Texas Housing Insight – June 2020

Here is the June 2020 Summary from Texas A&M Real Estate Center.





Total Texas housing sales rebounded almost 30 percent after three straight monthly declines corresponding to the initial wave of domestic COVID-19 cases. Falling interest rates and pent-up demand from the economic shutdown supported sales in the existing-home market and for new homes priced less than $300,000, pushing the Lone Star State’s second-quarter homeownership rate up to record-breaking levels. Ongoing uncertainty surrounding the virus, however, dampened supply-side activity in the second quarter with reduced lot development in all the major metros except for San Antonio and downward-trending building permits and housing starts. Although the pullback in construction is likely to be temporary, the decrease will exacerbate already low inventory levels.

Home-price appreciation accelerated in June after slowing to start the quarter. Nevertheless, housing affordability improved during the low interest rate environment and overall moderate price growth. The Real Estate Center’s single-family housing sales projection suggests a complete recovery in single-family homes sales will be reflected in July numbers. COVID-19 remains the greatest obstacle to the Texas housing market, and the resurgence in contracted coronavirus cases and hospitalizations in July could reverse progress.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, dipped slightly as construction values fell and hiring slowed. On the other hand, the Residential Construction Leading Index almost reached the post-recessionary high from December as interest rates continued to decrease and permits and housing starts picked up, suggesting positive momentum in the next few months. At the metropolitan level, Austin was the only major metro where the leading index decreased, pulled down by multifamily building permits.

According to Metrostudy, activity at the earliest stage of the construction cycle picked up slightly as the number of new vacant developed lots (VDLs) in the Texas Urban Triangle increased 3.5 percent quarter over quarter (QOQ). All of the second-quarter upturn, however, is due to VDLs in San Antonio more than doubling, with the $200,000-$300,000 price range accounting for most of the rebound. Houston and Austin’s 14.7 and 20.7 percent declines, respectively, kept total VDLs in negative YTD growth territory. The metric in Dallas-Fort Worth (DFW) ticked down 2.9 percent QOQ but the decrease slowed.

Despite sluggish activity to start the second quarter, single-family construction permits remained on track to exceed last year’s total after recovering 14.6 percent in June. Texas remained the national leader, contributing 16 percent of the national total. Nonseasonally adjusted permits increased to 1,105 and 4,028 in Fort Worth and Houston, respectively, almost reaching peak levels after accounting for seasonality. San Antonio permits rose to 889, while Austin and Dallas issued 1,540 and 2,358 permits, respectively. On the other hand, Texas’ multifamily fell 22.1 percent, declining for the third consecutive month.  

Total Texas housing starts rebounded 27.9 percent on a monthly basis but extended a downward trend. MetroStudy data revealed less than 26,000 single-family homes broke ground in the Urban Triangle during the second quarter, a 4.3 percent decline. Houston accounted for most of the decrease, with starts sinking 16.3 percent QOQ. The San Antonio metric fell for the second straight quarter, but activity in the $500,000-and-higher price range accelerated. In Austin and Dallas, however, starts increased 1.4 and 4.7 percent QOQ, respectively, with improvement in North Texas widespread.

After a brief reprieve in May, single-family private construction values decreased for the third time in four months, declining 18.8 percent. Quarterly construction values dropped across all four major metros due to the effects of the pandemic, ranging from a 22.75 percent plummet in DFW to 30.1 percent in Houston.

A dwindling supply of active listings and a resurgence in home sales pulled Texas’ months of inventory (MOI) down to an all-time low of 2.8 months. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 was even more constrained, sliding below 2.1 months. The MOI for luxury homes (homes priced more than $500,000) also decreased, falling to 7.2 months.

Austin and San Antonio posted record-low inventories of 1.6 and 2.6 months, respectively. The MOI in Dallas declined to 2.3 months, while the Fort Worth metric dropped to 2.1 months. Only Houston maintained a MOI above the state average at three months.

Demand

Pent-up demand and record-low mortgage rates pushed total housing sales up 29.4 percent in June. Improvement stemmed from a pickup in existing-home sales transactions as activity in the new-home market stalled after a year of solid growth. Sales accelerated more than 6 percent QOQ for new homes priced less than $300,000, but the $400,000-and-higher price range took a large step back. The divergence exemplifies the increasing demand for more affordable homes as many millennials become first-time homebuyers.

Fluctuations in second-quarter new-home sales varied across the major metros. Houston posted its sixth consecutive improvement, pushing transactions to 8,732. San Antonio new-home sales rebounded 16.1 percent QOQ to 3,640 after faltering to start the year. Although activity in DFW decreased during the second quarter, North Texas remained the top market with 9,100 transactions. Austin extended a downward trend, selling only 4,736 new homes after reaching an all-time high in 4Q2019.

Despite falling sales in April and May, Texas’ 2Q2020 homeownership rate rose its highest level on record (beginning 1996) at 67.5 percent, lessening the gap between the national rate to only half a percent, the smallest in eight years. National homeownership rates were higher across all races, including minorities. At the metropolitan level, Austin registered the greatest increase in homeownership, rising almost 6 percentage points to 65.3 percent. The metric in DFW and San Antonio ticked up to 64.7 and 66.2 percent, respectively. Houston boasted the state’s highest percentage of occupied housing units that were owner-occupied at 68.2 percent. Homeownership, however, could suffer as COVID-19 foreclosure-protection policies expire.

