January 2022 - Republic Title

2021 DFW Real Estate Year-End Stats at a Glance

We’ve taken our monthly stats-at-a-glance reports from January through December of 2021, totaled, averaged, and compared the data to the numbers from 2020. The result is an annual report of the DFW area real estate market in 2021. The annual totals reiterate the lack of inventory we saw in 2021, indicating a very strong seller’s market. This drove up lists prices by an average of 20% across the five counties reported on, for an average list price of just over $442k. While list prices steadily rose as the year progressed, so did average price per square foot, averaging $187 in the five counties. It sure will be interesting to see how 2022 plays out!

For more stats information, pdfs and graphics of our stats including detailed information by MLS area and condo stats, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

December 2021 DFW Area Real Estate Stats

December 2021 stats are here and we have the numbers! Let’s see how the DFW real estate market ending 2021. Active listing fell slightly from November, but that is to be expected over the holiday season. As expected due to the lack of inventory, the overall number of sales is down in all counties while the days on market continues to drop. Not surprisingly, the price per square foot in the metroplex continues to rise in all five counties with Collin County seeing the biggest increase up 33% over last year, followed by Denton county at 26%.

Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. We encourage you to share these infographics and video with your sphere.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

January Landscape & Gardening Tips & To-dos

Need help planting a successful garden or landscape? Here are some January planting tips from the Dallas Arboretum horticulture staff and the Dallas County Master Gardeners that can help keep your home garden looking beautiful this winter, whilst having it ready and set up for success in Spring.

January’s focus is prep! Decide what plants need to be replaced or moved this month and create a wallet list of plants to watch for as you begin to peruse the nurseries in preparation spring.

Planting:
– Plant annual color in beds and containers during days with warmer temperatures. Fertilize annuals regularly with a complete, water soluble fertilizer.
– Continue to plant new shade trees, fruit trees, and evergreen shrubs. Mulch root areas
– Continue to transplant established trees and shrubs while they are dormant.
– Finish planting pre-chilled tulip and hyacinth bulbs if you did not do so in December.
– Plant any bare-root plants including fruit and nut trees as well as roses.
– Continue planting pansies, snapdragons, kale, Swiss chard and other cool season annuals. Plant onion transplants anytime soil is ready. Plant spinach and snap peas mid to late month.
– Sow seeds in flats or containers to get a jump on the season. Petunias, begonias and impatiens can be started now.
– Tomatoes, peppers and beans can be started in late January into mid-February indoors, in a hot bed or heated greenhouse.
– Spring blooming bulbs can still be planted until mid-January in order to give them enough time to establish roots and bloom.

Pruning:

– Prune with a purpose. Do not “top” any trees or shrubs including crape myrtles. Never leave stubs. Cut flush against remaining branches on shrubs and along the branch collar on trees. Peach and plum trees should be pruned to encourage horizontal branching, remove any strongly vertical shoots.
– Continue to prune evergreen trees such as magnolias, live oaks, and wax myrtles to minimize possible ice damage.
– Re-shape evergreen shrubs and shade trees, as needed, during the winter dormant period.

Plant Care:

– Mulch new plantings to help retain moisture and insulate roots against cold temperatures.
– Keep frost cloth handy to cover any tender annuals, perennials or new plantings since January is usually the coldest month in North Texas.
– Check houseplants for insect pests such as scale, mealy bugs, and spider mites.
– Continue to mulch leaves from the lawn and remove debris from turf areas to reduce disease and insect problems.
– Continue to water lawn once every three weeks or so, if you have not had at least 1” of supplemental rain.
– Watch for scale insects on camellias, hollies, and euonymus.
– Water outdoor landscape plants, as needed, when the soil is dry. Water plants thoroughly before a hard freeze to reduce chances of freeze damage.
– Fertilize pansies and other winter annuals about once a month throughout the winter.
– Protect tender plants from hard freezes.
– Till and prepare new planting beds when soil is workable. Work in organic material. Add compost and mulch to all beds.
– Recycle your Christmas trees. Contact your city’s waste disposal department for sites. Know your soil by getting a soil test through Texas A&M.

Planning:
– Plan your early spring vegetable garden. Sow seeds for spring annuals and veggies, inside, per instructions based on the last frost date for your area. They need full sun and temperatures around 65 to 70 degrees (watch out for cold window sills!).

NTREIS Phasing Out Areas and Subareas

Over the next few months NTREIS users will be experiencing the phasing out of areas and subareas. NTREIS is rebuilding the Matrix system to be in compliance with the Real Estate Standards Organization (RESO) data dictionary. Through this process, the area/subarea fields will not be included. The decision was made over two years ago to remove areas and subareas. The reasons for doing so are many:

Area boundaries are subjective; some are school boundaries which change, others are neighborhood or street boundaries.
Area identifiers are not useful to consumers.
The vendor that updated the geo boundaries for our area maps is no longer available for that service.
Subjective area boundaries can be likened to the “redlining” maps of old and any suggestion of discriminatory steering has no place in the future of this industry.

