June 2010

Broker Robbie Briggs of Briggs Freeman recently joined commercial real estate leaders Newt Walker and Lou Leibowitz to hear AllianceBernstein’s Senior VP Greg Young expound on successes and setbacks in the commercial market.

Undoubtedly, transaction volume has plummeted and delinquencies have spiked over the last two years. Young reported that we have likely seen the worst of property value declines, though the cycle has not yet reached bottom.

After reporting significant challenges, Young called attention to the promising market movement not often conveyed by the media:

• The Organization for Economic Co-operation and Development (OECD) Leading Indicators Index confirms significant improvement since 2009 lows.
• U.S. exports are above the global average and corporations are poised to spend.
• Global mergers and acquisitions have begun to rise once more, pointing to increasing confidence. Young emphasized that the global economy is central to America’s commercial real estate stability.
• Publicly traded companies (REITs) have stronger capital positions and have reduced balance sheet leverage.

Dallas’ commercial market has undeniably experienced both ups and downs. For example, local condo sales have been making a comeback, but developers have not been buying lots.

Accepting the uphill battle ahead, local commercial real estate executives continue to embrace patience and optimism, especially encouraged by the latest global and national activity. Steve Brown of the Dallas Morning News also takes a positive stance: ”The freeze on commercial real estate investment is starting to thaw, and office and industrial leases are rising.”

For the latest real estate updates, follow @UpdateDallas on Twitter.

The U.S. Treasury  and the U.S. Department of Housing and Urban Development (HUD) received high marks on their new monthly scorecard, which was released for the first time last Monday. HUD Secretary Shaun Donovan commented, “We want to be judged and held to a high standard for all our housing efforts.”

When reviewing the scorecard, keep in mind that the government grades itself.

See an overview of the report dsnews.com. Also follow @UpdateDallas for the latest real estate news.

Briggs Freeman COO Stephanee Bates with JP Morgan Chief Economist Anthony Chan

Average rates for 30-year fixed loans have hit an all-time low of 4.69 percent, down from the previous record of 4.71 percent set this past December.  While housing market activity has slowed partly due to the tax credit expiration, experts predict another boost as buyers take advantage of this unprecedented opportunity.

As reported by the Dallas Business Journal, J.P. Morgan chief economist Anthony Chan strongly encourages an optimistic outlook. Yesterday Chan spoke to real estate professionals from Briggs Freeman Real Estate Brokerage, confirming that the U.S. economy is gradually improving. Chan explained that the residential market has stabilized, and he foresees a 3 percent economic growth during the remainder of 2010.

His consistent concern is the struggling labor market, since real estate performance hinges upon employment. Unfortunately the U.S. average unemployment rate remains high and has been hovering around 9.7 percent. Texas, however, has been graced with an 8.3 percent rate and recently added 43,600 jobs.  More specifically, the jobless rate in Dallas-Fort Worth dropped to 8.1 percent in May, positioning the Metroplex for a speedier housing recovery than much of the nation.

Home prices are not likely to spike dramatically in the next two years, but Chan advises homebuyers to take advantage of the record-low mortgage rates that will soon rise.

For further details, see dallas.bizjournals.com. Also follow @UpdateDallas on Twitter for the latest real estate news.

Recent reports have confirmed that Big D is big indeed. According to CNNmoney.com, “The booming Dallas-Fort Worth metropolitan area added more residents during the past decade than any other city in the United States.”

D-FW expanded by 1.3 million people (a 25% increase) between April 1, 2000 and July 1, 2009. The fourth largest city in the U.S., the Metroplex now boasts an approximate population of 6.5 million.

Dallas Mayor Tom Leppert attributes much of the growth to D-FW’s favorable business climate (no corporate income tax, low building costs, minimal regulations) and our “21^st century port,” i.e. DFW International Airport.

The national recession has likely contributed to Dallas-Fort Worth’s expansion. Many residents decided to stay put rather than move away, and others were drawn to Texas’ affordable housing and strong employment rates.

Demographer William Frey of the Brookings Institution calls Texas the “star of the Sun Belt.” When asked about the state’s strong performance he responded, “It’s big cities, it’s oil, it’s the suburbs. It’s a diversified economy. People are moving there for high-skilled and low-skilled kinds of jobs.”

See CNNmoney.com and USAtoday.com for further details. To receive regular real estate updates, follow @UpdateDallas on Twitter or visit briggsfreeman.com.

In 1982 when Lindalyn Adams and her husband Reuben were in the Virgin Islands and in line for dinner, they struck up a conversation with the British rocker, Phil Collins. They had no idea who he was. Reuben said they were from Dallas and that he delivered babies. Phil said he was from London and played drums with the group “Genesis.” Thinking “Genesis” was religious, Lindalyn said they had a son with Campus Crusade for Christ.

And thus was the beginning of a truly beautiful friendship that would lead Phil Collins to amass the largest private collection of Texas historic artifacts in the world. She recently invited him to “headline” a Dallas Historical Society event at the Hall of State where he talked about his love of Texas history before a rapt audience.

Lindalyn’s own love of history has been her driving passion that has inspired friends such as Phil Collins and benefited numerous edifices and organizations. Old City Park, The Dallas Historical Society and the Hall of State, the Sixth Floor Museum, and the Old Red Courthouse have all been tremendously improved – some even founded – because of her nurturing efforts and leadership roles. Read more…

Dog avenues and cat condos are some of the winsome spaces that will serve as temporary homes for rescue animals at the new planned SPCA facility – badly needed space that will help visitors see clearly the pet they just can’t live without. The large building off of I-30, west of downtown, will take $15 million to renovate, and the Rees-Jones Foundation has pledged a matching grant of $4 million.

