Dallas

 (Dallas Morning News & Texas Association of Realtors)  Texas was the third most popular state for international home buyers in the last year, according to a new report from the Texas Association of Realtors.  The buyers, not surprisingly, hailed from countries with growing populations in Texas. Mexico led the way, followed by China, India, the United Kingdom and Canada.  Texas cities accounted for 9 percent of all U.S. homes bought by international buyers from April 2017 to March 2018, according to the report. That represented 24,012 home sales, which the state real estate association estimated as a $10.89 billion boost to the Texas economy.  Mexican buyers were the most active, totaling 38 percent of the state's home purchases by international buyers. China (7 percent) and India (6 percent) were the next highest.  Six Texas metropolitan areas ranked in the top 50 nationwide for immigration in the most recent data compiled by the Department of Homeland Security, including:  No. 6: Houston/Sugar Land/The Woodlands  No. 8: Dallas/Fort Worth/Arlington  No. 26: Austin/Round Rock/San Marcos  No. 28: San Antonio/New Braunfels  No. 33: El Paso  No. 48: McAllen/Edinburg/Mission  Nationally, rising home prices and low inventory led to a decline in foreign home purchases in the United States last year. International sales totaled $121 billion, a 21 percent drop from the previous 12-month period, according to an annual survey from the National Association of Realtors.  "After a surge in 2017, we saw a decrease in foreign activity in the housing market in the latest year, bringing us closer to the levels seen in 2016," said Lawrence Yun, NAR chief economist. "Inventory shortages continue to drive up prices and sustained job creation, and historically low interest rates mean that foreign buyers are now competing with domestic residents for the same, limited supply of homes."

(Dallas Morning News & Texas Association of Realtors)

Texas was the third most popular state for international home buyers in the last year, according to a new report from the Texas Association of Realtors.

The buyers, not surprisingly, hailed from countries with growing populations in Texas. Mexico led the way, followed by China, India, the United Kingdom and Canada.

Texas cities accounted for 9 percent of all U.S. homes bought by international buyers from April 2017 to March 2018, according to the report. That represented 24,012 home sales, which the state real estate association estimated as a $10.89 billion boost to the Texas economy.

Mexican buyers were the most active, totaling 38 percent of the state's home purchases by international buyers. China (7 percent) and India (6 percent) were the next highest.

Six Texas metropolitan areas ranked in the top 50 nationwide for immigration in the most recent data compiled by the Department of Homeland Security, including:

No. 6: Houston/Sugar Land/The Woodlands

No. 8: Dallas/Fort Worth/Arlington

No. 26: Austin/Round Rock/San Marcos

No. 28: San Antonio/New Braunfels

No. 33: El Paso

No. 48: McAllen/Edinburg/Mission

Nationally, rising home prices and low inventory led to a decline in foreign home purchases in the United States last year. International sales totaled $121 billion, a 21 percent drop from the previous 12-month period, according to an annual survey from the National Association of Realtors.

"After a surge in 2017, we saw a decrease in foreign activity in the housing market in the latest year, bringing us closer to the levels seen in 2016," said Lawrence Yun, NAR chief economist. "Inventory shortages continue to drive up prices and sustained job creation, and historically low interest rates mean that foreign buyers are now competing with domestic residents for the same, limited supply of homes."

Median Price

This chart is updated after the end of the year

Real Estate Center Texas A&M

Some people don’t know that the state of Texas funds the Real Estate Center Texas A&M.  The Center is the nation's largest publicly funded organization devoted to real estate research. Most of their $5.1 million in annual funding comes from real estate license fees paid by more than 170,000 professionals.

The Center's staff conducts research on financial, socioeconomic, public policy, trade, legal, land use and local market analysis issues related to real estate.

The results of Center research are communicated in a variety of formats, including their website which you can access directly at https://www.recenter.tamu.edu/ 

You can see specific neighborhood statistics by clicking on one of the links to the left.

Texas Housing Insight

James P. Gaines, Luis B. Torres, Wesley Miller, and Bailey Cuadra (Jan 8, 2018)

Below is an article from Real Estate Center Texas A&M.  

