3/26/14: Metrostudy – SMPS San Antonio Monthly Luncheon: Planning for Growth in Northside ISD

Posted in Events | Posted on 03-25-2014 | Written by Jack Inselmann

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Planning for Growth in Northside Independent School District

With many families moving into the district and development on the rise, Northside ISD is faced with both challenges and opportunities to respond to this growth. Welcome Jack Inselmann, Regional Director of Metro Study and Dr. Brian Woods, Superintendent of Northside ISD as they discuss the growth of residential and private development within the district and the importance of passing the 2014 bond.

Wednesday, March 26, 2014

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WHERE: Marriott Plaza Hotel – 555 S Alamo Street, San Antonio, Texas (La Villita Ballroom)

AGENDA: 11:30 AM – 1:00 PM

Limited walk-in space available.

Registration cut-off is March 20th at 5:00 pm.

Sponsor pre-lunch begins at 11:15 am.

No refunds will be given once registration has closed.

No-shows will be billed/invoiced.

SPEAKERS: Jack Inselmann, Regional Director, Metrostudy

Brian Woods, Superintendent, Northside Independent School District

Register Here

February Sees Improving Traffic and Consumer Confidence

Posted in National Housing Market | Posted on 03-25-2014 | Written by Jonathan Smoke

The first read of February new home sales from the Commerce Department was released this morning.  Economists had been expecting a decline of 5 percent from January on a seasonally adjusted basis, but instead a non-statistically significant 3.3 percent decrease was reported.  Remember that last week we saw existing home sales decline moderately in aggregate but the mix of what is being sold was much better.  Looking at the new data along with Metrostudy’s more detailed traffic and sales data and recent survey data on consumers’ plans to buy a home, we continue to see encouraging signs that spring is just around the corner.

The suspicious January reading was revised down.  The year-over-year change was inconclusive.  In other words, the Census and Commerce Department data can’t really tell us if the short or long trends are changing.

Looking at Metrostudy’s data on traffic and sales per new home community, we are seeing improvement over January despite continued tough weather.  In February, the average number of traffic units per community was up 35 percent over January, with most markets covered showing positive growth month over month.  And traffic was up 6 percent over 2013. In addition, the month-to-date March traffic average continues the trend over 2013 despite the more severe weather this year.

Reported new contracts per community were again weaker in February, year-over-year, down 18 percent and only slightly  more than a third of markets seeing gains in sales year-over-year.  But, February saw a substantial improvement month-over-month of 35 percent.  Even though the year started slower in sales than 2013, the pattern appears much more normal than last year’s very strong start that tapered once spring began.  This year we are riding an increasing trend over the last three months, and have much more positive momentum going into spring.

The Conference Board reported that the Consumer Confidence Index in March increased much more than expected by 5 percent from February. The underlying data collected on intentions to purchase a home suggests strong demand for housing in the spring and summer.

For plans to buy a new home within six months, March saw a slight decline from February’s revised reading but the revision to February was a substantial change from an initially reported 4.8 percent of households indicating they are planning to purchase a home to a revised 5.7 percent.  The initial March reading was 5.4 percent.  Additionally, plans to buy a new home are up for the month and year-over-year.

Remember that all housing is local.  As I mentioned above, over a third of markets actually saw better new home new home sales in February than last year.   Areas with the highest improvements in new home sales compared to last year are Will, IL; Frederick, MD; DuPage, IL; Fairfax, VA; and Charles, MD.  Markets improving on sales the most over January include Imperial Valley, CA; Frederick, MD; Calvert, MD; Southwest Valley, AZ; and Prince George’s, MD.

Markets in Maryland, Utah, Illinois, Colorado, and Nevada have seen the biggest increases in traffic year-over-year in February.  How’s that for defying the snow and ice?

