Dallas Fed: Texas Housing Starts Rise

According to the Federal Reserve Bank of Dallas, the Texas economy continues to expand, although at a slow pace, with employment growing at a 0.1 percent annual rate in September. Texas home sales fell in September, but single-family permits and housing starts rose. Texas exports inched up in August, and manufacturing activity increased in October, according to the Texas Manufacturing Outlook Survey’s production index.

Housing starts in Texas rose 13.4 percent in September after falling 0.5 percent in August. September starts were up 24.2 percent from last year. Texas existing-home sales decreased by 2.1 percent in September and are up 11.8 percent year over year. Home inventories remain at 7.1 months. Texas single-family housing permits rose 2.6 percent from August to September.

Home Prices Rise, Again

Data through August 2011, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices showed increases of +0.2 percent for the 10- and 20-City Composites in August versus July.

Ten of the 20 cities covered by the indices also saw home prices increase over the month. In addition, 16 of the 20 MSAs and both Composites posted improved annual returns compared to July’s data; Los Angeles and Miami saw no change in annual returns in August; and Atlanta and Las Vegas saw their annual rates of change fall deeper into negative territory. The 10- and 20-City Composites posted annual returns of -3.5 percent and -3.8 percent versus August 2010, respectively. At -8.5 percent, Minneapolis posted the lowest year-over-year return, but has
improved in each of the last three months. Detroit and Washington DC were the only two cities to post positive annual returns of +2.7% and +0.3% respectively.

In August 2011, the 10- and 20-City Composites recorded annual returns of -3.5 percent and -3.8 percent, respectively. Both Composites and 16 MSAs – Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington DC – saw their annual rates improve in August compared to July.

“There was some weakness in the monthly statistics, as 10 of the cities post price declines in August over July,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “And even though the annual rates are largely improving, 18 MSAs and both Composites are still negative. Nationally, home prices are still below where they were a year ago. The 10-City Composite is down 3.5 percent and the 20-City is down 3.8 percent compared to August 2010.

Home Values Tread Water, Dallas Remains Flat in August

Home values in the United States showed minimal monthly appreciation in August of 2011, according to the Zillow® Real Estate Market Report(i). The Zillow Home Value Index(ii) increased 0.1 percent from July to August. On a year-over-year basis home values declined 4.5 percent to $172,600. Home values have fallen 28.3 percent since they peaked in June 2006.

Regionally, 68 of the 157 metropolitan statistical areas (MSAs) covered by Zillow experienced monthly home value appreciation, though minimal in many areas. Most notably, two of the hardest hit markets, Detroit and Ft. Myers, Fla., have now seen five and nine consecutive months of appreciation, respectively. Seventy-four markets saw home value depreciation and 15 markets, including Los Angeles, Dallas and Miami-Ft. Lauderdale, Fla., remained flat.

The foreclosure liquidation rate, which measures the number of homes lost to the bank, stayed steady at around 9.2 out of every 10,000 homes foreclosed in August. This is down from the rate of 10.9 out of every 10,000 homes in October 2010, before the robo-signing lawsuits slowed the pace of foreclosures in most states. However, foreclosure liquidations remained high in many of the hardest hit metros in California, Nevada, and Arizona. In Las Vegas and Phoenix more than 30 out of every 10,000 homes were liquidated in August.

"Due to the robo-signing controversy, the pace of foreclosure liquidations has been slower than it would be otherwise, which is impacting home value trends positively. Eventually the pace will pick up again, putting more bank-owned homes into local markets and putting additional downward pressure on prices," said Zillow Chief Economist Dr. Stan Humphries. "We remain encouraged about the organic stabilization in home values that we have been seeing absent the federal home buyer tax credits, but we remain concerned about the impact that recent economic turmoil and continued weak economic indicators will have on future home sales and home value trends."

"At this point, we maintain the expectation that a definitive bottom will not occur until 2012 at the earliest."

2010 Census Shows Second Highest Homeownership Rate on Record Despite Largest Decrease since 1940

Texas has 22.3 percent increase.

