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One of the great things about the reports published by the Real Estate Center at Texas A&M University is that you don’t have to be an economist to understand them. Luis Torres, Jim Gaines, and Mark Dotzour all do a fantastic job of breaking down the information into digestible bits. I was very impressed by Torres when I heard him speak at the National Association of Real Estate Editors conference in Houston, and having previously worked with Gaines and Dotzour, I know that they are brilliant.

Of course, as the Real Estate Center publishes its annual outlook, we enjoyed taking a more in-depth gaze at inventory and what the numbers really mean. Months of inventory is a significant indicator for housing demand, and inventory can greatly influence pricing.

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Lance Armstrong Lake Austin

We knew 2013 was a banner year for Dallas Realtors as our market pulled itself up by its bootstraps and posted post-recession growth that amazed even the most seasoned brokers. But according to research from the Real Estate Center at Texas A&M University, the market posted year-over-year numbers that showed Texas flexing its economic muscles like never before.

Numbers are up across most demographics, with condo sales, luxury sales, and investment properties getting snatched up at record paces.

“The Texas real estate market showed strength in sales volume and price all year long and the fourth quarter was no exception,” said Texas Association of Realtors chairman Dan Hatfield. “We’ve now seen year-over-year increases in both sales volume and price every quarter for more than two years. This makes it clear – demand for Texas homes is strong and enduring.”

We agree, as the Texas tech industry continues to boom in Austin, pushing up prices and demand reminiscent of the Bay Area’s unfettered growth. High salaries and limited inventories — the statewide numbers show a precipitous drop to a 3.6-month supply of homes (6.5 is recommended for balance between supply and demand) — have resulted in huge price increases. But, as Candy pointed out, not all growth is good for everyone. As prices increase, housing affordability decreases, pushing out lower wage earners.

But Austin’s growth isn’t isolated, as every metropolitan area in Texas posted sales volume and price increases in the fourth quarter of 2013. According to the report, 60,998 single-family homes were sold in the state during the fourth quarter — 6.78 percent more than fourth quarter 2012. Median home prices increased 8.48 percent from fourth quarter 2012 to $172,600, and the average home price was a whopping $226,216 — up 8.88 percent from Q4 2012.

Real Estate Center economist Jim Gaines Ph.D. explained: “One thing that is notable about the price increases seen in the fourth quarter is that they are relatively consistent across the state. Those increases are being seen in markets of every size, not just in the largest Texas markets, so that indicates broad-based appreciation for Texas real estate.”

“Demand for Texas homes in 2014 should continue, but it’s possible that a shortage of inventory could inhibit sales volumes,” Gaines added. “The steady price increases we’ve seen recently should help alleviate that, enticing more sellers into the market, but buyers should continue to expect to compete for desirable properties.”

Interesting outlook for 2014. What do you think? Will the growth price-wise lure more sellers to the market?

Swananoah Front

Homes priced at $1 million or more are moving like hotcakes in Texas, according to the 2014 Texas Luxury Home Sales Report from the Texas Association of Realtors. The figures, assembled using data from the Real Estate Center at Texas A&M University, show that every Texas metro area posted double-digit growth in luxury price ranges.

Dallas posted a 22 percent increase in luxury home sales for the period between January and October 2013, the report shows, with Austin posting a whopping 55 percent increase (no wonder Trulia is calling our capital city way overvalued). Houston came in second with a 46 percent increase in luxury home sales, and San Antonio posted an 18 percent increase.

“Data from the Texas Luxury Home Sales Report shows that million-dollar homes are playing an increasingly important role in the Texas housing market,” said Dan Hatfield, chairman of the Texas Association of Realtors. “The housing slump is behind us and as Texas’ economy and population continue to accelerate, we’re going to see increasing development and demand in larger, higher-priced homes with luxury amenities.”

So, what’s driving the increase? It’s mostly thanks to the influx of high-paying tech jobs in Austin, and in Houston it’s likely due to oil and gas wealth moving into the area. For Dallas, a brisk job market driven by a healthy financial sector, as well as oil and gas wealth, could be fueling the luxury real estate market. The increase in sales definitely shows appreciation, though, and it makes you wonder just how many of these $1 million-plus properties are second homes or even investments.

“It’s common for luxury homes to have a significantly longer sell time and higher housing inventory than the average home simply because the pool of interested homebuyers is so much smaller,” said Jim Gaines Ph. D., and economist with the Real Estate Center. “However, this data still indicates strong demand, particularly in Austin, where homes of $1 million or higher are close to 10 percent of all active listings and are selling in less than six months, and in Houston, where housing inventory is only 7.4 months.”

Here’s the Dallas-Fort Worth market breakdown from the report:

In the Dallas-Fort Worth area, 809 luxury homes were sold between January and October 2013. Luxury home sales made up 1.1 percent of the total housing market and experienced a 22 percent increase in sales compared to the same period in 2012. This is slightly higher than the 19 percent year-over-year increase of the Dallas-Fort Worth housing market as a whole. As of October 2013, there were 922 active luxury home listings, 4.1 percent of all active listings on the market. The housing inventory for a luxury home was 11.4 months, 8.4 additional months than that of the Dallas-Fort Worth housing market at large.

 

 

 

Shadybank Living

North Texas’ real estate market posted a 4 percent increase in sales for the month of November, the lowest such increase since the 2012 according to the Real Estate Center at Texas A&M University.

Gleaning numbers from NTREIS, the center’s report showed a 12 percent decrease in condo and townhome sales, too.

But instead of freaking out about whether increasing mortgage rates or dwindling inventory is to blame, maybe this is a case of a very hot, hot, hot spring/summer season and a seasonally slow fall/winter?

From Steve Brown’s DMN story:

Even with November’s smaller increase, sales of pre-owned homes through the first 11 months of 2013 are 18 percent ahead of where they were in the same period last year, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.

