Date Archives: March 2022

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Allen TX | 8 Posts
Buying a House | 7 Posts
Coming Soon! | 2 Posts
Coppell, TX | 1 Posts
Covid | 1 Posts
Covid-19 Update | 2 Posts
Dallas TX | 15 Posts
DFW | 5 Posts
DFW Real Estate | 30 Posts
Economy | 42 Posts
Exurb Counties | 2 Posts
Financial News | 1 Posts
Forth Worth TX | 1 Posts
Frisco TX | 5 Posts
Home Appraisals | 1 Posts
Home Prices | 7 Posts
Home Sales | 4 Posts
Home Showings | 1 Posts
Homebuyers | 1 Posts
Homeowner Tips | 1 Posts
Homeownership | 5 Posts
Housing Starts | 5 Posts
iBuyers | 1 Posts
In The News | 4 Posts
Inflation | 1 Posts
Las Colinas TX | 1 Posts
New Build | 1 Posts
Plano, TX | 2 Posts
Relocation | 1 Posts
Renting | 1 Posts
School News | 3 Posts
Taxes | 4 Posts
The Economy | 4 Posts
Zillow | 1 Posts
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Home Sales See Broad Nationwide Drop

Pending home sales declined in February for the fourth month in a row, as would-be buyers grapple with fewer, pricier homes to choose from and rising interest rates.  Contract signings dropped by 4.1% last month from January and were down 5.4% year over year with all four regions in the U.S. seeing a decline, according to the latest data from the National Association of Realtors.  "Pending transactions diminished in February mainly due to the low number of homes for sale," said Lawrence Yun, NAR's chief economist. "Buyer demand is still intense, but it's as simple as 'one cannot buy what is not for sale.'"    Yun anticipates a 7% decline in home sales this year compared to last, and forecasts that rates will hover around 4.5% to 5% for the remainder of 2022.    "It is still an extremely competitive market, but fast-changing conditions regarding affordability are ahead," he said. "Consequently, home sellers cannot simply bump up prices in the upcoming months, but need to assess the changing market conditions to attract buyers."

  • Fox Business, March 25, 2022

Builders Forecasting a Slower Second Half of Year

Rising mortgage rates are starting to take their toll on the nation's homebuilders, who are more concerned about affordability heading into the all-important spring housing market as mortgage rates surge.

Builders' sales expectations for the next six months declined a steep 10 points to 70, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The index doesn't often see such large monthly moves. Builders' view of current sales conditions fell 3 points to 86. 

Overall, builder sentiment in the market for single-family homes dropped 2 points to 79 in March. February's read was also revised lower. Last March it stood at 82.  This is the fourth straight monthly decline and the first time the index has slipped below 80 since last September, when the delta variant of Covid-19 was spreading. Anything above 50 is considered positive sentiment.     Overall sentiment is still good, but there are concerns for later this year.

  • Market Watch, March 22, 2022

Downturn Predicted in Home Sales Later This Year

The popular spring home-buying season is just ramping up. But one analyst is warning that it could be a bust.   Ian Shepherdson, chief economist and founder of research consulting firm Pantheon Macroeconomics, is predicting a dramatic fall in the pace of home sales this year. In a research note, he projected that existing-home sales will drop roughly 25% from the annual pace of 6.02 million set in February to a rate of 4.5 million by the end of summer.  

"The housing market is in the early stages of a substantial downshift in activity, which will trigger a steep decline in the rate of increase of home prices, starting perhaps as soon as the spring," Shepherdson wrote in a research note distributed Sunday.  There has been a drop in mortgage demand which typically predicts a downturn in home sales, since most buyers rely on financing to make sure a large purchase. Issues around affordability are likely to blame for the decline. 

The ripple effects of a shift in existing-home sales would be far-reaching, Shepherdson said, arguing that the pace of rent increases would eventually slow and perhaps even reverse. It also would spread to new-home sales, which he expects will likewise fall. A decrease in new-home sales would represent a downward drag on GDP, since that would implicate less demand for services tied to home-building and less spending on items like building materials and appliances. 

The bad news for any Americans who persist in trying to buy a home under these conditions is that it's less clear how this situation will ultimately impact the availability of homes for sale. Part of why home prices have surged is that there is a significant lack of inventory in the housing market, which has fueled competition for what few homes are listed for sale.  A drop in demand would seemingly lead to a boost in the inventory of homes for sale.

  • Market Watch, March 22, 2022

First Time Homebuyers Squeezed Out of the Market

As home prices soar, housing affordability is sinking to the lowest levels since 2008 and first-time buyers - who haven't benefited from rising home values and are also coping with rising rents - are being squeezed out.

First-time buyers accounted for 27% of existing home sales in January, according to the National Association of Realtors, near 2014 levels. With mortgage rates above 4%, around the highest in about three years, and expected to rise further, buyers on tight budgets may struggle even more to find homes they can afford.

