5 of the 15 Fastest Growing Cities are in North Texas

Flag of TexasThe National Association of REALTORS® (NAR) released its list of the 15 fastest growing cities in the country. Cities in the Lone Star State made up over half of the list!

According to the NAR report, “The state of Texas is growing fast. The state has eight of the nation’s 15 fastest-growing cities and six of the top seven, according to the U.S. Census Bureau, which evaluated population increases in 2011 for cities with more than 100,000 residents.”

North Texas did exceptionally well with 5 of the 15 cities. Local cities on the list include Plano (#4), McKinney (#5), Frisco (#6), Denton (#7) and Carrollton (#14). North Texas is an excellent place to live due to low unemployment, reasonable housing prices,  good salaries, no state income tax, and a temperate climate. Many businesses are leaving other parts of the country and relocating to Texas for the same reasons.

If you’re relocating to North Texas, you can click here to begin your North Texas home search.

Photo Licensed from iStockPhoto

Having Trouble Selling Your House? Consider Leasing.

For Rent Sign in Front of Home

Even with housing prices rising in the Dallas Fort Worth Metroplex, many homeowners are still unable to sell their houses. Many of those impacted have refinanced or did 100 percent financing, others are simply in pockets of homes that have seen a correction over the past few years.

Either way, they are unable to sell at a price high enough to cover the mortgage and the closing costs. That leaves the homeowner with a couple of choices. Take to house off the market and wait a couple of years for some more appreciation or consider leasing the house.

Leasing and property management is not right for all homeowners.

If you are considering leasing your home, the first step is to do the research. You really have to know the numbers to make sure that leasing makes good financial sense. You need to know the following:

How much rent you can reasonably charge? A local real estate professional should be able to give you details on comparable leases in the area. I usually advise clients to work on an 85 percent occupancy rate meaning the property is only leased and generating rent 85 percent of the year. On a monthly basis, simply use 85 percent of the projected rent as your base rental income.

How much are your monthly costs (including the mortgage, maintenance, taxes, insurance, HOA dues)? It is critical that you accurately project these costs.  Not only are there expected monthly costs, but you have to factor in maintenance and repairs as well. I usually recommend a Residential Service Contract for houses I manage.

How much will it cost to lease? You can advertise and lease it on your own or you can hire a real estate professional to market the property for you. Real estate professionals usually include tenant screening and lease preparation in addition to marketing the property. If you decide to go it alone, you need to figure in the costs of advertising, tenant screening, and document preparation. Proper and legal leases become critial if you have to evict or take other legal action against a tenant.

How much is ongoing property management if you decide not to manage it yourself? Like everything else, the cost to have professional property management varies. Cost is not the primary factor in my opinion. What you’re looking for is a company that will find good tenants and take care of your property.

Once you know the potential income and expenses, you can do the math. Most of our owners are generating positive cash flow from renting their houses while they wait for housing prices to climb some more. Others are losing money each month, but they have decided that losing a few hundred dollars each month is better than selling at a loss or facing foreclosure. 

As mortgage approval criteria tightened, the demand for lease and rental homes have risen along with it. Not only is demand up, but rental and occupancy rates are climbing as well. If you’re having problems selling your house, you might want to look into leasing it.

Tom Branch, Broker, CDPE, SFR

Foreclosures Make Dramatic Drop in June

Foreclosure Notice

I was interviewed by Danny Gallagher with the McKinney Courier Gazette as part of his story on the dramatic drop in foreclosures in June 2011.

According to the Foreclosure Listing Service (FLS), July 2011 foreclosure filings are down 28 percent across the Metroplex, the fifth straight month of decreased filings.

The real question is “What’s driving this change?” I agree with the FLS that while our numbers continue to decline, it’s hard to pinpoint the reasons.

As I dug into the MLS statistics, I note that North Texas continues to buck all the trends. Housing prices are up 3.5 percent year over year and Collin County prices are up 5.4 percent. Higher housing prices allow people to sell, if needed.

Additionally new listings are down 17 percent and home sales are down 14 percent. What these two numbers tell me is that the number of available homes is getting smaller since there are more sales than new listings. This has a positive impact on housing prices because the supply is actually getting smaller.

Other good news is that the North Texas economy is doing well. People who are working are far less likely to default on their mortgages.

Are we out of the woods yet?  Perhaps–but there is still too much economic uncertainty at the national level.  While some areas of the country are experiencing the “double-dip”, our housing market appears to be relatively stable.

If you are a homeowner having problems paying the mortgage, help is avaialable. Contract your lender or local real estate professional.

