Economic Update

Bounce Back in Pending Home Sales a Welcoming Sign

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After declining for three straight months, pending home sales reversed course in June as all major regions, except for the Midwest, saw an increase in contract activity, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index, a measure of housing contract activity, climbed 1.5 percent to 110.2 in June from an upwardly revised 108.6 in May. At 0.5 percent, the June index increased annually for the first time since March.

Lawrence Yun, NAR chief economist, says the bounce back in pending sales in most of the country in June is a welcoming sign. “The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs,” he said. “Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria.” Added Yun, “Low supply is an ongoing issue holding back activity. Housing inventory declined last month and is a staggering 7.1 percent lower than a year ago.”

Couple Cheering 02Yun noted that there could potentially be a sliver of increased hope in the months ahead for prospective first-time buyers, who continue to struggle reaching the market. Sales to investors last month were the lowest of the year (13 percent), which helped push all cash transactions to 18 percent – the smallest share since June 2009 (13 percent).

Source: National Association of Realtors

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KW | Dallas Metro North outperforming NTREIS!

Keller Williams Dallas Metro North is outperforming NTREIS!! Look at our figures: We’re selling $25,552 higher per home, taking 3.2% more listings and selling them 20 days faster in June 2017. Call us today for help with your real estate needs!

LORE JULY

It’s highly beneficial to use a professional, knowledgeable, local real estate agent! Call Keller Williams Dallas Metro North today!!

For Millennials, Homeownership Is a Waiting Game

shutterstock_282602042Millennials have their sights set on homeownership – but a new report makes a case that their dreams could be years from becoming reality.

According to a recent survey, though 80 percent of millennial renters aspire to become homeowners, 72 percent are held back by an inability to afford a home, with saving for a down payment the most challenging obstacle to overcome. Sixty-eight percent have less than $1,000 saved for a down payment; 44 percent, decidedly, have no down payment savings at all, and 40 percent have no savings plan in place to start.

Older millennials – those aged 25-34 and now in their prime home-buying years – are struggling to save for a down payment, as well: 42 percent have set aside nothing.

millennial-moneyThe down payment goose egg suggests millennials grossly miscalculate how much savings they need to afford a down payment, whether 20 percent – ideal to avoid monthly mortgage insurance and obtain better mortgage loan interest rates – or less. (In fact, when controlling for a 10 percent down payment, only 36 percent can save enough in three years.)

Another snag? Millennials who are saving up for a home have a long wait ahead of them. According to the survey, most will need to save for more than five years to accumulate enough for a 20 percent down payment, with those in the hottest housing markets – think ATX, the Bay Area and Silicon Valley – needing to wait roughly 20 years.

Injured Piggy Bank WIth Crutches“Our analysis shows that the lack of savings by millennials, combined with the extreme shortage in affordable entry-level homes, means that a large share of millennials may be stuck renting for years,” according to report authors Andrew Woo, director of Data Science and Growth, and Chris Salviati, senior growth associate, at ApartmentList.com.

All’s not doom and gloom, however. Millennials saving for a home in Kansas City, Mo., will need to squirrel away money for just five-and-a-half years, while those in Las Vegas, Nev., and Miami, Fla., will need about 6 years.

Millennial - indecisiveThere are other, less intimidating influencers keeping millennials from entering the housing market, too. Forty-five percent are “not ready to settle down” yet, and 36 percent are simply waiting to say “I do.”

“These results underscore the long-term crisis that homeownership in the United States may face, as millennials delay buying a home until later in life,” the authors state. “One of the outstanding questions for the housing market has been whether or not the nation’s largest generation – millennials – will purchase homes at rates similar to their parents or if they will continue to rent long into adulthood, or even indefinitely.”

For now, millennials are playing the waiting the game.

What’s The GOOD News?

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June 20, 2017

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Toyota Plano – Starting May 15, 2017, the first wave of Toyota employees — mostly in facilities and information systems management — began working in the new 2 million square foot North American headquarters in Plano.  By December 11, 2017, about 4,000 Toyota employees will work in the 100-acre development.   The company plans to move in employees in waves of about 250, with a peak of about 350 during the summer. Construction is expected to officially end in October and the project is reported to have remained on schedule.

