Tandy On Real Estate

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Markets

The housing shortage

At the National Association of Real Estate Editors Conference (NAREE) in Denver this month “The housing shortage: dealing with barren inventory” was presented. The panel presenting included Thomas O’Grady, Pro Teck Valuation Services; Aaron Terrazas, Zillow; and Javier Vivas, realtor.com. Here is a snapshot of what was covered.

According to the panel we have had 23 months of historic low home sales. With 200K fewer homes for sale, and 150K of the homes being in the mid- to low-tier. We are losing inventory at record pace and in a segment where we are seeing the most demand – in the entry-level buyer. The shortage is national, and in smaller square footage homes.

When looking at the inventory shortage, there are two factors to consider:

  1. Homes hitting the market are selling fast.
  2. There are not enough homes entering the market.

What’s causing the inventory shortage?

  1. New construction has lagged among existing home sales. Homebuilders are not building at the levels they were.
  2. Homeowners have negative equity in some markets.
  3. There is a shift of owner occupied stock to rented occupied stock with 6.3 million more renter-occupied.
  4. The power of psychology. There is a psychology of market for seller; they are holding on to homes to see what kind of gains they can get.

The homebuilder blame game

Homebuilders are getting a lot of the blame, particularly for affordable homes. 24% of all home building costs is put towards regulations – making it expensive for builders to build. And, there is a ack of labor and a high cost of acquiring land. Smaller builders are also having issues will accessing financing.

Housing trends:

It’s hard to move up in a rising market

People aren’t selling because they cannot replace what they have. Buying up is becoming out of people’s grasp in some markets. There is a fear that I can’t put my house in market because I won’t be able to find anything to buy. This is the inverse of what we had in the boom. Appreciation and run upon price is going to hit into affordability, and as always, people want to get a deal.

A rise in home equity

In appreciating markets where the homeowners have equity and a low interest rate, we are seeing homeowners tap into equity and make home improvements versus putting their homes on the market. 40% of home owners have more than 20% equity. And to further support this, people are staying in homes for 10 years which is an all-time high. This stat used to be only 6 years.

Homeowners in love with their loans Many homeowners are locked in by their super affordable mortgage rate. REALTORS® are starting to say that they have more people in love with their loan than with their home. Many homeowners do not want hassle with competitive market.

Investors are staying in the market

Investors propped up the market by buying homes in the crash. People thought they would sell them but they have been making so much money that they aren’t selling. Rental securitizations are bringing a lot of liquidation. We are seeing this more in urban areas.

Seasonal adjustment disorder

Spring buying season started in the winter this year. This is a very big trend this year. Spring home buying season started 3 weeks earlier based on online activity and market velocity. We typically see a spike in online activity in January. This year we saw a peak at the second week of January. This is important because we saw buyers earlier. 1 in 4 homes are selling in less than a month – typically the housing market hits that in March, but this year we hit it in January. And, some of this seasonal adjustment disorder is attributable to the shift in the population demographics. Younger buyers are not held to seasonality and schools.

The urbanization of employment

Job growth – employment growth over past decade has been concentrated in urban areas. There is an employment drive in a lot of markets. The panel called this the Urbanization of employment – creating white collar jobs.

Creating “gray space”

We are seeing people moving further out and now seeing commuting as a more viable solution for home ownership. A good example of this is people moving from San Francisco to Antioch.

In Nashville the population grew by 10%, but housing stopped and home prices went up. People can’t afford to live there anymore. The Mayor is trying to put housing along transit roots to make more affordable home options.

There is an urban, suburban myth. Will urban searchers ever compromise on their urban dream, or will they move to the “gray space”? These are the “gray spaces” between urban and suburban popping up and picking up in demand. The future of housing could be the Long Island’s of the U.S.

Building wealth and potentially frustration

There is a shadow buyer demand – a lot of renters who got in their rental really wanted to buy. They had no other option and needed the extra space. People want the white picket fence, and are almost frustrated that they cannot get it.

Boomers have preached that the best way for middle class to build wealth is through home ownership. Buyers not yet on the market are asking themselves, “Will I have less wealth because I entered the market later in life compared to the baby boomer?” There is a common legacy of thinking that owning a house is a big deal, and we will see frustration around this.

It is getting harder to get into the market. Many potential homebuyers know that the longer they wait the harder it will be to get into the housing market. The market at the entry level is very competitive. The high end the market is slowing down a bit.