Approximately two months after the forced economic shutdown, Texas’ average days on market (DOM) inched up to 64 days, at least partially due to slower activity during April. The major metros recorded softer demand. Houston and San Antonio’s metrics exceeded the state average, rising to above 64 and 65 days, respectively. The average home in North Texas sold after 59 days in Dallas and 51 days in Fort Worth. Austin was the exception, as the DOM decreased to 53 days compared with 57 days this time last year.

Continued uncertainty stemming from the ongoing spread of the coronavirus pandemic kept interest rates at historically low levels, although increased oil prices slowed the downward slide. The ten-year U.S. Treasury bond yield ticked above 0.7 percent, but the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate sank below 3.2 percent for the first time in series history (starting in 1971). Mortgage applications for home purchases rose 9.8 percent, jumping into positive YTD growth territory. Refinance activity decreased for the third straight month but remained at levels one-and-a-half times greater than at year-end.

Elevated volumes of mortgage applications corresponded to falling Texas mortgage rates. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.) In May, the median back-end debt-to-income ratio (DTI), loan-to-value ratio (LTV), credit score, and interest rate constituting the “typical” conventional-loan Texas mortgage were 36.10, 85.57, 747, and 3.35 percent, respectively. The typical Texas borrower who obtained a loan from a government-sponsored enterprise had a DTI of 36.14 and LTV of 87.49 while receiving an interest rate of 3.45 percent.

Prices

The Texas median home price jumped 3.9 percent to $249,100 in June after subdued growth to start the second quarter. Annual price appreciation accelerated 4.2 percent. Movements in metropolitan median prices moved similarly to statewide fluctuations, with Austin’s metric leading the state at $324,700. The median price shot up to $298,800 in Dallas and exceeded $250,000 in Fort Worth and Houston. San Antonio’s median home price increased to $240,800.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. The index corroborated healthy price appreciation, rising 4.5 percent YOY. The metric in North Texas also advanced, jumping 3.1 in Dallas and 4.3 percent in Fort Worth. The Austin and Houston indexes slowed but maintained healthy growth of 5.6 and 2.6 percent, respectively. Meanwhile, price appreciation in San Antonio stabilized at 3.5 percent.

Slower home-price growth and historically low interest rates increased housing affordability in Texas’ major metros during the second quarter. Houston and Fort Worth were the most affordable locales, with both indexes climbing to 1.8, indicating that a family earning the median income could afford a home 80 percent more than the median sale price. The metric in Austin and Dallas registered double-digit YOY gains, exceeding 1.7 and 1.6, respectively, with the former posting a five-year high. Meanwhile, San Antonio’s index rose steadily to 1.7. Continued improvement is important to Texas’ demographic advantages that have supported the state’s economic prosperity over the past decade.

Single-Family Forecast

The Real Estate Center projected single-family housing sales using monthly pending listings from the preceding period (see Table 1). The Center projected only one month in advance due to uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Sales are expected to rebound completely from the pandemic-induced shutdown in July. Texas single-family sales are estimated to increase 22 percent, while Houston should outshine the other metros with 25.2 percent growth. In Austin and Dallas, single-family sales are projected to bounce back 24.6 and 22.6 percent, respectively. San Antonio’s improvement is forecasted to be slightly lower than state’s at 17.8 percent but still sizeable nonetheless. Texas’ housing market recovery has so far outpaced its labor market’s less steady comeback.

________________

All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (August 12, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

6 Ways To Grow Your Real Estate Business By Using LinkedIn

LinkedIn is one of the most under-rated but highly valued networking sites you can be using in 2020!  The most important thing to remember about LinkedIn, at its core, it is an online resume.  It’s also likely to be among the first handful of results to come up on a Google search, and might be the first place a potential client looks to review your credentials.  Most clients won’t choose a real estate agent who appears to lack knowledge, education and expertise.  So it’s wise to set yourself up for success and utilize this powerful tool.

So, YES, LinkedIn is extremely important and a must-have in today’s digital world.  It’s also the perfect place to promote yourself, your real estate listing, and boast about the skills you bring to the table.

Here are the top 6 things you should focus on with LinkedIn:

  • Your Profile:

Fill out each section to include all levels of education, all accreditations and current and past positions.  Include a high quality professional photo of yourself.  Be sure to include a LinkedIn Banner image that includes a call-to-action (your phone number, your email, etc).  Your headline should be catchy and stand out.  Be sure to fill in your summary section to include real estate listings and other statistics that will jump out to potential clients.  Be sure to use keywords or phrases (real estate, real estate agent) throughout your headline and your summary to increase search engine optimization.  Also encourage previous clients to give you a recommendation so your LinkedIn profile is a non-stop shop for anyone who comes across it.  Upload videos and links to enhance your profile.  Customize your URL and use it everywhere (advertising, business cards, posts, etc).

  • Connections:

61% of real estate agents on social media view it as a way to connect to the community.  LinkedIn revolves around businesses, employees and their connections, so it’s the perfect network for real estate agents who work in an industry predicated on connections, referrals and being involved in the community.  Reach out to everyone in your sphere, alums, etc.  Remember LinkedIn is the best social media platform for professional networking, which means connect with everyone.  Take advantage of the biggest networking platform ever!

  • Content:

This is where many real estate professionals go wrong.  What doesn’t work is just content about listings (remember the 80/20 rule) in hopes of generating sales leads.  What does work is highlighting your professional experience, education and network strength.

