Real Estate Education
Texas Real Estate Market News
We know you are inundated with news on how the National Real Estate Market is faring but we wanted to provide you with some specifics on the Market here in Texas so you can judge for yourself. We hope this provides you, those you work with and those who are thinking about this as a career choice with some valuable insight into just how strong the Texas Real Estate Market is!
The Austin-Round Rock area tied for first on a list of large metros where the recession is easing. Central Texas tied Washington D.C. in the Forbes.com ranking that compiles job growth and real estate industry improvement, among other indicators.
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AUSTIN (Austin Board of Realtors) – Area home sales in January 2010 were at 884, up 5 percent from the same month in 2009, according to the Multiple Listing Service report by the Austin Board of Realtors.
The median price remained stable in the same period, up 1 percent to $179,250.
"At this point, we can look back and see that January 2009 was the low point of this cycle. With steady improvement throughout 2009 that continued in January 2010, we can see that we’re one year into the recovery in Austin," said John Horton, chairman of the Austin Board of Realtors.
Throughout 2009, the volume of single-family home sales in Austin improved steadily. In the first half of the year, the gap in year-over-year sales volume closed consistently, reaching levels similar to 2008 during the summer peak, with the exception of a dip in August.
In fall 2009, sales volume began outperforming 2008 and surged in October and November, spurred by the original deadline for the first-time homebuyer tax credit. In December 2009, sales volume returned to a modest increase of 5 percent compared with December 2008, a growth rate that was maintained in January 2010.
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That calculation includes default notices, scheduled foreclosure auctions and bank repossessions.
Overall, 100,045 housing units received foreclosure filings in Texas last year, up 4 percent from 2008 and up 18 percent from 2007.
In comparison, Nevada posted the highest foreclosure rate in 2009, with over 10 percent of its housing units receiving foreclosure filings. Colorado was tenth in the nation, with 2.37 percent of its units receiving foreclosure filings.
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After declines for the last four consecutive years, single-family homes starts are expected to climb 9.9 percent in 2010 to 3,019, according to a forecast by the University of Texas at El Paso. Last year’s 2,747 home starts were down 8.3 percent from the 2,995 that were begun in 2008.
The projection for 2010 is still well below the 4,472 home starts in 2005.
Overall, the influx of soldiers at Fort Bliss, the transition of Texas Tech University’s medical campus into a full university campus and the national economic recovery are expected to improve the outlook in El Paso in 2010.
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"The resiliency of the job market and relatively stable home prices will translate to a more positive consumer confidence level locally,” said Eldon Rude, Austin director of Metrostudy, which tracks the new home market in Austin and 30 other markets across the country. “Consumer confidence is an important driver of home sales."
Rude said builders in the Austin area cut new home production by approximately 19 percent in the last year, resulting in 6,490 new home starts in 2009.
"Starts have stabilized in recent quarters, builders have closed more homes than they have started for the last three years. This strategy has resulted in far fewer inventory issues in the Austin new home market compared to the more challenged markets across the United States," he said.
Metrostudy anticipates that new home starts in the five-county Austin region will be maintained at 2009 levels because of the expected lack of job growth through at least the first half of 2010 and the continued capital constraints facing builders.
Experts believe the region is at or near bottom with respect to housing starts and starts will begin to increase toward the end of 2010 and into 2011.
The conference was sponsored by the Home Builders Association of Greater Austin and the Austin Board of Realtors.
Industries looking up include high-tech manufacturing, paper, petrochemicals, staffing, housing and energy.
New and existing home sales improved over the six-week period, but the level of activity remains weak.
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Universal City buys over 3.6 million kilowatt hours of wind energy from CPS Energy annually through the company’s Windricity program. The program allows customers to choose wind as their power source.
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Total construction contract values for residential properties in October were $434 million, up 1 percent from $429 million in October 2008.
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- Several Texas metro areas have been ranked in the top spots of the 2009 Milken Institute/Greenstreet Real Estate Partners Best Performing Cities Index. The Lone Star State claimed four of the top five spots, including No. 1, and nine of the top 16 spots.
- The Austin-Round Rock area was named the No. 1 Best Performing City, with Killeen-Fort Hood-Temple, Mc Allen-Edinburg-Mission and Houston-Sugar Land-Baytown claiming the second, fourth and fifth spots, respectively. Additionally, Houston-Sugar Land-Baytown was named one of the top five largest cities, and Midland was named the No. 1 small metro.
- The index ranks U.S. metro areas based on their ability to create and sustain jobs, and includes long-term (five years) and short-term (one year) measurements of employment and salary growth, and four measurements of technology output growth. The report credits Texas’ favorable business climate and ability to attract jobs and corporations away from higher-cost states with propelling metropolitan areas to the top of the index.