All of this will resolve itself through natural evolutions. LA was a low-cost alternative to NY. And now, Dallas is a low cost alternative to LA.

Ways of adapting to the shortage

  • Seeing more multigenerational, joint home investments.
  • The spillover effect – people will move further out and commute longer.
  • Mermaid effect – people are falling in love with their 2nd and 3rd home choices.
  • Macroeconomic play in effect that will make us have to wait it out.
  • Only feasible relief is through the homebuilders.

Despite all of this according to the panel, the U.S. real estate is one of the most attractive asset classes.

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SOURCE:
https://www.proteckservices.com/category/home-value-forecast/
https://www.zillow.com/research/about-us/aaron-terrazas/
http://research.realtor.com/

 

NAR HOME survey says 71 percent of homeowners believe it’s a good time to sell

The National Association of REALTORS® released their quarterly Housing Opportunities and Market Experience (HOME) survey yesterday, and “71 percent of homeowners believe it’s a good time to sell.”

This is not surprising with the rising home prices.  This is up from 69% last quarter and 61% more than a year ago.

The survey also revealed that 42 percent of respondents believe homes are affordable for almost all buyers, with those living in the Midwest being the most likely to believe homes are affordable (55 percent) — and not surprisingly — West respondents (29 percent) being least likely to think homes are affordable. And, 20% would consider moving to a more affordable community. Twenty-seven percent of these buyers make under $50,000 a year versus 16% who make more than $100,000.

According to Lawrence Yun, NAR chief economist, in the NAR press release “it’s apparent there’s a mismatch between homeowners’ confidence in selling and actually following through and listing their home for sale. There are just not enough homeowners deciding to sell because they’re either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy. As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth.

Yun went on to say, “Perhaps this notable uptick in seller confidence will translate to more added inventory later this year. Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets.

Click here to see the full press release on the survey’s findings, or here for the full survey.

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SOURCE:
https://www.nar.realtor/news-releases/2017/06/71-percent-of-homeowners-believe-it-s-a-good-time-to-sell-economic-and-financial-confidence-dips
https://www.nar.realtor/infographics/home-survey-june-2017
https://www.nar.realtor/reports/2017-q2-homeownership-opportunities-and-market-experience-home-survey

 

 

 

Top 10 issues affecting real estate

The Counselors of Real Estate® (CRE) announced on June 14, 2017 the CRE 2017-2018 Top Ten Issues Affecting Real Estate at the National Association of Real Estate Editors Annual Conference in Denver last week. In the presentation Scott Muldavin, 2017 chair of The Counselors of Real Estate,  revealed the Top Ten issues, and then broke out the impact on both residential and commercial real estate. Today I will cover how the Top Ten affects residential real estate according to CRE.

 

 

  1. Political polarization and global uncertainty

Watch any bit of news or fake news, and you know this one to be true, but how does this impact real estate? As we continue to see uncertainty about changes to trade, travel and immigration policy threaten cross-border investing, hospitality properties, retail and manufacturing supply chains. Middle class how ownership will also be impacted as interest rates rise.

The impact on residential real estate:

  • Consumer price index rise
  • Interest rate rise
  • Mortgages less affordable
  • Polarized communities.
  1. The technology boom

We have seen the boom in apps. It is now at an inflection point where the use of technology will totally effect the real estate industry. In 2016 2.7 billion was spent in real estate tech. This boom will change every aspect of buying and selling real estate, as well as the homes that we live in.

The impact on residential real estate:

  • Smart homes (thermostats, lighting, security…)
  • Wireless access and bandwidth key
  • Health and wellness attributes on the rise
  • Suburbs could benefit from new transportation models
  1. Generational disruption

Babyboomers and millennials are now about the same. According to CRE The Baby Boomers generation of approximately 74 million (born between 1946 and 1964) is now smaller than the Millennial generations of approx. 75.4 million (born roughly between 1980 and 1997.) A significant number of today’s real estate decisions, as well as those connected to the workplace and consumer spending are now made by people under the age of 40. For the first time people are living and working together (both old and young). Boomers are wanting to move to inner suburbs and want more of an experiential lifestyle. “Surban” areas are the new it. These are suburban urban areas that feel urban-esque. People are looking for an urban feeling in suburban areas.

