Dallas-Fort Worth has one of the hottest housing markets in the country. Five years of rising home sales and soaring prices have put the local residential sector into uncharted territory. While there’s no sign of a price bubble or prospect for a crash, 2018 is likely to bring smaller gains for D-FW’s home market. North Texas pre-owned house prices rose 10 percent in 2016 and were 9 percent higher in 2015. In November, median home sales prices were up only 5 percent from last year. And the supply of houses on the market has increased by about 10 percent from late 2016. Most analysts forecast that 2018 home price gains and sales increases will be modest. But with almost 80,000 people a year moving to the area for new jobs, don't expect the local housing market to grind to a halt, just move slower than recent years.
That’s the verdict of the Wall Street Journal‘s prestigious “Heard on the Street” column. Importantly, Heard on the Street is run by the news side of the WSJ, not its tax-cut loving editorial page. So there’s no particular pro-tax cut or pro-Republican bias at work here. Justin Lahart of Heard writes:
There were several surprises for investors when Congress unveiled their final tax bill Friday, but the most significant is that they add up to a bigger boost to economic growth next year. The bigger stimulus could fundamentally change how the market behaves in 2018. Sales and profits will be stronger than most investors expect. But with the unemployment rate low, wage pressures will mount faster, and inflation should pick up more. If the tax plan passes, as seems likely, it could lead the Federal Reserve to raise rates faster, putting the bond market at risk.
The tax plan was always expected to juice the economy, and the bill unveiled Friday front-loaded more than $200 billion in stimulus for next year. Economists had been penciling in a boost of about a third of a percentage point next year. Now that is looking way low. Some of the pro-growth changes include eliminating any delay to the corporate tax cuts, lowering of the top individual rate, lowering rates for most taxpayers, and increasing the child tax credit. The latter is particularly important because middle-class households are “more likely to spend extra income than the rich.” The tax bill could increase GDP by 1.3 percent, Lahart writes. That’s an additional full percentage point gain from what economists had been expecting based on earlier bills.
Confidence Among America’s Home Builders at Highest Level Since 1999
The 18-year high of 74 in December on the National Association of Home Builders/Wells Fargo Housing Market Index was due to falling unemployment, rising demand for housing and an improved regulatory environment. In short, the builders are calling this the “Trump Boom.” “Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. All three components on the index registered gains in December. The component measuring buyer traffic jumped eight points to 58, the index gauging current sales conditions rose four points to 81 and the index charting sales expectations in the next six months increased three points to 79, the NAHB said.
“The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” said NAHB Chief Economist Robert Dietz. “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.” The rise in confidence is spread throughout the country, with the biggest rise in the heartland of America and the smallest on the coasts. Home building is a key driver of economic growth and jobs in the U.S. Housing accounts for more than 15 percent of economic output.
National Association of Home Builders, December 18, 2017
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If you have noticed a lot of out of state license plates, there’s a reason. Almost 80,000 people are moving to the DFW area each year from other parts of the nation. And the Dallas-Fort Worth market ranked second among top markets for moves, according to a new study by Updater.com, an online relocation technology firm. Washington, D.C., was the lead market this past year for moves – no surprise, with all the changes in the federal government from a Democrat administration to a Republican administration. Thanks to an expanding job market, low cost of living, affordable housing, great weather and a central location in the country for business – the DFW area will continue to be a strong destination market.
If you're looking to purchase a property in a neighborhood, community or building with shared common areas (like a pool, clubhouse, parking garage, etc.) or even a security gate, it's likely the community or neighborhood is maintained by a homeowners association, also known as a HOA. When you move into a community maintained by a HOA, you are obligated to join the association and are responsible for any monthly, annual, or special HOA fees that come along with the association. But what is a homeowners association, and what can a HOA do for your community?
The primary purpose of a homeowners association is to manage a neighborhood's common areas such as roads, parks and pools. The HOA ensures the community looks its best and functions smoothly. Management isn't normally free, so owners are expected and obligated to pay monthly or yearly dues to the association that go toward the maintenance and upkeep of the community. Homeowners are also obligated to live by the association's rule book, also known as covenants, conditions and restrictions (CC&Rs).
If you purchase a property in a community with a HOA, you are locked into abiding by the rules and regulations of the HOA. Depending upon how detailed the CC&Rs are for the community, everything from the size of a dog to the type of mailbox you have to whether or not vehicles are allowed to park on streets can be dictated by the HOA's CC&Rs.