Try these 6 content ideas to maximize your effectiveness on LinkedIn:
    1. Share real estate news, industry updates or trends.  Don’t forget to include a caption with your thoughts and opinions as well as a call to action soliciting others opinions and thoughts.  Remember, it’s about engagement so ask questions.
    2. Share information or updates about your local city.  Remember people are very patriotic when it comes to the city they live in, so find local information to share.  Also, now that LinkedIn allows the use of hashtags, include local hashtags in all your posts so anyone searching for that hashtag might come across you, and in turn check out your profile.
    3. Thoughtful and conversational posts.  Try something that will resonate with others such as your struggles, wins, inspiration, or something you overcame.  These are going to be the best conversation starters you can share on LinkedIn.  As real estate agents, you go through a lot, so sharing that will resonate with your audience.
    4. Networking events you’ve attended.  Include connections you made and give them an @mention, photos, food, the service, highlight the event, the vibe and your takeaways.  It shows your connecting with people in your local city.  Often times you’ll hear people say, it’s not what you know, it’s who you know.  That’s why this works.
    5. Native video uploads.  Every platform, whether it’s Facebook or Instagram, wants you to use the video feature that is native inside the program.  This doesn’t mean go to YouTube and share it to LinkedIn.  It means, open up a post on LinkedIn and use their Video icon and shoot native video within LinkedIn.  This will keep connections engaged longer in the LinkedIn program and hopefully on your profile.  Our best recommendation for video ideas would be “value added” for the consumer (i.e., Buyer/Seller Tips, Market Updates, community highlights, business you’ve interviewed, etc.).
    6. Write LinkedIn Articles.  When you write an article on LinkedIn, everyone in your connection list receives a notification.  You couldn’t ask for better advertising than that.  If you are a blogger, this is a perfect place to use the content you’ve already created and post it within LinkedIn as an article.

So, take the time, get your profile set up for success, start connecting with former and current clients, friends, colleagues, etc. and work on creating great content.

Alushta, Russia - December 3, 2014: Woman holding a iPhone 6 Space Gray with social networking service Instagram on the screen. iPhone 6 was created and developed by the Apple inc.

Instagram Tips for Your Real Estate Business

One of Republic Title’s most popular CE classes is consistently our “Instagram: I Have An Account, Now What?” class. We all know how important it is to have a presence on social media for your real estate business, but how do you create content, know which hashtags to use and most importantly, connect with buyers and sellers? Our technology trainer Annette Carvalho is here to help! Read on for Annette’s top takeaways from our popular class and visit us at www.republictitle.com/residential-education for a full list of upcoming CE classes.

Use Hashtags and Link to your Website

  • Using the “Stair Step” approach, users can spread out hashtags using the Stair step approach (hashtags with lower #’s mean you might be seen more.  So if you did 27 hashtags (which we don’t necessarily recommend) use nine that have 0-50K followers, nine with 50K-100K followers, and nine with 100-250K followers, etc.
  • Make sure to include contact information – including your website – in your Instagram bio.

Use Instagram Stories

  • Instagram Stories are temporary and only hang around for 24 hours. This allows you to post lots of content without bombarding your followers. And your followers are watching! According to embedsocial.com, Instagram stories are used by 500 million users every day.

Connect with your sphere by turning on “Post Notifications”

  • Because Instagram is always changing their algorithmic feed, you may not see everyone that you follow consistently. Make sure to turn on Post Notifications for the accounts that you want to make sure and see. This allows you to respond to their posts in a timely manner.

Use Direct Messages

  • Did you know that you can direct message up to 50 people at a time?

GeoTag your Posts

  • Searching by “Places” is an entire search category on Instagram. Make sure you are using this feature!

Use Instagram Live

  • This is a powerful tool that Instagram is promoting – you will reach more of your audience using Live since Instagram features those videos in a different way.
  • A best practice in using Instagram Live is to promote your live video in advance with email or Facebook. For example: “Catch me LIVE on Instagram Friday at 10am where I will share my 10 biggest tips for getting your home ready for the market.”

For MUCH more on Instagram, social media and other technology trends, sign up for one of our CE classes at www.republictitle.com/residential-education

Sold Home For Sale Real Estate Sign in Front of Beautiful New House Republic Title

Helpful Terms for Buying/Selling Your Home

Buying or selling a home is one of the most important undertakings of a lifetime. When buying or selling a home, there are many real estate terms that may be unfamiliar to you. Check out this list of commonly used terms that you may find helpful during the process.

AIR:  Adjustable Interest Rate

AMORTIZATION SCHEDULE: A schedule showing the principal and interest payments throughout the life of the loan.

APPRAISED VALUE: An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc. of the property and surroundings.

CD/CLOSING DISCLOSURE: This form is a statement of final loan terms and closing costs. Sometimes referred to as ICD or Integrated Closing Disclosure.

COMMITMENT:  The document by which a title insurer discloses to all parties connected with  a particular real estate transaction all the liens, defects, and burdens and obligations that affect the subject property.

CREDIT REPORT: A report on the past ability of a loan applicant to pay installment payments.

DOCUMENT PREPARATION FEE: A charge by an attorney for preparing legal documents for transaction.

ESCROW FEE: A fee charged by the title company to service the transaction, to escrow monies, and cover documents. Usually split between buyer and seller.

ESCROW ACCOUNT: Funds held by the lender for payment of taxes and insurance when due. Usually does not include maintenance fees.