  • Reuters, March 13, 2022

Home Prices Rise 27% in 4 Suburban DFW Counties

Collin, Denton, Ellis and Kaufman counties

As home costs soar across the state, four counties in Dallas-Fort Worth saw especially significant growth over the last year.  The median sale price for single-family homes increased nearly 27% in Collin, Denton, Ellis and Kaufman counties in February compared with a year prior, according to the latest numbers from the MetroTex Association of Realtors.   Collin County holds the highest median sale price at $475,000. Tarrant County led in sales, with 1,812 homes changing hands.  The sale price for local single-family homes sold by real estate agents across North Texas reached a record median of $365,000 in February, up 21% from a year earlier, according to the latest data from the Texas Real Estate Research Center at Texas A&M University and North Texas Real Estate Information Systems. It shot up $15,000 from January to February, a 4% increase.

"Everyone is hoping for a spring inventory influx, but it's unlikely it will be nearly enough to balance this market," Marissa Benat, president of the Collin County Association of Realtors, said in a statement. "We are getting buyers ready to make competitive offers so they can get moved into their home sooner than later."

Inventory is not keeping up with the high demand, and building permits are down as builders face supply chain and labor challenges.

  • Dallas Morning News, March 16, 2022

Redfin Stinks; Stocks Falling

Shares of Redfin were falling sharply Friday after the online real estate brokerage said it expected a first-quarter loss wider than analysts' estimates.  The company said it expects to report a loss in the first quarter of $115 million to $125 million vs. analysts' forecasts that called for a loss of $75 million. For all of 2021, the company lost $109.6 million.  Redfin said it expects first-quarter revenue of $535 million to $560 million. Revenue at the company's properties segment, which including iBuying — a business that rival Zillow (Z) has been exiting — was forecast at between $330 million to $350 million.  For the fourth quarter, Redfin reported a loss of 27 cents a share vs. a profit of 11 cents a year earlier. Analysts expected a fourth-quarter loss of 31 cents. 

Analysts at RBC Capital Markets downgraded their rating on Redfin shares to Sector Perform from Outperform, and lowered their price target on the stock to $23 from $60.  "We throw in the towel on RDFN as the primary points of our thesis appear broken and unlikely to show enough improvement in the coming year to warrant an Outperform rating," RBC analysts wrote in a research note.  They added that share gains at Redfin "are simply not materializing at a fast enough rate," and said "home inventory challenges" and "lack of secular story should make for slower growth."

  • Barrons, March 3, 2022

IBuyers purchased over 70K homes in 2021, doubling previous record

'IBuyers purchased 70,402 homes in 2021, more than double the previous annual high of 32,726 homes in 2019,' according to Zillow's Q4 iBuyer report.

iBuyers sold homes they bought for a median mark-up of 1.1 percent in the fourth quarter, according to the Zillow report. That's the second-lowest margin on record, down from 8.6 percent in the first three months of 2021.

Companies operating as instant buyers picked up more than 70,000 homes last year, setting a new high water mark for the industry.  A new report from Zillow looking at the final figures from 2021 found that iBuyers more than doubled their previous annual high for homes purchased in the 38 largest markets and also sold more homes. 

However, iBuyers continue to struggle to show profitability at a scale where they're valuating, buying, repairing and selling thousands of homes across the country.  The data also included homes bought and sold by Zillow Offers, which was famously shuttered in the fourth quarter after it failed to correctly valuate and sell homes for enough profit. (The segment lost the company $342 million in the fourth quarter of 2021.)

Opendoor, the largest of the major iBuying companies, bought 9,639 homes in the fourth quarter and sold 9,794. Both were major increases for the company, and it ended the year with 17,009 homes on hand.  In the same timeframe, its losses grew. It lost $191 million, more than triple the $54 million the company lost during the final three months of 2020. Opendoor lost $662 million in total for 2021.

The companies operating in their 38 largest markets picked up 1.9 percent of homes sold in the third quarter of last year, a record high. But as their market share grew, so did the time it took to get rid of the homes.  Hold times for iBuyers rose to 98 days in the fourth quarter, up from 63 days in the middle of the year. To flippers, the time spent holding onto a house is a significant operational cost that has implications for profitability. Investors pay utilities, property taxes, financing (if needed) and other costs while they still own the home.

  • Inman News, March 3, 2022

A dozen residential developments that will reshape North Texas

Almost 60,000 more single-family homes for the DFW area

Housing starts climbed by more than 20% in 2021 across North Texas, hitting a new record level of over 58,000 units. The developers of the sprawling residential communities that most of those homes are being built in are busy making room for more.  The Dallas Business Journal, with input from Dallas-based housing market analysis firm Residential Strategies Inc., has compiled a list of a dozen of those developments to keep an eye on for the rest of this year and the next decade or so. 

