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2009 SABOR Housing Forecast

This housing forecast for Texas in 2009 highlights changing trends in the real estate industry, top economic concerns, job growth, foreclosure information, and issues to watch in the coming year.

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2009 SABOR Housing Forecast

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  1. 2009 SABOR Housing Forecast

  2. “The Recession is bad enough. A relentless new cycle is making it worse.” -Washington Post December 28, 2008

  3. If the FDA regulated the media, it would require all stories about the economy to carry this warning: “Dizziness and pangs of existential angst may result. Do not read if you suffer from gloominess or are prone to bouts of anxiety. If you are near retirement age, consult with a physician before reading.”

  4. CHANGING TRENDS • 1947-1974: Era of the Broker • “Civic Generation of Giants” • 1974 - 2001: Era of the Agent • “All Commissions and credit were the results of the agents” • 2001 - Present: Era of the Consumer

  5. ECONOMIC OUTLOOK: TOP CONCERNS • Being able to afford the cost of living • Having enough money to retire • Uncertainty about things that could affect the family budget • Healthcare • Long-term care Source: Harris Interactive

  6. TEXAS HOME PRICES AT LEAST RISK • According to PMI Group’s Winter 2009 Risk Index: “Dallas, Houston and San Antonio – least likely large MSA’s in the country to experience lower home prices in the next two years.” - Austin ranked 12th

  7. OTHER TOP RANKING TEXAS CITIES • Sherman/Denison • Victoria • Odessa • Bryan/College Station

  8. TEXAS IS TOP RELOCATION DESTINATION Allied Van Lines annual survey of Top Relocation Destinations • Texas Tops list – 4th year in a row • Number of inbound relocations in Texas exceeded • Number of outbound moves net of 1,903 • #2: North Carolina • #3: Virginia • Largest Net Losses: • Michigan, Pennsylvania, New Jersey, Illinois

  9. ANNUAL SALES TRENDS (JAN – DEC) Number of Sales Source: MLS

  10. Number of sales is down 18% year to date compared to 2007 • Down 23% from their peak in 2006

  11. NUMBER OF SALES BY PRICE RANGE(NOVEMBER) 1210 1162 1072 # of Sales 762 362 328 310 231 Source: MLS Price Range

  12. Number of homes that sold at or below $199,999 has market share of 74% • Number of houses that sold at or between $200,000 - $499,999 has market share of 22%

  13. NUMBER OF SALES $500,000 AND ABOVE(NOVEMBER) 46 40 38 27 # of Sales Nov. ‘06 Nov. ‘07 Nov. ‘08 Nov. ‘05 > $500,000 Price Range Source: MLS

  14. Number of houses that sold at or above $500,000 is down 5% from 2007 • Down 17% from November 2006 • Market share in November of 2008 – 4%

  15. NUMBER OF MONTHLY ACTIVE LISTINGS BY YEAR # of Active Listings Source: MLS Month

  16. MONTHS OF INVENTORY BY YEAR(Includes Single-Family & Condos/Townhomes) Months of Inventory Month Source: Texas A&M Real Estate Research Center

  17. Months of Inventory • Months of supply are up because the number of sales is falling • Months of supply will vary by price range • $1,000,000+ = 48 months of supply (Nov ‘08) • $500,000-$999,999 = 23 months of supply (Nov ‘08) • $250,000 - $499,999 = 14 months of supply (Nov ‘08) • $250,000 and below = 7 months of supply (Nov ‘08)

  18. Days on Market(November) 87 78 68 61 Source: MLS

  19. DAYS ON MARKET ANALYSIS • Days on market are up 12% from 2007 • Days on market increase as you move north of Loop-1604

  20. FORECLOSURE INFORMATION UP 23% 2008 COMPARED TO 2007 Foreclosure postings have climbed 41% over the past 5 years, since 2003. Foreclosure Listing Service, Inc. www.FLSonline.com

  21. YTD MEDIAN SALES PRICE PER YEAR (JAN - DEC) Source: MLS

  22. Prices are stable and are expected to continue this trend in 2009 • Price stability will vary by price range and location

