TIGHTEST DFW APARTMENT MARKET IN DECADE

Provided By TAMU Recon Center


Dallas-Fort Worth’s robust economy is generating new households, creating the tightest apartment conditions in over a decade and facilitating healthy rent growth.

According to Marcus & Millichap's Apartment Research Market Report for third quarter 2012, employment gains in the Metroplex will approach 3 percent this year, more than the national rate of 1.7 percent.

"With business booming, job seekers will flock to the area from some late-recovery markets in the Midwest and the West Coast," notes the report. "As a result, leverage in lease negotiations will remain firmly on the side of apartment operators through the end of the year, spurring strong revenue gains.

"Some headwinds are forming, however. Year over year, home sales are up 20 percent, an indication that more renters are transitioning into single-family homes. Foreclosure activity, meanwhile, is up more than 10 percent from second quarter 2011, mitigating attrition from apartments to the housing market. As foreclosure activity begins to abate and new construction accelerates next year, apartment operators may have to react quickly with concession offerings to maintain tight occupancies."

Is Professional Property Management Right for You?

Provided By Realty Times

Whether you're a reluctant landlord --- renting out a property that you can't or don't want to sell in this market --- or an investor considering adding rental properties to your portfolio for the first time, you're likely considering whether you want to try and manage your rentals yourself, or whether you should hire a professional property manager. Here are a few factors to consider:

Distance

The first thing to consider is how close the rental property is to your own residence. If it's right around the corner, you'll have an easy time keeping an eye on the place, and you'll stand a better chance of being able to handle any needed repairs or emergency situations in a timely manner. On the other hand, if you live more than a 30-minute drive away, you're likely setting yourself up for a lot of scheduling difficulties if you try to manage the property on your own.

Time

Once you've rented your house to a responsible tenant, managing a rental property is not the kind of job that will require regular long hours. However, certain phases of the rental cycle will require quite a bit of your time. Getting a house ready to rent, marketing and showing the property, screening tenants, and getting all the proper paperwork in order can be time-consuming. Once you've placed a tenant, you'll need to be on-call in case repairs are needed. You'll need to ensure that rent is paid on time each month and keep accurate records of income and expenses for tax purposes. If you end up with problem tenant, chances are that many hours will be spent resolving the issues he or she presents you with.

Expertise

Professional property managers manage rentals systematically, using best practices that they've honed in the course of managing hundreds, if not thousands, of properties over the course of their careers. They have the market expertise to get top dollar for any given rental, and they know how to market properties to quickly find good tenants. They know how to structure leases to protect the property owner, how to work within Fair Housing laws, and how evictions need to be carried out. They have teams in place who can quickly respond to any issues that arise, including relationships with a variety of local service providers. If you're planning to manage rentals yourself for any length of time, these are all capabilities you'll need to be prepared to develop.

Finances

Property managers typically charge a one-time fee to get a property leased, then 8-12% of monthly rent for ongoing management. Many novice rental owners are reluctant to part with this kind of cash, especially if they already expect profit margins to be tight. However, it's important to consider that professional property managers can often command higher rents, reduce vacancy rates, address inexpensive problems before they become expensive ones, and provide many other cost efficiencies. When you realize that each month of vacancy costs about 8.3% of your total rental profits for a given year, it's easy to see how a professional property manager can easily earn his or her fee and then some---all while freeing you to pursue other revenue-generating activities.

In short, while it's easy to become the owner of a rental property, it's not always easy to manage one. If you want to enjoy the benefits of owning a rental without the time-consuming responsibilities that come with operating it, professional property management may be right for you.

Visit AllPropertyManagement.com to learn more about property management, then find a property manager in your area.

700,000 homeowners no longer underwater on mortgages

Provided By CNN

Thanks to improving home prices, fewer mortgage borrowers owe more on their homes than they are worth.

More than 700,000 homeowners were no longer underwater on their homes during the first quarter, according to CoreLogic.

According to the report, 11.4 million -- or 23.7% -- of mortgage borrowers were underwater on their homes at the end of March. That's down from the 12.1 million, or 25.2%, of borrowers who were underwater three months earlier.

"This is a meaningful improvement that is driven by quickly improving outlooks in some of the hardest hit markets," said Mark Fleming, CoreLogic's chief economist.

Home price rebounds, a better balance of supply and demand and fewer distressed sales all helped to reduce the number of people who were underwater during the quarter, he said.

Another 1.9 million homeowners were only 5% underwater on their homes during the quarter, suggesting that if home prices continue to climb, they too can soon breathe a sigh of relief.

When mortgage borrowers have equity in their homes, they're less likely to fall into foreclosure since they have the home's value to tap if they run into a rough financial patch.

"While the overall stagnating economic recovery will likely slow [the] housing market recovery in the second half of this year, reducing the number of underwater households is an important step toward reducing future mortgage default risk," said Fleming.