Back to the Future – Present Day Land Run

Posted in National Housing Market | Posted on 03-21-2014 | Written by Quita Syhapanya

I am no historian but there is something about the Oklahoma Land Run of 1889 that reminds me of today’s new home construction industry. In April of 1889, an Indian Territory in Oklahoma was opened up for settlement in unassigned land. It is regarded as the first and most prominent land run in American history. The unassigned land in Oklahoma was considered the most desirable unoccupied public land at that time in the United States. The Indian Appropriations Bill of 1889 was passed and authorized the president to open two million acres of land for settlement. Legal settlers could claim lots up to 160 acres in size provided the settler lived on the land and improved it. Then the settler could receive the title for the land, according to historians.

At noon on April 22, 1889 an estimated 50,000 people raced to get their desired land in our modern day Canadian, Cleveland, Logan, Payne, Oklahoma, and Kingfisher in counties in the state of Oklahoma. What happened next was the settlement of entire cities in less than a day. It is incredible considering the means of transportation the early settlers used. With some with wagons with their families, horse and carriage, just a horse, some arriving from other parts of the country by train, and even many on foot with just a bag and a shovel to settle the land they wanted. They all had one goal in mind and it was to get the land they considered prime real estate. Some had intentions of building a home for their family, others farming, some had ideas of getting back their equity from land they lost in Kansas with a fresh start in Oklahoma, but the main attraction was to create wealth with this new found land or all of the above. Read the rest of this entry »

Home Buying Binge Ends as Prices Surge: Mortgages

Posted in National Housing Market | Posted on 03-21-2014 | Written by J.W. Colvin IV

Blackstone’s American Homes 4 Rent owns roughly 840 residential properties in the Triangle, and closed on about 75% of those properties during 2013. About half were from businesses and the other half from individuals.

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Read Full Story Here

Existing Home Market Keeps Getting Better, Just Not Bigger

Posted in National Housing Market | Posted on 03-21-2014 | Written by Jonathan Smoke

Economists were expecting another slight decline in existing home sales in February.  The report this morning from the National Association of Realtors (NAR) set the initial February reading at 4.60 million, a decline of 0.4 percent.  No one should fear this as a harbinger of housing deteriorating—it’s actually a reflection of the existing home market getting better.

But better is not necessarily bigger.  Better is a result of having more of what we want to see and less of what we don’t want to see.  While the overall volume is declining slightly, we are seeing that outcome as a result of fewer investor transactions, fewer foreclosures, and fewer REO sales.  Therefore, the resulting mix is becoming more and more normal—good old fashioned, non-distressed resales purchased by consumers who intend to live in the homes.  Call it the return to the old normal.  The old normal is good for housing, and much better for the economy than what we have been living through for 7+ years.

An indicator that conditions are improving, and not deteriorating, is continued price appreciation. According to the NAR release, the median existing home price in February was $189,000, 9.1 percent up over this time last year.

We can afford to see further declines in overall volumes.  The 45-year average of single family existing home sales is a monthly annualized rate of 3.52 million; February’s rate of 4.04 million is still 14.8% percent over that level.  The abnormal level of investor activity continues to be about 9 percent of the volume, so take away that and we would still be at least 5 percent above average in volume.

Meanwhile we are not seeing the financing part of the equation hurt demand.  Mortgage rates on actual mortgages used to purchase homes are not ticking up.  The average mortgage rate on purchase mortgages has slightly declined since the beginning of the year due in part to an increasing share of adjustable rate mortgages.  At the same time, the percentage of homes purchased with cash has remained steady.  Of course with declining investor activity this does likely mean that consumers are now more likely to purchase with cash, thus explaining why purchase mortgage numbers are in decline.

Bottom line—we have strong demand that is keeping limited supply in check, as the months’ supply of existing homes remain at very low levels.   Therefore as spring brings out more home shoppers, we should continue to see housing get better.

