Dallas Update for all you Texans

Is the Housing Market in North Dallas Hot or What? Check out Prestwyck in McKinney!
Posted on September 29, 2015 by Your Connection to the North Dallas Real Estate Market

As Real Estate agents in the North Dallas area we are asked daily, “How’s the market?”  This morning I woke up to an incredible news story on NBCDFW.  In McKinney, Texas, about 30 miles north of Dallas, approximately a dozen families camped out over night to be the first families to purchase lots where they hope to build their future homes in a community named Prestwyck.  This is truthfully an unknown phenomena in North Dallas.  The developer expects the lots to sell out in 24 hours.

We moved to Texas, January 1, 2006.  We can not remember a time where the housing market was this hot.  We left the crazy Southern California housing market at the end of 2005  in search of  a better education for our kids (at the time ages 3 and 7), more affordable housing, more integrated communities and a well-educated workforce.

2015 totals show North Texas real estate market is near an all-time high
Recession? What recession?

As 2015 winds down, real estate activity in North Texas is near an all-time high.

Looking at the latest statistics, there’s almost no sign that the Great Recession ever happened.

You couldn’t say that five years ago when the market was coming out of the economic crash.

While Dallas-Fort Worth fared much better than most U.S. urban markets, the housing crash and financial sector shakedown were certainly felt in these parts.

That’s easy to forget in these halcyon days of Toyota, soaring job gains and rocketing real estate values.

Remember back in 2009, when local home foreclosures were jumping and commercial property projects were getting put on hold? Those days are long past.

The 2015 snapshot of D-FW’s real estate market takes things to a new level.

Chinese invest billions in Dallas-area real estate

evelopers who are redoing downtown Dallas’ landmark Statler Hotel have spent time in China courting investors.

“I’ve already made three trips to China,” said Frank Zaccanelli, a partner with Centurion American Development Group. “They are very interested in what’s going on in Dallas.”

Centurion American, which also has suburban home and commercial projects in the works in North Texas, isn’t the only local real estate firm with an appetite for Chinese investment.

Chinese money has funded recent downtown Dallas tower sales.

(NAR Leadership Summit 2014) Economic Forecast Presentation

Lawrence Yun, NAR Senior Vice President & Chief Economist, gives an economic update to the 2014 NAR Leadership Summit.

Lawrence oversees and is responsible for a wide range of research activity for the association including NAR’s Existing Home Sales statistics, Affordability Index, and Home Buyers and Sellers Profile Report. He regularly provides commentary on real estate market trends for its 1 million REALTOR® members. Yun creates NAR’s forecasts and participates in many economic forecasting panels, among them Blue Chip and the Harvard University Industrial Economist Council. He appears regularly on financial news outlets, is a frequent speaker at real estate conferences throughout the United States, and has testified before Congress. USA Today in 2008 listed him among the top 10 economic forecasters in the country and he has been named among the Most Influential Real Estate Leaders by INMAN News over the past several years.

See Video Presentation here

Net Worth of Homeowners vs. Renters

Graph

In the past 15 years, the net worth of the typical homeowner has ranged between 31 and 46 times that of the net worth of the typical renter.

Homeowner equity is a substantial component of homeowner wealth. The Federal Reserve’s Survey of Consumer Finances, conducted once every three years, provides a snapshot of family income and net worth along with basic demographic details and more detailed information on where families keep the wealth they have accumulated.

The most recent survey, conducted in 2013, offers a picture of the situation as home and equity prices normalized for most household balance sheets.

Data shows that median homeowners had nearly $200,000 in net worth or 36 times that of the median renter who had just over $5,000. The median value of owners’ homes was $170,000.

Many households own a primary residence (65.2 percent). It is the most commonly held non-financial assets after vehicles (86.3 percent).

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How to woo a Chinese homebuyer…in four easy steps

 

Chinese buyers are flocking to the U.S. Some want their kids to go to American schools. Others are looking for new ways to invest.

Either way, American real estate brokers want a piece of it.Chinese buyers spent $22 billion on homes in the 12 months ended March 31. They buy more expensive houses, spending an average of close to $600,000 — more than twice the national average. And many of those deals are done in all cash.

Here’s how to woo them in four easy steps:

First, you need to be part of a big American brand.

Not only will your brokerage’s name be more recognizable, but it will also give you the resources you need to reach them a continent away.