Home prices had fallen steadily since the housing crisis began and are still down about 34% since they peaked in mid-2006, according to the S&P/Case-Shiller home price index.

Now, however, some of the markets that recorded the steepest price drops have been enjoying a rebound. Phoenix, for example, has seen prices climb by 8.6% over the 12 months ended April 30, according to Case-Shiller. That was enough to move many homeowners back into positive territory

HOA Noise Ploys

Provided By Realty Times

Noise is a common complaint in common wall communities. That new and beautiful hardwood floor in Unit 2A is Unit 1A’s worse nightmare. Suddenly, a normally soft shoed neighbor sounds like a flamenco dancer at full crescendo. While new construction usually provides an extra measure of sound protection, older construction is often woefully inadequate. Is there anything the board can do besides turn a deaf ear? Since construction related noise complaints are bound to be heard again and again, the board should indeed be proactive and there are a number of things it can do. Here are some ploys to deal with noise.

Quiet Hours Policy. Have a formal policy that promotes a quiet environment. Quiet hours like 9 pm to 9 am Monday through Friday and 10 pm to 10 am Saturday - Sunday are reasonable. In defining what noise is, rather than get into specifics like stereos and barking dogs, something like “any sound disruption that significantly interrupts sleep and the quiet enjoyment of the neighbors” works best.

Dealing with Complaints. The board should not get involved in noise complaints unless several documented attempts have been made by the affected parties to resolve the issues. They need to recite the nature of the disturbances, frequency, dates, times, action taken by the complainant and response from the noise maker. Do not circumvent this step by accepting requests to intercede prematurely. In most cases, neighbors dealing directly with neighbors will solve the problem.

Accept only the hard and documented cases. And never intercede in events that normally would be handled by the police (domestic disturbances and other violent activity). Also, frequency of the disturbance is a critical element. There is a big difference between two complaints over a six month period and two within a week. A repeat disturbance within no more than two weeks is a reasonable standard.

Call in the Experts. If there is a flaw in the building sound design, it isn’t necessarily fatal. There are a variety of corrections varying from lifestyle changes to architectural modifications. To help sort them out, hire a qualified architect or engineer to analyze the problem and provide a list of solutions that can be shared with owners. Those should include modifications made by both noise senders and receivers. A soundproofed ceiling may be more expedient than expecting the upstairs neighbor to rip up the oak floor. Most neighbors do not want to be a pain and will follow the recommendations.

Set Architectural Standards. In the interest of community peace and quiet, the board does have the authority to establish reasonable standards for architectural design. While this generally applies to exterior appearance, structural components that impact the neighbors, like floor surfaces, can also be included. For example, any owner that wants hardwood flooring should be required to install a sound proofing material under or over it to reduce or eliminate sound transmission. Let remodeling owners know the requirements before the floor is installed.

Facilitate the Upgrade. One of the real advantages of homeowner associations is group buying power. If there is a building wide problem, even if it exists within the units, the owners can join together by way of the HOA to address the problem as a whole rather than sending individual owners off on their own. By joining together, the whole problem is solved at the same time and at a volume discount.

Fines. Fining is usually a last resort solution for hard cases. The noise fine policy should lay out a series of increasing penalties like first disturbance, a written warning; second, $25 fine; third, a $50 fine; fourth, a $100 fine...make the penalty enough to get their attention but not so outrageous that a judge would spank the board for being dictatorial.

Right of Appeal. All notices of violation and fines should be in writing and include an appeal process. That ensures a record of the event and no misunderstanding of the issues. Fines should be billed and collected just like regular assessments. If not paid, follow the normal collection routine.

Defensive Action. Sometimes a good defense is the best offense. Some noise complaints are the result of over sensitivity or mismatched schedules like a swing shift worker trying to sleep during the day. In such cases, it makes more sense that the complainer take defensive action rather than expect unreasonable changes from the neighbor. Using "white noise" like a box fan or fountain can drown out many noise problems and cost little.

Noise can be a vexing issue, especially when the offender is insensitive. The board can reduce widespread complaints by enacting noise reduction standards and providing proactive solutions. Using these creative noise ploys in your community, peace and quiet will soon be heard loud and clear.

Buying a Condo

Provided By Realty Times

Buying and living in a condominium community has both benefits and drawbacks. This is why purchasing a unit in the right community for you is so important.

Condo communities can be as different as night and day. Some have strict rules, while others are lax in their enforcement.

Additionally, there are always variances in the costs associated with certain communities. Some have large monthly HOA fees. Others are minimal.

What sort of questions should you be asking your real estate agent and the local condo board? Let's find out.

