For the past 4
years, Jim Fite, President of CENTURY 21 Judge Fite Company, has been asked to attend the Dallas Morning News annual roundtable on
the “Economic Forecast” for the Dallas/Ft. Worth Metroplex.
Here is a list of this year’s participants:
2013 Economic Summit Members
§ ■ Norm Bagwell, chairman
and CEO, Bank of Texas
§ ■ Lucy Billingsley,
commercial real estate developer, principal Billingsley Co.
§ ■ Wilson Chu, M&A
partner K.L. Gates
§ ■ Jim Fite, president,
CENTURY 21 Judge Fite Co.
§ ■ Ken Hersh, CEO of NGP
Energy Capital Management
§ ■ Hattie Hill, CEO,
Hattie Hill Enterprises Inc.
§ ■ Gary Kelly, chairman
and CEO, Southwest Airlines
§ ■ Michael Rawlings,
Dallas Mayor
§ ■ Wyman Roberts, CEO
Brinker International
§ ■ Shad Rowe, principal,
Greenbrier Partners
§ ■ Harvey Rosenblum,
executive vice president, Federal Reserve Bank of Dallas
On Sunday,
April 28, 2013, there should be a special section in the Dallas Morning News
Business Section with each of these business leader's perspectives on their
respective business interests.
Local Dallas/Ft.
Worth Outlook
Dallas/Ft. Worth real estate continues to be one of the top residential
real estate markets in the United States.
2012 was the best of the previous 5 years. The residential real estate market has
shifted from a buyer’s market to a seller’s market in less than 6 months. The market has shifted faster in this cycle
than any in the past. Real estate
professionals are optimistic about DFW in 2013.
Inventory is currently at 3.6 month supply which is the lowest since
2006. As inventories drop and demand
increases, we expect another increase in closed sales from 6-8% during 2013
both locally and nationally.
The “Wild Cards”
in the immediate future:
1.
Lack of Inventory – as inventory is at an all
time low, usually the new home inventory fills the demand from the consumer
a.
Developers and builders have not been active in
over 5 years
b.
New home construction costs continue to rise
rapidly
c.
The new home market is 18-24 months behind
demand
2.
Existing home prices –
a.
Multiple offers are common place
b.
Will rise in most sub-markets rapidly
c.
Appraisals keeping up with rising prices
d.
Buyers paying above list and appraisal price is
common place
3.
JOBs – even though consumer confidence is
increasing, jobs continue to be the #1 factor of consumer confidence or lack
thereof
4.
Credit restrictions on qualifying buyers -
further government restrictions and sanctions that affect available credit
continue to be discussed
5.
Shadow Inventory – virtually does not exist in
DFW, the loan work-out and short sale initiatives in housing policy have
reduced the foreclosure rate by 50% year over year
6.
Rental of foreclosed properties - direction of
Fannie Mae, Freddie Mac and FHA to rent current inventories rather than sell to
the private sector seem to be doomed for failure as real estate is a local
business and very difficult to manage a national portfolio
7.
Investor activity – is at an all time high, DFW
is experiencing local and international investors in addition to Real Estate
Investment Trusts (REITs) bringing 10’s of Millions of dollars into the DFW
market
December 2011 vs.
December 2012:
New Listings -
2.8%
Closed Sales +
0.3%
Days on Market Until Sale -
20.8%
Median Sales Price +
9.5%
Supply of Homes For Sale -
34.9% (down from 5.7 to 3.7 months)
Year to Date
Fiscal Year 12/31/2011 vs. 12/31/2012:
New Listings - 0.1%
New Listings - 0.1%
Closed Sales +
14.9%
Days on Market Until Sale -
19.6%
Median Sales Price +
8.3%
Opportunities in
2013:
- Inventory dropping rapidly
- Demand is high
- Interest rates remain low
- Prices rising rapidly in most sub-markets
- Foreclosure rate is dropping rapidly – replaced with loan work-outs and short sales
- High rents and going up
- Real Estate Investors continue to enter the market in unprecedented numbers
- Relocation – as other U.S. markets have begun to sell, relocation buyers (pinned up demand) are buying in DFW
U.S. Real Estate
Market Overview
As you have seen over the past year we are experiencing
the beginning of a recovery in the residential real estate market. NAR is
forecasting an 8% increase in the number of homes sold in 2013 as compared to
2012 (5.0 million units compared to 2012)
If we are able to return to more normal lending
standards, home sales could rise to as many as 5.3 million units, or a 14%
increase compared to 2012.
NAR also is forecasting a 7% increase in median existing
home sale prices in 2013 compared to 2012.
However, the greatest challenge for many markets today is
a decreasing supply of inventory…
While total housing inventory at the end of February rose
9.6 percent to 1.94 million existing homes available for sale, which represents
a 4.7 month supply 2 at the current sales pace, up from 4.3 months in January,
which was the lowest supply since May 2005. Listed inventory is 19.2 percent
below a year ago when there was a 6.4 month supply.
The good news is that the decreased inventory has had a
positive effect on pricing. Prices have stabilized in the vast majority of
markets, and are in fact rising in 92 of the country's 100 largest metropolitan
areas, (according to CoreLogic) Sales volume rose in 69 of the top 100 markets,
and 35 of those showed double-digit gains.
The impact of price appreciation should attract more
sellers to list their homes for sale as they see the advantages of buying in
today’s market. There may never be a better time to investigate the
possibilities of homeownership, moving up, investing or even moving down.
Interest rates remain historically low, below 4%. This
has a tremendous impact on the ability for first time home buyers to get into
the market. Even with rising home prices, affordability remains historically
favorable because home prices over-corrected during the downturn. This means
there is still great value for buyers in the current market.
Foreign Home Buyers,
Diversity and Demographics
The global market is very exciting. The prospect of
transacting more business through the Century 21 global network is a new area
of future growth.
In the United States international transactions totaled
$82.5 billion dollars for the 12 months ending March 2012, that figure is up
24% year over year from 2011.
Transactions were divided evenly between foreign clients
with permanent residences outside of the U.S. and clients who are recent
immigrants or temporary visa holders residing for more than six months in the
U.S.
Especially here in Texas as the proximity to Latin
American markets and technology-based economy attracts people from all around
the globe.
As a global real estate company, the inter-connectivity
that Century 21 has is critically important as we enhance our business
opportunities with foreign investors and referral and relocation business.
Understanding different cultures is important… as the
opportunities for serving a diverse clientele increase.
Did you know that non-whites and Hispanics accounted for
98% of the population growth in large metropolitan areas between 2000 and 2010?
The Asian population, while smaller than the Hispanic
population, grew just as rapidly in the 2000’s. A larger share of Asians
represents new immigrants, especially the flourishing Asian Indians.
Another major shift is in the Age Demographics.
Between 2000-2010 the number of 45-64 year olds swelled
by nearly 20 million people. However, what is more surprising to note is that
the 65+ population grew by more than five million during this time frame.
More than 10,000 Baby Boomers will retire every day for
the next 20 years.
Conversely, the number of 30–44 year olds declined by
nearly five million as the smaller Baby Bust Generation supplanted the Boomers
in this age range.
The number of young and emerging adults aged 15-29 increased
by six million due to the maturation of the large Baby Boom Echo Generation
(aka Gen Y or Millennials), which rivals the BabyBoom in size.
The size and differing demands on real estate
professionals by the Millennial Generation will play a pivotal role in shaping
the housing industry during the present and next decade.
Overall Message on Residential Real Estate:
“If you have a job, good credit, and money for a
down payment - BUY NOW”
Learn more about Dallas area real estate at http://century21judgefite.com.
