The number of flips were up for the year in D-FW and nationwide, but local profits are much lower than the U.S. average.
Dallas-Fort Worth house flippers had much lower returns than the national average in 2019, making only $36,629 in profit compared with an average of almost $39,000 in 2018, according to a new report by Attom Data Solutions. Nationwide, flippers made an average of $62,900 — down from $65,000 in 2018 and $66,899 in 2017. Flipping returns fell even though the price of properties has risen steadily in the last few years.
For all of last year, there were an estimated 4,924 home flips in the D-FW area — up about 1% in total numbers from the year before. In the fourth quarter, Attom Data tracked 1,094 home flips in the Dallas-Fort Worth area, which was 1% less than in the same period of 2018. With home prices higher across the board in D-FW, investors are finding fewer undervalued properties to be fixed up and resold. The average flip house in North Texas sold for $233,004 and took 177 days to turn over. Home flips accounted for 6% of total D-FW home sales last year, and the D-FW area ranked 11th nationally for total 2019 home flips.
More than 56% of flip homes purchased last year were all-cash transactions, Attom Data found.
Low mortgage rates are keeping the outlook strong for home sales in the coming months.
North Texas home sales jumped 10% in February — the second month in a row of double-digit percentage sales increases from a year ago. Area real estate agents sold 7,574 single-family homes last month, the largest total ever for the month of February. So far in 2020, home sales in North Texas are up 14% from the first two months of 2019, according to data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems. Near record low mortgage rates have given homebuyers a boost, causing property purchases to surge in the past few months.
Prices are up, too. The median home sales price in North Texas was $266,620, up 7% year over year. The sharp increase in sales caused a drop in home inventory. At the end of February, 20,723 single-family homes were listed for sale with real estate agents in the more two dozen counties included in the survey. That's a decline of 5% in the number of homes on the market in the area.
With mortgage rates so low, the outlook for home sales in the coming months is strong. The number of pending home sales in the area — properties under contract but not yet purchased — was up 15% in February from a year ago. "The stunning decline in mortgage rates has stimulated both the new and existing housing market thus far in 2020," said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. "Inexpensive financing costs will remain a stimulus for housing — and it is likely that rates will remain very low for some time."
The Texas housing market had a "banner year" in 2019, and looks to be heading for another one, a top economist said at a seminar Friday at the Federal Reserve Bank of Dallas. Nine years after the housing market's downturn, housing sales in Texas have returned to their pre-recession peak, said Jim Gaines, chief economist at the Real Estate Center at Texas A&M University. "That prior peak was back right before the Great Recession," Gaines said. "It was very artificial. It's pretty easy to have a lot of home sales when anybody who could walk into a bank and fog a mirror got 110 percent financing."
The Real Estate Center is predicting an increase in home sales in Texas of about 6 percent in 2020, which would beat the 4 percent increase in 2019, Gaines said. Home prices statewide are predicted to rise 5 percent to 6 percent in 2020, after increasing about 3 percent in 2019. "We've had an outstanding decade, and the market is still really strong," he said. Population projections for the next 10 years call for the addition of 5.2 million Texans, including 1.6 million in Dallas-Fort Worth, 1.7 million in the Houston metro area, 622,000 in Austin and 563,000 in San Antonio, and the population and job growth are driving the housing market, Gaines said.
1 in 4 Plano residents are foreign born
Plano ranks slightly higher than Dallas in ethnic diversity, according to a new study by WalletHub, a personal finance website, making it one of the most ethnically diverse cities in the nation.
WalletHub's study used three key indicators — ethnicity and race, language and birthplace — to rank more than 500 of the largest U.S. cities. Each category was graded on a 100-point scale, with 100 representing the most ethnic diversity. The study then calculated each city's weighted average across all metrics to determine its "Ethnic Diversity Score."
Plano ranked 46th nationally by scoring 78 in ethnicity and race, 54 in language and 57 in birthplace. Wallethub's study states that it used figures from U.S. Census data to determine rankings. The most recent census estimates show that Plano is 65.6% white, 20.4% Asian, 15.2% Hispanic or Latino and 8.4% black or African American. In its Plano Tomorrow plan, the city says its white population is decreasing while minority populations are increasing. By 2030, Plano is expected to have a white population of just over 50%. The Hispanic population is projected to rise to 19%, and all other races will represent 22%.
An estimated 1 in 4 Plano residents were born in another country, according to the city's website. The diversification of the U.S. is expected to continue, according to WalletHub. "The U.S. today is a melting pot of cultures, thanks to increasing ethnic and racial diversification," the website reads. "If the trend continues, America will be more colorful than ever by 2045, at which point no single ethnic group will constitute the majority in the U.S. for the first time."
Here are 8 Mind Blowing Facts about the Texas Economy
Homeowners in Dallas and across the country are staying put longer
One reason there are fewer houses for sale is that homeowners are staying put longer. The average Dallas-area homeowner has been in his or her house almost eight years, according to a new report by LendingTree.com. The mortgage company looked at homeownership tenures in major markets around the country. "Our study found that there's an inverse relationship between home price and the length of time people stay in their homes," the LendingTree report found. "In other words, prices rise more quickly when people stay in their homes for shorter time periods." The amount of time homeowners stay in a property has grown significantly since the Great Recession. Before the economic downtown, homes tended to turn over every three to five years. But owners are remaining in their properties longer and have been more likely to remodel or refinance rather move. That has contributed to the shortage of houses on the market in many U.S. cities.