The impact on residential real estate:

  • Younger renters/buyers’ income limits
  • Marrying later, moving to suburbs
  • Older owners downsizing, selling, moving back to cities
  • Design, amenities differ by age group, yet they will live side-by-side in the same properties and neighborhoods
  • “Surban” communities thrive
  1. Retail disruption

According to CRE, there is a trend toward transforming retail in to “experiential” continues and is offsetting the shrinkage in the physical “bricks mortars” consumer goods platforms. Half of all U.S. households are members of Amazon Prime. There is a fundamental behavioral change in how people shop. The emphasis is on “timely, fast delivery of goods to consumers. May retailers are adopting an “Amazon-like approach, creating new warehouses; new distribution methods; and new fulfillment models while, ironically “disruptive retailers” such as Amazon are opening physical stores. With these changes, up to 30% of malls expected to close, but with this comes opportunities to repurpose the malls Retails is not dying, it is just changing. It is resilient. This disruption is similar to when Sears had to reinvent themselves because of Walmart.

The impact on residential real estate:

  • Walking distance retail demand is up
  • Unique destinations in high demand
  • Retail disruptions is a residential value determinant
  1. Infrastructure investment

We don’t really know what is going on with infrastructure now with the political polarization. It is clear that infrastructure investment is critical. 200 billion was spent over 10 years. 80% of which was state and local government. Mass transportation is being zeroed out. Don’t typically do tax reform or infrastructure spending in a time of growth.

The impact on residential real estate:

  • More infrastructure jobs = more income for housing
  • Better access to housing, work, shopping; improved utilities
  • Improved delivery of purchased goods
  • Potential higher costs for access to privately owned infrastructure (roads, utilities)
  1. Housing: The big mismatch

Affordability is a big issue. In Cleveland you can still buy a house for 80K. But, where jobs are being created there are huge affordability issues, i.e. Denver, West Coast… According to CRE, “Safe, decent, affordable housing has been shown to have a stabilizing effect on urban economies, crime, and public health.  A current lack of inventory has  generated a spike in home prices and, as a result, declining affordability for many home buyers, particularly those in lower income sectors.   A critical disparity exists between housing needs and housing supply. Although improving home prices, economic growth, mortgage accessibility and rental development have improved housing access and affordability in many areas, a confounding series of supply-demand mismatches continues to severely impact markets worldwide.  While the United States increasingly wrestles with the issue, a recent study of 300 metropolitan areas around the world ranked North America as a market with far fewer affordability problems than most.”

The impact on residential real estate:

  • Lack of inventory
  • Few “starter homes” for young buyers
  • Spike in home prices
  • Rising rents
  • Declining affordability
  • Poor market for older, larger homes in suburbs hinders Baby Boomer downsizing and moves
  1. Lost decades of the middle class

According to CRE, “After successive post-recession years of insignificant gains, median household incomes in the U.S. rose in 2015 by 5.2% to $56,516. Still, despite this welcome increase, middle class incomes have yet to recover their pre-recession highs ($57,403 in 2007), and are actually hovering below inflation-adjusted levels from almost two decades ago ($57,909).  Battered by automation and outsourcing, middle class jobs are still under pressure as the U.S. economy transitions from manufacturing to services.”

The impact on residential real estate:

  • Lack of funds for home purchases = postponed home buying
  • Debt and rents of more than 40% of income makes saving for down payment difficult
  • Little disposable income to support retail, restaurants…
  1. Real estate’s emerging role in health care

According to CRE, “Building occupants are increasingly demanding that the space they inhabit be designed, constructed, and operated in ways that advance positive health outcomes. It makes intuitive sense that buildings could help or hurt health in that people spend 90% of their time indoors. Research from the Mayo Clinic also concludes that only 20% of health comes from health care, with environmental and behavioral factors accounting for 40%.”

The impact of residential real estate:

  • Rising health care costs put a strain on household spending and saving
  • Potentially increased access to medical services at malls
  • May see health buildings/homes increase in desirability
  1. Immigration

According to CRE, “New immigrants tend to rent, boosting demand for multifamily housing, especially in gateway cities.  Recent surveys suggest that immigrant populations aspire to own homes and to move relatively freely from cities to suburbs and back in the search for employment. Labor mobility and homeownership rates will be constrained by limiting immigration. Industries like tech that demand highly skilled workers may be forced to innovate and substitute capital for labor if they cannot fill vacancies by recruiting foreign workers – constraining job growth. Longer term, if the entry of immigrant populations that tend to have larger households is curtailed, there will be a limit on the so-called demographic dividend for economic growth, with less of a labor force to support an aging population.”