Metrostudy’s Brad Hunter on Today’s Housing Starts

Posted in National Housing Market | Posted on 03-20-2014 | Written by Brad Hunter

Housing starts were essentially unchanged in February (-0.2% overall, and +0.3% for single-family) according to the Commmerce Department, on the heels of a sharp drop in construction in January.  New home construction has recently reflected trends in not only weather, but also in homebuyer attitudes.  Harsh winter conditions this winter slowed construction crews, and also kept would-be buyers indoors.  These factors, combined with shortages of lots and labor, have done a number on builder confidence.

Home shoppers are relatively abundant, but home buyers are relatively scarce. Home buyers have been reticent to sign on the dotted line because of a lack of confidence. On top of that, they are getting sticker shock when they go and visit the builders’ sales centers.  Builders raised prices at the fastest rate since the downturn last year. This means that home prices are a bit of a surprise to some home shoppers.

The winter selling season in Florida has been a disappointment for most Sunshine State builders, and the spring selling season, which is just beginning, has been tepid as well.  For these reasons, housing starts have been low.

As I have been saying, we expect the selling season to be “good” but not “great.”  Some builders are starting to get models ready, but the experience of February, during which sales were very slow, leaves many builders feeling anxious.  Builders in Phoenix Arizona feel that they need to see a strong showing in March and April, or their entire year’s results will be poor.

Household formation rates are thought to be rising, and job growth is improving, and these factors are key to the success of the rest of the year.

Land Strategies Have Shifted Radically

Posted in National Housing Market | Posted on 03-11-2014 | Written by Brad Hunter

During this cycle, we have done work for some of the largest land investment companies, and opportunity funds, as well as private equity companies. At one point, I thought of the idea of a Land investment client name generator. You choose one word from each column to create the name of the investment company. The first column has Black, Arch, Rock, Star, Red… you get the idea. The second column is the second half of the company name, and it contains words like: Stone, Rock, Point, Wood,… Generate your own! The point is: there are a lot of big players who are all betting on (and influencing) land prices, and all trying to anticipate the next Big Land Play.

In order to understand what is going on with builders and land strategies today, it is useful to take a look at how the world has changed in the last three years. In 2010, builders divided themselves along the lines of a debate: “land-light” versus “land-long.” These were two very different strategies for the publics — one camp feeling that the last misadventure of having a lot of land on the books was a teachable moment, and that Wall Street would reward them for keeping the balance sheet light. The other betting on tailwinds, and a revival of home prices, buying land with abandon in 2010, 2011, and 2012. The latter camp WON the bet. Clearly, the best strategy was indeed to load up on land during that time period, but it took a leap of faith that the recovery would come soon. We advised some of the largest investment firms in the country to go LONG in specific “supply-constrained” markets that we identified for them during that period, and that did indeed pay off.

Read the rest of this entry »

4/22/14: Metrostudy – Real Estate Private Equity on Land & Homebuilding

Posted in Events | Posted on 03-10-2014 | Written by Brad Hunter

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Real Estate Private Equity on Land & Homebuilding

April 22 – April 23

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WHERE: The Ritz Carlton – South Beach, Miami

AGENDA: See Full Agenda Here

SPEAKERS: Metrostudy’s Director of Consulting and Chief Economist Brad Hunter along with many other industry leaders

For More Information Click Here

3/31/14: Metrostudy – Real Estate Investors Summit

Posted in Events | Posted on 03-10-2014 | Written by Brad Hunter

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Real Estate Investors Summit

March 31 – April 1, 2014

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WHERE: Eden Roc Miami Beach, Miami Beach, Florida

AGENDA: See Full Agenda Here

SPEAKERS: Metrostudy’s Director of Consulting /Chief Economist Brad Hunter along with other leaders in the housing industry

For More Information Click Here

Rapids Ascent: Top 10 Cities for Raising Children

Posted in Raleigh - Durham Market | Posted on 03-05-2014 | Written by Metrostudy News

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What do you look for when raising a family? A 2014 study based on seven metrics (median income, cost of living, housing affordability, commuting delays, percentage of families owning a home, crime rate, and education quality) highlights the U.S. cities that are best for raising a family with young children. RealtyBizNews’ Brian Kline reports.

Read More Here