Date Archives: July 2018

Frisco, for the first time in at least five years, topped the U.S. Census bureau's list of fastest-growing big cities in the nation, adding an average of 37 new residents every day for a population jump of 8.2 percent, data released Thursday showed.   The booming Dallas suburb also landed in the ninth spot in terms of the raw number of residents it added over the year that ended in July -- an impressive feat for a city that, at 177,286 people, is still relatively small.    The 14 largest cities in the country didn't change from the prior year.  Which means that Texas surpassed California's share of the top 15 list, with five cities making the cut. California -- which has about 11 million more residents than the Lone Star State overall -- had four.

Dallas-Fort Worth was one of the top destinations for domestic migrants from California in 2017, according to a recent study.  There were 1,051 moves from coastal California, the home of some of the country's toughest housing markets, to Dallas in the first quarter of 2017, according to Alexandra Lee, a housing analyst with the real estate listing and research site Trulia, which did the study.  Out of 19,132 moves out of the region during that time period, 5.5 percent went to D-FW.   Houston is also a popular destination for people fleeing the California coast — 3 percent of the migrants in the study came to Texas' most populous city, meaning that 8.5 percent of those in the study came to either Dallas-Fort Worth or Houston.   The Trulia report looked at census data for transplants from four coastal California hubs: San Francisco, San Jose, Los Angeles and San Diego. Homes in those markets listed for an average of $720,000 in March 2017, Trulia says, compared to $313,000 in Dallas and $250,000 nationally.   The home prices in these cities is clearly a major determinant in whether people leave California and to where they move, Lee said over email, but it's not the be-all and end-all.  Texas is a big destination for job-to-job flows, a U.S. Census Bureau-designed statistic that measures flows of employees from one company to another when they've been at each company longer than three quarters. The biggest source of these flows is California, which contributed 6,884 in the first quarter of 2016.

• Dallas Morning News, June 28, 2018

Dallas' housing market gets top marks in a new consumer study by JPMorgan Chase.  The banking giant teamed up with Pulsenomics to ask homeowners about current market conditions, their aspirations for homeownership and outlooks for home values and affordability.  Dallas headed the housing confidence ranking ahead of Denver, Las Vegas and San Francisco, according to Chase.  "These record results were driven by healthy assessments of local real estate market conditions among existing homeowners, but even more so by surging expectations among renters," Terry Loebs, founder of Pulsenomics, said in the report. "Seven in ten renters now express confidence in their ability to afford a home someday, and nearly three-quarters of those with an opinion say that buying a home is the best long-term investment a person can make."  Dallas-area residents polled by Chase in the survey had the strongest homeownership aspirations.  Eighty percent of Dallas renters Chase surveyed said they are confident they will eventually own a home. And 70 percent said they plan to purchase in the next five years.

• Dallas Morning News, July 5, 2018

When it comes to moving, Americans are becoming homebodies. The median time U.S. homeowners stay put has risen to 13.3 years — twice the time between moves back in the early 2000s.  But in many Texas cities, homeowners are changing addresses more frequently.  Frisco residents have one of the lowest median time between moving of any U.S. cites — just 7.5 years according to a new study by consumer research firm ValuePenguin. Frisco recently topped the Census Bureau's list of the fastest growing cities in the country.   Folks in McKinney (7.9 years), Allen (9.5 years) and Denton (9.5 years) also move more often, compared with the rest of the country. Of course, all of those Dallas suburbs have big supplies of new housing that have more recently attracted owners.

The online firm looked at more than 300 U.S. housing markets for its comparison.  A look at how homeowner tenures compares across the country. Nationwide, U.S. homeowners have been in their house a median of 13.3 years.  In Texas, the median time residents have been in their homes is about 12 years. The longest tenure is in El Paso where the median home residency is 14 years.  In the D-FW area, the median time for occupancy is closer to 11 years — residents stay the longest in Garland (13.4 years) and Richardson (13.3 years).  Texas leads the country in home building, which contributes to a younger housing stock and shorter resident tenures. And in fast-paced economies in the state — especially the D-FW area — thousands of people move to the area each year to take new jobs.  While an increase in millennial homebuyers should mean more moves, real estate agents are worried that rising mortgage rates will keep many homeowners staying put rather than relocating.

• Dallas Morning News, July 15, 2018

Dallas' constricted housing market took a small dose of real estate Miralax in the second quarter, but analysts say that relief is likely not long-lasting.  The Dallas metro saw a year-over-year increase of more than 32 percent in housing inventory — homes, new and old, available for sale — during the April-June period, according to a report from home listing site Trulia. This means that the Dallas metro's stock grew to include 14,875 houses, up from 11,653 in the first quarter — and up from 11,234 houses for sale in second quarter of 2017.   The Fort Worth metro was similar, with nearly 35 percent inventory growth in that time period.   This inventory spike, while far from providing complete relief for the metro's housing market, is the highest in recent months.