First, you should find out about the financial health of the community. You'll want to see if there are adequate funds in reserve. A reserve fund is held for large future repairs, such as replacing roofs, drives, sidewalks, and pools. The condo board must be charging an adequate amount every month to keep this reserve fund in pace with inflation.

If a board hasn't been doing their due diligence you may be slapped with a big bill when a future repair needs to be made. This could range from the a few hundred to thousands of dollars.

Does this community allow you to rent out a unit? Sometime down the road you may find yourself wanting to move or rent out your unit, even to family. Many communities are very renter friendly and this will be no problem. Others strictly prohibit non-owner occupied units.

You'll also want to ask what the percentage of tenant-occupied units is. Is this a mostly rental-based community? This can bring with it the usual complaints of rentals. There may be less upkeep, more noise, and less of a sense of permanent community.

Along this same line of thought you should ask what the turnover rate is. Are residents settling in for years (an indication they like it there) or is this a community that sees people come and go?

Is the condo board involved in any sort of litigation at the moment, meaning are they being sued by a former resident? Conversely, is there any litigation they are pursuing against any current or past residents? These kinds of questions can give you a real feel for the tone of the community.

Finally, be sure to ask about the bylaws and restrictions of the property. You may have your heart set on having a garden or doing your own landscaping. The condo board may have other ideas. What if you want to make certain upgrades or improvements to your unit? Is this allowed? Be sure to ask for a copy of these bylaws and then have a professional look them over.

Living in a condo can be a wonderful experience. They can be tidy and low maintenance as well as a great social hub. Just be sure to do a little research when you're in the market to buy to be sure you purchase in the perfect community for you.

DALLAS BOASTS SECOND LOWEST FORECLOSURE RATE

Provided By TAMU Real Estate Center


The Dallas area had the second lowest foreclosure rate in the country in May, according to CoreLogic Inc.
The California-based housing and finance analysts found that about 1.6 percent of Dallas-area homes with mortgages were in foreclosure in May. Only Denver had a lower foreclosure rate, at 1.5 percent.
Nationwide, 3.4 percent of homes with loans were in the foreclosure inventory. At less than 2 percent, Texas is among the states with the lowest inventory of foreclosures.

For more information click here!

We're Getting The Message About Debt

Provided By Realty Times

For the last few years, the Bank of Canada and the federal finance minister have been constantly reminding Canadians that household debt levels have hit a record high. The decade-long housing boom, fuelled by the lowest mortgage interest rates ever, has produced thousands of new homeowners. The housing market contributed greatly to helping Canada weather the global financial crisis.

Throughout it all, naysayers warned that the end of the housing expansion was near and that a U.S.-style housing crash was imminent. The government took action to slow the market by introducing tougher standards to qualify for an insured mortgage and by reducing amortization rates to a maximum of 30 years. All the while, the Bank of Canada continued to warn that interest rates must soon begin to rise.

Two new surveys show that Canadians have been listening, and while they've continued to buy homes and show confidence in the long-term future of their real estate investments, they've also been cautious about the debt load.

A survey by Leger Marketing for BMO Bank of Montreal shows that 54 per cent of Canadians with debt say they will be debt-free within the next five years. The report says 70 per cent of Canadians say they can afford to pay more than their minimum payments.

A report from the Canadian Association of Accredited Mortgage Professionals (CAAMP) says that during the last year, 23 per cent of mortgage holders have increased their monthly payments and a further 17 per cent had increased their payments in previous years. Nineteen per cent of mortgage holders have made a lump sum payment on their mortgage during the last year. Ten per cent have been able to make both a lump sum payment and increased monthly payments.

"Borrowers are taking prudent advantage of current low interest rates – they are leaving themselves considerable amounts of budgetary room, which they can use to accelerate repayment and/or accommodate future rises in interest rates," says CAAMP economist Will Dunning in the report. He also says borrowers who have been choosing longer amortization periods for their mortgages "are often acting to give themselves flexibility to manage future uncertainties, rather than out of need."
An analysis of consumers' actual mortgage payments versus the amounts that might be required by the amortization schedules shows borrowers are paying more than required, says Dunning. He says the "surplus" payments are estimated to average about $250 per month or $3,000 per year.
The BMO study says the average household debt load in Canada, including mortgages, credit cards, lines of credit and other loans, is $112,329. It says 25 per cent of Canadians are debt-free, but 41 per cent say they have taken on more debt in the last five years because of increased spending. The average monthly debt payment is $1,138.49.

"After the lengthy run-up of the past decade, it's encouraging that many Canadians are planning to rein in their debt, as interest rates won't stay low forever," says Sal Guatieri, senior economist with BMO Capital Markets. He says household credit growth recently slowed to five per cent, from the nine per cent clip that it was climbing at during the last 10 years.

Residential mortgages represent about 63 per cent of household debt. CAAMP says during the last year, the number of mortgages in arrears in Canada has fallen. It is currently about 0.38 per cent, which CAAMP says represents less than one in 250 borrowers.