The U.S. Census Bureau today released a 2010 Census brief, Housing Characteristics: 2010, that shows the homeownership rate is the second highest on record, behind only 2000, since homeownership data collection began in 1890. However, the rate decreased by 1.1 percentage points to 65.1 percent between 2000 and 2010. The decrease is the largest since the period from 1930 to 1940.

Housing Inventory Grew the Most in South and West

The national housing inventory increased by 15.8 million units, or 13.6 percent, from 2000 to 2010. The housing inventory increased in all states during the decade but grew faster in the South and West than in the Midwest and Northeast. The South grew 17.9 percent to 50.0 million units and the West grew 17.3 percent to 28.6 million units. In contrast, the Midwest grew by 9.3 percent to 29.5 million units and the Northeast grew by 6.6 percent to 23.6 million units.

All of the states with the largest percentage increases in housing units were in either the West or the South: Nevada (41.9 percent), Arizona (29.9 percent), Utah (27.5 percent), Idaho (26.5 percent), Georgia (24.6 percent), Florida (23.1 percent), North Carolina (22.8 percent), Colorado (22.4 percent), Texas (22.3 percent) and South Carolina (21.9 percent).

No states in either the Midwest or the Northeast experienced a percentage change in housing inventory greater than the national increase of 13.6 percent. In the Northeast, housing units in Pennsylvania (6.0 percent), New York (5.6 percent) and Rhode Island (5.4 percent) increased less than both the nation and the Northeast as a whole (6.6 percent). West Virginia had the lowest percentage increase of any state at 4.4 percent.

Metro Areas Have More Homeowners while Major Cities Have More Renters

As a percentage of the entire national inventory, more than a third of all owner-occupied homes (38.3 percent) and renter-occupied homes (35.6 percent) were in the South. The homeownership rate in the Midwest was 69.2 percent, followed by the South (66.7 percent), the Northeast (62.2 percent) and the West (60.5 percent). Homeownership rates decreased in each region from 2000 to 2010.

West Virginia (73.4 percent) and Minnesota (73.0 percent) had the highest homeownership rates in 2010 as well as 2000. The states with the next highest homeownership rates in 2010 were Michigan (72.1 percent), Iowa (72.1 percent), and Delaware (72.1 percent). As in 2000, New York had the lowest percentage of homeowners at 53.3 percent.

All but one metropolitan area had more homeowners than renters in 2010. With a homeownership rate of 49.5 percent, Manhattan, Kan., was the only metro area where renters outnumbered homeowners. In 2000, five metro areas had more renters than homeowners.

The metro areas with the highest homeownership rates can be found primarily in Michigan and Florida, where each had three metro areas in the top 10. Monroe, Mich., had the highest percentage of owner-occupied units at 79.8 percent, followed by Punta Gorda, Fla. (79.7 percent), Holland-Grand Haven, Mich. (78.2 percent), Bay City, Mich. (77.8 percent) and Barnstable, Mass. (77.4 percent).

While homeowners were the majority in most of the nation's metro areas, they were outnumbered by renters in many of the country's largest cities, including the four most populous cities. This was similar to 2000. In New York, renters made up 69.0 percent of households, followed by Los Angeles (61.8 percent), Chicago (55. 1 percent) and Houston (54.6 percent).

Similar to metro areas, homeowners were the majority in most of the nation's counties. Homeowners outnumbered renters in all but 1.5 percent of the 3,143 counties and equivalent areas in the country. The counties with the highest homeownership rates were Keweenaw County, Mich. (89.8 percent), Sumter County, Fla. (89.7 percent), Alcona County, Mich. (89.6 percent), Morgan County, Utah (89.1 percent) and Powhatan County, Va. (88.5 percent).

Despite most counties having a majority of homeowners, many saw a decrease in the homeownership rate and an increase in renter occupancy. The largest percentage point increases in renter occupancy were in Loving County, Texas (19.8), Manassas Park, Va. (13.2), and Madison County, Idaho (10.9). Only 14 counties had more than a 5 percentage point increase in their homeownership rates.

Every region and all but three states experienced a percentage point increase in their gross vacancy rate during the decade. Nevada led all states with both the largest percent increase in total housing units and the largest percentage point increase in the gross vacancy rate. Only three states, New Mexico (-0.9), Wyoming (-0.2) and Hawaii (-0.1), experienced a decrease in their gross vacancy rates.