Text with an (*), indented and in italic (like this), are comments from Robert Jory, Realtor, who has been in real estate for over 9 years and experienced the good, bad and ugly.

James P Gaines is a excellent economist and you can open or download the PDF full article by clicking here Texas Housing Insight or read the summary below which is a synopsis geared more to existing home sales.

November 2017 Summary

The Texas housing market advanced as sales rose 6.6 percent, overcoming supply constraints especially for homes priced under $300,000. If maintained, strong growth in single-family permits and housing starts could improve supply conditions starting in mid-2018. Housing demand remained robust, particularly for existing homes, as buyers search for affordable housing. Intense demand and restricted supply pushed the resale median price to a record high. Rising sale-to-list price ratios for existing homes corroborated the shift toward the resale market.

Supply

Tight inventories were prevalent in the existing home market, where homes are generally less expensive than newly constructed equivalents. The Texas Months of Inventory for existing homes declined for the fifth straight month, settling at 3.3 months. Austin, Dallas, and Fort Worth maintained exceptionally low inventories at 2.2, 2.1, and 1.9 months, respectively. Despite the downward trend across the state, all of the major metros maintained positive YTD growth. Overall, this year’s new home inventory expansion decelerated, heightening supply pressures in the resale market.

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*New construction permits are a leading indicator of how the real estate economy is doing. Dallas shows strong demand as new permits outpace other cities.

The existing home days on market remained historically low at 53 days. Rising home prices pulled many prospective buyers into the resale market. In Dallas and Fort Worth, the resale DOM settled at 34 and 33 days, respectively, amid soaring home values. New home demand softened as Texans searched for lower-priced options, pushing the new home DOM to 93 days.

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*Months on inventory is a demand indicator which tells us how fast homes are selling. The lower the number the faster the homes are selling. This chart indicates a shift to existing homes as new home construction prices increase.

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*You can see that Dallas and Austin have the lowest months of inventory which in turn causes prices to rise. When demand outpaces supply then prices rise. You can see when the market started to crash in 2007 and rebounded rapidly in 2012. The supply is not going up as fast as the rebound.

Demand

The existing home days on market remained historically low at 53 days. Rising home prices pulled many prospective buyers into the resale market. In Dallas and Fort Worth, the resale DOM settled at 34 and 33 days, respectively, amid soaring home values. Demand also intensified in Austin and San Antonio with the DOM dropping to 45 and 50 days, respectively. The Houston resale DOM remained below the state level at 51 days but has expanded every month since August.

New home demand softened as Texans searched for lower-priced options, pushing the new home DOM to 93 days.

*This chart reinforces that buyers are leaning toward existing homes as the days on market have remained low in both 2016 and 2017. There was a slight uptick in the last quarter of 2017.

Prices

Texas home prices appreciated for the fifth consecutive month as the median rose 5 percent YTD to $227,318. Prices accelerated in the resale market after stabilizing last month, reaching a record high $218,190. The median price for existing homes surged across state, hitting record levels in every major metro.

 Austin led the state with a median price of $298,617. However, the Dallas median continued to converge amid a five-month climb above $275,700. However, the Dallas median continued to converge amid a five-month climb above $275,700. The Fort Worth median remained lower at $217,622 but increased 8.6 percent YTD.

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*This chart shows a rapid rise in prices since the recover.

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*This chart demonstrates that homes between $200K and $300K are selling the fastest however at the end of the year there was a leveling off and an increase of days on market for that price range. We will provide year end charts when available.

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*Again, Dallas is leading the state with the lowest days on market.

Interest rates were stable as optimism regarding tax reform balanced investors' concerns regarding the quantity of long-term debt the Treasury Department plans to sell as the Federal Reserve begins scaling back its balance sheet. The ten-year U.S. Treasury bond yield fell one basis point to 2.35 percent, while the Federal Home Loan Mortgage Corporation 30-year fixed-rate hovered around 3.9 percent. Yields remained low by historical standards, contributing to a nationwide surge in mortgage applications for new home purchases.

2018 Outlook for the Texas Economy

November 2017 Summary
Luis Torres, Wesley Miller, and Bailey Cuadra (Jan 11, 2018)

You can open or download the PDF full article by clicking Outlook for Texas Economy  or read the summary below which is a synopsis.

