Economy

Dallas’ latest real estate data indicates that the bounce-back from the bottom has begun, and that significant obstacles are still ahead.

The good news:

Steve Brown reported Friday that both “sales and prices were up in the first half of the year in most Dallas-area residential districts.” From Oak Cliff to Westlake, Dallas home prices have rebounded at an average of 7 percent over July 2009.  The largest year-over-year home sales gains occurred in the Park Cities, Westlake and North Dallas.

Local realtors generally agree that activity has increased due to record-low interest rates and especially attractive deals that are likely to disappear shortly.

The sobering side:

The tax credit is no longer motivating first-time buyers, loans have been difficult to secure, and high unemployment rates have dampened homebuyer activity.

U.S. new-home sales rose 24 percent over May, the largest increase since 1980. But while the headlines seem positive, economist Tom Purcelli reminds readers that “you have to look at the overall report, and what you notice from that is there is not a lot of activity going on in the new-homes sales pace.”

The bottom line:

National improvements are uncertain, but housing analyst Ted Wilson remains optimistic about Dallas’ real estate market and expects that North Texas’ strong economy will sustain the recent gains. “I’m hopeful that the slug of net new jobs that have been created over the past five months in D-FW will lead to a steady housing recovery in the months ahead,” Wilson said.

Find additional details as dallasnews.com. Also follow @UpdateDallas on Twitter for the latest real estate news.

Every homebuyer is looking for an unbeatable deal, and the mortgage is a significant part of the package. Fortunately, today’s record-low interest rates offer a variety of affordable options.

But how do you know your lender is offering the best? Mortgage banker Jonathan Doddridge gives simple advice: get a second opinion. He recently encountered a homebuyer who wholeheartedly agrees.

A client of Dallas realtor Jeannie Nethery, the buyer was upsizing to a $1.1 million Preston Hollow estate and planned to put 25 percent down. He had an existing relationship with a small bank that pledged a 15-year Jumbo Loan at 4.5 percent.

Eleven days prior to the purchase contract, the bank suddenly reneged and was unable to deliver either the promised product or rate. The loan officer attempted to clean up his mess by proposing a 1-year ARM at 6 percent as a “bridge” loan, which could be refinanced after the buyer sold his original home.

Needless to say, Nethery was not pleased. She took her client to Ascent Financial Services and requested a (very speedy) second opinion.

Doddridge immediately assessed the buyer’s stated goals and needs.  They agreed upon and locked a Jumbo 5-year loan with no points at 4.625 percent.  His quick, strategic calculation saved the buyer approximately $8100 in origination fees and $900 per month in reduced interest costs. The loan closed on time despite the short interval (which also included the 4^th of July holiday). Undeniably, the situation worked out well and the second opinion proved incredibly valuable.

Of course Doddridge knows that not every outcome is as outstanding. Nevertheless, he reminds homebuyers that “It never hurts to find out what the guy down the street has to offer in terms of product, loan structure and rates. Getting a second opinion will either validate that you don’t want to change lenders or motivate you to make the switch.”

Doddridge adds, “Always ask how your loan officer gets paid.  Many receive commission, which can definitely alter their products and prices.” He also points out that lenders have different strengths and weaknesses, emphasizing the importance of finding a lender whose strengths meet your needs.

For a free consultation contact Jonathan Doddridge of Ascent Financial Services at (214) 353-7701 or visit ascentfs.com. Also contact Jeannie Nethery for expert real estate assistance.

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

Which U.S. housing markets are on the rise? The Wall Street Journal predicts that Texas is likely to “recover most smoothly” and specifically references Dallas’ home prices, which are only 7% lower than their peak.

Several factors are now attracting investors to Texas, most notably the state’s robust housing demand.  Over the past decade, Texas has naturally needed additional homes to accommodate its 19% population increase.

A favorable business climate, affordable housing and stable employment rates have also given Texas national recognition.

For additional details, visit wsj.com. Also follow @UpdateDallas on Twitter to receive the latest real estate news.

Jenni Stolarski is a North Oak Cliff resident, an environmental buff, a bike enthusiast, and a residential Realtor. And on her commute across the Continental Bridge each morning, she has watched the gradual progress of Dallas’ Margaret Hunt Hill Bridge.

Excited by the Trinity River project’s potential (for the real estate industry and for her personal enjoyment),  Stolarski shares her observations and expectations.

Q: Approximately $117 million is being invested in the bridge. What pay-offs do you predict?

A: The biggest boost so far has been the increase of positive press for the area. I expect to see additional creative and unique businesses that will draw people to neighborhoods like Kings Highway Conservation District and Winnetka Heights.

Unfortunately, a bridge in itself won’t solve Oak Cliff’s long-standing issues. We also need innovative entrepreneurs like Matt Spillers of Eno’s Pizza and Monte Anderson of the Belmont Hotel to do their magic and invest in the neighborhood.

Q: Real estate investor Larry “Butch” McGregor has bought dozens of acres in the area. He believes that “the real estate market is going to turn around. It’s just a matter of time.” Do you agree?

A: I’m a Realtor.  As such, I see possibility in vacant land, worn-out garages and abandoned buildings. The area where the bridge lets out in West Dallas could be great, in the right hands.

Projects of this scale can draw ingenious participants from around the world.  Larry Beasley, a world-class urban planner, just signed on to consult with the City of Dallas. Larry understands the Trinity River Corridor to be a unique asset that, done well, can attract residents and business to Dallas for decades to come.

Q: The bridge will link West Dallas and North Oak Cliff with downtown Dallas. What are these neighborhoods’ primary needs?

A: Home to approximately 300,000 people, North Oak Cliff is essentially a city in itself and thus has a wide variety of needs.

I see a huge need for complete streets that include lanes for cars, pedestrians, cyclists and public transportation (busses or street cars). Fortunately, residents Jason Roberts and Amy Cowan, along with City Councilwoman Delia Jasso, are addressing this issue from a grassroots level.  They are re-working antiquated laws in City Hall to be more conducive to the businesses and services needed.

Our hope is that the Trinity River projects and bridges will fan the flames!

Q: There are concerns that the current residents will be forced out once development begins. Any thoughts?

A: As a city, we have to come up with a better plan for addressing housing for all income levels.  Until we do that, we will always leave it to the forces of economics to set the pace.

Again, referencing Larry Beasley, his team has met with the families in La Bajada, West Dallas who are concerned about being pushed out of the area. Larry believes that if you are protecting and enhancing the neighborhood it will encourage the current residents to have pride and stay.

To explore opportunities to live in Oak Cliff or other Dallas neighborhoods, contact Jenni Stolarski. For further details about the Margaret Hunt Hill Bridge and the Trinity River Corridor, visit dallasnews.com.

Also follow @UpdateDallas on Twitter for regular real estate news.

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.

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.