While many of the rules within a HOA may seem tedious and unneeded, the goal of the HOA is to maintain a specific aesthetic throughout the community. For some, this brings value in that yards are maintained, house colors remain true to the originals of the neighborhood as a whole, trash is not on display for others to see, and overall the community is kept up and thrives. For others, especially those that don't like having to adhere to a list of rules, the HOA can be limiting and its rules bothersome.
While it may seem like the CC&Rs of a HOA can be easily ignored, it's best to stick with what's safe when it comes to your home and the community's guidelines. In many areas, violation of the rules or not paying monthly/yearly/special fees can lead to notices and fines. In some communities, owners can even be evicted or their properties foreclosed on if violations become egregious. Depending on where you choose to live, knowing the rules set forth by the HOA before you lock yourself into a property is a must, especially if you're the type of person that likes to toe the line when it comes to sticking to a rule book.
A positive part of a homeowners association is that it provides a way for the homeowners to actively participate in what's going on in their community. The association generally has a board, made up of members of the actual community who are voted into their positions. If you like being active in your neighborhood or building, joining the HOA or attending the monthly meetings is a great way to stay up-to-date on the regular goings on of the area.
For some, a homeowners association is a great addition to a neighborhood or building in that it guarantees the upkeep of the shared spaces and ensures a certain quality level is maintained by every homeowner. While it may seem like there are a lot of rules, the rules help to keep up the general appearance of the properties and help keep the resale value of the community up. For others, the many rules can seem like a power grab, limiting their freedom of expression and dictating what they can and cannot do with their own property.
In any case, if you're considering a home or property in a community with a HOA, don't be afraid to ask some of the current owners how they feel about the homeowners association, and ask your agent for any information s/he can provide about the association before you make your final decision, including:
What are the monthly/annual fees associated with living here?
What does my HOA fee cover?
How often do HOA fees increase?
By how much do HOA fees increase?
What are the HOA rules?
Current or anticipated special fees (If the HOA does not maintain sufficient reserve funds, special fees will be assessed owners at times of roof or siding replacement, etc.)
Number of units that are owner occupied and percentage of units the HOA allows to be rented
Definitely ask for a copy of the association bylaws and CC&Rs as well as a copy of the three most recent financial statements and association minutes. Review these carefully to help you determine both the association topics currently being discussed and the financial condition of the association. Owning a home within an HOA can be a positive or negative experience. Doing your homework before purchase will help your experience be a positive one.
Half wish they had done at least one thing differently...
IF PEOPLE COULD REVISIT THEIR HOMEBUYING DECISIONS, 13% would opt for a larger house, 14% would do more research on mortgage lending, and 20% would save more money before buying.
These results from a survey conducted by Harris Poll for online personal-finance website NerdWallet showed that Baby Boomer had fewer regrets than Millennials and Gen Xers. The survey also reported that 41% of buyers said they were not aware of all the lending options available to them during their buying process.
Forty-two percent of survey respondents considered the homebuying process stressful, while 32% said their real estate agent made their homebuying process easy.
Another poll about regrets conducted by Trulia showed about half of people have regrets about their most recent housing decision. Among renters, 41% regretted deciding to rent rather than buying a home. One-third of renters felt more positive about owning a home than they did five years ago, while one quarter say they were more negative about homeownership.
This poll also reported 33% of homeowners who wished they had bought a larger home, while 9% believed they should have purchased a smaller property. Twelve percent of homeowners felt they should have done more remodeling when they bought their current home.
Thirteen percent of parents of children under 18 wished they had bought a house in a neighborhood with better schools compared to1% of homeowners without children under 18.
HOMEOWNERS SELL FOR LESS WITHOUT A REALTOR- 5.02% to 7.26%
A study by Collateral Analytics Research of millions of home sales in 11 states including Texas concluded that FSBO's sold for a lower average price per square foot than MLS sales, depending on the area and time frame.
OLDER BUYERS WANT SHORTER LOANS- 15 YEARS
The majority of Baby Boomers prefer a 15-year mortgage, while most Millennial and Generation X homebuyers want 30-year loans, according to the online Mortgages in America Survey. Unsurprisingly, a majority of all generations surveyed said they would prefer a 10% downpayment rather than 15%, 20% or 30% downpayments.
LOT SIZES ARE SHRINKING - 14%
Median lot sizes for new single-family homes in the South (including Texas) have gotten smaller since 2009, according to the U.S. Census Bureau. The median of 8,648 square feet is nearly the same as the nationwide median but far smaller than the Northeast, with a median of 13,178 square feet.