Vacant Units

Many of the states with the highest homeowner vacancy rates also had the highest rental vacancy rates in 2010. The homeowner vacancy rate is the proportion of homeowner inventory that is unoccupied and "for sale," and the rental vacancy rate is the proportion of the rental inventory that is unoccupied and "for rent." Of the top 10 states with the highest homeowner vacancy rates, eight were also in the top 10 for rental vacancies: Alabama, Arizona, Florida, Georgia, Michigan, Nevada, North Carolina and South Carolina.

Data on vacant units and homeownership rates are collected for several different Census Bureau surveys in addition to the 2010 Census, including the Housing Vacancy Survey and the American Community Survey. Noticeable differences in results occur because of differences in data collection methods. For example, the 2010 Census measured occupancy status as of April 1, 2010, while other surveys measure the status of a sampling of units at the time a field representative conducts the interview.

New Survey: Homeowners Expect Declines

One an almost certain retirement vehicle, Rasmussen Reports has released the results of a national telephone survey shows that 40 percent of U.S. homeowners now expect their home’s value to go down over the next year-- the highest level of pessimism to date.

Just 13 percent expect the value of their home to go up over the next year. In the longer-term, there's a bit more optimism. Thirty-six percent expect their home’s value will go up during the next five years

The survey of 753 Homeowners was conducted on September 15-16, 2011 by Rasmussen Reports.

Home Sales Ahead of Last Year, Prices Stabilizing

August home sales reached a level 18 percent higher than August 2010. Traditionally, June is the highest sales month, but this year July and August were the two summer months that experienced higher sales than in 2010. In the August 2011 RE/MAX National Housing Report based on MLS data from 53 metropolitan areas, the inventory of homes-for-sale dropped for the 14th consecutive month, while total inventory remains almost 19 percent below the level in August 2010. And the Median Sales Price of homes sold in August, like July, was down fractionally, while the loss from last year’s prices continues to shrink.

The Median Sales Price for August was $189,831. This is just 0.6 percent below the price in July and 3.6 percent below the price in August 2010. Home prices have risen in 4 of the last 8 months, while on a year-over-year basis, the Median Price has improved for five consecutive months. Of the 53 metro areas reviewed for this report, 14 saw prices rise from July, and 10 saw prices rise over August 2010, including: Detroit +15.7 percent, Orlando +14.2 percent, Milwaukee, +10.6 percent and Pittsburgh, +2.2 percent.

Dallas-Based Investment Firms Form Hotel Venture

Downtown Dallas

Dallas-based hotel investment venture, GVM Hotel Partners (GVM), today announced the acquisition of five TownePlace Suites by Marriott, at a purchase price of $30 million. Four of the hotels are located in Texas markets (Austin, College Station and Houston) with the fifth in Birmingham, Alabama. GVM Hotel Partners is a joint venture among affiliates of Gatehouse Capital, Varro Hospitality and the Muse Family Office.

"This acquisition falls directly in line with the stated goals of our venture -- to purchase assets built in the last ten years in solid Texas growth markets at a discount to their current replacement and by changes in management and/or additional capital investment, produce good year one yields," said Marty Collins, of Gatehouse Capital. "We are hopeful this is the first of many deals, as we feel there is particular opportunity in the major growth markets of Texas within this segment of the hospitality industry."

This is the first acquisition by GVM, which was formed to acquire and manage a portfolio of financially distressed select-service, limited-service, and extended-stay premium-branded hotels. The venture builds on broad depths of experience in the investment, real estate and hospitality markets, while marking its initial entry into this particular segment of the hotel market.

"With the hospitality markets showing quicker rebounds in recessionary periods than most other classes of commercial real estate, we are excited about our growth possibilities and look forward to generating positive cash-flow for our investors," said Jeremy Robinson of Varro Hospitality.

Gatehouse Capital is an investor and provides specific investment strategies and oversight for this portfolio and the GVM venture. Gatehouse has developed a $1 billion portfolio of hotels including the W Hotels of Hollywood, Silicon Valley, San Diego and Dallas, as well as The Joule Hotel in Dallas, Hyatt Regency Resort and Marina in Mission Beach and Aloft Jacksonville Tapestry Park.

