MARKET SPOTLIGHT: TASTE OF TEXAS
a three-bedroom single-family home in Travis County rose 4 percent in 2018 to $1,812 a month for a potential annu- al gross rental yield of 6.3 percent. GOING BIG IN DALLAS Known as “The Big D,” the Dallas metro area had the largest popula- tion growth of any metro area in the United States in 2017, according to estimates from the Census Bureau. And U.S. News & World Report ranked it the 18th best place to live in the country in 2018. The number of jobs there contin- ues to grow as well, up 2.99 percent over the 12-month period ending October 2018, and rising 16.8 per- cent over the five-year period end- ing in October, according to Stewart Title Guaranty Company. But there are signs of a market cooldown in the Dallas-Fort Worth
metro, some of which were high- lighted in a Wall Street Journal article with the headline “The U.S. Housing Boom Is Coming to an End, Starting in Dallas.” Amuchastegui, the HomeRock co-founder, said he is seeing some signs of this cooldown. "It feels like they have overbuilt in Dallas. Builders are giving discounts to sell,” he said, noting that the rise in mortgage rates in 2018 has contributed to the slowdown. "The market has started to slow. Changes in interest rates affect buyers' pur- chasing power a lot.” The median sales price for the entire Dallas-Fort Worth metro area in the third quarter was $261,250, a 1.2 per- cent quarterly decrease but 5.8 percent above the price reported for the third quarter of 2017 — the slowest rate of annual appreciation since Q4 2014. Still, median home prices in Dallas-Fort
AUSTIN SCHEDULED FORECLOSURE AUCTION TRENDS
AUSTIN HOUSING STATS AT A GLANCE
YEAR-OVER-YEAR PCT CHANGE
AUSTIN SCHEDULED FORECLOSURE AUCTIONS (STARTS)
500
80%
$310,000 median home price, up 5.4 percent
450
60%
$1,812 average rent for 3 bedroom, up 4 percent (Travis County)
400
40%
350
6.3 percent potential annual gross rental yield (Travis County) $55,469 average gross flipping profit, 19.4 percent gross ROI 1,347 scheduled foreclosure auctions, up 31 percent
20%
300
250
0%
200
-20%
150
-40%
100
-60%
50
DALLAS-FORT WORTH SCHEDULED FORECLOSURE AUCTION TRENDS
-80%
-
YEAR-OVER-YEAR PCT CHANGE
DFW SCHEDULED FORECLOSURE AUCTIONS (STARTS)
2,000
100%
1,800
80%
AUSTIN: AGREAT PLACE TOWORKAND LIVE
tistics provided by Dr. Ted Jones, chief economist and senior vice president at Stewart Title Guaranty Company. In November 2018, ATTOM Data Solutions reported a 42 percent year- over-year increase in foreclosure auctions in Austin, and foreclosure auctions — which start the foreclosure process in Texas — were up 31 percent through the first 11 months of the year compared to the same period in 2017. “A few years ago, Austin was much more affordable than the rest of the U.S. You could get more bang for your buck two to three years ago. Now investors are coming into a market that’s been booming for a couple of years,” said Amuchastegui. While the main city centers are no longer affordable as they once were, he noted that investors who are
coming in to look for bargain proper- ties need to go 30 minutes outside of Austin’s city core to get more house for not as much money. The median sales price for a home in the Austin metro area in Q3 2018 was $310,000, down 1.3 percent from the previous quarter but still 5.4 percent above the same quarter a year ago. In Travis County, ATTOM Data Solutions reported a median sales price of $350,000, a 5.0 percent yearly increase and up 141 percent increase from the county’s home price trough in Q1 2008. Amuchastegui said his target price for rental properties close to the city core is $250,000 and $125,000 for those 30 minutes out- side the city center. ATTOM reported the monthly rent for
1,600
60%
U.S. News & World Report ranked it the top place to live in the U.S. for 2018. More than just the state capi- tal, Austin is the 11th largest city in the country. Everything considered, it is no wonder that Austin is a popular place for flipping as well as buying and holding rental properties. Named the eighth fastest growing city in the country in 2018 by Forbes, Austin has a very stable tenant pool to draw from thanks to population growth and low unemployment, which remained at 2.7 percent in October 2018, unchanged from 2017. The number of jobs in Austin grew by 3.88 percent during the same 12 months and is up 20.5 percent over the past five years, according to sta-
1,400
40%
1,200
20%
1,000
0%
800
-20%
600
-40%
400
-60%
200
-
-80%
24 think realty housing news report
february 2019 25
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