The list is not comprehensive, but the communities selected for this roundup were selected because they stand to have a major impact on their surrounding areas and shape how Dallas-Fort Worth morphs and where its people live for years to come.   Presented in no particular order, the selections were limited to housing developments that are in early stages and phases:

Elevon, Lavon

The Elevon housing development will bring more than 4,500 single-family homes to 1,500 acres north of Wylie and partially within the Collin County city of Lavon.  Work on the projected $2 billion community east of Plano started in early 2021 by Dallas-based MA Partners LLC.  When completed, Elevon is designed for roughly 4,700 single-family homes, about 1,000 multifamily residences, an 80-acre business park and more than 100 acres of mixed-use construction. The 300-acre initial phase will have 1,000 homes.  MA Partners has developed projects in North Texas, Austin and Houston, including communities the company has in progress in Dallas, Fort Worth and Melissa.

Cartwright Ranch, Crandall

Centurion American Development Group is developing Cartwright Ranch on more than 1,300 acres along Interstate 20 in the Kaufman County city of Crandall.  Plans call for roughly 4,000 homes on the site near Terrell.  Industrial and retail uses are also planned along with the single-family residential in the Farmers Branch-based Centurion American Development Group project.  

Painted Tree, McKinney

The new Painted Tree residential community under development in McKinney will include about 3,400 residential homesites at full buildout ranging from detached townhomes and cottages to larger single-family homes and some custom homesites.   Located north of U.S. Highway 380 near Lake Forest Boulevard, Painted Tree is one of the largest residential developments underway in North Texas. It will have 1,200 single-family homes for purchase in its first phase, and 275 built-to-rent homes will be part of the phase.  Tom Woliver, co-president and founder of Dallas-based Oxland Advisors, the developers of Painted Tree, called it a record-breaking phase one delivery.  "This may be the largest phase one in DFW in history," Woliver said. "It's a pretty aggressive phase one."

The homebuilder line-up for Painted Tree includes Trophy Signature Homes, Normandy Homes, CB Jeni Homes, Tri Pointe Homes, David Weekley Homes, Highland Homes and Drees Custom Homes.  The 1,100-acre residential community is projected to open in 2022.  Amenities at Painted Tree will include 25 miles of looped paths and trails, a 20-acre lake, 11.5-acre signature trailhead and community gathering space called "The Outpost," pools, parks, adventure playgrounds and more.

Hunter Ranch, Denton

Hillwood Communities plans to kick off construction later this year on the 3,200-acre Hunter Ranch development on Interstate 35W in Denton, which is master-planned for more than 6,000 houses.  Located at I-35W and Robson Ranch Road in far southwest Denton, the property includes the landmark Pilot Knob rock outcropping, which Hillwood plans to protect with the buildout.  The city of Denton has already zoned Hunter Ranch and the adjoining Cole Ranch to bring thousands of new homes to the area.

Hunter Ranch and Cole Ranch would encompass about 6,400 acres and bring a combined 19,350 new homes to Denton, boosting the city's housing stock by roughly 50 percent. Together, the development would include 12,900 single-family homes and 6,450 multifamily units, according to prior reports to Denton's City Council.  In addition to 6,500 single-family home sites, Hunter Ranch is planned to have 3,500 multifamily units, about 4 million square feet of commercial construction along I-35W and about 1 million square feet of retail.  Phase 1 will deliver some 800 lots in late 2023, according to Hillwood Communities' Fred Balda.

Prairie Ridge, Midlothian

The Prairie Ridge residential community under development near Midlothian will eventually add 4,600 homes to North Texas at full buildout.  The 1,500-acre master-planned community is being developed by Dallas-based Provident Realty Advisors. The site is off U.S. Highway 287 near Midlothian.  The community will have multiple amenity centers, swimming pools, walking trails and fishing ponds.  Provident Realty also developed Paloma Creek off U.S. Highway 380 in Denton County, which now has more than 5,000 homes. Provident is also developing the Tavolo Park community in southwest Fort Worth.

Pecan Square, Northlake

Pecan Square in Northlake, developed by Hillwood Communities, is the youngest and most successful master-plan launch to date for the Dallas-based residential company, according to Fred Balda, president of Hillwood Communities. It continues to draw buyers with its Town Square concept and on-site co-working space, Balda said.  Pecan Square sold 495 homes in 2021 and 509 the year prior, making it one of the top-selling master-planned communities in the nation in both years, according to John Burns Real Estate Consulting.  More than 30,000 square feet of indoor/outdoor amenity space forms the heart of the $1.5 billion community, including a large former horse arena now repurposed as the event and sports hub for residents.