Ryan Sherman and Douglas Magid founded Metropolitan Residential Services in New York City as an independent boutique, but in February they decided to become a local Century 21 franchise.

“The reason we affiliated with Century 21 is because it’s the largest franchise operator in the world with 2,400 offices in Asia alone,” said Sherman.

Second, hire agents who know the language and the culture.

Metropolitan courts Chinese clients by hiring agents who speak the language and know the culture. It sends agents overseas to build relationships. One, Sophine Hung, travels to Taiwan and Hong Kong regularly.

“When she goes, she stays a month, networking there,” said Sherman.

Hung said she makes friends, builds trust and lets her sales grow naturally. Nearly all her business comes from word of mouth. Her investor clients trust her so much, they let her pick out properties by herself.

“They don’t even know what the buildings look like,” she said.

Third, be prepared to play personal concierge.

That includes lining up banking services and getting your client’s kids into the best American schools.

For one couple with young kids, Hung arranged a meeting with the principal of a highly regarded school in Scarsdale, N.Y., and a guided tour of its facilities.

She has also set up banking services for clients, finding convenient branches and opening accounts. She puts clients up in her home when they come to New York and when she goes overseas, she sometimes stays with them. Old customers introduce her to new ones.

Finally, build on and maintain the relationship.

Chinese people are all about guanxi, the establishment of connections, said Janice Lee, the luxury properties director for Berkshire Hathaway Home Services in Pasadena, Calif.

“Chinese prefer to go to someone who a friend tells them to go to; they have the guanxi,” she said.

Wei Min Tan, is a New York-based agent for Rutenberg Realty with many Malaysian Chinese clients. He keeps in touch with his past customers and informs them of any bargains he finds. He also provides free property management services for absentee landlords.

One other thing to note: Not all real estate pros who cater to Chinese clientele are Asian.

Rachel Saltmarshall is an African-American broker with Brice Winthrop & Associates in Detroit. She purchased as many as 20 homes a month for Chinese investors, mostly low-priced housing that will be converted to rentals.

A past president of the Detroit Association of Realtors, Saltmarshall offers her foreign buyers a trusted local expert who can put together portfolios of homes.

As an added bonus, she also runs a contracting business, so she can offer her Chinese clients a one-stop shop.

They never even need to step foot in the U.S.

See Original Article and watch the video

A Look at the Existing Home Sales Market Over the Past Decade

 

A Look at the Existing Home Sales Market Over the Past DecadeEvery month NAR produces existing home sales, median sales price and inventory figures. The reporting of this data is based on homes sold the previous month and the data is explained in comparison to the same month a year ago. We also provide a perspective of the market relative to last month, adjusting for seasonal factors, and comment on the potential direction of the housing market.The data HERE shows what our current month data looks like in comparison to the last ten Julys and how that might compare to the “ten year July average”, which is an average of the data from the past ten Julys.

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New Home Sales: Cash Purchases on the Rise

 

New Home Sales: Cash Purchases on the RiseThe onset of the housing crisis in 2007 led to a decline in the share of new home sales due to conventional mortgage financing and increases in the shares due to mortgages backed by the FHA and the Department of Veteran’s Affairs (VA), as well as cash purchases.The second quarter data from the Census Bureau’s Quarterly Sales by Price and Financing indicates that count of cash-based new home sales rose to 10,000 for the quarter, matching a cycle high. During the 2002-2003 period, cash sales made up only 4% of purchases. In contrast, cash purchases constitute a considerably larger share of the existing home market – 32% of sales in June 2014 for example.

It is worth noting that another measure of cash sales for total new construction from CoreLogic shows a higher level of cash sales than the Census: 17% in April 2014.

New home sales due to FHA-backed loans fell to 11% of the market during the second quarter. This is down from 28% in the first quarter of 2010 and is closer to the 10% 2002-2003 average. As the conventional mortgage financing share has risen, the share of new single-family home sales due to FHA-backed mortgages has declined. Falling FHA loan limits will likely place additional downward pressure on this share in 2014.

VA-backed loans were responsible for about 11% of new home sales during the second quarter of 2014.

These sources of financing serve distinct market segments, which is revealed in part by the median new home price allocable to each. For the second quarter, the median new home price due to FHA financing was $212,500. The median price for VA-backed loans rose to $274,800.

Conventional mortgage financing had a median price of $289,500.

Finally, the median price for cash purchases for the fourth quarter was $303,500.

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