Forbes1Forbes 2017 Global 2000 List – The Forbes 2017 Global 2000 list of the world’s largest public companies was released in late May.  The list features public companies from 58 countries that together account for $35.3 trillion in revenue, $2.5 trillion in profit, $169.1 trillion of assets, and have a combined market value of $48.8 trillion. All four metrics are up from the 2016 ranking, with market capitalization up 10% from last year. Industrial & Commercial Bank of China and China Construction Bank are the #1 and #2 largest public companies in the world, with the top five rounded out by three American financial institutions: Berkshire Hathaway, JPMorgan Chase and Wells Fargo.

AT&T has leapfrogged Exxon Mobil in Forbes’ 2017 Global 2000 list, taking over the perch as the largest public company in Texas.  The Dallas telecom giant moved up a spot to 11th in this year’s edition of the rankings, with Exxon dropping down to 13th from 9th in 2016.  Japanese automaker Toyota Motor comes in at the 10th spot on the list. Round Forbes4Rock-based Dell Technologies Inc. landed at No. 608 overall and No. 14 in Texas on Forbes’ list.  Dell has been privately owned since a 2013 buyout led by CEO and founder Michael Dell, but it has a tracking stock listed on the New York Stock Exchange under the ticker “DVMT.”  Overall, the U.S. earns 565 of the top 2,000 spots, with China grabbing 263 and Japan taking 229.   The three countries account for more than half the list.

 DFW1DFW International Airport – More than 18 million passengers are expected to travel through Dallas Fort Worth International Airport during the 2017 summer travel period — a projected increase of 3.5% over last year.   More than 65 million customers pass through DFW Airport every year, making it one of the most frequently visited super hub airports in the world. The airlines serving the DFW offer a total of 163 domestic and 55 international nonstop destinations worldwide, including new DFW2nonstop routes to Rome and Amsterdam.  DFW Airport plans to spend $400 million on infrastructure, including an August 2017 start date for a new north entry cellphone lot, a better baggage handling system at Terminal B, passenger boarding bridges and more employee parking over the next few years.

TreeHouse – Home improvement retailer TreeHouse, which opened in TreeHouse4Dallas Friday June 2nd, is the world’s first retail store to produce more energy than it uses. A Tesla power pack battery wall stores harvested solar energy to redistribute when needed, and to put excess back into the grid. All of its plants are native species and watered from harvested rainwater. The store uses daylight as much as possible, and cools by using Big Ass fans.

The Austin-based home improvement store sells products that fall into 3 categories: Performance – meaning energy efficient merchandise,EKO_symbol_cmyk windows, roofing, insulation; Design including paint, flooring, cabinetry, lighting; Landscaping including decking, irrigation, gardening.  Many products come from recycled materials, are free of toxins, are more sustainable or integrate automation for ease.  Inside the store, customers will also experience a live kitchen with local chefs demonstrating smart-home appliances, and two to three classes each week on topics like native landscaping.  The location is at the northeast corner of Interstate 75 & Walnut Hill Lane. The store will span 25,000 square foot, including 5,000 to 10,000 square feet for an outdoor landscaping section.  TreeHouse has also announced it will open a second North Texas location this fall at the corner of Preston Road and Park Boulevard in Plano, adjacent to a Whole Foods.

EpicWaters1New Epic Waters Waterpark – A new Dallas-Fort Worth Waterpark is set to make an EPIC Splash! The city of Grand Prairie announces their new $75M recreational facility that is slated to open in November of this year.  Epic Waters indoor waterpark is an indoor-outdoor venue with a retractable roof that’s open year round.

EpicWaters3The park will have nine water slides, including an outdoor wave pool, a lazy river, an activity pool, a children’s area, and an arcade. There will be cabanas, a full-service grill/bar, and private party/meeting areas, both indoor and outdoor. It’s part of The Epic recreation center, which will feature fitness equipment, indoor tracks, a digital library, and recording studio. The complex will also have a 5,000-seat amphitheater, and more than two miles of trails. Epic is the final phase of the 172 acre Grand Central recreational development.

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Dallas, Seattle top cities for U.S. Home Price Changes

business - growth 2[reprinted] from Dallas News – by Steve Brown, Real Estate Editor, May 25, 2017

U.S. home values have risen above the peak before the last recession, according to a new report from Zillow.