Varro Hospitality, a co-equity investor in the venture with their Opportunity Fund I, is a privately-held hotel investment company whose principals have broad experience in real estate and investments. Varro provides the underwriting, due diligence, asset management, re-development, administration and reporting for the GVM venture.

John Muse is the single largest investor and brings more than 30-years investment experience to the venture through his experience as co-founder and chairman of HM Capital.

The partners engaged Texas Western Management to operate these Marriott branded hotels, among others owned by Texas Western Hospitality and third parties.

"This portfolio of quality Marriott properties, in attractive markets at well below replacement cost, represents a compelling investment opportunity. We hope to drive growth in performance by having Texas Western manage these assets," said John Muse of the Muse Family Office.

Seven Hills Commercial Selected to Build New Spec Suites for Westdale Real Estate Investment and Management

Dallas based Westdale Real Estate Investment and Management has selected Seven Hills Commercial, LLC to build over 8,000 square feet of new high end spec suites at 3100 Monticello. These will be move in ready tenant spaces featuring glass conference rooms, stainless steel appliances, granite counters in the break rooms and wood flooring in the reception areas. They are scheduled for completion starting in early October. The efficient and friendly floor plans were designed by Entos Design.

Westdale recently acquired 3100 Monticello, a 174,879-square-foot, Class A office building located near the Katy Trail, Knox/Henderson and Highland Park areas of Dallas. CB Richard Ellis is doing the leasing for the building.

Seven Hills Commercial has expanded services into four primary markets to include Texas, Arkansas, Oklahoma and Louisiana. Their current pipeline of projects includes: ground up multifamily and office and retail tenant finish. They recently hired 4 additional senior team members to keep pace with their growing book of business.

Seven Hills Commercial, LLC is a Dallas based full-service construction company, driven by a single mission: take care of the clients, take care of the company culture and take care of the community. Our core team of professionals has more than 50 years of collective expertise. We approach each project with personal involvement from the inception to completion.

Beige Book: Dallas District Sees Increase in Home Sales

Reports from the twelve Federal Reserve Districts indicated that economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity. The St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco Districts all reported either modest or slight expansion. 

Residential real estate activity remained weak overall, although a few Districts noted some slight improvements. Contacts in the Boston, Atlanta, Minneapolis, and Dallas Districts reported an increase in home sales over the previous year's weak levels; however, the uptick in the Atlanta District was concentrated mainly in Florida. The remaining Districts all reported stable or slower sales from the previous survey period, with several citing greater economic uncertainty as the primary cause. 

Both the New York and Philadelphia Districts reported that a growing backlog of foreclosures in New Jersey continued to weigh down the housing market. Home construction was down or stagnant in most Districts, with the exception of Minneapolis and Kansas City. However, several Districts indicated an improvement in home remodeling activity, and the New York, Philadelphia, and Cleveland Districts reported increased demand for multi-family housing projects. 

Home prices were flat to slightly down in several Districts, although New York said prices in many areas edged higher but remained below year-ago levels. Contacts in the Boston District reported competitive pricing by sellers with even lower prices negotiated by buyers, but in the Cleveland District many builders have shifted away from discounting. Inventories were elevated or rising in the Boston, Atlanta, and Kansas City Districts, particularly for existing homes, and demand for apartment rental space increased in the San Francisco and Dallas Districts.

Commercial real estate conditions remained weak or little changed in most Districts, although some improvements were noted by New York, Minneapolis, and Dallas. Commercial real estate activity was sluggish in the Boston, Cleveland, Richmond, Atlanta, Kansas City, and San Francisco Districts. 

However, San Francisco noted some areas have benefited from technology sector growth, and Boston noted investor demand for prime office buildings remained strong. New York said office vacancy rates declined noticeably in the Buffalo and Rochester metro areas and modestly in Manhattan and Long Island. Lower commercial rents helped push down vacancy rates in the Kansas City District, and the Dallas District noted strong demand for leased space in Houston due to solid energy activity. 

