Property Management

Wednesday, February 6, 2008

10:31 AM

Wednesday, January 30, 2008

2:00 PM

Look for a bubble proof environment

The Dallas area as a whole has had a steady 4% to 5% annual appreciation for the last decade, however, some areas have far surpassed that performance. Last year Park Cities increased 14%, Princeton jumped 23% and Farmersville increased 35%. Knowing where to invest in the Dallas area is crucial.

Dallas sat out the housing boom of 2001-2006. In fact, Dallas homes appreciated below the national median for over 16 years, until this year. Recovering from the oil embargo of the 70s, the Savings and Loan crisis of the 80s and technology meltdown of the aughts, Dallas never got up off its knees.

Realty Times 10-13-2007

Look for a market with huge snap-back potential.

Before the bubble burst, Dallas was 11% undervalued while many California cities were 40% to 50% overvalued. Most economists agree that the national market is adjusting back to value. This is why as California is going down, Dallas will be coming up.

NAR expects the national median price of homes to drop to $218,200 in 2007. In Dallas, where it's warm, wide-open, and there are lots of jobs, the median home price is going up. One of the few bright spots of the retreating housing market, Dallas is beating national numbers in jobs, culture, and inflation in terms of housing appreciation. And with a median-priced home only two-thirds the price of the national median at $156,000, the city is a screaming, stomping bargain.

Realty Times 10-13-2007

Look for an area of strong demographic growth.

Supply and Demand…The higher the population growth is the higher the demand for housing.

Not surprisingly, population growth accompanies job growth. The Dallas-Fort Worth area gained 842,449 residents from April 1, 2000, to July 1, 2006, the second-largest numerical gain of the nation's 361 metro areas, bringing the total population to about six million.

U.S. Census April 2007

Look for a strong, growing, and diverse economy.

Unlike Houston which is an oil city or Austin which is a tech city, Dallas is the most business diversified city in the state. This cushions the city from major industry specific economic fluctuations.  

The Dallas-Fort Worth area added 91,500 jobs between March 2006 and March 2007, the largest numerical increase among the 12 largest U.S. metropolitan areas. The local job growth rate during that period was 3.2 percent, more than double the national increase of 1.5 percent, and total non-farm employment for the area stood at 2,915,000 in March 2007.

Bureau of Labor Statistics.

Look for an area of growing retirement population.

Retirees provide an area disposable income without taking a job. We consider retirees as bonus population. They buy or rent, infuse the economy with money but do not take jobs or populate the schools.

In 2005, Texas gained 27,000 new residents over the age of 65, bringing a total of $732 million in added income to the state. While that's less than half of Florida's gain at 68,000 new older population and $1.9 billion, what's significant is a large number of workers and retirees are not "following a job" to the state, but choosing to live there on Texas' merits.

The retired population will more than double in the next ten years. Affluent retirees have disposable income. They also foster the creation of new businesses tailored to retiree specific needs.

Realty Times 10-13-2007

Look for new and substantial infrastructure changes.

Highways and other infrastructure changes almost always affect property value positively. Projects of these magnitudes don't happen overnight so get informed early and buy in these areas.

Click on http://www.keepitmovingdallas.com/ to see the newest Texas Department of Transportation projects for Dallas.

Only move into undervalued markets.

When incomes rise faster than home prices, the market becomes undervalued. Undervalued markets are the only place in which to invest. You help protect your investment from any real estate bubble and you help guarantee your long-term valuation.

Some Realtors say the smart housing investment money is starting to move out of the hot markets and is beginning to heat up cities no one has been talking about in a long time, like Dallas, Little Rock and Raleigh-Durham, all boom towns of yesteryear. Dallas is under priced by 11 percent and Austin by 5 percent.

Realty Times 10-25-2007

Always acquire a property with strong potential for appreciation.

Fortunes are made through appreciation. Positive cash flow aids in the ability to hold the property while it appreciates. Many investors purchased properties that had negative cash flows in the bubble areas, counting solely on appreciation, and are now in trouble. If it does not cash flow…Do not buy it.

Dallas continues to be one of the cheapest big-city housing markets in the country, according to a new comparison of U.S. housing costs.

