Will Rising Interest Rates Stifle DFW Home Buying?

By Ryan Smith, Mortgage Professionals Association Magazine

Will rising interest rates stifle homebuying?  The majority of prospective homebuyers are worried about low inventory and rising interest rates impacting their ability to purchase a home, according to new data from Zillow.  insurancerate 

Mortgage rates increased last year following the presidential election and December’s federal funds rate hike. With more hikes expected on the horizon, rising rates may stifle homebuying ability, Zillow said.

Low inventory is still homebuyers’ number-one concern, with 65% saying they worried about their ability to find an affordable home. However, rising interest rates were in second place, with 53% concerned that interest rates could prevent them from buying. When Zillow conducted the same survey in 2015, interest rates ranked behind worries about both finding an affordable home and saving for a down payment.

It’s not all bad news, however. According to Zillow, plans to purchase won’t be immediately impacted by rate hikes. Eighty-three percent of people planning to buy a home in the next three years said they’d go ahead with their plans even if rate rises increased their monthly payment by $100. And 49% said they’d still purchase a home even if rate hikes upped their payments by $200 per month.

However, as rate hikes continue to increase monthly payments, buyers will start to shy away. A quarter of prospective homebuyers said they would reconsider the type of home they were looking for if their monthly payment were to increase by $100. Another 38% would revise their homebuying budget if rates were to rise by $200.

“For years, falling interest rates have been a boon to the US housing market, keeping monthly mortgage payments low for first-time and move-up buyers alike, even as home values rose,” said Erin Lantz, Zillow Group’s vice president of mortgages. “As rates rise this year, first-time homebuyers and those looking to buy in expensive markets where affordability is already an issue will feel the pinch of higher rates on their budget. That said, for most borrowers, there is quite a bit of head room for rates to rise before homebuying becomes unaffordable.”

In the event of a mortgage-rate hike, the hardest-hit buyers will be those living in already-expensive markets. In pricey markets like San Francisco or San Jose, a rate hike to 5% could mean increases of $400 or more in monthly payments, Zillow said.

Source: http://www.MPAMag.com, Feb. 24, 2017

Just In: January Home Sales in DFW

By Alicia Kay Lanier, REALTOR®

Is 2017 destined to be another scorching hot year for home sales in North Texas? January sales stats indicate that may be a good bet.

Continuing job growth propelled buyer demand for housing across the region and drove January home sales 8 percent higher than the same month last year. Home prices were boosted upward, with the average selling price reaching $273,057, gaining 12 percent above prices in January, 2016.

A snapshot of the most populous counties in January revealed a still-strong housing picture – giving advantage to sellers in this market – with rising prices and extremely low inventory of homes for sale:

Collin County:  Average sales price was $351,985 in January, up 11.4 percent over the same month in 2016; sales were essentially flat, declining -0.8 percent; average days on market before selling was 46 days; Collin has 1.8 months of homes for sale inventory (normal supply is 6 months).

Dallas County: Average sales price was $291,635 in January, up 15 percent over the same month in 2016; sales declined by 7 percent; average days on market before selling was 38 days; Dallas County has 1.9 months of homes for sale inventory (normal supply is 6 months).

Denton County: Average sales price was $319,413 in January, up 7.3 percent over the same month in 2016; sales increased 1.9 percent; average days on market before selling was 47 days; Denton County has 1.8 months of homes for sale inventory (normal supply is 6 months).

Rockwall County: Average sales price was $301,267 in January, up 12 percent over the same month in 2016; sales increased 1.8 percent; average days on market before selling was 51 days; Rockwall has 2.4 months of homes for sale inventory (normal supply is 6 months).

Tarrant County: Average sales price was $241,417 in January, up 9 percent over the same month in 2016; sales declined 8.5 percent; average days on market before selling was 38; Tarrant has 1.5 months of homes for sale inventory (normal supply is 6 months).

Want this data for your specific city? Just email me and and name your city.

Alicia Kay Lanier is a REALTOR® affiliated with Coldwell Banker DFW Residential and provides professional real estate services to both Home Sellers and Home Buyers in North Texas. Email Alicia.Lanier@cbdfw.com or call/text 972-998-8751.