NTREIS has been encouraging the use of the digital mapping layers and custom shapes for searches—consumers have become comfortable with digital mapping and agents should use the same tools their customers use. However, many of NTREIS statistics were based on area identifiers and they are embedded in several tools, so it has been a long processes to get to the point where they can be phased out.

The steps to be taken over the next 60-90 days are:

Texas A&M has been using other geo identifier in working with statistics for the Texas REALTORS® Data Relevance Project.
The area breakdowns will be removed from the NTREIS statistical reporting.
NTREIS Trends will be removing the Area criteria option for creating reports.
Area/Subarea fields are being removed from IDX data feeds and we are working with those vendors for Broker tools.
Any remaining NTREIS products that use Areas in search criteria are in the process of removing those.
Notifications to users will be sent out notifying them that they need to remove that search criteria from saved searches.
Area/Subarea will be removed from the Realist auto-pop.
Area/Subarea will be removed from the input screen and displays.

Make sure to join Annette Carvalho-Jordan, VP/Real Estate Technology Trainer, for our Mapping Tools in Matrix class on January 12th. In this class, we will explore all the map tool functions in Matrix so you can create powerful searches for your clients who want to live in specific neighborhoods, near points of interest or certain distances to where they work.

Courtesy of MetroTex Association of Realtors

Texas Housing Insight October 2021

Texas housing sales slowed in October but trended upward amid continued supply constraints. Along with higher mortgage interest rates, double-digit home-price appreciation chipped away at housing affordability. Elevated demand persisted as homes averaged roughly one month on the market. On the supply side, single-family housing permits increased for the second consecutive month, but housing starts declined as lumber and other input material prices rose. The relatively low level of inventory available for sale is the greatest challenge to Texas’ housing market. The state’s diverse and expanding economy, favorable business policies, and steady population growth, however, support a favorable outlook.

Supply¹

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, flattened nationally and within Texas due to decreased construction values despite employment and wage gains during October. The Texas Residential Construction Leading Index ticked down as weighted building permits decreased, signaling a potential slowdown in future activity. Among the major metros, weighted building permits and residential starts increased, except in Dallas-Fort Worth (DFW), where there was a decrease in both metrics. Inflationary pressures, however, tempered economic expectations and may slow construction activity in coming months.

Single-family construction permits accelerated 4.5 percent in October, increasing for a second straight month. Houston topped the national list for seven consecutive months with 3,887 nonseasonally adjusted permits after registering a healthy seasonally adjusted increase. DFW ranked second on the national list and posted a double-digit monthly expansion to 3,523 permits. Meanwhile, Austin and San Antonio issued 1,480 and 872 permits, respectively. On the other hand, Texas’ multifamily sector registered incremental growth as issuance shifted from two-to-four units to five-or-more units. The metric ticked up just 0.7 percent on a monthly basis but elevated 12.3 percent year to date (YTD) relative to the same period last year.

Despite strengthening economic conditions and ample housing demand, total Texas housing starts declined as lumber prices increased 17.9 percent in October. Single-family private construction values, however, increased slightly in real terms, but the metric continued to trend downward in Texas’ major metros. The majority of the statewide growth was attributed to the elevation in Austin and DFW values.

Texas’ months of inventory (MOI) normalized at 1.6 months as sales activity and new listings slowed. A total MOI around six months is considered a balanced housing market. Supply remained relatively constant across all price cohorts except in the upper and lower extremes. For example, inventory tightened for homes priced less than $300,000 and for luxury homes (those priced more than $500,000), diminishing to 1.2 and 2.5 months, respectively.

Inventory in the major metros decreased slightly in October, except in Houston, where MOI flattened at 1.7 months. Supply remained the most constrained in Austin at 0.9 months, while San Antonio’s MOI lowered to 1.7 months. North Texas’ metric declined at the largest rate, falling to 1.1 and 1.2 months in Dallas and Fort Worth, respectively. Depleted inventory remains a major headwind to the health of Texas’ housing market.

Demand

Total housing sales flattened in October, dipping 0.3 percent amid rising mortgage interest rates and dwindling inventory. The slowdown was attributed to historically low activity for homes priced less than $200,000. On the other hand, the number of homes sold priced between $400,000 and $499,999 reached an all-time high. Reduced transactions at the lower end of the price spectrum slightly outweighed the uptick in the higher price ranges.

Housing sales decreased in all metro areas except for in Dallas. San Antonio reflected statewide fluctuations across the price spectrum as total sales declined 1.5 percent. In Houston, the metric dropped 0.9 percent, while activity in Austin contracted 3.2 percent. Sales in North Texas slowed overall, decreasing 3.4 percent in Fort Worth. However, transactions in Dallas increased 1.9 percent due to strong gains for homes priced between $200,000 and $299,999.