CAAMP says most mortgage defaults happen because the borrower lost his job, or had work hours or pay rates reduced significantly. Marital breakdown is also a major cause of mortgage defaults.
BMO says that men are more likely than women to carry large amounts of debt, but they are also more optimistic about being able to pay it off. Those with the largest debt are in the 35 to 44 age group.

CAAMP's research shows that although there is concern about extended amortization periods, which twice caused the government to shorten the maximum periods, "the new data…hints strongly that over time, a large share of the borrowers will use increases in their incomes to expeditiously retire their mortgages. This should lesson concerns about the riskiness of extended amortizations."
For mortgages that have been repaid during the last 20 years, actual repayment periods have usually been only two-thirds of the contracted periods.

CAAMP says there is currently $994 billion in outstanding mortgages on primary residences in Canada, and $161 billion in home equity lines of credit. It says that unlike the situation in the U.S. before the housing crash, 83 per cent of Canadians have at least 25 per cent equity in their homes. The average amount of equity is estimated at $214,000.

CAAMP also says that although the timing of interest rate increases is still uncertain, many Canadians are ready if rates begin rising. Since many homeowners have already made increased payments and lump sum contributions to their mortgage debt, "if interest costs increase to unaffordable levels, the borrowers can often reduce their payments, within the limits imposed by the contracted amortization period."

TEXAS CITIES AMONG NATION'S MOST BUSINESS-FRIENDLY

Provided By TAMU RECON
Shared By CNN

Three Texas metros landed on CNN Money's list of seven most business-friendly U.S. cities.
Dallas-Fort Worth ranked second, San Antonio third and Austin fourth.

CNN Money said all three cities benefit from the "pro-business Texas atmosphere," including low taxes and tort reform measures that help shield companies from lawsuits.

Nabbing the top spot was Oklahoma City.

The rankings are based on responses from more than 6,000 small businesses that weighed in on a recent Thumbtack survey of the nation's 40 largest metro areas. The seven top cities rated highest on hiring, licensing, regulation, zoning and more.

To learn more about DFW, San Antonio, Austin and other Texas Metropolitan Statistical Areas, check out our Market Reports. The reports are free, and each covers Census data, employment and unemployment, major industries, business climate, education, transportation and infrastructure issues, growth patterns and more.

Picking the Right Neighborhood

Provided By Realty Times

You're in the market to buy. You've probably given a lot of thought to the type of home you want as well as your budget and buying price range. There's an additional topic, though, that requires your careful consideration. Which neighborhood is right for you?

Neighborhoods vary as widely as the people that live within them. Some have diligent HOA's with strict rules of appearance and conduct, while others are more lax ... sometimes to the detriment of home values.

It's important to research the neighborhood where you're considering purchasing a home. You want an area that fits your needs, personality, and social habits. These factors can influence your overall happiness just as much as that updated master bath or outdoor kitchen.

First, consider the safety of a neighborhood. In many big cities you'll find more affluent neighborhoods adjacent to large strips of rental apartments or low-income housing. Now, this doesn't always present a problem, but it can mean a trickle over of petty crimes, such as vandalism and theft. Check with the local authorities to see crime rates for the neighborhood.

You may also want to check the national sex offender database to see if any offenders live in your new neighborhood. Again, there may be no need to have concern, but having all the facts can help you make a more educated decision.

Next, check out the lines for local school districts. Some neighborhoods may surprise you by which district they're in and that's a big deal for some families. You may already have children in a certain school and don't wish for a move to displace them.

You'll also want to see how far away amenities are. Do you want to be able to walk to shops and restaurants? Walkability is really important to some buyers. Others are happy when grocery stores and gas stations are just around the corner.

In order to properly access a neighborhood, you should be sure to gather the facts. Your real estate should have data on the most recent sales (comparables) in the area. This will help you see the latest trends in pricing. Are home prices dropping? If so, by how much? Is there a large percentage of distressed homes for sale in the neighborhood? This could signal a larger trend and indicate further median home value reductions in the future.

You can also get information from people that already live in the area. Take a walk or drive around your prospective neighborhood. Take a good, hard look at the state of repair of the homes and how good yard upkeep is. If you see someone out in their yard, don't hesitate to go introduce yourself.
You could say something like, "Hi! My name is X and I'm thinking of buying in this neighborhood. What do you think of this area?" If you're lucky you'll find a talker that can give you all the down and dirty details, from the neighbor that plays his music a little too loud to struggles with a picky HOA. They may also be able to answer questions about the social aspects of the community. Is this a neighborhood that has block parties, neighborhood watch meetings, and is friendly and social? Is this a place where people mostly keep to themselves?

Picking the right neighborhood is just as important as picking the right house!