The Texas expansion continued as the energy sector advanced, and Gulf Coast reconstruction efforts stimulated the state economy. Oil prices hit a two-year high amid decreased inventories and robust global demand, driving Texas crude oil production up 5 percent. 

The average West Texas intermediate crude oil spot price increased to $56.642, the highest in two years, driven by geopolitical tension in the Middle East, robust global demand, and extended OPEC production cuts. The number of active rigs in Texas rose to 4462, primarily from increased activity in the Permian Basin. In response to higher prices, crude oil production increased more than 5 percent for the second straight month
 

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Texas' economic expansion continued as the Dallas Fed's Business-Cycle Index (a measure of current economic activity in the state) posted 6 percent quarterly annualized growth—the highest since 2014. The metropolitan business cycle indices accelerated across the Texas Urban Triangle, led by Austin's 8.7 percent quarterly annualized growth. Dallas and Fort Worth posted strong numbers at 6.8 and 5.2 percent, respectively, as the region's unemployment rate approached 3 percent. 

Texas monthly nonfarm employment increased by 54,500 jobs, pushing the year-to-date total above 300,000. However, data revisions from the Quarterly Census of Employment and Wages (QCEW) indicated softer growth in the first half of the year than was previously reported. That said, the labor market expansion continued, pulling the Texas unemployment rate to an all-time low of 3.8 percent. Unemployment remained even lower in the major metros. Austin unemployment settled under 3 percent for the third consecutive month, while rates in Dallas and Fort Worth hovered at 3.2 and 3.3 percent, respectively. 
 

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*This is a statistic to keep your eye on. Most economist agree that when mortgage rates rise, demand slows, and prices decrease. Though hard to predict, currently FED is steadily raising rates and it is hard to predict what the tax cut will bring. Coupled with the 2017 Tax Cut and Jobs Act that sets a cap of what homeowners can write off from their personal property taxes at $10,000, buyers may be more selective as to what price range and location their new home will be in. But keep an eye on the mortgage rates. If that climbs steadily, you may want to think about selling sooner than later because homeowners will be fighting for a smaller pool of buyers if that continues.

The Texas Leading Economic Index (a measure of future directional changes in the business cycle) reached a two-year high as advances in the U.S. leading index and higher oil prices outweighed appreciation in the Texas value of the dollar (a weight on Texas export competitiveness). The Texas Consumer Confidence Index returned to pre-hurricane levels amid improved labor market conditions and the overall economic expansion.

* This is a valuable future prediction. If consumers have confidence in the economy, they keep spending which in turn keeps the economy going. This can have a spiral effect in either direction. If consumer confidence goes down, usually consumer spending decrease which in turn produces more lower confidence which less spending. If this happens we usually end up in a recession. Texas confidence has leveled off but the national figure is still rising. We need to keep an eye on this, especially the national figure.

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Despite low unemployment levels, employee compensation remained stagnant as real Texas private hourly earnings fell 0.9 percent, pulling YOY growth below 1 percent. Wages fell 1.3 and 2.0 percent YOY in Fort Worth and Houston, respectively, while dipping 0.4 and 0.3 percent in Austin and San Antonio. Dallas remained the exception, boasting 3.1 YOY wage growth but posting a 1.1 percent monthly decline.

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*The lack of wage growth is something that concerns us because if wages are not increasing but home prices are, less people will be able to afford them. That in conjunction with a rise in interest rates could price many out of the market. Less people able to purchase reduces the demand and can cause prices to level or even decline. In addition, the inflation rate is rising which also puts a damper on people’s budgets. Add anything catastrophic and the housing market will probably suffer.

Texas monthly nonfarm employment increased by 54,500 jobs, pushing the year-to-date total above 300,000. However, data revisions from the Quarterly Census of Employment and Wages (QCEW) indicated softer growth in the first half of the year than was previously reported. That said, the labor market expansion continued, pulling the Texas unemployment rate to an all-time low of 3.8 percent. Unemployment remained even lower in the major metros. Dallas and Fort Worth hovered at 3.2 and 3.3 percent, respectively