Nationwide home values are 1 percent higher than they were in 2007, the real estate marketing website said in a new report.

North Texas home prices have already soared past pre recession levels.

Zillow said D-FW’s median home value in April were up 11.1 percent from a year earlier to $207,300.

That’s almost $10,000 more than the U.S. median.

Only Seattle at 11.8 percent had a greater year-over-year home price gain in April, blog 053017according to Zillow.

“Now that the typical U.S. home is worth more than ever, people may be tempted to ask if we’re in another national housing bubble,” Zillow Chief Economist Dr. Svenja Gudell said in the new report. “We aren’t in a bubble, and won’t be entering one anytime soon.

“Supply has been slow to catch up to this demand, which is causing home values to grow at a faster clip than we might otherwise expect,” she said. “Beyond that, the market’s fundamentals look largely healthy.”

North Texas home prices are now almost 50 percent higher than they were at the peak before the recession in the summer of 2017.

Median home sales prices in the region are up 13 percent for the first four months of 2017 compared with the same period last year, according to data from local real estate agents.

It’s highly beneficial to have a professional, knowledgeable, local Real Estate Agent by your side! Call Keller Williams Dallas Metro North today for all your real estate needs!

Good News – May 2017

business - growth 5Nationally, homeowners saw 24% average return in 1st Q. 2017 – Homeowners who sold in the first three months of this year saw an average price gain of $44,000 from purchase, according to a report from Attom Data Solutions released April 27, 2017. That represents a 24% return on the purchase price – the highest gain since third quarter 2007.  Nationwide, the median home price was $225,000 during the first quarter of 2017, the report stated, up 13% from a year ago. Homes in more expensive markets have seen the highest average price gains so far this year, the report found. Sellers in San Jose, California, saw an average price gain of $356,500 (71% return on investment), followed by those in San Francisco with a gain of $276,750 (65% return on investment).  The Austin-Round Rock, Texas market is the only Texas market that shows up on the Top 20 metro areas where home sellers are making the most money when selling their homes, with an average return on investment of 39% and an average price gain of $81,795…..and that puts them at the #19 spot on the list.   

shutterstock_389597869Noble Gold Investments opens IRA depository in Dallas – Delaware and New York no longer have a monopoly on storing gold and precious metals for IRAs. This month, Noble Gold Investments opened an IRA depository in Dallas, the first of its kind in this region of the country.  Charles Thorngren, CEO of Noble Gold, said they will store everything from bullions to coins and platinum to palladium at the high-security facility. He could not disclose the  location, only that it is in Dallas.

And yes, they are storing the physical metal. Like any asset, gold prices do fluctuate from day-to-day based on economic conditions and demand. On May 12, spot prices for gold were at $1,226 an ounce.  Noble Gold stores the precious metals for a flat $300 annual fee.

Plano Water TowerAltice USA Inc. expansion to bring 400 jobs to area – International telecommunications firm Altice USA Inc. has decided to expand its presence in North Texas with a new 79,000 square feet office in Plano. The company already has an office in Plano, and this new office, which they expect to occupy by the 3rd quarter of this year, will bring 400 relocated or new jobs to the city.  The company provides internet, video and phone services throughout the country with 4.9 million residential and business customers in 21 states.  Altice has expanded its 1 Gigabit per second broadband services in Texas to about 85 communities in the state and has announced a five-year plan to build a next generation fiber optic network capable of delivering speeds of up to 10 Gbps.   

Innovative Design of Connex Office Park will Use Shipping Containers as Construction Material – Construction has begun on an office park made entirely of shutterstock_554962666shipping containers, which, once started, will deliver a new office and retail option to tenants near downtown Fort Worth.  The three-story office park, called Connex Fort Worth, will sit on a tract at 1201 Evans Ave. and is being developed with the help of 40 shipping containers.  The Connex office park is slated for completion by the end of October.  Upon completion, the Connex office park will bring a zero energy building powered with the help of solar power and wind turbine trees atop the roof of the structure.   