Commercial construction was characterized as weak or limited by Cleveland, Atlanta, Chicago, and Kansas City, although Atlanta noted some strength in the healthcare sector. St. Louis described conditions as mixed, with some improvement in education and energy-related construction, while Minneapolis District contacts reported an increase in small retrofitting projects and rebuilding in flood-damaged areas. The Chicago District noted continued strength in industrial construction, particularly in the automotive sector. Credit for commercial development remained an obstacle for small retailers in the Richmond District, although Boston said aggressive competition among lenders led to reduced borrowing rates.

Crooked Tree Coffee

What is perhaps the best coffee house in Dallas is on Routh Street in the State Thomas neighborhood. It's not a main thoroughfare, if fact it's kind of hidden around a corner in a neighborhood of single-family houses from the late 19th Century. It's set up like a house inside too with tables, sofas, books and even a piano. The off-the-beaten-path location doesn't keep customers away, it seemed busy throughout the day Monday. I know because after stopping by in the morning, I returned to fetch my hat in the afternoon. It was still there, sitting on the floor unnoticed by students typing away on their laptops, taking advantage of the wi-fi. Crooked Tree Coffee.

Sweeping up the Foreclosure Mess

It was immediately apparent what this work of art was all about- cleaning up the foreclosure mess. This work is currently on view at R2ART in Uptown at 3699 McKinney. The artist is John Frost and the title is Wake.  A new exhibit open Thursday, September 8.

Is “Traditional” Avoided Like the Plague?

I was out for a stroll this morning and noticed an interesting catch phrase on a real estate sign, “anything but traditional.” Sure it could refer to operations and attitude, but my guess is they wouldn’t have chosen the phrase if traditional was a hot feature in homes.

If you’ve been out looking for homes you may have noticed finding a traditional-looking home with lots of walls doors and square symmetrical spaces can be difficult. More often there are big, open spaces, multi-purpose rooms, built ins and large windows.

This all makes it difficult to find places to put stuff. A traditional home can accomodate lots of things because there are lots of walls and spaces in corners, between windows, in hallways and atop stairways. There just isn’t a lot of room for stuff in many of the homes being built now.

I don’t think its necessarily that home buyers want to be minimalists, the open spaces don’t offer places for too many things even though there may be more space over-all. It would be nice to see a traditional form come back to home building.

Luxury Home Sales Outperform Others

Gloomy news that July sales of existing homes dropped 25.5 percent year-over-year has overshadowed new statistics showing summer sales of million dollar plus homes significantly outperformed other price ranges.

“Luxury homebuyers have been buying this summer,” said Laurie Moore-Moore, CEO of The Institute for Luxury Home Marketing (ILHM). “After waiting in the wings, many affluent buyers spent the summer shopping for value and snapping up trophy properties.”

Statistics would indicate that she’s right. According to The National Association of Realtors (NAR), for 2009 million-dollar and above home sales were just 1.2 percent of total sales or about 61,500 sales nationally. In July 2010, million dollar plus market share was up to 1.9 percent. While sales of homes in the $500,000 and above range rose dramatically in June, the million-dollar-plus market segment was the only price range in July showing positive growth compared to last year. “The mix of what is selling has shifted in favor of homes priced at $750 and above,” added Moore-Moore.

NAR’s report that July’s median sales price increased 0.7 percent  year-over-year may be more a function of increasing sales of expensive properties relative to other price ranges than an indicator of across-the-board home price appreciation.

According to the ILHM National Luxury Market Report -- which does a weekly analysis of luxury homes for sale in more than 30 major markets -- after a dramatic rise in upper-tier inventory, which started in January of this year, the numbers of luxury homes for sale has declined about 5 percent  since the beginning of July. Along with a decrease in inventory, there has been a decline in asking prices. Forty three percent of luxury homes currently on the market have had at least one reduction in asking price over the last 90 days. An additional 19 percent  have been pulled off the market and subsequently re-listed.

“While I wouldn’t say the luxury market is in recovery,” said Moore-Moore, “ the growing market share of luxury sales relative to total sales, a slight downward trend in inventory, and sellers who are more realistic about price are factors shifting the affluent into a buying mode.”

S&P: Dallas Home Prices Bottomed in 2009

Data through June 2011, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index increased by 3.6 percent in the second quarter of 2011, after having fallen 4.1 percent in the first quarter of 2011. With the second quarter’s data, the National Index recovered from its first quarter low, but still posted an annual decline of 5.9 percent versus the second quarter of 2010. 