Texas’ average days on market (DOM) rose marginally to 32 days, confirming robust demand and attributing sales decrease to limited inventory. Austin’s DOM improved by one day, averaging 19 days, while North Texas’ metric also increased, selling after an average of 23 days in Fort Worth and 27 days in Dallas. San Antonio’s and Houston’s metrics registered narrow gains, matching the statewide average of 32 days in both metros.

With monetary policy possibly normalizing, starting with the Federal Reserve Bank’s tapering of bond purchases, economic growth forecasts for the coming years point to a slow return to the long-run structural trend as the initial and strongest stage of recovery likely reached its peak. It’s becoming clearer that inflation pressures will be permanent. The ten-year U.S. Treasury bond yield ticked up for the second consecutive month to 1.6 percent², while the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate elevated to 3.1 percent. The median mortgage rate for the typical Texas homebuyer remained constant at 3.1 percent for GSE loans in September³ and ticked down ten basis points to 2.9 percent for non-GSE loans. Although mortgage interest rates rose over the past two months, Texas home-purchase applications increased in October but fell 6.5 percent YTD. Meanwhile, refinance applications declined on a monthly basis and were down 24.6 percent since December 2020. Year-over-year (YOY) purchase and refinance applications diminished 9.8 and 10 percent, respectively, largely due to baseline effects after a surge of remodeling and refinancing in 2020. Increasing rates, lenders adding more requisites, and the shrinking pool of households able to refinance are likely impacting refinance activity as well. (For more information, see “Finding a Representative Interest Rate for the Typical Texas Mortgagee“.

In September, the median loan-to-value ratio (LTV) constituting the “typical“ Texas conventional-loan mortgage dropped from 87.8 a year earlier to 84.5. The debt-to-income ratio (DTI) elevated from 35.4 to 36.4, while the median credit score increased ten points to 749 over the same period. The LTV GSE borrowers decreased from 85.4 last September to 85.9; however, DTI grew from 35.4 to 36.4. Overall improved credit profiles reflected the fact that only the most qualified housing applicants were able to outbid their competition for their desired homes amid exceptionally tight inventories and robust demand.

Prices

Average home prices were boosted by the ongoing shift in the composition of sales toward higher-priced homes due to constrained inventories at the lower end of the market. The Texas median home price rose for the tenth consecutive month, appreciating 1.4 percent on a monthly basis and 15.5 percent YOY to a record-breaking $312,700 in October. The share of luxury homes sold in Austin continued to expand, contributing to the 24.4 percent YOY surge in the median price ($453,600). The Dallas metric ($383,100) increased 17.6 percent, while annual price growth in Fort Worth ($319,600) shot up to 18.2 percent. Houston’s ($309,100) and San Antonio’s ($303,000) metrics elevated 15.1 and 18.4 percent, respectively.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. Texas’ index corroborated significant home-price appreciation, accelerating 18.6 percent YOY. The repeat sales index also accelerated in the major metros, except in Austin and Houston, as annual price growth reached recent peaks. The metric dipped to 35.1 percent in Austin, followed by Dallas and Fort Worth with 24.1 and 22 percent home-price appreciation, respectively. San Antonio posted an 18.4 percent annual hike, while Houston’s index decelerated to 14.6 percent. Increasing home prices pressured housing affordability, particularly in an environment of low real wage growth.

Single-Family Forecast

The Texas Real Estate Research Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Only one month in advance was projected due to uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Texas sales are expected to recover 2.7 percent in November after October’s decline. The metric is estimated to rebound 2.5 and 2.4 percent in Austin and Houston, respectively, with additional increases of 4.9 percent in DFW. Transactions in San Antonio, however, are forecasted to slow further to -3.6 percent. Sales through November 2021 should accelerate relative to the same period in 2020. On the supply side, inventories reached a trough in May 2021 and should improve in the coming months. Listings seemed to reach a trough in May and are rising, easing some of the price pressures amid a rise in new and pending listings. (For more information, see 2021 Mid-Year Texas Housing & Economic Outlook).

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners behind on their mortgage payments increased to 6 percent nationally and 9 percent in Texas (Table 2). Houston and DFW hovered above the national average at 13 and 8 percent, respectively. The share of Texas respondents who were not current and expected foreclosure to be either very likely or somewhat likely in the next two months declined from 27 percent in September to 14 percent in October (Table 3). The proportion of delinquent individuals at risk of foreclosure fell in North Texas, decreasing from 20 to 18 percent, and declining 28 percentage points to 16 percent in Houston. The Federal Housing Finance Agency’s foreclosure and REO eviction moratoria for properties owned by Fannie Mae and Freddie Mac (the Enterprises) expired Sept. 30, 2021. Continued stability in the housing market is essential to Texas’ economic recovery.