Analyst: Dallas-Fort Worth home prices to turn positive next summer
The long run of declines in Dallas-Fort Worth home prices should turn positive next summer, an industry analyst said Thursday.
First American CoreLogic, a California-based housing and finance information firm, is forecasting that home prices around the country will bottom out by spring.
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RealtyTrac: Not as many Houston-area foreclosures in third quarter
The number of foreclosures in the Houston-Sugar Land-Baytown metropolitan area increased just 1.5 percent between the second and third quarters, according to figures released Wednesday by RealtyTrac.
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NOW'S THE TIME TO BUY, IF . . .
COLLEGE STATION- "It appears we are at the bottom of the housing market in most Texas cities," said Real Estate Center Chief Economist Mark Dotzour after reviewing the state's latest home sale numbers.
Dotzour mentioned two years ago that new home construction needed to fall dramatically to avoid the level of overbuilding that could damage Texas housing markets. He even picked summer 2009 as the bottom of the housing cycle because bankers would constrain credit to homebuilders and developers.
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More Great News About Texas!
According to Forbes, Best Cities to Buy a Home:
#1 Houston
#2 Austin
#5 San Antonio
#6 Dallas
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Round Rock Texas named second fastest growing city in the country
Annual census report shows Round Rock, Texas as #2 of the top 10 fastest growing cities in the nation.
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Austin will be 5th fastest growing U.S. metro in coming years
The population of the Austin metro area will grow to more than 2.7 million by the year 2025, according to an analysis of government data by bizjournals.
The projected growth rate of Austin and its suburbs ranks 5th among 250 U.S. metropolitan areas studied in the report
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Texas Real Estate Texaplex
With national headlines looking down see why Texas is looking up
10 of the top 25 fastest growing counties are in Texas!
Ten of the top 25 fastest growing counties in the country between July 2007 and July 2008 are in Texas, according to a Capital Area Council of Governments analysis of the most-recent U.S. Census report.
Read full article Austin Business Journal.
RREEF Report: Recession Fails to Diminish Demand for Green Real Estate
In Downturn, Owners Eye Existing Buildings for Sustainability, Energy Efficiency Measures
The fundamental shift in real estate markets toward sustainable buildings will experience only a mild disruption from the global recession and credit crunch, according to research published last month by RREEF, the investment management business of Deutsche Bank's Asset Management division.
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Positive Houston & Dallas News
- While other cities are struggling to create growth, Houston is maintaining its reputation as a bustling area with boundless economic growth possibilities according to Site Selection magazine. The 2009 "Top Metro" rankings have been released and Greater Houston tops the list as the No. 1 metro area in the nation for corporate location and expansion activity. This is a key factor for job growth and retention in Houston, which will ultimately lead to increased residential and commercial real estate activity.
- This is the first time the Houston Metropolitan Statistical Area (MSA) has taken the number one spot. The announcement was made by Site Selection in its 30th anniversary "Governor's Cup" issue.
- Dallas followed at number two and Chicago, which has won the title the last six out of seven years, came in third place.
2008 Total Building Permits: 42,697
"They like to do things big in Houston. Now the metro area, home to nearly
5.8 million people, can lay claim to being the largest home building market
in the country, with 42,697 building permits. The market is still benefiting
from an influx of population and jobs and rebuilding in the wake of Hurricane
Ike. Employment rose 2.2 percent last year, representing the addition of an
incredible 57,000 jobs. Home building activity in Houston has only fallen 31
percent since 2005. Also, existing home prices actually rose in Houston last
year, 2.8 percent, to $160,200, still a very affordable level. Roughly one third
of the home building action is in Harris County, followed by Houston proper
and Fort Bend County."
Have You Heard the Good News? Houston Leads Nation in Job Growth.
Houston had the best year of any market, picking up an additional 57,300 jobs, according to a new bizjournals analysis.
The study focused on the 88 U.S. markets that have at least 250,000 nonfarm jobs. Collectively, the nation's major labor markets lost nearly 1.2 million jobs last year, according to the analysis.
Texas dominated the small list of markets that added jobs last year, nailing down the top three positions, and four of the top five.
Bizjournals compared nonfarm employment totals for the final month of the past two years, based on the latest figures released by the U.S. Bureau of Labor Statistics.
Positive Houston & Dallas News
- The Association of Foreign Investors in Real Estate just ranked Houston as the 8th best investment market in the world!
- Texas has taken its place as the No. 1 destination state for residential relocations for the fourth year in a row, according to Allied Van Lines' 41st Annual Magnet States Report.