The cities with the most significant additions to inventory — Nashville (52 percent), Salt Lake City (48.6 percent) and Dallas-Fort Worth — are all in states with robust construction markets and ample land to build, said Laila Assanie, senior economist with the federal Reserve Bank in Dallas.  There are some other indicators of temporary blockage relief: The Dallas area had a brisk second quarter for new home starts and a slow(ish) June for home sales. Observers recorded more than 9,900 home starts in D-FW in the second quarter, according to local real estate analyst Residential Strategies, 12 percent more than that period last year.  Meanwhile, D-FW real estate agents sold 10,754 pre-owned homes in June. It's a healthy number, but represents 3 percent fewer such sales than in June of 2017.

In May 2018, there were only 1.8 months of inventory for homes for sale in the $200,000 to $299,999 price range, slightly more than in months previous.  While the loosening of inventory will give more choice to consumers and perhaps take some of the urgency out of home buying, it's still not satisfying the ample demand, Assanie said. Most inventory gains are coming in price points above $500,000, she said.  But the demand isn't built up for homes above $500,000, where there's more than seven months of inventory.

Overall, Assanie is optimistic that developers will respond to demand and the market will hit a sweet spot without overbuilding or overpricing. Plus, if interest rates continue to climb, absorption rates may slow somewhat.  "I'm not too worried about Dallas," he said. "Any supply issues have to be watched, but it's more of a timing issue than anything."

• Dallas Morning News, July 12, 2018

• * Texas claims the top spot in CNBC's 2018 America's Top States for Business rankings.
• * The energy sector is helping to turbocharge the $1.6 trillion Texas economy.
• * Texas has added more than 350,000 jobs in the past year.
• * Texas is home to some of America's most important public and private companies, including giants like AT&T, ExxonMobil and Dell.

Riding the rising tide of energy prices—and the job growth that goes with it—Texas claims the top spot in CNBC's 2018 America's Top States for Business rankings.

This is familiar territory for the Lone Star State, which becomes the first four-time winner in our annual study, now in its 12th year. But it has been a long time coming. This is the first time since 2012 that Texas has claimed top honors. Not coincidentally, West Texas Intermediate Crude Oil—the state's most important export—peaked at just over $108 per barrel that year, a figure it has not seen since. But it has risen enough—around 60 percent in the last year, powering through the $70 per barrel mark in June—to turbocharge the $1.6 trillion Texas economy.

"The Texas economy remains in a broad-based expansion," said Dallas Federal Reserve economists Christopher Slijk and Jason Saving in a recent report. "The state's energy sector continues to boom, and areas of the state tied to oil and gas are growing at their strongest pace since 2014."  Texas has added more than 350,000 jobs in the past year, with the largest increase in the energy sector. Put another way, 1 in 7 jobs created in the United States in the past year was created in Texas.

Texas is home to 39 companies in the Standard and Poor's 500 index, including AT&T, ExxonMobil and Texas Instruments. And it boasts some of the nation's largest privately-held companies, including supermarket operator H-E-B, Neiman Marcus Group and Hunt Oil.  With solid economic growth last year — including a torrid 5.2 percent state GDP increase in the fourth quarter — Texas finishes first in our Economy category this year.

• CNBC, July 10, 2018

SOURCE: Estimates from Texas Education Agency

• Dallas Morning News, July 4, 2018 (excerpts)

  *School districts with relatively low enrollment (below 1,500 students)

Coppell and Highland Park Pay the Most Per Capita

Property taxes continue to rise, but increasingly for taxpayers in North Texas, those dollars aren't going to local school districts.  According to estimates from the Texas Education Agency for the 2018-19 school year, 25 D-FW school districts are expected to surrender $539 million back to the state through recapture, the mechanism designed to better balance school funding between "property-rich" and "property-poor" districts.  Statewide, the TEA estimates that 217 school districts will be subject to recapture for the upcoming school year, with $2.69 billion of local property taxes siphoned back to the state.  

In the North Texas area, Coppell and Highland Park school districts send the most to the state per capita, both classified as "property-rich" districts to help pay for the "property-poor" districts around the state, mostly along the Texas border with Mexico.   Interestingly, Frisco ISD has not been classified as a "property-rich" district but that may change as early as next year, in which then millions of tax dollars will be required to be sent to the state.  This will be a financial dilemma for Frisco since the school district has been unable to get voter approval for higher taxes.