Grand Opening of Kubota Tractor Headquarters in Grapevine – Early April marked the grand opening of the Kubota Tractor headquarters campus in Grapevine, completingshutterstock_322361249 a 2 year building process.  The new facility includes the headquarters building and an adjacent 62,000 square foot research and development building, an outdoor water garden, and a large employee lounge and food service area.  The facilities already have about 280 employees working there, with 2017 employment expected to reach 340 jobs created. The new Grapevine campus is built to ultimately house as many as 600 workers, and has already brought a payroll of $25 million annually to our area. The completion of the $50 million campus for Kubota Tractor Corp in Grapevine has pushed the vertical limit of tilt-wall construction, with its tallest concrete panel coming in at 82 ft 11 in.  In the past, tilt-wall construction has been reserved for mainly industrial buildings, but as technology has evolved — so has the use of tilt-wall construction — and it has fully transferred into the construction of office buildings.  The building appears to be four-stories tall instead of its actual three story height and has 20-foot floor-to-floor heights. A 300-ton crane was used to erect the concrete walls.

What was the good news for the DFW in March?

Zinwave, a global provider of wideband distributed network solutions for in-building wireless, announced on March 15, 2017 that it has relocated its headquarters from Cambridge, UK to Dallas, Texas.  The firm plans to bring about 100 workers to its new 5,000 square foot space in Dallas on McKinnon near Victory Park and Klyde Warren Park.  The projections are to hire an additional 100 workers in the next 18 months.

 

“The simple message is that the economy is doing well,” said the Federal Reserve’s Janet Yellen in a press conference on Wednesday, March 15th.  This comment followed a hike of the benchmark interest rate by 25 basis points, or 0.25%.  This is the first interest rate increase in 2017, the second increase since December and only the third increase since the financial crisis.  Most experts believe this is the first of several increases to come in 2017, and that the increases bring more stability to the economy as a whole. The rate hikes are evidence that the Fed is becoming increasingly confident in the economy, as they follow reports showing that employers have added jobs for the last 77 straight months, unemployment has edged lower and wage growth has slowly been increasing.

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The Dallas-Fort Worth market, along with Austin, remains a strong market for hotels in both occupancy and development. Both the Dallas-Fort Worth area and the Austin area saw hotel revenues rise in 2016. The Dallas-Fort Worth area saw an increase of 7.6%, just below Austin’s 8% increase, according to Source Strategies Inc. Statewide, in 2016, occupancy averaged 63.3%, down from 64.9% last year but still well above the long-term annual average of 60%, according to Source Strategies.  A new Choice Hotels property, Cambria Southlake DFW North officially opened its doors on March 8, part of the Kimball Park development. Grapevine has selected Tulsa-based Coury Hospitality as the developer of its boutique hotel that will be built in historic downtown area near a TEX Rail station.

 

Construction of The Lakeside Tower, which has been planned for more than two year, has officially begun. The long-awaited 16-story, 48-unit building is part of a $1 billion mixed-use development. In all, the condo tower will bring about 226,000 square feet of living space to Flower Mound, with a three-story enclosed parking garage and four 3,000-square-foot bungalows on the perimeter of the high-rise building. About 60 percent of the condo tower is pre-sold to homebuyers. Construction is slated for completion in July 2018.

 

Midwestern_State_Mustangs_logoMidwestern State University has agreed to partner with 2,000-student NCTC in Flower Mound, with plans to double the total enrollment to over 4,000 students.  NCTC will continue to teach freshman and sophomore classes, while MSU will teach upper level and some graduate classes. The first subjects MSU will offer are courses in respiratory care and radiologic sciences, nursing, education and possibly business, according to Keith Lamb, vice president for student affairs and enrollment management at MSU.  Classes will begin this fall in a new, two story, 30,000-square-foot building being constructed adjacent to NCTC’s Flower Mound college.

 

The Visa brand is 40 years old.  Visa chose to have a large presence at SXSW this year, as a way to spread the message that they are agnostic about which payment technologies succeed or fail – whether you pay with your phone, your watch, by pressing a button on your frig or by using a plastic card does not matter to the company…and in fact they are currently prototyping a pair of RayBans that allow you to tap on the side of the glasses when you want to make a purchase.  Visa claims that they are focusing on security innovations including fingerprint, voice recognition and iris scans, and is spreading the message that they are a large, secure payment network ready to work with any and all technologies.  Brand Finance recently ranked Visa as the 5th most powerful brand in the world behind Lego, Google, Nike, and Ferrari.  As we increasingly move towards a cashless society, how we pay for things could get interesting.