The impact on residential real estate:

  • Fewer immigrants = fewer new household formations
  • Fewer renters
  • Fewer homebuyers
  • Fewer larger immigrant families = fewer larger homes needed
  • Affects urban and suburban areas alike
  1. Climate change

According to CRE, “In January 2017, the National Oceanic and Atmospheric Administration (NOAA) released a new report based on the most up to date scientific evidence on sea level rise that more than doubles the 2013 forecasts of potential sea level rise by 2100 from 2.2 to 4 feet to 6.6 to 8.6 feet.  Sea level rise is caused by both the thermal expansion of the oceans—as water warms up, it expands—and the melting of glaciers and ice sheets.  These dramatic rises were due largely to new research on the role of the Antarctic in sea rises as well as improved forecast models.  The Atlantic (Virginia Coast North) and western Gulf of Mexico Coasts’ sea rise is projected to be greater than the global average by .3 to .5 meters by 2100.  Alaska and the Pacific Northwest are projected to be 0.1 to 1 meter lower.

While a potential rise of sea level by 6.6 to 8.6 feet by 2100 may seem far in the future, NOAA also estimates that annual frequencies of disruptive and damaging flooding would increase 25-fold with only a 14-inch increase in local sea level rise.  Major cities such as Miami, New York, New Orleans, Tampa and Boston are projected to have the most costly problems, with South Florida and most coastal areas all exposed to differing levels of sea rise risk and cost.”

The impact on residential real estate:

  • Property value declines
  • Property insurance too costly or not offered in impacted areas
  • Potential early home sales before next climatic event to protect ‘nest egg” equity for retirement
  • Particularly in cities like Miami, NYC, New Orleans, Tampa, Boston, South Florida

CRE also identified three issues to watch including: tax reform and monetary policy, other policy issues and the cannabis.

The CRE Top Ten list is developed annually by members of the CRE organizations’ External Affairs group. The Counselors’ 1,100 members around the world undertake an extensive dialogue on current issue and trends to identify the final list. Click here to see the full list or follow #CRETopTen on Twitter.

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SOURCE:
https://www.cre.org/
https://www.cre.org/news-releases/political-polarization-global-uncertainty-top-cre-2017-18-top-ten-issues-affecting-real-estate-list/
https://www.cre.org/external-affairs/alert-the-cre-2017-18-top-ten-issues-affecting-real-estate/
https://www.cre.org/external-affairs/cre-2016-2017-top-ten-issues-affecting-real-estate/

 

Buyer traffic on the rise

Each month the National Association of REALTORS® surveys 50,000 real estate practitioners on their expectations for home sales, prices and market conditions to create the REALTORS® Confidence Index. On April 21st, the new REALTOR® Confidence Index was released. The index reflects strong buyer traffic and tight supplies as we enter the peak housing market, and that REALTORS® are optimistic about the next six months. 88% of respondents reported higher prices than a year ago this due to the strong buyer traffic and reduced home inventory levels. Given this demand, REALTORS® believe home prices will continue to climb.

Lawrence Yun, Senior Vice President and Chief Economist highlighted the Confidence Index’s findings as follows:

  • First-time homebuyers accounted for 32 percent of sales.
  • Amid sustained job creation, the share of first-time homebuyers has been on a modest rise, up from 29 percent in 2014.
  • With fewer new foreclosures, distressed properties accounted for six percent of sales, purchases for investment purposes made up 15 percent of sales, and cash sales accounted for 23 percent of sales.
  • Amid tight supply, half of properties that sold in March 2017 were on the market for 34 days or less compared to 47 days in March 2016.
  • Lack of homes for sale was the main issue reported by REALTORS®.

Click here to download the full report.

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SOURCES:
https://www.nar.realtor/news-releases/2017/04/pending-home-sale-dip-08-in-march
https://www.nar.realtor/topics/pending-home-sales
https://www.nar.realtor/reports/realtors-confidence-index

 

Corpus Christi real estate activity is alive and well; City continues to turn on seasonal activity

It is that time of year to start planning your summer vacations. The days are longer, Spring Break is over, and now we can look forward to a sunny spring and summer. This planning brings to mind our Texas beaches. On that note, today I would like to highlight Corpus Christi.