Nationally, home prices are back to their early 2003 levels. 

As of June 2011, 19 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up versus May – Portland was flat. However, they were all down compared to June 2010. Twelve of the 20 MSAs and both Composites have now increased for three consecutive months, a  sign of the seasonal strength in the housing market. None of the markets posted new lows with June’s report. 

Minneapolis posted a double-digit 10.8 percent annual decline; Portland is not far behind at -9.6 percent. Thirteen of the cities and both composites saw improvements in their annual rates; however; they all are in negative territory and have been so for three consecutive months.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.9 percent decline in the second quarter of 2011 over the second quarter of 2010. In June, the 10- and 20-City Composites posted annual rates of decline of 3.8 percent and 4.5 percent, respectively. Thirteen of the 20 MSAs and both monthly Composites saw their annual growth rates improve, although remaining in negative territory in June.

“This month’s report showed mixed signals for recovery in home prices. No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates. The National Index was up 3.6%

from the 2011 first quarter, but down 5.9 percent compared to a year-ago,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. 

“Looking across the cities, eight bottomed in 2009 and have remained above their lows. These include all the California cities plus Dallas, Denver and Washington DC, all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities – Las Vegas, Miami, Phoenix and Tampa – as well as the weakest of all, Detroit.

These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.

“As with May’s report, June showed unusually large revisions across the same MSAs – Detroit, New York, Tampa and Washington DC. Our sales pairs data indicate that, once again, these markets reported a lot more sales closing in prior months, which caused the revisions. Since deed recording is usually county based, if the price trends across counties are very different, then delays from a subset of counties can lead to larger revisions. And data lag lengths tend to vary across the counties within a metro area. If counties with relatively stronger/weaker markets report sales with longer/shorter lags, this will result in larger revisions as we receive the lagged data. Revisions are also likely to be larger when sales volumes are low or the proportions of distressed/non-distressed sales are changing rapidly. Any and all of these factors are likely contributing to the revisions we have seen over the past few reports.

Trader Joe's Eying Knox-Henderson

Pegasus News reports that following a May announcement that it's moving into Dallas, Trader Joe's is eying locations in the Knox-Henderson neighborhood. According to the article, the chain will also open a store on Camp Bowie in Fort Worth. 

Pending Home Sales Slip in July but Up Strongly From One Year Ago

Pending home sales declined in July but remain well above year-ago levels, according to the National Association of Realtors. All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.

The Pending Home Sales Index,  a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said sales activity is underperforming. “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,” he said. “We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”

The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.

“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” Yun said. “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”

Dallas Among Worst Places to Walk

As I walked back from Uptown along Bowen/Cedar Springs last night, I came to a section near Turtle Creek with no sidewalks on either side of the dark road. The sidewalks just end, forcing pedestrians into brush or onto the street. This seems like such an easy thing to remedy, yet my guess is its been that way for some time. A missing section of vehicular roadway would not be tolerated for a day.

Today a tweet came across my deck regarding preventable pedestrian deaths. Listed were then ten worst places in the U.S. to walk, and coming in at number ten on that list is Dallas-Fort Worth-Arlington.

Here's a video I shot trying to walk from the TRE Medical/Market station to Katy Trail.

As the group Transportation for Americans points out, Beyond making new and refurbished roads safer for pedestrians, we need to create complete networks of sidewalks, bicycle paths and trails so that residents can travel safely throughout an area.

RE/MAX Says Home Sales Remain Flat

The July 2011 RE/MAX National Housing Report, which surveyed 53 U.S. metropolitan areas, shows signs of a continuing, but uneven, recovery in the housing market. After rising for two straight months, Home Sales fell 12.7 percent in July when compared with sales in June, following a traditional summer trend. However, for the first time in six months, Home Sales were higher than one year ago, up an impressive 13.1 percent from July 2010. Strict lending standards, bad appraisals and concern about the economy all contributed to lower-than-normal sales in July. 

Many lenders are already using the lower GSE and FHA loan limits set to take effect on September 30. Home Prices were even and inventory levels continued to fall for a thirteenth straight month.