Jocelyn White and Tricia Linderman are serving as co-chairs of the “Raise the Roof” committee, which must raise $2 million by the end of September for construction to begin, which will take $6 million. Enjoy images of the renderings – and help raise the roof!  To make donations or read more information about the SPCA and the Rees-Jones gift, visit spca.org.

Homebuyers trying to take advantage of the tax credit may have until the end of September to close on their home purchases. The possible extension – proposed by Senate Majority Leader Harry Reid (D.-Nev.) and Sens. Chris Dodd (D., Conn.) and Johnny Isakson (R.-Ga.) – would apply only to home buyers who had a valid contract by April 30, 2010.

What has motivated Reid to pursue the measure? His office spokesman Jim Manley reported,

“The Realtors believe there will be a lot of homebuyers who will not be able to meet the June 30 deadline through no fault of their own. There are a lot of transactions that need to be closed which is overwhelming the system. And many of the homes that are being bought are short sales that require the sellers lending institution to agree to take accept less than full payment on the outstanding mortgage. The financial institutions are taking a very long time to come to that decision and the homebuyer is helpless to move the process along. This amendment gives those homebuyers an additional three months to close the transaction.”

The extension is an amendment to American Jobs and Closing Tax Loopholes Act of 2010, which is currently pending in the Senate.

Click below for commentary from CNBC’s Diana Olick, or find the full story at washingtonpost.com.

For three months straight North Texas has seen double-digit home sales gains. This May’s pre-owned home sales rose 18 percent over April, and 12 percent over May 2009. North Texas’ median pre-owned home sales price also increased 2 percent.

Because the latest data was affected by the recently expired home buyer tax credit, some economists are concerned that improvements will soon cease. “Expect September, October and especially November numbers to look really bad by comparison to last year’s when the credit was in full force for first-time buyers,” said James Gaines of Texas A&M’s Real Estate Center.

On the contrary, others continue to take a cautiously optimistic stance. Ted Wilson, a housing analyst at Residential Strategies Inc. commented, “Builders remain hopeful that the job growth seen so far this year keeps coming and that sales continue their modest recovery in the second half of the year.”

Local real estate broker Robbie Briggs of Briggs Freeman reminds Dallas residents, “This type of data must be interpreted according to specific neighborhoods, as home sales vary in each pocket of Dallas.” Briggs has seen “significant improvement in the Park Cities, where several lots have been selling at prices even higher than the 2006 real estate peak.”

Briggs continued, “Nonetheless, luxury home sales prices remain relatively flat, and there is still a large housing inventory. While Preston Hollow lots are selling at a faster pace, the neighborhood’s home sales remain fairly slow.”

Specializing in Dallas’ high-end areas, Briggs is also encouraged by recent reports regarding improving buyer confidence in luxury housing markets and car sales.

Visit dallasnews.com to find home sales data for each Dallas neighborhood and to read more about Dallas’ housing market activity.

For regular updates, subscribe to UpdateDallas or follow @UpdateDallas on twitter.

‘Remodel’ is the word. While some folks are fixing-up to stay put, others are seeking to sell. Regardless of the reason, Harvard’s Joint Center for Housing Studies predicts that annual remodeling spending will increase in 2010 for the first time since housing’s 2006 peak.

According to a recent Wall Street Journal article,

“Craig Menear, executive VP of Merchandising at Home Depot, says there has been strength recently in projects involving simple décor updates such as ceramic tile, interior paint, faucets and bath fixtures. At Lowe’s, customers were drawn to products to update flooring, cabinetry and countertops during the last few months of 2009.”

Of course, during this season homeowners are looking to add value with cost-effective projects. Remodelormove.com is an excellent site to start the process, providing calculators for cost estimates and tips to reduce expenses. Thisoldhouse.com also gives examples of economical updates, complete with photos and videos.

For home sellers weighing the costs and benefits of minor updates, Dallas real estate agent Shelley Koeijmans offers insight.

Shelley recently worked with clients who had been with another realtor, watching their home sit on the market as a tear-down for two years. Situated in the 4500 block of Livingston – steps from Bradfield Elementary and Highland Park Village – the property offered an exceptional location with incredible potential.

Because buyers weren’t biting and builders weren’t building, Shelley suggested that the sellers fix the home up a bit and list it as a lovely cottage. She personally helped her clients paint the interiors, replace the stove and microwave, install new carpet, refresh the landscaping, wash the windows, and stage the home.

Furthermore, Shelley secured great deals – $10,000 covered every update as well as the post-inspection repairs. She priced the finished product right, and it immediately went under contract (for over the average price per square foot) even before the Briggs Freeman and MLS tours. Needless to say, the home sellers were happy.

If facing the home seller blues, remodeling could be the smart move. For expert advice, contact Shelley Koeijmans or visit briggsfreeman.com.

“The Texas markets are much healthier,” said Mike Inselmann, founder of Metrostudy Inc., which tracks homebuilding across the country. “We are the most active state.”

Thank you, Steve Brown, for sharing the good news with Dallas this morning.

While one Inselmann’s opinion is not necessarily a fact, he is definitely tuned into Texas real estate and qualified to make educated predictions.

What builders have seen:

• Houston and Dallas-Fort Worth lead the nation in homebuilding and population growth.

• The ready supply of new housing in Texas has kept prices from overheating.

• First-quarter home starts in DFW rose over 50 percent in the first quarter as builders tried to meet the rising demand, caused in part by the expiring tax credit.

• North Texas home sales increased approximately 30 percent in April, also influenced by the federal incentive.

What they foresee:

• The U.S. home market is on the bottom and edging up, likely to rise about a quarter this year.

• Texas prices have stabilized, and Texas will likely continue to be a “robust” market for builders.

• Home construction hinges on a healthy job market, thus builders are eager to see employment gains in 2010.

For the full report, visit dallasnews.com.