side the city center. ATTOM reported the monthly rent for 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 continues to grow as well, up 2.99 percent over the 12-month period ending October 2018, and rising 16.8 percent over the five-year period ending 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 Worth have increased 119 percent from the post-recession bottom price of $119,253 in the fourth quarter of 2012. The slowdown’s silver lining is improving affordability. ATTOM Data Solutions reported a 1 percent improvement in housing affordabil- ity in Dallas County during the third quarter of 2018, although affordabili- ty was still down 10 percent from the same quarter the year before. "Dallas is a very business-friendly city. The houses are very affordable. That's the draw for Dallas,” Amu- chastegui said, noting that most of what his company buys are prop- erties sold via foreclosure auction. “Ninety percent of what we do is buy on the courthouse steps. We buy and sell about 20 percent then use the profit as equity to refinance the other 80 percent that we keep as rentals." Scheduled foreclosure auctions
AUSTIN SCHEDULED FORECLOSURE AUCTION TRENDS
YEAR-OVER-YEAR PCT CHANGE
AUSTIN SCHEDULED FORECLOSURE AUCTIONS (STARTS)
80%
500
450
60%
400
40%
350
20%
300
250
0%
200
-20%
150
-40%
100
-60%
50
DALLAS-FORT WORTH MEDIAN PRICES & APPRECIATION
-80%
-
MEDIAN HOME SALES PRICE
YEAR-OVER-YEAR PCT CHANGE
50%
$300,000
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-
40%
$250,000
30%
$200,000
20%
$150,000
10%
AUSTIN HOUSING STATS AT A GLANCE
$100,000
$310,000 median home price, up 5.4 percent $1,812 average rent for 3 bedroom, up 4 percent (Travis County) 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
0%
$50,000
-10%
-20%
$-
72 | think realty housing news report :: february / march 2019
thinkrealty . com / hnr | 73
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