The South Texas Economic Development Center Economic Pulse, 2017, Issue 4 on the “Housing Market Downswing?” covers how the Corpus Christi housing market has boomed since the beginning of the decade. According to the article, “recently, the local economy has stalled in the wake of falling oil prices. Still the area’s residential construction remains remarkably active, and home prices stay at historically high levels.”

Here is a snapshot of the article:

  • The housing market has grown without major interruptions since 2000. Even during the burst of the nationwide housing bubble and the subsequent recession of 2007-2009, local home prices merely slowed down.
  • Along with other metro areas in Texas, Corpus Christi was among the top cities in home price appreciation during the decade ending in 2016.
  • The area’s median home price grew nearly 40 percent over the 2006-2016 period, slightly below the 45 percent and 44 percent growth rates for Houston and Dallas, respectively.While the median home price of the Corpus Christi metro area tended to rise at a solid pace in the past decade, the housing conditions varied widely across its local communities.A real estate bubble might have developed and then burst recently in the Rockport-Fulton area—the major community of Aransas County. Construction of a large number of industrial sites around the Port of Corpus Christi seems to have boosted the housing markets of various communities in San Patricio County. Following a long period of swings in different directions, the median home prices of these three counties converged to about $160,000 by the end of 2016.
  • Developers responded to rising home prices by increasing the supply of home units.The column chart below shows the Real Estate Center’s Texas Home Affordability Index (THAI) for Corpus Christi and the state. The index indicates the ability of the typical household, measured by total earnings, to buy a house selling for the median home price. The higher is the index, the more affordable are homes in the area.The chart suggests that homes in both Corpus Christi and Texas are less affordable today than in 2012. Home prices across Texas have caught up with income growth, which has recently slowed down from the 2011-2014 period of economic boom. Still the latest THAI readings remain higher, meaning more affordable, than their respective readings at the previous housing boom ending in 2007.
  • Given its relatively large exposure to the oil and gas industry, Corpus Christi’s overall economic condition is tied to developments in the oil market. For the three years that local personal income per capita recorded a loss, the crude oil price also fell. Year 2016 was the most recent period that local income per capita shrank, after the collapse of the oil market beginning in early 2015.
  • Oil and gas drilling and production in South Texas began to rebound in late 2016, and based on the oil futures market, oil prices are expected to rise steadily at least in the next six months.
  • Should the current market trends continue under normal conditions, home prices would rise modestly through the end of this year.
  • Corpus Christi will likely continue to recover from the recent economic downturn, holding up home demand.

Let’s talk about seasonal activity.

According to the Texas A & M Corpus Christi South Texas Economic Development Center Corpus Christi employment and unemployment reflect remarkable seasonal fluctuations. This to me, is no surprise given the tourist attractiveness of the city. In this article, Jim Lee covers the seasonal variations in unemployment not only from tourism, but also other cyclical activities which greatly effect South Texas, like harvest seasons and how this effects the agricultural sector, as well as government job and hiring patterns and their contribution to seasonal fluctuations. The graph below shows the Corpus Christi MSA unemployment rates, both the original and then in blue the seasonally adjusted rates.

“The level of farm employment indeed shows considerable seasonal variations. For the United States as a whole, the peak months for farm employment are March and September. Another regular seasonally pattern occurs in retail sales, which tend to peak during the holiday season in November and December 2017.” For Corpus, “employment typically peaks in April, and dips the most in January with New Year holidays.”

To explain the dips in the latter summer months, Lee attributes this to local government. He states, “compared to the average for the first half of the year, employment in the local government sector fell about 1,500 positions on average in July and about 1,200 position in August. This regular pattern was attributable to the summer break taken by some of those 2,500 local grade school teachers. The public sector typically recovered most of the jobs lost from those two summer months in the latter part of the year beginning in September.”

The bottom line, Corpus Christi will continue to be a strong housing market. There is inventory, homes continue to be affordable and the city is on the upward swing of recovery from the energy crisis. And, we now have the seasonal activity to look forward to. Bring on the summer.

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SOURCES:
http://stedc.tamucc.edu/files/Econ_Pulse_2017_1.pdf
https://stedc.atavist.com/housing-market-downswing

 

The state of Texas’ South Region

Texas is almost like a country in itself with 12 economic regions including: High Plains, West, Northwest, Metroplex, Upper East, Capital, Central, Southeast, Upper Rio Grande, Alamo, Gulf Coast and South.

Today I would like to take a look at what we Texans call “the Valley”, to look at our economy and job growth.

