
  • Only 25 percent of vacation home buyers plan to rent them.
  • Only 20 percent of investment buyers plan to use their second homes themselves.
  • The median price of a vacation homes hovers between $150,000 and $170,000 and is falling.
  • The median price of an investment property is usually around $105,000.
  • Vacation homes accounted for 10% of all real estate sales last year.
  • Investment homes accounted for 17% of all real estate sales last year.
  • Baby Boomers closing out their “peak financial years” are shopping for second homes and swooping up the bargains, but the second home market is still tepid. The benefits: a long-term investment and hedge against inflation if they are buying at the bottom, and income potential through rental. If Boomers are looking toward retirement or a scaling back of work, many see a future retirement home in the second home. That is, they want to lock down a place now while prices are low in anticipation of selling the larger family home eventually.

    Why is this so different from the way Boomer’s parents operated? Most Boomers bought their home, paid it off, and stayed in it until they moved (or were moved) to a retirement home. My uncle lived in his home until he died at the age of 100. But dynamics that made this scenario attractive have changed. Property taxes, for one, are rising in urban areas, as is crime and traffic. Federal tax laws have changed and may change again, making home ownership more (or less) attractive. As income dips, real estate investment can provide additional tax benefits or shelter. Children are spread across the globe and may not be able to take care of an elderly parent in the family home. Boomers lived in homes that average less than 2,000 square feet. Their children (baby boomers) bought and built bigger homes that eventually become costly or cumbersome to maintain.

    Demographically, the typical vacation-home buyer is about 46 years old, has a median household income of $87,500, and purchases a property that is a median distance of 348 miles from their primary residence, according to the National Association of Realtors. (About 34 percent were within 100 miles of their primary residence, and 40 percent were more than 500 miles away.)

    Annually, between 10-27 percent of all homes sold in the United States are in the vacation homes, second home or investment home category. And those numbers will increase because vacation homes are a bargain right now. The median price of a vacation or second home was $150,000 in 2010, down a whopping 11.2% from a year earlier, according to the NAR. Nationally, values at primary residences fell 4.5% in  2010. Nearly 40% of vacation home sales were cash sales, and if a buyer did obtain financing, they put a bunch down, 30 to 40% down. Finally, most vacation home buyers wanted the great deals and found them: nearly 17% of the investment homes they bought were foreclosures.

    Those percentages were little changed for 2010 as home sales declined across the board. There were 543,000 vacation homes sold, down from 553,000 in 2009; investment purchases fell to 867,000 from 940,000.

    One factor depressing sales was the difficulty in getting mortgages due to tight credit markets. Buyers often did an end-around this problem by paying cash. Nearly 40% of vacation home sales were cash deals, while nearly 60% of investment deals were handled that way.