HOA ASSESSMENT FEES: Charged by the homeowner’s association as set out in subdivision restrictions.

HOMEOWNER’S INSURANCE:  Protects the property and contents in case of loss; must be for at least the loan amount or for 80% of the value of the improvements, whichever is greater.

INSPECTIONS: An examination of property for various reasons such as termite inspections; to see if required repairs need to be made before funds are received, etc.

INTEREST: Money paid regularly at a particular rate for the use of money lent.

LOAN TITLE POLICY: Required by the lender to insure that the lender has a valid lien; does not protect the buyer.

ORIGINATION FEE:  A fee the buyer pays the lender to originate a new loan.

OWNER’S TITLE POLICY: Insures that the buyer has title to the property, that there are no other claims as to ownership. Among other matters, it also insures access to the property, the right to occupy the property, good and indefeasible title, and that there are not other types of specific liens against the property. 

POINT:  1% of the loan amount.

PREPAIDS: Items to be paid by the buyer in advance of the first scheduled payment of the loan (Homeowner’s Insurance Premium, Mortgage Insurance Premium, Prepaid Interest, Property Taxes and a maximum of three additional items).

PREPAYMENT PENALTY:  Charged by the lender for premature payment of a loan balance.

PRIVATE MORTGAGE INSURANCE: Insurance against a loss by a lender (mortgagee) in the event of default by a borrower (mortgagor).

REALTOR FEES:  An amount paid to the REALTOR® as compensation for their services. RECORDING FEES: Charged by the County Clerk to record documents in the public records. RESPA:  Real Estate Settlement Procedures Act.

RESTRICTIONS: Certain limitations or conditions related to the future use of the property put on the property by a prior owner. These restrictions stay with the property until they expire or are amended as per certain procedures set forth in the restrictions.

SURVEY:  Confirms lot size and any encroachments or restriction violations.

TAX CERTIFICATES: Certificates issued by taxing authorities showing the current year’s taxes, the last year the taxes were paid, and any delinquencies to be collected at closing.

TAX PRORATION: Means that the payment of the taxes for the year of sale are divided between the Buyer and Seller, usually based on the amount of time the Seller owned the property during that year. Prorations, and how they are calculated, are typically addressed in the Contract of Sale.

TIL:  Truth in Lending.

TIP: Total Interest Percentage; the total amount of interest the borrower will pay over the loan term as a percentage of the loan amount.

TOTAL OF PAYMENTS: Total amount paid after all payments of principal, interest, mortgage insurance and loan costs are scheduled. 

To download our Helpful Terms for Buying/Selling Your Home flyer,  visit Helpful Terms for Buying and Selling Your Home.

June 2020 Stats Are In!

The June 2020 DFW area real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight – May 2020

Here is the May 2020 Summary from Texas A&M Real Estate Center.





Total Texas housing sales continued to fall in May, but the decline slowed to a 2.1 percent monthly decrease. Nonetheless, the inventory of homes for sale fell to a record low of 3.2 months, possibly due to owners pulling their homes off the market or failing to list them in the first place during the COVID-19 pandemic. Increased caution during the buying process resulted in softer demand, pushing the average days on market up to 61 days. The Repeat Sales Home Price Index, however, suggested stable price gains.

The coronavirus outbreak is the greatest threat to the Texas housing market since the 1986-90 recession via disruptions to buyer and seller confidence, the negative income shock, and wariness of visiting or showing homes for sale. Mortgage applications for home purchases and the Real Estate Center’s single-family housing sales projection, however, implied that home sales were beginning to recover before the second wave of new coronavirus cases.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, inched up in May as the industry began rehiring some of the jobs shed during the economic shutdown. The Residential Construction Leading Index, however, continued to trend downward as falling housing starts offset increased permitting activity and decreased real interest rates, suggesting sluggish activity in the near future. The metropolitan leading indexes also extended downward trajectories.

Private bank loan data revealed construction activity accelerated 3.4 percent quarter over quarter (QOQ) during the first three months of 2020. After a sluggish second half of 2019, single-family investment increased 2.9 percent QOQ. Meanwhile, multifamily loan values rose for the fifth straight quarter, jumping 3.8 percent QOQ to a record-breaking $8.9 billion. Second-quarter financing, however, may stall as lending standards tightened at the onset of the pandemic.

As the statewide stay-at-home mandate expired and economic uncertainty temporarily calmed, single-family construction permits recovered 12.6 percent in May. Although levels remained nearly a fifth below that of peak issuance during February, Texas remained the national leader, contributing 17 percent of the national total. Houston topped the list with 3,035 nonseasonally adjusted permits, followed by Dallas-Fort Worth (DFW) with 2,799. Rockwall County accounted for much of the Dallas metropolitan division’s 14.1 percent improvement, the greatest increase in the Texas Urban Triangle, after adjusting for seasonality. San Antonio registered an upturn in activity, posting 787 nonseasonally adjusted permits. Issuance remained sluggish in Austin, however, with only 1,412 permits. In Texas’ multifamily sector, permits fell 18 percent, but the trend maintained a strong upward trajectory.

Total Texas housing starts fell 30.1 percent to a six-year low with particular weakness in the multifamily sector. Single-family private construction values increased 5.8 percent after adjusting for inflation with Houston posting the largest improvement, rising 20.2 percent, followed by San Antonio with a 10.0 percent climb. Values jumped 3.9 percent in Austin but extended a two-month fall in DFW, declining 3.7 percent.