The much talked about border towns of Texas are growing, as is the opportunity for jobs. Texas’ South Region is comprised of the 28 counties covering the Gulf Cost and Mexico border and offers a “young, growing workforce”. According to the Texas Comptroller, “the South Region added more than 138,600 jobs from 2004 to 2014, led by Hidalgo County. Its 26 percent job growth accounted for 37 percent of the region’s net new jobs.”

Here is how South Texas ranked against Texas and the US on Job Growth.

Job growth 2004 – 2014
South Texas – 20.1%
Texas – 21.7%
U.S. – 5.5%

In the Texas Comptroller’s Regional Snapshot, they conclude that “The South Region is one of Texas’ fastest growing and most diverse. It overlies a portion of the Eagle Ford Shale that has helped fuel the state’s energy resurgence. It also serves as a hub for shipping, farming and manufacturing. Meanwhile, tourists flock to shoreline destinations such as Corpus Christi and South Padre Island.

The region offers a dynamic workforce. Both birth and graduation rates top state averages. It has also added jobs at a faster rate than Texas as a whole, though wages lag significantly behind the state average. Rapid growth, coupled with drought conditions, has strained the region’s water supplies.

Thriving cities, agriculture and mining helped drive Texas’ largest consumption increase over the past decade. In all, the region offers much promise. It will remain relatively young and culturally dynamic  while supporting some of Texas’  key industries.”

Here is the rest of the story from the Comptroller.

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SOURCES:
http://stedc.tamucc.edu/rei/
https://www.comptroller.texas.gov/economy/docs/regions/region-10.pdf
http://eaglefordshale.com/

CFPB enforcement action hits two real estate brokerages

The Consumer Financial Protection Bureau (CFPB) took action last week against a major mortgage lender, Prospect Mortgage, LLC,  for paying illegal kickbacks for mortgage referrals. In addition, two real estate brokers and a mortgage servicer were held responsible for taking the illegal kickbacks.

Under the terms of the action announced by the CFPB, “Prospect will pay a $3.5 million civil penalty for its illegal conduct, and the real estate brokers and servicer will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties.”

According to reports on this and to my knowledge, this is the first legal action against a real estate broker by the CFPB. In a press release issued by the CFPB on Tuesday, January 31st CFPB Director Richard Cordray states, “Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals. We will hold both sides of these improper arrangements accountable for breaking the law, which skews the real estate market to the disadvantage of consumers and honest businesses.”

REALTOR Magazine reports, “The action involves marketing service agreements, an area of RESPA enforcement that the National Association of REALTORS® says generates confusion among real estate companies and others in the industry. The association says its analysts on staff will closely examine the facts of these cases and build on existing guidance for real estate professionals for how to best comply with RESPA.”

For more information on RESPA, visit the National Association of REALTORS’ RESPA resource page.

As more information unfolds, I will keep you updated. To receive Tandy on Real Estate news updates direct to your inbox, please subscribe.

SOURCE:
http://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-prospect-mortgage-pay-35-million-fine-illegal-kickback-scheme/
https://www.nar.realtor/articles/cfpb-enforcement-actions-real-estate-brokers-a-mortgage-lender-and-a-mortgage-servicer
http://realtormag.realtor.org/daily-news/2017/02/01/cfpb-hits-brokers-for-marketing-agreements
http://www.robchrisman.com/2017/02/01/feb-1-ae-jobs-cfpb-enforcement-action-realtors-take-note-about-referral-fees-gse-news-jumbo-program-trends/

It’s February – best bargains for homebuyers!

Can you believe it is February already? 2017 is flying by already. February tends to be a seasonally slow month for real estate. As we hit February 1st, homebuyers should be on the lookout for home price bargains. Per ATTOM Data Solutions, February is the best month for homebuyers to buy a home at a discounted rate. ATTOM data solutions looked at more than 50 million single family and condo sales for the past 16 years to determine the numbers of sales, median sales prices, and calculated the discount/premium against the annualized sales price. In their findings, “Homes in February sold at a price per square foot that was 6.1% less than the rest of the year on average – the biggest discount of any month of the year.”

Check out the ATTOM infographic for the details on the best bargain months.

It is not a strange coincidence that the first four months of the year are also in the Top 4 list of the best month to purchase a home at a bargain. We in real estate know that real estate is seasonal. November – January are typically slow due to the holidays. As the new year rolls in sellers who have homes on the market tend to get a little impatient, which could be why home prices decrease. In the early part of the year the spring and summer frenzied selling seasons have not yet hit, but more people begin to list their homes making it a more competitive buyer’s market.  Then comes the summer when buyers and sellers want to complete a move before school which helps drive peak activity and increase home prices. 