  23. PRICE/SQ. FT. PER SUBDIVISION

  24. PRICE/SQ. FT. PER SUBDIVISION

  25. PRICE/SQ. FT. PER SUBDIVISION

  26. NEW HOME CONSTRUCTION Source: Metrostudy

  27. NEW HOME CONSTRUCTION (CONT.) Source: Metrostudy

  28. TEXAS JOB GROWTH IN 2008Leads the Nation from Oct07 to Oct08

  29. MAJOR METROS JOB GROWTH( Oct07 to Oct08 )

  30. JOB GROWTH PAST 12 MONTHSEnding October, 2008 Source: Texas Workforce Commission

  31. JOB GROWTH PAST 12 MONTHSEnding October, 2008 Source: Texas Workforce Commission

  32. JOB GROWTH PAST 12 MONTHSEnding October, 2008 Source: Texas Workforce Commission

  33. SINGLE-FAMILY BUILDING PERMITSNov07 to Nov08 5,856 Permits issued in San Antonio from Nov07 to Nov08

  34. HOME PRICE APPRECIATION 3Q07 to 3Q08 Best StatesWorst States N. Dakota 4.0% Nevada -20.9% S. Dakota 3.9% California -20.8% Texas 3.2% Florida -16.0% Alabama 2.8% Arizona -13.5% Oklahoma 2.8% Rhode Island - 8.0% Source: OFHEO

  35. BUYING A HOUSE FOR THE LONG TERM(Even in the roughest markets) Source: OFHEO

  36. ISSUES TO WATCH: 2009 • May be the lowest mortgage rates in our lifetime • Can the government get Fannie Mae & Freddie Mac working again? • Housing starts bottom at lowest level since WWII • Home sales volume could decline 5-10% again in 2009 due to high level of uncertainty

  37. ISSUES TO WATCH: 2009 (CONT.) • Oil and Gas prices • The economy is likely to hit bottom before the end of the year; a rising stock market will be the signal • Thousands of families will buy homes in 2009 • Government intervention is quickly becoming a problem and not a solution

  38. 81ST TEXAS LEGISLATURE • Appraisal Reform • Mandatory Sales Price Disclosure vs. Appraisal Reform • Reliance on Property taxes to fund public schools

  39. 81ST TEXAS LEGISLATURE • REALTOR Position: • Support a Constitutional amendment to give state entity authority to enforce uniform standards among ALL appraisal districts in Texas • Support legislation that changes how an effective tax rate is calculated to ensure no new revenue is realized by local taxing jurisdictions when local property values increase • ABR hearings: uniformity, consistency, and transparency • Bexar County: Consumer report and media campaign

  40. What’s In… and What’s Out with homebuyers of 2009 Source: Mark Nash, Chicago-based residential real estate author, broker and columnist

  41. SIDELINED HOMEBUYERS • Fence-sitters • “It’s time for our family to buy the new home that suits our needs.”

  42. COLLABORATIVE HOME PRICING • Seller with agent look at closed comparables, set a price, and the buyer and his agent agree/disagree • In the end, a mortgage lender and their appraiser will set the price

  43. HOUSE THERAPISTS • Independent third-party (house therapist or coach) • Brings household relationships to common ground on prickly issues such as to stay or move, how much to spend on remodeling or decorating, etc. • Outline benefits and pitfalls of overspending

  44. LOVESEATS • Consumers appreciate ease at which they can be arranged

  45. DINING CHAIRS THAT DON’T MATCH

  46. OLDER WAR-HORSE APPLIANCES • 1940’s – 1980’s • Harvest gold double ovens (1970’s) • Cold spot refrigerators (1950’s) • Dryers (1960’s)

  47. MASTER BED AS THRONE • At-home luxury hotel experience • Posh linens, pillows and mattresses • Dual master suites

  48. OBAMA ERA PAINT COLORS • Parchment Whites • Cashmere Yellows • Bright Optimistic Blues • Radiant Golds • Grassy Greens

  49. SPECIAL HOME COMPONENTS • Open Floor Plans (minimizing walls in common areas) • Eco-friendly/green building components • Larger garages • Garage floors & doors

  50. FIXER-UPPER HOMES • Buyers want to inherit new kitchens & bathrooms

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