Despite decreased sales, Texas’ months of inventory (MOI) fell to a historic 3.2 months as the state’s supply of active listings plummeted to its lowest level in three-and-a-half years. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 slid to an all-time low of 2.4 months as the price range registered increased sales. On the other hand, the supply of active luxury home (homes priced more than $500,000) listings expanded for the first time this year while closed listings fell, pushing the MOI up to 7.6 months. This disparity exemplifies the shortage of affordable housing during a time when the rocky economic atmosphere may make lower-priced homes look more financially feasible to the potential homebuyer.

Inventory in the major metros decreased across the board in every price cohort except for homes priced more than $500,000. The supply of active listings fell the most in Central Texas, which, combined with falling sales, resulted in more substantial changes. Austin’s MOI slid to 1.9 months after two straight monthly increases, while the San Antonio metric recorded a historic low of just three months. In Dallas and Fort Worth, inventory inched down to 2.6 and 2.4 months, respectively. The Houston MOI was the only one above the statewide average at 3.4 months.

Demand

Public health precautions and social distancing measures during the previous couple of months continued to weigh on total housing sales, which decreased 2.1 percent in May. Sales for homes priced less than $300,000 increased marginally but remain one-fifth below peak levels this year. Still, Texas registered a smaller decline than the U.S. as a whole, as nationwide sales sank 6.6 percent.

North Texas sales fell 4.7 and 1.9 percent in Dallas and Fort Worth, respectively. Sales declined 7.7 percent in Austin and 3.0 percent in San Antonio. Houston was the exception with sales rising 1.9 percent. YTD levels are still behind last year’s pace during the first five months, much less record-breaking activity during February.

Reduced showing and visiting of homes during March and April translated to slightly softer housing demand, pushing Texas’ average days on market (DOM) up to 61 days and ending a year-long downward trend. The Houston and San Antonio DOMs hovered just above the statewide average, ticking up to 62 and 63 days, respectively. In Austin, the average home sold after 55 days, six days slower than the previous month. The metric in North Texas increased by five days to 57 and 50 days in Dallas and Fort Worth, respectively. Demand for existing homes softened more than for new homes in every location except Fort Worth, possibly reflecting more willingness to visit and purchase new construction.

The ongoing spread of the coronavirus kept interest rates at historically low levels, but an upturn in oil prices slowed the downward slide. The ten-year U.S. Treasury bond yield flattened at 0.7 percent, but the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate dropped to its lowest reading on record at 3.2 percent. Mortgage applications for home purchases rose by a third in May after three straight decreases yet remained 4.5 percent below year-end levels. Refinance activity stumbled on the month, although applications were up 60.8 percent YTD.

Prices

The Texas median home price contracted 2.3 percent in May, falling to a near-annual low of $240,500. In year-over-year (YOY) terms, the median sale price appreciated just 1.6 percent, the smallest annual change since 2012. A shift in sales composition may explain the monthly decline, but the distribution was similar relative to the same period last year. Another explanation for the subdued price appreciation is that the state’s sale-to-list price ratio fell for the second consecutive month, with the recent decrease the steepest in nine years. The shift in leverage toward buyers coincided with softer demand.

At the metropolitan level, median home prices declined on a monthly basis in all but Austin, where the metric flattened to $317,700 following a 4.6 percent decrease the prior month. Annual growth was sluggish except in San Antonio, where the median price rose 3.5 percent YOY to $235,400, but the increase remained below the long-term average pace. The metric in both Fort Worth and Houston was $240,800, while Dallas’ median price fell to $287,300.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. Although the index did decelerate on a monthly and annual basis, a YOY increase of 3.4 percent suggests the pandemic’s effect on home values has been minimal. Houston’s and San Antonio’s indexes grew less than the statewide measure, rising 2.5 and 3.1 percent YOY, respectively. Austin’s metric jumped 4.9 percent but recorded its slowest rate in seven months. Only in North Texas did the index accelerate, climbing 2.9 percent in Dallas and 4.0 percent in Fort Worth.

Single-Family Forecast

The Real Estate Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Only one month in advance was projected due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Sales are expected to increase in June for the first time since February, when activity peaked. Texas’ single-family sales are estimated to rebound 33.7 percent, with Austin leading the major metros, climbing 39.1 percent. Dallas and Houston single-family sales are expected to jump 36 and 35 percent, respectively, while San Antonio’s sales increase 30 percent. Nevertheless, the data indicate a full recovery will not be reached in June. Even then, a third-quarter comeback may be threatened if the second wave of COVID-19 cases triggers another economic shutdown.

 

All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (July 14, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

Preparing Your Home For Sale

Remember: First Impressions are the Strongest!

When buyers make a decision to purchase a home, they do it emotionally!  The feeling they get from the house and the way they picture themselves enjoying the home are two of the most important factors in the decision to buy.  The following list offers suggestions to help the potential buyers create their own good feelings and visualize themselves owning your home.

EXTERIOR

  • Does the house need painting?
  • Are there any holes or cracks?
  • Are the walks and porches clean and in good repair?
  • Doe the front of the home give a “Welcome” appearance?
     LANDSCAPING
  • Does the yard look well maintained?
  • Trees and bushes trimmed/lawn mowed?
  • Is it free of weeds?
  • Are the decks and patios clean?
      ROOF
  • Does it leak, sag or have shingles missing?
  • Is the chimney in good shape?

