in the Dallas-Fort Worth metro area declined 13 percent in November compared to a year ago, but are still up for the year, according to ATTOM Data Solutions. A total of 6,694 prop- erties in the metro area were sched- uled for foreclosure auction through November, up 3 percent from the same time a year ago. Memphis Invest partner Chris Clothier still considers Dallas a vi- brant market for single-family home investors because of all the whole- sale activity going on there. “We’re in that sweet spot of rental property. We’re not competing with everyone else who wants to be cheap and compete on price,” Clothier said. “Our price point is $150,000 to $225,000. Once you get above $200,000 you have fewer investors who want to commit that much money to a passive
investment. In reality, those houses tend to be the best performers.” When it comes to buying in Dal- las, Clothier is talking about a 2,000 square foot home with three or four bedrooms and two baths, an at- tached garage and a backyard. “We’re appealing to a higher-in- come-earning family. You get a more stable resident; therefore, your income flattens out. It’s the more expensive property that may not feel like it cash flows as well, but over a period of time it costs less to hold it,” he said. The monthly rent on a three-bed- room single-family home in Dallas County rose 4 percent in 2018 to $1,563 a month, for an annual gross rental yield of 8.9 percent, according to ATTOM Data Solutions. Plus, Clothier said investors are having a positive impact on the
room single-family home in El Paso County was virtually unchanged from the year before at $1,302 a month for a potential annual gross rental yield of 11.9 percent, according to ATTOM. “We have a lot of single-family bun- galows, detached and attached, with a yard. El Paso is abundant with oppor- tunities in all areas of the city because it’s expanding east and northwest,” she said. “The areas of central and south El Paso are seeing a lot of revitalization.” While home affordability during the third quarter of 2018 was down 3 percent from the previous quarter and down 7 percent from a year ago in El Paso County, the median sales price of $147,130 was up 3 percent over the past year and up 20 percent from the first quarter of 2013 (it’s most affordable quarter). In the El Paso metro area the me- dian sales price in the third quarter was $146,519, up 2.5 percent from a year earlier and up 50 percent from the post-recession bottom in Q2 2001, according to ATTOM Data Solutions. WEATHERING THE MARKET IN ‘SPACE CITY’ Despite the damage inflicted when it made landfall as a Category 4 hurri- cane in August 2017, Houston weath- ered Hurricane Harvey and recovered fairly quickly in many ways. Known as “Space City” as the site of NASA’s Manned Space Center, Houston is the largest city in Texas and the fourth largest in the country. And while its population growth has slowed down, the metro area is projected to exceed 10 million people by 2040. “Houston is benefiting from people moving from other states,” said Jones, the chief economist at Stew- art Title. “We lost thousands of jobs after Harvey, but recovered three months later.” According to Jones’ data, the number of net new jobs in the Hous- ton metro area were up 3.87 percent for the 12-month period ending October 2018, and up 10 percent
market by giving complete overhauls to the many homes that were built before 1985. “Investors are putting their money to good use in Dallas, making them like new. It’s a good thing for Dallas — bring- ing them up to code,” he said. “Investors want to be in this market because they think it’s a safe place for their money.” ASAFE BET IN ‘SUN CITY’ Known as the “Sun City” for its sunny days most of the year, El Paso is a popular place for investors seek- ing opportunities to get into a safe and stable market. Plus it ranked 7th among the top 10 safest metro cities in America for 2018. “We recently had an expansion of the Fort Bliss military base that has brought in soldiers and families,” said Lacy O’Leary, president of the El Paso Investors Club. “We have a very diverse economy sustained primarily by the military base, and El Paso is making an effort to be more tourist-oriented.” As of October 2018, unemployment in El Paso has dropped to 3.9 percent, down from 4.1 percent a year earlier. According to Stewart Title, employment in the El Paso metro area gained 2.32 percent net new jobs in the 12 months ending October this year, and net new jobs have risen 9.2 percent over the five-year period through October. Depending on the size of the house, O’Leary estimated that the housing inventory in El Paso is be- tween a three- and six-month supply. “El Paso is a great city for rental properties,” she said. “It’s a great place for seeking passive income and flipping opportunities. Not only are tenants abundant, but you have the ability to find plenty of distressed prop- erties and the market will buy them.” A total of 1,312 properties in El Paso have been scheduled for fore- closure auction through November 2018, up 6 percent from the same time period in 2017, according to ATTOM Data Solutions. The monthly rent on a three-bed-
DFW HOUSING STATS AT A GLANCE
EL PASO HOUSING STATS AT A GLANCE
$146,519 median home price, up 2.5 percent $1,302 average rent for 3 bedroom, unchanged (El Paso County) 11.9% potential annual gross rental yield (El Paso County) $27,813 average gross flipping
$261,250 median home price, up 5.8 percent $1,563 average rent for 3 bedroom, up 4 percent (Dallas County) 8.9% potential annual gross rental yield (Dallas County) $41,250 average gross flipping profit, 22.0 percent gross ROI
profit, 27.8 percent gross ROI 1,312 scheduled foreclosure auctions, up 6 percent
6,694 scheduled foreclosure auctions, up 3 percent
for the five-year period through the same month. Unemployment in the metro area was 3.8 percent for Oc- tober 2018, down from 4.4 percent for the same month the year before. “We have more jobs than any time in history,” he noted. Until Harvey hit in 2017, the Hous- ton real estate market was primarily overbuilt, said Jones. Prior to the storm, builders had constructed as many as 70,000 new Class A apart- ment buildings that sat unoccupied.
DALLAS-FORT WORTH SCHEDULED FORECLOSURE AUCTION TRENDS
YEAR-OVER-YEAR PCT CHANGE
DFW SCHEDULED FORECLOSURE AUCTIONS (STARTS)
100%
2,000
1,800
80%
1,600
60%
HOUSTON HOUSING STATS AT A GLANCE
1,400
40%
1,200
20%
$231,563 median home price, up 3.5 percent $1,565 average rent for 3 bedroom, up 9 percent (Harris County)
1,000
0%
800
-20%
600
9.5% potential annual gross rental yield (Harris County) $44,078 average gross flipping profit, 26.4 percent gross ROI 8,952 scheduled foreclosure auctions, up 54 percent
-40%
400
-60%
200
-
-80%
74 | think realty housing news report :: february / march 2019
thinkrealty . com / hnr | 75
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