- Even as more corporations announce coming layoffs, including Home Depot, BBVA Compass Bank, Caterpillar and others, the Texas Workforce Commission reported that Houston added 57,300 jobs in 2008, a gain of 2.2 percent
Good News about Houston
- NAR Chief Economist Dr. Lawrence Yun was in Houston on Friday speaking at an event. While he was here, HAR set up some interviews for him with local media.
- Each of the outlets has run his interviews, including Channels 2, 11 and 13, and the Houston Business Journal and Houston Chronicle.
- During his interviews, he cited Houston and Denver as the top markets to watch next year and predicted a 5%+ rise in pricing for the Houstonmarket in 2009.
- He also said that Houston's real estate market is undervalued by any measure and that the expected job growth in our area will help maintainHouston's better performance relative to the nation.
- You may also view a quick interview with Dr. Yun conducted by HAR Chairman Michael Levitin here: http://www.har.com/hartv/?v=454.
Texas Metros are Top Performers
SANTA MONICA, CA (Milken Institute) - Texas made a strong showing in "America's Best-Performing Cities," the Milken Institute's annual ranking of metros based on economic growth.
Although Provo-Orem, Utah, came out the winner among the 200 large metros that were studied, six major Texas metros made the top 25. Austin, Round Rock was ranked fourth, McAllen-Edinburg-Mission seventh, Killeen,Temple, Fort Hood 13th, San Antonio 15th, Houston, Sugar Land, Baytown 16th and Dallas-Plano-Irving 23rd.
Within the small metros division, which included 124 areas, Texas dominated. Midland ranked first in the nation. Longview and Odessa came in at seventh and tenth, respectively. At 37th, El Paso showed the biggest gain among small metros, jumping 85 spots from its 2007 position.
Historical Low Rates
Rates are near an historic 40-year low. Even one/half of one percentage point difference means a buyer could save more than $1,000 per year on a median-priced home
Job Growth
The state's annual job growth rate leads the nation's by a ratio of more than 2-1.
Texas Economy Remains Strong
Texas Ranked No. 1 in Economic Development.
Texas is headquarters to 45 Fortune 500
Companies and home to 14 of the 100 Fastest Growing Businesses in America.
Texas ranked No. 1 in economic development. Based on a state-by-state survey of economic development deals over the last 12 months, Business Facilities magazine named Texas, with a total of $15.4 billion in investment and 9,335 jobs to be created from new projects, its State of the Year for 2007.
While a housing downturn continues in other areas of the country, particularly in California and Florida, and a current threat of a recession is in the air, Texas' economy remains relatively healthy, (Dr. James P. Gaines, research economist, Real Estate Center at Texas A & M University) said. Affordable housing, a lower cost of living and cost of doing business, rising employment opportunities and attractive lifestyle are drawing more people than ever to Texas. These and other circumstance point toward a Texas-sized boom over the next 25 years, he said.
Stable Home Market
There is a less than 1 percent chance that home prices will fall in San Antonio, Austin, Houston, Dallas or Fort Worth during the next two years, according to the most recent Winter 2008 U.S. Market Risk Index. The index is released by PMI Mortgage Insurance Co. and looks at the measures including price appreciation, affordability, unemployment, foreclosures and unsold inventory to predict volatility in home prices in the largest 50 cities.
"While nationwide home prices are down almost 2 percent this year, many areas of the country, including North Texas, are holding up well. The job markets in Texas are the strongest in the country."
Still a Great Investment
Over the past five years, the average homeowner has seen an increase of 50 percent in value.
Over the long-term, real estate has consistently appreciated. On a national level, home appreciation has historically increased 5-6 percent annually.
A recent PMI Group study reported that the risk of U.S. housing price declines remained low in many areas of the South, Midwest and Northwest. Among the 50 largest metropolitan statistical areas, Texas cities were the lowest and most stable in risk outlook during 2007.
"Despite the national slowdown, Texas is still strong. There's no reason prices shouldn't continue to rise despite the increase in foreclosures and the slowdown in transactions, construction and new home starts."
Benefits of Home Ownership Ownership trumps renting. Consider these financial benefits:
- Deductions on your annual income tax return
- Locked-in payment with a fixed rate mortgage
- Home price appreciation if you plan to live there for a few years
- Monthly mortgage payment comparable to rent payments.
"Owning a home is one of the best builders of wealth," says Todd Nordstrom, a sales associate with Esslinger Wooten Maxwell. "There is a huge difference in net worth between renters and owners." In fact, the most recent Federal Reserve Survey of Consumer Finances shows the median net wealth of a homeowner household is $171,700 compared with just $4,800 for a renter household.