INTERIOR

      WALLS
  • Any cracks or holes?
  • Is paint/wallpaper in good shape?
     KITCHEN
  • Are the appliances clean and working?
  • Are the cabinets/countertops in good condition and tidy?
  • Is the tile grout clean?
  • Is the sink stained, chipped or in need of re-caulking?
     CEILINGS
  • Are there any water stains, cracking or peeling?
  • Do they need painting?
     CARPETS
  • Are they clean, have spots or faded areas?
  • Do they need stretching?
     BATHROOM
  • Do the faucets work and sinks drain freely?
  • Are the toilets in good condition?
  • Are the shower doors shiny?
  • Do the tubs need caulking?
  • Is the floor in good condition?
  • Are the vanities/mirrors in good condition?
     WINDOWS
  • Do the drapes/shutters/shades work properly?
  • Are they clean and open and close easily?
  • Are any screens  bent?
     DOORS
  • Are they in good condition/need paint?
  • Do they seal tightly with no sagging or sticking?
  • Do you need to replace the storm doors?
     FIREPLACE
  • Is it clean and attractive?
  • Is the screen in good shape?
     ATTIC
  • Is it organized and clean?
  • Is there sufficient lighting
  • Does the access function well?
  • Are there any signs of insects/rodents
     GARAGE 
  • Is it organized and clean?
  • Is there sufficient lighting?

Before the Inspector Arrives

Remember: Repairs made prior to the inspection will save time and aggravation.

  • Cut tree limbs away from the house
  • Wash stained siding and brick to remove discoloration or mildew
  • Install splash blocks at downspouts
  • Clean gutters and repairs where necessary
  • Repair all rotted wood and paint to match
  • Remove any items against the house or garage
  • Repair and replace damaged screens
  • Clean chimney
  • Clean and inspect heater
  • Check A/C; it should cool to 20 degrees below outside temperature
  • Check condensing unit & clean away any debris, leaves, grass, etc.
  • Test all smoke detectors & add new batteries where necessary
  • Toilets should be secured (should not rock)
  • Make sure all tubs and/or showers do not leak into wall when water is sprayed from fixtures
  • Have all cracks in masonry repaired by professional mason
  • Repair dripping faucets

We hope these tips have been helpful to you in answering any questions you may have had. As always, please do not hesitate to contact your closer should you have any questions.
Thank you for allowing us to be a part of this transaction.

Click here to print the Preparing to List Your Home Checklist.

Using Links in Instagram

Since launching in 2010, Instagram has become one of the leading social media platforms and has transformed the way people do business. It’s no secret why businesses have spent hours developing and creating a strategy to grow and promote their business on Instagram. But as a real estate agent, do you know how to get the most out of the popular platform to help generate leads, market yourself, and engage with your sphere?  Whether you are new to Instagram or a seasoned pro, we want to help!

Why You Should Use Links on Instagram

Instagram has seen an impressive rise since it first launched in 2010. This has naturally made it a desirable outlet for marketers, and anyone else who wants to spread the word about their brand or website.

The problem is that, up until recently, Instagram has been extremely hesitant when it comes to enabling links. Even now, it’s not possible to add links directly to your posts through comments or post descriptions, even though this is something that has been possible on other social networks for a long time (Note: Stories can have links, however, you must have 10,000 followers to incorporate them).

However, there are still ways to incorporate links into your Instagram profile, and they’re well worth looking into. The key is knowing how to encourage those users to check out your key marketing links.

How to Use Links Effectively on Instagram

  1. Add a Link to Your User Profile

The simplest way to get a link on Instagram is to simply add it to your profile. The link will then appear right underneath your user bio, enabling visitors to click through. This is a perfect way to send people to your website’s home page, or to a special landing page.

However, you can also use this feature to get around the fact that you can’t add links to your post descriptions. All you need to do is include a link in your profile that is relevant to your most recent post. Then, add a message to the post itself, along the lines of: “Link in bio!” This is a common tactic, and it offers the added benefit of driving users to your profile.

Since you only get 1 link with Instagram (in your bio), we suggest that you check out one of these services.  They each have free services, as well as pro services.  The nice thing about them is that you can track each link to see how well they are performing in terms of engagement, page views & click through percentage rates.  Even better news – You can send followers to all your favorite sites including your real estate lead generation sites (see our example below using Linktr.ee):

  1. https://Linkin.bio
  2. https://linktr.ee

  1. Use a URL shortening service

The second method we recommend that you use are shortened and trackable links in your posts. You can easily create these using a URL shortening service and a link management platform (Bitly). That way, you’ll be able to track your links and see how well they perform on Instagram, which can help you optimize your efforts even further.

At first glance, it might seem it’s impossible to use links on Instagram.  However, while the platform is unusually restrictive with linking, it does offer numerous creative ways to implement links into your posts and profile.

Residential on the rise: The current and future state of real estate in North Texas

Expect a wave of moves to the suburbs and continued relocations as COVID-19 redirects, rather than deters, the DFW residential real estate market.

“History is the best predictor of the future, in my mind, and I feel like we’ve weathered some really great storms in the past 10 years since the last recession,” said Janet Allen, a senior vice president and leader of Republic Title’s team of Business Development representatives for the company’s 13 residential branches. “I honestly believe we’re going to be fine. I do believe that there’s going to be a big wave out to the suburbs. I’m seeing a little piece of that right now”

In addition to Allen, panelists included Fred Balda, president of Dallas-based residential development company Hillwood Communities; Rogers Healy, founder, owner and CEO of The Rogers Healy Cos. based in Dallas; and Brian Palmer, president of McKinney-based mortgage brokerage Pinnacle Funding Group Inc.