At buildout, the community will consist of more than 3,000 homes. It's being built on 1,157 acres near the southwest intersection of I-35W and FM 407 in Northlake. Builders include Ashton Woods, CalAtlantic Homes, DR Horton, David Weekley Homes, Highland Homes, Perry Homes, Plantation Homes and Pulte Homes.  Hillwood's Union Park community in Little Elm also made the Burns list of top master-planned communities, with 460 homes sold in 2021 and 607 home sales in 2020.

Silo Mills, Godley

A partnership between Southlake-based Terra Manna and Prophet Equity broke ground late last year on the first phase of Silo Mills, an 840-acre master-planned community in Johnson County.   Located on FM 917 and west of Chisholm Trail Parkway, the residential development is within the extraterritorial jurisdiction of Cleburne and Burleson.  Silo Mills will offer 2,500 home sites upon buildout. The first phase will have 262 sites of 50-, 60- and 70-foot lots.   Antares Homes and Bloomfield Homes are the designated homebuilders, and model homes are anticipated for spring 2022. Prices will start in the high $200,000s.  The development will include a resort-style swimming and entertainment complex, parks and playgrounds, trails, water features and preserved green space. The Godley ISD will serve the families in Silo Mills, which will have a new elementary school.

Green Meadows, Celina

Tomlin Investments is building the $2 billion, 1,400-acre Green Meadows master-planned community on Legacy Drive one mile west of the planned Dallas North Tollway extension on the west side of Celina.  Green Meadows will have more than 4,000 home sites at buildout.   The first phase of homes is priced starting in the high $200,000s, and homebuilders on the project include Castlerock Communities, Gehan Homes, Pacesetter Homes and Stonehollow Homes.  Green Meadows, located at Legacy Drive and Punk Carter Parkway, will have a 10,000-square-foot clubhouse with party rooms and a full kitchen, workout facility, a large covered patio, pool with two giant water slides, splash pool, large deck and playground.

Legacy Hills, Celina

The massive Legacy Hills community along the future extension of the Dallas North Tollway through Celina is expected to include 7,000 single-family homes.  The development, spanning 3,200 acres, is also planned for 4,100 apartment units, 100 acres of commercial space, a 27-acre sports park, two Celina Independent School District schools, an extensive network of walking trails, seven amenity centers and a championship golf course.  Centurion American Development Group out of Farmers Branch is tackling the project.  Homebuilders committed to the Legacy Hills development include Ashton Woods, Beazer Homes, DR Horton, First Texas Homes, Lennar Homes, M/I Homes and Mattamy Homes.

Celina and Frisco, Prosper, Forney and Little Elm were some of the hottest markets in North Texas and the nation for new home construction last year.  Last year, Celina, the top residential construction market in North Texas, issued 2,516 building permits in 2021, up 35% from the 1,862 issued in 2020, which was up 49% from the 1,862 permits in 2019.

Mosaic, Celina

Prosper-based Tellus Group has purchased 686 acres in Celina for a new $1.5 billion master-planned community called Mosaic, which will have roughly 3,000 higher-end homes.  The Mosaic property is immediately north of Windsong Ranch in Denton County, just off Frontier Parkway. It's nine miles southwest of downtown Celina and roughly one mile from the Dallas North Tollway.

The community will have a nature-inspired lifestyle theme to encourage residents to connect with the world around them, said Craig Martin, president and founding partner of Prosper-based Tellus Group LLC.  "We have a long track record for developing residential communities of the highest quality while maintaining a commitment to environmental stewardship, value investing and thoughtful land planning," Martin said.  Tellus is perhaps best known for developing Windsong Ranch in Prosper, which boasts a large freshwater lagoon surrounded by white sandy beach as an amenity.

Rolling V Ranch, Rhome

The sprawling Rolling V Ranch residential development northwest of Fort Worth will accommodate 12,500 homes.   Dallas-based PMB Capital Investments has acquired more than 3,400 acres of land for the project near the intersections of State Highway 114 and U.S. 287 in Wise County, with sections of the property in the towns of Rhome and Newark.  In addition to the homes, the project includes over 300 acres of commercial property. The development is estimated to take 30-plus years to build out fully.

Monterra, Fate

Monterra is a 231-acre master-planned residential community in Fate, one of the fastest-growing cities in Rockwall County and the state.  The property, purchased by Dallas-based Wynne/Jackson real estate development firm in the third quarter of 2021, is located on Ben Payne Road, which runs perpendicular to Interstate 30 and provides direct access to the I-30 frontage road. The total project will consist of about 650 lots ranging in size from 50-feet wide to 70-feet wide.   Development began in late 2021 on the project's initial phase, which includes about 250 lots and the amenity center and the initial trail system.  Homebuilders in the project include K.Hovnanian Homes, Grand Homes, Highland Homes and David Weekley Homes, according to Wynne/Jackson.

  • Dallas Business Journal, February 25, 2022

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