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Collin County real estate is a hot commodity

Photo courtesy of CNN.

Robert Francis
rfrancis@bizpress.net

For Collin County real estate agents selling new homes, it’s a sellers’ market.
Property values are up, new housing inventory is down and the time a new home is on the market is…well…don’t sleep on the idea of buying that dream home you toured too long.
“Collin County has been one of the most robust markets in North Texas,” said Ted Wilson, principal at Dallas-based Residential Strategies Inc.
New housing starts in Collin County topped 5,500 in 2013, well up from 2011’s 3,611, according to figures from Residential Strategies.
Even the larger cities showed increases; Frisco, for instance, had 2,214 permits in 2013, up from 1,573 in 2012.
But the generally undeveloped areas of the county are really showing strength. Prosper set another record in issuing single family permits, finishing 2013 with 486, a 115 percent increase from five years ago, according to Chris Copple, director of development services for the city.
“The strength of our housing market continues to show steady resilience, trending upward on a progressive incline year to year,” he said. “Since 2008, we’ve seen an average yearly increase of about 15 percent in the numbers of permits issued. Even in the tough financial environments of 2009 and 2010, the town held its own.”
In February, Ross Perot Jr.’s Hillwood Communities announced Union Park, a 787-acre master-planned community located along the U.S. Highway 380 corridor in Little Elm. The $600 million project is scheduled to break ground in spring 2014.
Approximately 2,400 single-family homes are planned for the community. The first phase of Union Park will feature 300 homes in a range of lot sizes. A wooded, 30-acre park featuring open greenbelts, ponds, trails, an amenity center and an amphitheater will serve as the central gathering spot for the community.
“People really want open spaces more than anything else in a master-planned community,” said Fred Balda, president of Hillwood Communities. “We were very deliberate in building this community around more than twice the required green space to promote a small town feel and encourage socializing.”
“There is a large consumer demand in D-FW that wants the high-end amenities like those at Union Park without a million dollar price point,” said Residential Strategies’ Wilson. “Union Park gives families a sense of community and will encourage outdoor activities that the whole family can enjoy.”
While all that points to a strong residential real estate market for Collin County there are some trends that may slow the rate of growth.
Lot prices, for instance, are up, sometimes double what they were a few years back. And while mortgage rates are still low, they are up from the low point of a few years ago. Those factors may lead to some sticker shock among some potential homebuyers, not just in Collin County, but in all of North Texas.
That's the word from David Hicks, HomeVestors of America co-president. HomeVestors, known for its “We buy ugly homes,” marketing campaign, does a quarterly survey to identify markets that will be good rental markets and where home prices are likely to increase at a good rate over the next few years. The latest data suggest there will be a housing shortage that may boost home prices in some areas, particularly Texas.
Hicks noted that new quarterly data compiled by Local Market Monitor identify the markets where conditions are right for home prices to rise, making them prime targets for investors in single family homes as rental properties and that three Texas cities lead the list – Fort Worth, Houston and Austin, in that order.

."We think there are a number of markets nationwide that will run up against a housing shortage that will boost home prices even higher than most of us initially expected as the spring thaw gets under way," he said. "In all the major markets in Texas, we are experiencing an actual shortage of properties for sale. Our franchises tell us they are quickly selling every house they can buy."
However, according to a new Freddie Mac gauge that weighs criteria including mortgage applications, income ratios and employment, the most stable metro areas for home prices as of January were three Texas cities – San Antonio, Houston, and Austin – followed by New Orleans.

The Freddie Mac measure assesses the stability of each market relative to its historical range, based on home purchase applications, payment-to-income ratios, local employment and the proportion of on-time mortgage payments.
Exacerbating a possible shortage of new homes is a shortage of workers to build new houses.
While the Texas oil boom is pumping millions of dollars into oil-patch communities in West and South Texas, it also is drawing away labor needed to build houses, roads and commercial establishments, say construction industry officials.
“It creates a shortage of workers,” says Phil Thoden, president and CEO of the Austin chapter of the Associated General Contractors of America. He points out, for example, that a welder “working for the oil and gas industry” is not available “to put up steel in a commercial building.”
Scott Norman, executive director of the Texas Association of Builders, says Texas’ surging construction industry is the envy of the nation. Homebuilders who comprise the association’s 10,000-strong membership have been enjoying a hefty upswing since Texas began an unwavering rebound from the national recession several years ago.
“We’re glad we’re in Texas,” said the Austin-based official, pointing out that Texas is leading the nation in housing starts for the fifth year in a row. “Folks are continuing to move to Texas. They all need somewhere to live. From that perspective it’s good for folks that are in the business of housing people.”
But, at the same time, he says, the steady onslaught of population in the nation’s fastest-growing state also presents “a lot of challenges,” putting pressure on Texas legislators and policymakers to continue upgrades in roads, water and other infrastructure.
“We have challenges with water supply moving forward (and) the transportation system,” Norman said. “Both of those …affect us directly because it’s going to affect our members’ ability to develop and build new subdivisions.”
While the potential for home price increases are there, it didn’t show up in January.
U.S. home prices dipped in January for the third straight month, likely because of slower sales in recent months caused by cold weather, a limited supply of homes and higher mortgage rates.
The Standard & Poor’s/Case-Shiller 20-city home price index, released March 25, declined 0.1 percent from December to January, the same drop as the previous two months.
In Dallas-Fort Worth, the index declined by 0.2 percent. That figure is not adjusted for seasonal variations, so the dip partly reflects weaker winter sales.
– The Associated Press and Dave Montgomery contributed to this report.
 

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