Below, panelists discuss the pandemic’s impact on the workforce, opportunities ahead in the residential space and more.


 

How has COVID-19 impacted your workforce or customers?

Fred Balda: Our two objectives were making sure the team was safe and able to work from home remotely, of course, and so I give a lot of credit to our IT group. They really got us up and running pretty quickly.

Second, the main objective was to keep the machine rolling. We needed to to continue to do business in a different manner – and I will say we fared very well. We are starting to bring our people back into the office now. I’m in the office right now and probably 20 percent of our people stayed in the office [since March]. We probably have 50 percent of our people back here working.

We are requiring testing, so before anybody comes back to the office, they must get tested. We’ve gone through two rounds of testing with our employees and it’s worked quite well. We have a pretty strict protocol. When I come to the office, I’m greeted by a nurse. I’ve got my mask on. She takes my temperature. And then she takes my oxygen level through a pulse oximeter. Only then and I able to enter the building.

I wear my mask all the way to my office. Whether I’m going to the cafeteria or to the restroom, or going to see anybody, I put the mask back on. It’s a deliberate protocol that we have instituted.

Rogers Healy: My approach is probably different than most real estate people. I’m a cautious guy and my grandma is almost 100 years old lives and in an assisted living facility and my fiancée has chronic asthma, so those two things are always going to trump bringing in revenue. I just lead with my head differently and with my heart.

We’ve adjusted well, and something that we’ve learned is in the world of real estate, especially residential, we become very routine, right?

Which means it’s hard for an older dog to learn new tricks, but we just really became attached to the word agile. And I think, being agile, you learn how to be proactive versus reactive.

The first thing I had to change was the way that I thought, because I’ve been in real estate for a long time and part of my assumption was I can’t be productive and mounted an office.

But it’s been a great surprise that our numbers have still increased year-over-year with everything going on, even with people working from home. I’m probably the most extreme business owner in terms of being cautious.

For example, our office is shut down. I can’t get into my own office. I haven’t heard of any owner locking themselves out, so it may seem extreme, but we all need to be taking precautions.

Brian Palmer: It really hasn’t been much different for me. I feel fortunate more than anything, because started to move to an electronic closing process a couple of years ago. I feel like the mortgage industry in its entirety is probably going to be forced to move into that electronic world, probably a lot faster because of the circumstances I’ve always balanced working from home, the office or wherever.

Most of our stuff is all done electronically through e-mail, phone calls and text messages until we get to the closing table, so nothing really changed for us in that regard.

Janet Allen: We have more than 400 employees spread across DFW. We did our very best to execute a plan quickly and actually had about 70 percent of our workforce working from home starting in March. Our residential people really stuck it out. They have done an incredible job and taking care of our customers, buyers, sellers, realtors, lenders and developers.

 We’ve talked about the challenges of COVID-19. What are some of the opportunities it presents?

Janet Allen: Last year, we started moving more into the digital space. I am so glad we did because it allowed us to get ahead of things, rather than fall behind when we had to move to a remote work environment.

The other thing is learning that we might be able to have people work from home a lot more often than in the past. Maybe they can actually do the job better.

This could result in more of a work-from-home situation for our employees in the future.

Fred Balda: I’m in the master-planned community business, building in the suburbs, and so the demographics are playing to our favor. You have a variety of demographics that are hitting us right now. There’s a millennial that obviously is creating families right now, and has basically located in the urban sectors, and there’s a big desire right now to move out of the urban area.

I think urban will survive, of course. But we are seeing this demand coming in, the urban sectors into suburban areas, more so than we’ve seen in the past.

The relocation activity has always been good here, so we’ve always been attracted new companies. It just seems to be accelerating more now.

I think our business in the long run, even short-term, is going to take off again. We were all expecting a bit of a drop off in 2020, maybe a hiccup. Obviously due to coronavirus, it was more than that – it went pretty deep. Nobody expected this kind of hit, so the opportunities I see are in the future. At least in our master-planned communities, we about why you’re moving out and why you are reconsidering your shelter.

You may need a bigger house, you need a better designed home, you need a cleaner home, you need to a better technology package for your home. New homes are able to really address that quite well. Our master plans right now are very appealing, because of all the normal amenities that we normally do, and you’re able to do it a little bit further out. All of our parks, and trails, and playgrounds, and those sorts of things are really a premium right now for folks coming in and want to see that sort of lifestyle. I think that’s a big focus.

But the rental side is really another opportunity now, too. We build lots of multifamily ourselves. The single-family rental right now is another focus of ours that I hope we can roll out, at least a pilot program, in the next six months or so. I think will go quite well. That’s another line of business that we’ve observed that really makes sense.

I think affordability is always going to be an issue here. We’d need to really address that interest rates have healthy affordability right now, that’s going to creep back up. How do you design homes that are semi-affordable right now in these in these places that people want to be?

Brian Palmer: I feel like it’s a great opportunity, just because there are going to be people that change their direction a little bit. For us, it’s just going to be full force ahead, to continue to try to serve the clients even better than what we already did.