Tom Branch, Broker, CDPE, SFR

KRLD Interview – Home Prices in North Texas

On The Air Interview

I did an interview with Mitch Carr on KRLD News on May 31st. With all the news of rapidly decreasing property values across the nation, he wanted to know what the Dallas Fort Worth market was doing.

“Texas likes to buck the trends” I told him. Property values in North Texas are up 3.5 percent and Collin County home values are up 5.4 percent.

Mitch asked the logical follow-up question, “Why?”

There are many reasons. First, Dallas has a stable economy. Second, Dallas never saw the run-up in prices so there was no bubble to burst. We do have our share of distressed properties, but the market is absorbing them at a reasonable rate.

I looked deeper into the local statistics and noted that listings are down 17 percent and home sales are down 14 percent over 2010. That’s also a good sign for housing prices. Fewer listings helps keep inventory down and prices stable.

Know the value of your DFW home.

Search the MLS for North Texas Homes for Sale.

Tom Branch, Broker, CDPE, SFR

Flipping Versus Income Producing Real Estate Investing

Modern Home for Rent

I did an interview with Bonnie Petrie on KRLD Radio last week. It was an interesting conversation. She wanted to talk about the shift away from flipping homes to buying homes to use as income producing investments. We’ve been talking about this shift for the past several years yet the emphasis has remained on flipping houses.

Why the shift? The primary reason is the lack of “easy” money that once fueled the flipping engine. Investors were able to purchase properties, rehab them, and then get them back on the market. Buyers were able to take advantage of the “easy” money, securing a mortgage and becoming homeowners.

The lending market softened with mortgage meltdown. Underwriting guidelines tightened on both borrowers and the properties. This left fewer buyers able to purchase and lenders began asking lots of questions about why a property that sold for $100k two months ago is now worth $150k.

The conditions that have made flipping properties much harder are what make investing in income-producing properties the thing to do now.

Investors can purchase properties at a discount, rehab them, and then lease them to produce a steady stream of income. I find investors with cash have a much easier time of it but money is available. Investors need to be prepared to put 20 to 30 percent down and carry the costs of rehabbing the property.

Investors need to carefully select properties. Not only is initial price important, but the cost of rehabbing the property has a huge impact on the long-term capitalization rate. This is where working with a seasoned real estate professional and having a solid pool of trusted contractors is critical.

Property management has lots of pitfalls, so investors need to outsource the management of their properties or become very familiar with state and local laws.

Looking to invest in real estate in the Dallas area? Contact us!

Lease and Rental Homes in the DFW Metroplex

Tom Branch, Broker, CDPE, SFR

There is a Crack in the Sheetrock

Crack in Sheetrock

I was out showing homes the other day to some out of state buyers. As they looked at homes, they would spot some hairline cracks in the sheetrock of some of the homes. They were concerned about potential foundation issues. Welcome to Texas!

North Texas is notorious for expansive clay soil. Why is this important? The foundations of our homes are built on top of this soil and this causes the foundations to move with changes in the water content of the soil. When the foundation moves, hairline cracks can appear in the sheetrock.

The key to minimizing the movement is to keep the soil around the foundation at a consistent moisture content. What does that mean?  Water the lawn or add soaker hoses around the foundation. Dried up soil contracts and allows the foundation to move.

Foundation movement is not the only reason that cracks appear in the sheetrock. In new construction, the studs may not have been completely dry when the home was built. As the wood dries, it shrinks and can cause minor cracking.

If you’re purchasing a home and you have concerns, hire an engineer to inspect the foundation of the home. The cost ranges from $250 and up depending upon the size and type of foundation.

Dallas Foundation Repair and Inspection

Tom Branch, Broker, CDPE, SFR

Is Your Home Ready For Plummeting Temperatures?

Here it comes! The National Weather Service is predicting low temperatures on Monday morning to be close to 20 degrees. Is your home ready?

Is Your Home Ready For Plummeting Temperatures

Copyright 2010 - Tom Branch

If your home is heated, you’ll not likely have any problems inside.

Outside, be sure to disconnect your hoses from the faucets. This allows the water to drain. While many newer faucets have freeze prevention built-in, many older faucets can freeze. If they do freeze, the pipes may fracture and the home can flood.

You can purchase covers for less than $5 at many local stores. These covers help insulate the faucet and keep it from freezing. The cost is far less than repairing damaged pipes behind the brick facade and cleaning up the water damage inside.

Tom Branch, Broker, CDPE, SFR