“The fact that July home sales were higher than a year ago, and by such a significant amount, gives us reason for great optimism,” said Margaret Kelly, CEO of RE/MAX, LLC. “And now that prices have risen for four of the past five months, the housing market is beginning to show definite signs of

recovery.”

In the last 12 months, only January and July had Home Sales higher than the previous year. January was up fractionally and July was up a solid 13.1 percent from July, 2010. Both investors and traditional home

buyers became more skittish about the economy in July, perhaps due to the Debt Ceiling debate. 

Traditionally, June sales are the highest of the year, with a slight drop in July. Overall, sales were 12.7 percent lower in July than in June. However, 45 metro areas experienced more sales than in July of last

year including: Des Moines, IA +49.9 percent, Omaha, NE +46.8 percent, Milwaukee, WI

+37.7 percent, Providence, RI +32.4 percent and Wichita, KS +29 percent.

The July 2011 RE/MAX National Housing Report shows that Home Prices in July were just 0.18 percent lower than in June, while the year-over-year decrease of 4.6 percent is the smallest the survey has recorded in 6 months. On a monthly basis, prices have now risen for four of the past five months.

There were 11 metro areas that recorded higher prices in July than in the same month last year, most notably: Detroit +14.3 percent, Birmingham, AL +9.8 percent, Des Moines, IA +7.7 percent, Orlando, FL +5.5 percent and Pittsburgh, PA +4.4 percent.

The average Days on Market for homes sold in July was 88, down just two days from the June level. July marks the first month since September, 2010 that the Days on Market figure has been below 90. 

The July average is identical to September, 2010, when the average Days on Market was also 88. Days on Market is the average number of days from listing to receipt of a signed contract. Perhaps due to fewer foreclosure properties coming on the market, the 53 metro areas surveyed in the July, 2011 RE/MAX National Housing Report had an average Months Supply of Inventory of 7.2, which is up slightly from the 6.9 mark registered in June, but down significantly from the 9.3 mark seen in July

2010. 

Overall inventory continued a 13-month trend to lower levels. Inventories were 5.3 percent lower in July from June, and down 17.1 percent from July, 2010. The Florida markets continue to see the largest annual drop in inventory: Miami, FL -52.5 percent, Tampa, FL -37.3 percent, Phoenix, AZ -35.6 percent, Los Angeles, CA -32.4 percent and Chicago, IL -26.9 percent.

Existing-Home Sales Down in July but Up Strongly From a Year Ago

Existing-home sales declined in July from an upwardly revised June pace but are notably higher than a year ago, according to the National Association of Realtors. Monthly gains in the Northeast and Midwest were offset by declines in the West and South.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 3.5 percent to a seasonally adjusted annual rate of 4.67 million in July from 4.84 million in June, but are 21.0 percent above the 3.86 million unit pace in July 2010, which was a cyclical low immediately following the expiration of the home buyer tax credit.

Lawrence Yun, NAR chief economist, said there is a tug and pull on the market. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he said. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.55 percent in July, up from 4.51 percent in June; the rate was 4.56 percent in July 2010. Last week, Freddie Mac reported the 30-year fixed rate dropped to 4.32 percent.

Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price – were unchanged in July, reported by 16 percent of NAR members. In addition, 9 percent of Realtors report a contract was delayed in the past three months due to low appraisals, and another 13 percent said a contract was renegotiated to a lower sales price because an appraisal was below the initially agreed price.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said an unacceptably high number of potential home buyers are unable to complete transactions. “For both mortgage credit and home appraisals, there’s been a parallel pendulum swing from very loose standards which led to the housing boom, to unnecessarily restrictive practices as an overreaction to the housing correction,” he said.

“Beyond the tight credit problems, all appraisals must be done by valuators with local expertise and using reasonable comparisons – it doesn’t make sense to consistently see so many valuations coming in below negotiated prices, often below replacement construction costs,” Phipps said.

In an environment following a large price correction, Phipps said a price negotiated between a buyer and seller would appear to be a fair market price. “Banks frequently request numerous sales comparisons, well beyond the customary three comps used in the past, with little consideration that some of those properties may be discounted foreclosures used to valuate a traditional home in good condition,” he said. “To a great extent, banks are exerting influence on appraised valuations with negative impacts for both home sales and prices.”