We’re making sure that we can get to a full digital world. There are some things that Gov. Abbott has done in the interim that make it easier, like how notaries don’t necessarily have to be in front of anybody.

There are going to be some people that are going to be cautious and don’t want to go out, whereas others will and we want to serve those people, too.

 If Covid-19 becomes worse in coming months, do you think that it would it be a positive or negative impact on rental market? Do the obvious effects — prospective buyers putting purchases on hold; increase in unemployment numbers — balloon into something worse, or can North Texas weather it?

Rogers Healy: I think real estate is going to change to a hybrid of affordability and space.

We’re going to see that the days of the $30,000 millionaire are probably going to be over, because I think people would rather live somewhere in a rental home community. Which I think is going to be a trend we’re going to see in the next few years: people literally developing communities for that sole purpose, which we’ve never really seen happen.

Living on the penthouse right now is not as good as living on the first floor, for example, in a lot of these buildings, too. So we have seen a pretty big shift in trends and the amount of people that we’ve worked with on the first-time homebuyer front that normally would live within the loop or moving north … instead, they’re moving east and west, too.

We’re going to see pockets like Mansfield and Richardson get people in certain demographics who historically wouldn’t have purchased there. So, you know, it’s interesting to see what’s happening.

And DFW still has people moving here, too. You have to provide housing, but I think that it’s going to shift to where people are going to start renting and if they have to, they’re going to rent single-family detached homes, if they have the option to do so.

Fred Balda: I think we’ll be more prepared at this time. Chapter One was pre-coronavirus, which was stellar. It was just very robust, and people were moving in and it was going to be another banner year. Everything was looking really positive.

And then corona hits and we probably had about a six-week slowdown. In our business, it really probably dropped to a 50 percent level, from the prior 10 weeks or so. But there was still activity, which was interesting, to see that we still had that activity, even if it was 50 percent. And then, the last six weeks or so, we’re starting to come to work again and people are getting out. It’s been incredible.

I believe the next few weeks will be robust.

I think we are more prepared because now we can work remotely a little bit better. But let’s hope we find a solution to coronavirus right now, because it’s not fun. Let’s hope it’s not the new normal. We’ll get past this, but I appreciate being an essential business. I appreciate having the opportunity to sell homes and building new communities.

 How is DFW’s inventory right now — and how do you think it will look over the next year?

Rogers Healy: Surprisingly, inventory, up until about a month ago, was awful.

The last three weeks, especially in the larger home market above $3 million, it’s been gangbusters.

And in terms of a recession, it’s important how you interpret or communicate it. My favorite class in school was recess. Got me a break from the classes that were kind of work. And so I think that we have an opportunity to lead. Our industry said, “Hey, it’s OK to take a little bit of a break, right?” Because work is not going to define you. And we all work so hard.

It’s OK to just take a step back and relax. Because you know, it’s always going to be there, right?

I don’t know anything about the stock market, but I’ve watched it the last three months and it literally makes me nauseous.

One tweet can go and change the world and then the next day, another tweet changes the world the other way. That means I have people that may have to have to sell pretty quickly, right?

And on top of that, the thing that we’ve seen that’s been crazy is secondary homes are flying off the shelves as well. Historically, you don’t see lake houses farms and ranches so in the late spring and the summer. Because people already want them.

And we’ve seen that, and also the short-term rental market has been insane as far as inventories are concerned, too, like Airbnb-type places. I’m talking like 3-to 6-month places, where you don’t have to obviously have an appraisal. You can ask for whatever you want, and we’ve seen those things go crazy as well, because people want to get the heck out of town.

So inventory is starting to get a little bit healthier. But again, North Texas is the unicorn of real estate, versus some cities like New York, where you can’t even show properties at this time. And DFW has a shortage?

I don’t think we really had a recession. I think we’re at a time out.

Who knows what, the immediate future holds, but it’s a good time still to be in real estate, you know, four months into a pandemic. And that’s absolutely crazy.

Source – Dallas Business Journal – June 26, 2020 – https://www.bizjournals.com/dallas/news/2020/06/26/residential-real-estate-north-texas.html?iana=hpmvp_dal_news_headline

 

 

ABCs of Title Commitment

A Commitment is a document the title company provides to all parties connected with a particular real estate transaction. It discloses the title of record to the property as well as all the liens, defects, burdens and obligations that affect the subject properties. It is comprised of four schedules.

Schedules A, B, C and D are as follows:

Actual Facts
Is the Who, What, Where and How Much section of the Commitment. You will see the names of the buyer, record owner (seller), a legal description of the property, the sales price and the name of the lender, if applicable. It is a good idea to double check this information with the contract.

Buyer Notification
This section lists the general and specific exceptions to the property. It will list
items such as survey matters, taxes, easements, setback lines and a variety of other items that will not be covered by the title policy. It is important to review and discuss any questions you have with your title company.

Clear in Order to Close
These items must be resolved in order to transfer title to the new owner. They might include such things as a mortgage that will be paid off at closing, liens for home improvements or unpaid taxes. All items shown on Schedule C should be discussed and resolved before the closing.

Disclosure
This section outlines the ownership of the title company and all the parties who will share in any part of the insurance premium collected to issue the policy. It includes underwriters, title agents and attorneys.

This information is not to be substituted as legal advice and is descriptive only. If you have any concerns about any portion of your title commitment or any portion of Schedule A,B,C, or D, please contact your attorney.

For a PDF version of the ABCs of the Title Commitment, click here.