Let’s bring on the real estate seasons.

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SOURCE:
http://www.realtytrac.com/news/home-prices-and-sales/why-february-is-the-best-month-to-buy-a-home/
http://www.attomdata.com/
http://static.realtytrac.com/images/reportimages/infographic_best_month_to_buy.png http://www.themreport.com/daily-dose/01-30-2017/homebuyers-adore-february

 

Slow and steady growth for the Texas economy

 

 

 

 

 

 

 

 

 

 

 

I have said before, 2017 is looking very hopeful – reports are predicting a slow and steady growth. We may not increase at a rate that we have in the past, but we are still on the rise. This is confirmed by the Federal Reserve Bank of Dallas and the Austin American Statesman. The Federal Reserve Bank of Dallas released their Regional Economic data for December 2016, and all major metro business cycles indexes increased, except for a small dip for Houston.

The Austin American Statesman reports that Texas is ready to shift into 2nd gear in 2017. According to AAS, Keith Phillips senior economist of Dallas Fed, reported that, “Texas employers should expand payrolls by 2 percent this year, about 242,000 jobs. While far lower than the state’s long-run average, which typically exceeds national job growth rates, the job gains in 2017 are expected to surpass the estimated 1.6 percent annual growth rate through November of last year.”

Phillips said, “Texas still fared better than most energy states. And the Interstate 35 corridor, particularly Dallas and Austin, remained an exception to the otherwise modest growth in Texas.”

Phillips went on to say, “job growth picked up in the second half of 2016 due to a stabilization of the energy sector,” he said. “With that positive momentum, the Texas economy enters 2017 poised to shift into ‘second gear.”

Hear first hand from Phillips on how our Texas economy will be “slightly better than last year”.

Mine Yucel, Dallas Fed’s director of research, supported this with, “Despite the sharp drop in oil prices that sent the energy industry into a tailspin over the past two years, Texas did not drop into a recession at any point. And the modest recovery in commodity prices has helped stem the bleeding of oilfield services jobs and helped buoy statewide manufacturing outlooks.”

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SOURCE:
https://www.dallasfed.org/research/econdata/metro9tab.aspx
https://youtu.be/IaoHg499HEg
http://www.mystatesman.com/business/economists-texas-economy-pick-2017-but-modestly/PY8GfgB4e0hndibj1oOK8J/?ref=cbTopWidget

Two Top 10 lists in one: Top 10 New Year’s resolutions and the Top 10 cities for job seekers

A new year is full of potential – the promise of what is to come. People make resolutions and promises to themselves on what they want to accomplish or how they will improve in the year to come. Curiosity has gotten me when it comes to the resolutions people make, especially as we enter into the post-New Year’s Day weeks where these promises to ourselves begin to become less of a priority.

According to Inc.com the Top 10 New Year’s Resolutions are:

  1. Diet or eat healthier (71%)
  2. Exercise more (65%)
  3. Lose weight (54%)
  4. Save more and spend less (32%)
  5. Learn a new skill or hobby (26%)
  6. Quit smoking (21%)
  7. Read more (17%)
  8. Find another job (16%)
  9. Drink less alcohol (15%)
  10. Spend more time with family and friends (13%)

Not too far off from what I was thinking: be healthier, kick an old habit, save money, advance your career… I don’t think there are any huge surprises on the list. Today I want to focus on one in particular – finding another job. If your resolution happens to be in line with #8, one of advancing your career or finding a new job then, this will come as good news to you. According to NerdWallet, Austin is the best city for job seekers.

Here are the Top 10 lists of cities for job seekers:

  1. Austin, TX
  2. Denver, CO
  3. Nashville, TN
  4. Seattle, WA
  5. Durham, NC
  6. Atlanta, GA
  7. Minneapolis, MN
  8. Lincoln, NE
  9. Irving, TX
  10. Raleigh, NC

The report analyzed federal data for the 100 largest cities to see where there is the most potential coupled with affordability. Data included the U.S. Bureau of Labor Statistics, the increase in the working-age population from 2010-2015 with U.S. Census Bureau data, as well as census data for median earning and monthly rent in each city to factor in the cost of living.