DFW Housing Market Looking Good for 2017 According to Two Recent Reports

By Alicia Kay Lanier, REALTOR®

housing-market-curve-cotd

Two reports this week offer extreme optimism about immediate prospects for the Dallas-Fort Worth housing market in 2017. Here are excerpts of interest  to  Home Sellers, Home Buyers as well as Investors.

Independence Title Company’s 2017 Real Estate Housing Forecast sums up a rosy year to come and proclaims, Now is the time to buy,” backing it up with these selling points:

  • DFW area resale home inventory is at only 2.1 months (seller’s market). Note: 6 months is normal.
  • New and resale home inventory levels remain tight with appreciating values in all DFW sub markets.
  • DFW home values remained positive during the recession and continue to gain value.
  • Record affordability with the 3rd lowest mortgage rates in 60+ years.
  • 1 out of 2518 properties in the DFW area is in foreclosure process.
  • Lending requirements are still tight, causing fewer opportunities.
  • Rentals 94.7+/-% occupancy / less than units 35,000 currently available DFW metro area.
  • 200,00+/- people annually moving to DFW
  • Lower Supply + Higher Demand = Continued value improvement.

The Independence Title report insists: “So far, all signs are good for the 2017 housing market … 2017 should be as robust as 2016 when we saw …

  • The 54th consecutive month of year over year increases the country has seen.
  • The 68th consecutive month of year over year increases that DFW has seen.
  • A presidential election’s effect on home prices is usually less pronounced than it is on stock values, but home values rise more slowly during election years than off years.

What are factors that we should watch during 2017? The Report says:

  • Job creation / employment numbers, period. Without solid work prospects, what household would bet on the cost of local housing? Any cooling in employment growth, especially in high-paying industries, is problematic for housing. The good news is that DFW continues to show strength with an avg. of 10,000+ jobs a month in 2016.
  • Rates will slow sales temporarily; however after the public realizes they are here to stay, sales will pick back up to previous highs.
  • Home appreciation and sales will slow in those inner areas that have been strongest the last 5 years because there’s too much overpriced inventory.
  • Home values under $500K will continue to show strong appreciation and sales
    • Surprisingly, luxury sales (1.5 million$+) will continue to be good. High inventory remains, but sold homes above a million in 2016 were a little better than 2015.
  • Apartment rents continue to rise. Single family rentals will continue to be strong in most neighborhoods, if on the market longer than 30 days, overvalued.
  • The cost of labor going up 1% a month, without federal infrastructure needs yet addressed will cause labor shortage, labor value increases and delays.
    • Because of labor and rates inventory tightness under $600K, resale inventory should be tight.
  • Price points below $350K near work and convenience will continue strong appreciation.

As for the economic forecast, the Independence Title report projects over the next couple of years that “substantive national growth will still be challenged.” On the other hand, “Texas growth has been strong since 2013, and will continue through 2017-18.” The report points out:

  • Housing and real estate slowly stabilizing, putting more people to work.
  • Corporate earnings continue to improve. When do wages follow?
  • + years of household formation pent up demand.
  • Interest rates stayed low through all of 2014, all of 2015 until December.
  • Real estate construction stronger across all channels nationally, Texas leading nation. Construction costs continue to rise. Labor cost increasing 1% a month.
  • Consumers are spending, lenders lending in Texas region.
  • Home, car and retail sales continued improvement in 2015-16; highest oil consumption in 10+ years.
  • Local Unemployment: Texas 4.7% / DFW 3.5%. Both DFW and Texas have been lower than the national avg. the last 116 months (9.5+ years).
  • Employment – Nationally, very slow recovering. Unemployment US 4.6% (U6 9.3%).
  • Texas economic indicators continue to show strength:
    • Total Texas debt balance per capita is 2nd lowest in US.
    • Texas debt balance 90+days late, 2nd lowest in US.
    • Texas percent of new bankruptcies lowest in US.
    • Texas job creation still strong, 35+% of jobs in US created in Texas.
    • Texas metros’ economic rankings near top.
    • Texas housing demand continues to be greater than supply.
    • Texas real estate and land values continued to improve

Looking back at 2016, NTREIS has released its December, 2016, sales stats for our 30-county MLS (Multiple Listing Service).  Home selling prices continued to rise significantly year-over-year. Here are the average sales prices for all homes in selected DFW Metroplex counties:

  • Collin County: $348,000 average sales price in December, up 12.3% over the same month in 2015; 1.7 months homes for sale inventory (6 months is normal).
  • Dallas County: $319,000 average sales price in December, up 5.7%; 1.7 months inventory.
  • Denton County: $324,000 average sales price in December, up 5.1%; 1.8 months inventory.
  • Ellis County: $243,000 average sales price in December, up 10.4 %; 2 months inventory.
  • Rockwall County: $304,000 average sales price in December, up 8.4%; 2.4 months inventory.
  • Tarrant County: $255,000 average sales price in December, up 12.3%; 1.5 months inventory.

Finally, some are beginning to question whether our region and others might be in a “real estate bubble.” The Independence Title report includes a revealing real estate cycles chart (at top of article) developed for Business Insider in September showing exactly where various Texas housing markets stand among the four cycles.

Our DFW area clearly has moved from “expansion” into “exuberance” mode, with capital flowing freely, prices and sales surging, affordability declining while construction increases – and  note this last as well – smart money taking some chips off the table.

Contact me today at Alicia.Lanier@cbdfw.com if you want me to email you a copy of Independence Title’s 2017 Real Estate Forecast or the December, 2016, MLS home sales statistics for your home county.

Home Builders Offering Discounts on Hundreds of Ready-to-go Brand New Homes in North Texas

By Alicia Kay Lanier, REALTOR® 

Alicia Kay Lanier, REALTOR, is affiliated with Coldwell Banker Residential DFW and works with both Home Buyers and Home Sellers in North Texas. Contact her at 972-998-8751 (call/text) or Alicia.Lanier@cbdfw.com to learn how you can reach all your real estate goals.

Blue Christmas Gift Drive for Irving Kids

By Alicia Kay Lanier, REALTOR®

Please donate a gift for a needy child in Irving during our Blue Christmas toy drive this month. Our Coldwell Banker office is located in Irving Las Colinas at Williams Square (5221 N O’Connor Blvd, Suite 180).

blue-christmas

Alicia Kay Lanier is a REALTOR® affiliated with Coldwell Banker Residential DFW and works with both Home Sellers and Buyers in several North Texas counties, including Dallas, Denton, Collin, Ellis and Tarrant Counties. Contact her at 972-998-8751 or Alicia.Lanier@cbdfw.com

DFW Metroplex Home Selling Prices Continue Upward Trend in October

By Alicia Kay Lanier, REALTOR®      

Home sales in North Texas did not cool down with irvinghome2the weather in October.  Just released housing stats from North Texas Real Estate Information Services (NTREIS) show that selling prices remained pretty hot – increasing an average of 11% across the entire region, year over year – and were still trending upward. Here are October, 2016, housing market highlights compared with the same month of 2015 for major five DFW Metroplex counties:

Collin County – Average selling price was $337,820 (up 7.5% over same month 2015); 38 days average selling time; there were only 2.3 months of homes for sale inventory (“normal” is 6 months).

Dallas County – Average selling price was $318,654  (up 14.4%); 32 days average selling time; 2.2 months homes for sale inventory.

Denton County – Average selling price was $312,942 (up 7.3%); 38 days average selling time; 2.2 months homes for sale inventory.

Ellis County – Average selling price was $246,686 (up 23.8%); 47 days average selling time; 2.6 months homes for sale inventory.

Tarrant County – Average selling price was $245,978 (up 13.4%); 32 days average selling time; 1.9 months homes for sale inventory.

Translation: It’s a sellers-advantaged home sales market. If you are considering selling a property and want to know what it might sell for in today’s hot housing market, contact me today. You might be pleasantly surprised at the probable selling value of your home!

Alicia Kay Lanier is a REALTOR® affiliated with Coldwell Banker Residential DFW and works with both Home Sellers and Buyers in several North Texas counties, including Dallas, Denton, Collin, Ellis and Tarrant Counties. Contact her at 972-998-8751 or Alicia.Lanier@cbdfw.com

 

Happy Halloween!

I hope you have some spooktacular fun this Halloween. Here’s a cute animated musical card to enjoy and get you started:

Haunted Harmony