STATE SPOTLIGHT: TEXAS
ally paid less in 2017, however, with rental rates falling by two percent in the city. Investors found that competition drove prices up in the metro area thanks in part to swiftly rising prices as more homebuyers entered the fray in an attempt to make a purchase before the end of the year. Local tech companies like USAA, a financial services company, and incoming tech companies like Dizzion Inc. (moving from Denver, Colorado) and Freedom Security Alliance (moving from the San Diego area), created significant additions to the local population of talented high-tech and IT professionals, many of whom drove up prices as they fought for homes.
nio in 2017 was fierce,” said Mitch Stephen, owner of local investment group 1000Houses.com and author of the three-part series of books, My Life & 1,000 Houses. “Last year was one of the hardest years in my career to find homes in the San Antonio area. That being said, an astute professional can still find their share, and we were able to locate more than 77 properties despite the hot mar- ket,” he added. “Honestly, we are hoping for the market to cool in 2018!” •
SAN ANTONIO San Antonio also made Forbes’ “most overvalued” list in 2017, with analysts projecting an overvaluation of nearly 19 percent despite median home values of just over $202,000. According to the San Anto- nio Board of Realtors (SABR), home sales volumes rose consistently throughout 2017 despite concerns that overvaluation might slow the market. SABR reported that in most areas, prices were rising, with average sales prices hovering around a quarter of a million dollars, but in the Travis County area north of the city, median prices fell in the last part of the year to about $340,000. Zillow chimed in as well, indicating that San Antonio homes gained 7.1 percent in value over the course of 2017, translating to $125.4 billion. Renters in the area actu-
upgrades we’re doing in our rehabs,” he said. “What we are doing in a $120,000 house, for example, to bring it up to market standards is what we used to do for nothing less than a $150,000 home. We’re using higher quality materials and the work requires more skill. “For example, we’re laying tiles in a brick pattern instead of just plain squares. With labor in our industry costing more everywhere, it definitely translates to more expensive renovations. We are also seeing more investors buying older homes from as far back as the 1940s or even the 1920s, and completely gutting them, moderniz- ing them inside and out, and then renting them out or selling them for top dollar.” Investor Insights: In DFW, Johnson noted that “high- er-end” upgrades, even in rentals, now include fashionable granite counter tops (instead of laminate) and porcelain tiles, as well as redesigning interior layouts to create open-concept homes. According to Think Realty coach Pamela J. Goodwin, founder and CEO of Good- win Commercial, a boutique commercial real estate firm based in the DFW area, the stretch of land between DFW and the Oklahoma state line is ripe with opportu- nity for real estate investors. “Following the roads, whether it’s the interstate or the new toll road being built, is the best way to spot
where new growth in commercial and residential is happening,” she said. “First come the homes; then comes the retail.” Crowe, who is based in the DFW area, recommended local investors take a close look at their investment strategies before taking action, even if those tactics were successful in the past. “Local investors may still be in sticker shock that prices have gone up as fast as they have given how steady the DFWmarket has historically been,” she said, adding that rising insurance rates and property values are affecting CAP rates for many investors. “More and more, we’re looking at out outlying areas, like Deni- son, Texas, where rent is afford- able for our tenants and where in- vestors with capital can get good value,” Crowe noted. “We recently sold 21 properties in Denison to
Carole VanSickle Ellis is the editor of Think Realty Magazine. She can be reached at firstname.lastname@example.org.
Investor Insight: “The competition in San Anto-
Don't miss your chance to hear from dozens of Texas real estate experts at the Think Realty National Conference & Expo on February 24-25, 2018. The event will feature a local market insights panel moderated by All Star Home Group Realty team leader Cathy Crowe as well as local investors specializing in all sectors of the industry. Reserve your space at https://thinkrealty.com/ events. DFW’s meteoric rise in home prices is fin- ished, although she did suggest that prices might start a “slower spiral” later in 2018. Hear directly from Crowe and other Texas real estate veterans and experts at theThink Realty National Conference & Expo at the end of this month (see above for details).
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a California real estate inves- tor. They will probably have no trouble finding tenants who work in DFW to rent those properties. More and more people are accepting longer com- mutes to work. In fact, a lot of employers are starting to offer commuter pay to make working there more attractive.” Crowe added that she does not believe
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