First quarter 2013 sets aggressive pace for Texas real estate

Today, the Texas Association of REALTORS® released the 2013-Q1 edition of the Texas Quarterly Housing Report, showing surging demand for Texas homes at the start of the year as well as rising prices and shrinking inventory. Fueled by Texas’s population and job growth, the report bodes well for the summer selling season.

Shad Bogany, chairman of the Texas Association of REALTORS®, commented: “2012 was a strong year for Texas real estate and, based on these first-quarter results, 2013 looks to be even stronger. We’ve heard a lot about the growth of Texas and now we’re starting to really see the impact on our real estate market.”

As featured in the report, 53,937 single-family homes were sold in Texas in the first quarter of 2013, which is 17.53% more than the same quarter of the prior year. Of the 48 markets included in the report, 40 markets featured increases in sales, indicating the surge is broad-based throughout the state.

The median price for Texas homes in 2013-Q1 was $158,000, which is 7.04% more than the first quarter of 2012. In the same timeframe, the average price was $204,718 – that’s 6.87% more than 2012-Q1. The median price for Texas homes has steadily increased, exceeding or matching the price of the prior year every quarter since the Texas Quarterly Housing Report began in 2009.

“Historically, the median price for Texas homes has increased about four percent each year and we usually see the biggest jump in price between the first and second quarters,” said Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University. “So, with price increases already in the range of seven percent in the first quarter, we could see Texas homes increase in value significantly this year.”

However, Gaines also offered a strong caution, “We’ll only realize our potential for increased sales volume if more sellers enter the market and start listing their properties, increasing the inventory of homes for sale.”

In first quarter 2013, the market featured 4.2 months of inventory, which is 1.7 months less than the prior year. That is significantly less than the 6.5 months of inventory cited by the Real Estate Center as a market in which the supply of homes is balanced with demand.

Gaines explained, “There is clearly demand for Texas homes and rising prices are encouraging more homeowners to consider listing their properties. However, if a homeowner wants to move up, they must be able to find a property to move to, so more supply is needed to capture the growth potential in the market.”

Gaines continued, “In the coming months, I expect we’ll start to hear national news reports about increasing sales in other markets, possibly exceeding those in Texas. That’s because other markets boomed in the mid-2000s and busted in the late 2000s, meaning they need dramatic increases in sales volume and price to recover. I call that an ‘echo boom’ and it’s more indicative of market fluctuations than fundamentals. That never happened in Texas, so the increases you’re seeing in our state are indicative of true increases in demand, driven by population growth. Assuming we continue to add jobs as we have recently, that will make our increases more sustainable.”

The Texas Association of REALTORS® has been working to help the state absorb that growth, advocating for homeowners at the Texas Capitol during the current legislative session. Texas REALTORS® have advanced ideas on improving infrastructure for transportation and water in the state as well as consumer-protection provisions in the property-tax loan industry, mortgage lending, and the property-appraisal process. The 83rd Texas Legislature regular session ends May 31.

Chairman Bogany concluded, “The word is out that Texas is a great place to live and these results are further evidence of that. Now, Texas REALTORS® are on a mission to ensure that remains the case and help our state provide for the needs of its homeowners today and far into the future.”

The Texas Quarterly Housing Report is issued four times per year by the Texas Association of REALTORS® with multiple listing service data compiled and analyzed by the Real Estate Center at Texas A&M University.

About the Texas Quarterly Housing Report

Data for the Texas Quarterly Housing Report is analyzed by the Real Estate Center at Texas A&M University using statistics compiled from 48 multiple listing services in markets throughout Texas. The report includes data for single-family home sales over the course of one quarter and is scheduled for release by the Texas Association of REALTORS® on the following dates each year (or the next business day): Feb. 1, May 1, Aug. 1, and Nov. 1. This report is issued to the media, local REALTOR® organizations, and published on the Texas Association of REALTORS®’ consumer Web site, TexasRealEstate.com.

About the Texas Association of REALTORS®

With approximately 80,000 members, the Texas Association of REALTORS® is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS® and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.

Monday Market Update

Overall, the economic data came in pretty close to expectations this week, and Greece successfully reached a debt deal with private bondholders. With a lack of surprises in the economic news, mortgage rates ended the week nearly unchanged.

While it was a little stronger than expected, the important monthly Employment report had little impact on mortgage rates. Against a consensus forecast of 200K, the economy added 227K jobs in February, and revisions to prior months added an additional 61K jobs. The Unemployment Rate remained at 8.3%, as expected. Average Hourly Earnings, a proxy for wage growth, increased at a 1.9% annual rate. With gains above 200K for the first three months of the year, the recent pickup in job growth and the decline in Jobless Claims reflect solid improvement in the labor market.

Greece took a necessary step along its path to receive a much needed financial aid package. Private bondholders agreed to the proposed Greek bond swap deal, which will help reduce its debt burden. Without the deal, Greece was at risk of a potentially disastrous full default on its debt, which may have forced it to leave the European Union.

The big news next week will be Tuesday's Fed meeting. Investors will be trying to determine the likelihood of additional Fed easing. The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production, Consumer Sentiment, Import Prices, Philly Fed and Empire State will round out a busy schedule. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday.

Copyright @ 2012 MBSQuoteline

Monday Market Update :: What's going on with Greece...

With little US economic news this week, investors focused most of their attention on Europe, where Greece is attempting to avoid a debt default. A lack of progress in Greece late in the week caused a minor flight to safety, and mortgage rates ended slightly lower than last week.

For most of the week, it appeared that Greek officials were on track to deliver a package of austerity measures required for Greece to receive additional aid. The negotiations took an unexpected step backward on Friday, however, as Greek political leaders agreed on an austerity package on Thursday, but European Union (EU) officials stated that Greece will not receive additional aid until the Greek Parliament passes the package. Given the resistance among the Greek people, this is not a sure thing, and it extends the uncertainty about whether Greece will be able to avoid a debt default. As a result, investors shifted to relatively safer assets, including US mortgage-backed securities (MBS), which helped mortgage rates and hurt stocks.

In a light week for US economic data, the Jobless Claims report stood out. Weekly Jobless Claims unexpectedly dropped to 358K. Following several years of readings consistently above 400K, weekly claims have been mostly under 400K over the last couple of months. In the past, readings in this range have been consistent with an improving labor market. In January, the Unemployment Rate dropped to the lowest level since February 2009, and the recent Jobless Claims reports provide additional evidence that the labor market is moving in the right direction.

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Wednesday, along with the detailed FOMC Minutes from the January 25 Fed meeting. Housing Starts will be released on Thursday. Import Prices, Philly Fed and Empire State will round out the schedule.

Copyright @ 2012 MBSQuoteline