The snapshot comparison is based on the purchase of a 2,200-square-foot, single-family home with four bedrooms, 2 ½ baths, a family room and a two-car garage in a neighborhood that would appeal to relocating families.

That house costs $302,198 in the Dallas area, compared with an average of $422,343 in the 317 U.S. markets surveyed.

Dallas Morning News 10-27-2007

Look for tightening vacancy trends.

Do not invest in a market saturated with income properties and no renters. Pay close attention to the new construction and vacancy trend cycles. Overbuilding increases vacancy rate but overbuilding is almost always followed by under building, to the great benefit of rental properties.

Renters filled almost 7,000 apartments since the end of June, according to statistics released Tuesday by apartment analysts at M/PF YieldStar Inc. The increase in net leasing pushed overall apartment occupancy in the D-FW area above 94 percent – the highest level in six years.

Dallas Morning News 10-26-2007

Wednesday, January 30, 2008

12:00 PM

What’s HOT…What’s NOT

What's Hot

Golden Corridor

Dallas is a Northern growing city. The Golden Corridor is an area of Dallas that is located between the North Dallas Tollway and North Central Expressway (I-75), North of Highland Park and South of US 380. This area includes Highland Park, University Park, North Dallas, Richardson, Plano, Allen, Frisco, McKinney, Prosper and Celina. The corridor is always a good bet.

Hot Locations in the corridor:

Highland Park

Highland Park school district is the highest priced property in the Dallas area. It has always proved to be a great investment area, however, because of its price, is not very conducive to rentals. Median price jumped 14 percent, to the highest in the area, at $830,000. Teardowns and new additions continue to increase value. The school district is a big draw.

North Dallas

North Dallas appreciated 19% last year and provides some very good opportunities. This is a great location to purchase 30 to 40 year old homes. Tear down to build mini-mansions is getting very popular in this area.

Plano

Plano is the classic suburb. This northern suburb saw home prices increase a modest 2 percent, but total sales hit a chart-topping 4,194, not counting southeastern Denton County at 4,490. Good city planning helps this once-hottest market continue to grow.

Frisco

Frisco at 121 and Custer is the hot up and comer. 121 will be completed next year connecting I-35 with I-75. The cities of Frisco, Allen, Plano and McKinney come together at this intersection. TPC golf course, $100,000,000.00 Golden Tulip Hotel, sports facilities, major commercial developing underway all make this an area to buy.

Prosper - Celina

Prosper and Celina are the next hot areas to develop. They are still very rural but make a very good long term buy.

North-East HOT Spots

Lovejoy ISD

This northeastern suburb adjacent to Allen had a drop of 2 percent in median price, to $275,500, but it’s a good place to sell quickly, with an average of only 39 days on market, least in the area.

I-75 and

Princeton ISD

Next to Lovejoy and Lake Lavon. Growth in this direction has paid off to produce a handsome 23 percent increase, to $120,270.

Farmersville

This far northeastern suburb on the eastern shore of Lake Lavon boasts the area’s top increase—36 percent—in median price, to $118,640. It may be the place to go when McKinney is too full.

What’s NOT

COLD Areas…

Oak Lawn

Median sales price down 21 percent. The older, upscale population is moving into North Oak Cliff.

Wilmer-Hutchins

Houses in this far southeast neighborhood lay unwelcome claim to longest days-on-market, an average of 205. The median price of $53,000 was a drop of 30 percent from last year, a continuing decline due in large part to the troubled school district.

The Colony

Zero increase in home value of $133,380 from 2005 to 2006. As the urban fringe expands, areas that a few years ago were hot tend to stagnate.

South Oak Cliff

Decrease in sales price of 10 percent, while its more buzz-worthy neighbor, North Oak Cliff, was off 1 percent. Will the new inland port and the Trinity development kick this area back to life? We will see, but do not buy now.

Royse City

Not-so-hot I-30 eastbound exodus, with a 5 percent drop in sales prices, to $130,080. Builders have overpopulated the area with subdivisions and have lowered prices of homes to stay competitive.

Blue Ridge ISD
Although just north of Farmersville, this is a weak performer with an 11 percent drop in median price, to $80,500. Seekers of a country lifestyle are choosing other towns such as Trenton and Leonard in Fannin County to avoid Collin County’s high tax.