The national median existing-home price for all housing types was $174,000 in July, down 4.4 percent from July 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 29 percent of sales in July, compared with 30 percent in June and 32 percent in July 2010.

Total housing inventory at the end of July fell 1.7 percent to 3.65 million existing homes available for sale, which represents a 9.4-month supply4 at the current sales pace, up from a 9.2-month supply in June.

All-cash sales accounted for 29 percent of transactions in July, unchanged from June; they were 30 percent in June 2010; investors account for the bulk of cash purchases.

First-time buyers purchased 32 percent of homes in July, up from 31 percent in June; they were 38 percent in July 2010. Investors accounted for 18 percent of purchase activity in July compared with 19 percent in June and 19 percent in July 2010. The balance of sales was to repeat buyers, which were a 50 percent market share in July, unchanged from June.

Single-family home sales declined 4.0 percent to a seasonally adjusted annual rate of 4.12 million in July from 4.29 million in June, but are 21.5 percent above the 3.39 million level in July 2010. The median existing single-family home price was $174,800 in July, down 4.5 percent from a year ago.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 550,000 in July, and are 17.3 percent above the 469,000-unit pace one year ago. The median existing condo price5 was $168,400 in July, down 4.0 percent from July 2010.

Regionally, existing-home sales in the Northeast rose 2.7 percent to an annual level of 750,000 in July and are 19.0 percent above July 2010. The median price in the Northeast was $245,600, down 6.8 percent from a year ago.

Existing-home sales in the Midwest increased 1.0 percent in July to a pace of 1.05 million and are 31.3 percent above a year ago. The median price in the Midwest was $146,300, down 2.9 percent from July 2010.

In the South, existing-home sales declined 1.6 percent to an annual level of 1.84 million in July but are 19.5 percent above July 2010. The median price in the South was $152,600, which is 2.2 percent below a year ago.

Existing-home sales in the West fell 12.6 percent to an annual pace of 1.04 million in July but are 16.9 percent above a year ago. The median price in the West was $208,300 down 7.1 percent from July 2010.

MBA Says Mortgage Applications Increased

Mortgage applications increased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 12, 2011.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3.6 percent compared with the previous week and was 13.5 percent lower than a year ago. The Refinance Index increased 8.0 percent from the previous week, but was 16.3 percent lower than the same week last year. The seasonally adjusted Purchase Index decreased 9.1 percent from one week earlier. The unadjusted Purchase Index decreased 10.1 percent compared with the previous week and was 1.1 percent lower than the same week one year ago.

“Unprecedented volatility in the stock market last week amid additional signs that the economy has slowed led to further drops in mortgage rates, with the 15-year rate reaching a new low for the MBA survey,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “Purchase application activity fell sharply over the previous week, likely the result of potential homebuyers hesitant to purchase in this highly volatile and uncertain environment.”

Fratantoni continued, “Refinance application volume increased substantially for the week, although there was substantial variation across the market. In September MBA’s Weekly Applications Survey will transition to an expanded sample that covers 75 percent of the retail market rather than the current sample that covers roughly 50 percent of the retail market. That expanded sample showed a significantly larger increase in refinance applications than the current sample, with some lenders reporting increases in refinance applications in excess of 50 percent for the week. The big differences in refinance volumes were likely driven by the decisions of some lenders not to drop rates last week, largely due to the need to manage their pipelines.”

The four week moving average for the seasonally adjusted Market Index is up 6.9 percent. The four week moving average is down 2.2 percent for the seasonally adjusted Purchase Index, while this average is up 10.1 percent for the Refinance Index.

The refinance share of mortgage activity increased to 78.8 percent of total applications from 75.6 percent the previous week, the highest the refinance share has been since November 2010. The adjustable-rate mortgage (ARM) share of activity decreased to 5.8 percent from 6.1 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.32 percent from 4.37 percent, with points decreasing to 0.87 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week. The 30-year fixed contract rate has decreased for three straight weeks and is at a new low for this year.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.47 percent from 3.52 percent, with points increasing to 1.08 from 0.96 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week. The 15-year contract rate is at lowest level in the history of this survey.