And November saw no decline in the pace of North Texas home price increases. The median home sales price in the region was up 10 percent last month to $170,000, according to sales by real estate agents through their multiple listing service.
Economists have been watching for a softening in the rate of growth in the Dallas-Fort Worth housing market, which has seen unprecedented increases in prices and huge jumps in purchase volumes this year.

“We’ve been expecting things to slow down,” said Dr. James Gaines of the Real Estate Center. “Some is seasonal, but the year-over-year numbers are a little lower than I thought they’d be.”

So, has the fall been unseasonally slow for you, our dear Realtors? Or are you just noticing the regular drop-off in transactions that happen around the holidays?

(And just in case you’re wondering, the lovely home decked out for the holidays in this post is 16224 Shadybank Dr. in Prestonwood. Gorgeous, innit?)

2340-Victory-Park-Lane.jpg 27PH

We’ve talked until we’re blue in the face about how brisk the market its for single-family homes in North Texas, and Dallas especially, but the market for condominiums is just as hot according to the 2013 Texas Condominium Sales Report from the Texas Association of Realtors.

We definitely agree, and we noted in November that luxury units are moving quickly, selling units in buildings in Uptown, the Arts District, Downtown, and the Cedars like hotcakes!

Texas’ four major metro areas all showed double-digit increases in condo and townhome sales, said the report featuring data from the Real Estate Center at Texas A&M University. Austin, Dallas, Houston, and San Antonio experienced an average 26 percent increase in condominium sales in  2013, but Dallas led the pack with a huge 38 percent jump in sales, followed by Houston at 25 percent, Austin at 24 percent, and San Antonio at 18 percent.

“Data from the Texas Condominium Sales Report shows that all types of housing are in demand in Texas,” said Shad Bogany, chairman of the Texas Association of Realtors. “Given the rapid job and population growth across Texas’ major metro areas as well as our state’s shrinking housing inventory, it’s no surprise condo sales are playing an increasingly important role in the Texas housing market.”

The report echoes the trends we’ve been noticing in housing here at CandysDirt.com: High demand thanks to a healthy job market is fueling higher prices, and homes are flying off the market, leaving the Dallas Real Estate market feeling like picked-over department store shelves after Black Friday.

“Inventory is at an all-time low for both condominiums and single-family homes, but the development of new condos and townhomes has lagged behind that of single-family homes through the housing recovery” said Jim Gaines, PhD., economist with the Real Estate Center at Texas A&M University. “As a result, we’re at least a year or two away from delivering the condos that are currently needed in Texas’s metro areas.”

Here’s the report for Dallas:

In Dallas, 4,468 condos were sold between January and September 2013. Compared to the same period in 2012, the median price increased 10 percent to $153,000. The number of new listings also increased 10 percent to 6,311, whereas active listings dropped 26 percent to 1,607 listings and pending sales jumped 33 percent to 4,077 year-over-year. Finally, days on the market dropped to 67 days, a 28 percent decrease from the year prior.

You can read the full, city-by-city report right here.

You’d think that rising interest rates would slow the real estate market, but that’s not the case for the Dallas Area. According to Jim Gaines, an economist at the Real Estate Center at Texas A&M University, Dallas-area pre-owned home sales are up 20 percent year-over-year.

In a conversation with Steve Brown, Gaines had this to say:

“I keep thinking it’s going to slow down, but it hasn’t so far,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “Yes, the rates are higher and the builders may be feeling it a little, but really, the rates are still very good and don’t seem to be hindering sales much.

“Also, if people expect the rates to continue to increase, they’ll buy now rather than wait.”

Still, even though rates are increasing, fellow Real Estate Center economist Mark Dotzour says Texas needs builders to step up the pace when constructing new homes:

The demand for single-family homes and condos is still outstripping supply. It will take time for home builders to staff up to higher levels of production. It will also take time before there are sufficient construction loans to finance this higher level of activity. In the meantime, inventories of homes for sale are likely to remain at breathtakingly low levels. Expect higher prices in the coming months.

So, with higher prices and higher rates on the horizon, do you think the market will slow?

Classified Jobs

While the Midland/Odessa area is leading the rest of our great state in job growth, Texas is adding jobs at a quicker clip than most other states, and beats the national average easily.

That’s according to the July figures from the Real Estate Center at Texas A&M University’s “Monthly Review of the Texas Economy.” Coming in second for job growth is the Fort Worth/Arlington metro area, with Corpus Christi in third and Dallas/Plano/Irving in fourth.

Why did Dallas rank fourth in job growth? Service and business/professional jobs didn’t grow nearly as much as construction, mining/logging, and hospitality. Still, with 6.5 percent unemployment (national average is 7.4 percent) and adding 289,200 non-government jobs, Texas isn’t doing so shabby.

Of course, more jobs mean more salaries, which means more people who can afford to buy homes. It’s no stretch to say that if job growth continues to increase, home sales will continue to increase, too. That’s good news for everyone, especially Realtors!

Want to read the full report?  Check it out on the Real Estate Center’s website right here.

Hilton Southlake

Mark DotzourIt’s going to be a veritable sea of maroon and white in Southlake later this month as the Aggie Real Estate Network invades Hilton on Southlake Town Square for the group’s annual conference. The four-day event features loads of speakers covering economics, finance, investment, construction, and tons more.

The conference is put together by the nonprofit Society of Texas A&M Real Estate Professionals and includes panel discussions as well as keynote addresses from Real Estate Center at Texas A&M economist Mark Dotzour (left) and Dallas Economic Development Director Karl Zavitkovsky.

Registration closes a week from today, Aggies. We’re waiting to hear if the conference is open to anyone other than Old Ags, so stay tuned!