Laura McMullen & Sreekar Jasthi at Nerd Wallet summarize the Top 10 list by saying job seekers should follow the young people, find fast growing hubs (like technology or healthcare), and head to the state capitals. And wherever you are, volunteer to grow your professional and friend network. They say to surround yourself by people who know and like you and want to help you. I could not agree with this more.

Two Texas cities made the list. Austin at #1 and Irving at #9.  Austinites understand this, but for those looking to change up your career or job here is a breakdown for you on why Austin and the Dallas area could help you fulfill your new year’s resolution.

Low unemployment

Unemployment in Austin was 3.2% in October 2016 and 3.6% in Irving. Texas unemployment held steady in December at 4.6% overall. And, according to Sterling’s Best Places, “the unemployment rate in Irving, Texas, is 3.60%, with job growth of 3.09%. Future job growth over the next ten years is predicted to be 42.59%.”

High quality jobs in technology

Bureau of Labor Statistics’ 2014-2024 employment projection says that technology is one of the fastest growing in terms of output. Austin is no stranger to technology, being the home of two major technology companies, Dell and IBM, with many other companies following suit, like Apple. Forbes argues that Austin is the most attractive tech hub attributing the draw to the “young, educated population, large VC presence and burgeoning restaurant and music scene”. Companies see the potential of Austin’s labor pool and are taking advantage of this to grow their tech advantages.

According to Christopher Calnan at the Austin Business Journal, “Texas ranks No. 2 in the nation for number of tech jobs, 585,614, second only to California. And, tech companies accounted for 6 percent of the Lone Star State’s private sector jobs, the report by Computing Technology Industry Association found.”

Attractive salaries

So, the jobs are here, and per CIO.com Austin salaries are 106% of the national average. Not too bad. For a detailed look at wages, here is snapshot of tech salaries by industry from the Austin American Statesman. In addition, the Salary Increase Forecast for U.S. Jobs projects a 3.3% increase in tech salaries from the 87K median salary as reported by the Economic Research Institute.

This is exciting news for our city.

Job growth in healthcare

On the healthcare side Will Anderson with the Austin Business Journal says that, “in the health care sector, the opening over the summer of the Dell Medical School is expected to accelerate the development of a business ecosystem that combines the city’s existing care centers with entrepreneurial startups and innovators in medicine.”

Irving attributes much of its growth to technology. According to the Irving Chamber of Commerce, “Irving was recently ranked number three for tech startups per capita in the United States by American Express through research conducted by SizeUp.com. In addition, the City of Irving is the first city in Texas and the second in the nation to earn the Malcom Baldrige Quality Award.”

The Irving Chamber of Commerce also notes that “five of Irving’s approximately 50 Fortune 500 companies have chosen Irving for their global headquarters: Celanese, Commercial Metals, ExxonMobil, Fluor and Kimberly-Clark. Irving is home to more of the DFW Metroplex’s largest private and public companies than any other city except Dallas, including Citi, Microsoft, Verizon, NEC Corporation, Allstate Insurance Company, Time Warner Cable, RIM (BlackBerry), Aviall, Michaels Stores, Pioneer Natural Resources, CEC Entertainment and TXU Energy.” These companies choosing Irving, TX as their home base no doubt makes it a hot bed for career opportunities for job seekers.

So, how about it, are you ready to make the move to one of our great Texas cities? The opportunity is definitely here.

And, of course, I would love to help you with Resolution #7. If you are trying to read more, please subscribe to my updates.

SOURCE:
https://www.nerdwallet.com/blog/finance/best-cities-job-seekers-2017/
https://www.bls.gov/news.release/ecopro.nr0.htm
http://dfw.cbslocal.com/2017/01/20/texas-unemployment-holds-steady-in-december/
http://www.bestplaces.net/economy/city/texas/irving
http://www.erieri.com/nationalcompensationforecast
http://www.bizjournals.com/austin/blog/techflash/2016/03/texas-among-tops-in-nation-for-technology-jobs.html
http://www.irvingchamber.com/edc/
http://www.irvingchamber.com/edc/economic-profile-demographics/
http://www.bizjournals.com/austin/news/2016/12/20/with-low-unemployment-and-relatively-affordable.html
http://www.inc.com/peter-economy/10-top-new-years-resolutions-for-success-and-happiness-in-2017.html
http://www.512tech.com/technology/which-tech-jobs-pay-the-most-austin/9ZmYz20mz9KxfAm8u2eemN/

 

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