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I'm John Askins of Royce Realty in Houston, or text me directly at (832) on my blog I'll keep you updated on the latest trends and info about our local and state real estate market. Member - HAR Technology Advisory Group

You can expect at least three more years of favorable real estate conditions, with the overall housing market projected to continue expanding at steady levels from this year through 2017, according to a new survey from the Urban Land Institute Center for Capital Markets and Real Estate, based on 49 of the real estate industry’s top economists and analysts.

Still, compared to previous forecasts, the latest ULI foreis less bullish on its outlook. Overall, real estate indicators are expected to be better than their 20-year averages this year, except among the following indicators that are forecasted to perform worse: commercial property price growth, equity REIT returns, retail availability rates, and single-family housing starts.

“The latest Consensus Forehas picked up on recent growth concerns and stock market corrections around the world,” says William Maher, ULI leader. “The U.S. economy and real estate markets are in much better shape than most other countries, but global economies and capital markets are increasingly inter-related. Still, the vast majority of indicators in the foreindicate favorable economic and capital markets in the U.S., as well as moderately strong real estate fundamentals and investment returns.”

Additional highlights from ULI’s Consensus Forecast:

  • Commercial property transaction volume is predicted to rise for another two years and then level off to $500 billion by 2017.
  • Commercial real estate prices are forecasted to rise by 10 percent in 2015 and then slow to a 6 percent increase in 2016 and to 4.5 percent in 2017 – below the long-term average growth rate.
  • Vacancy rates are projected to decrease slightly for office and retail over the next three years. On the other hand, industrial availability rates and hotel occupancy rates are projected to improve in 2015 and then basically plateau in 2016 and 2017.
  • Single-family housing starts are projected to increase to 745,000 in 2015; 842,000 in 2016; and 900,000 in 2017. Despite the increases, starts are expected to remain below the 20-year average.
  • Home prices are expected to moderate to 5 percent this year; 4.3 percent growth in 2016; and 3.9 percent in 2017.

source:  Urban Land Institute


Demand is growing for retail assets in San Antonio, according to Marcus & Millichap's third-quarter 2015 market report.

High-quality, multitenant assets are drawing the strongest interest, and bidding for these properties is intensifying. As demand for these centers continues, Marcus & Millichap said investors will begin to close the gap between Class-A and B assets.

Cap rates for high-quality retail centers are around 7 percent, while a Class-B center will trade approximately 50 basis points higher.

Construction will remain limited to mostly single-tenant product this year, creating new opportunities for investment and further fueling the number of sales for these properties. Buyers will continue to target single-tenant investment opportunities, and cap rates will remain on par with other Texas metros in the mid-to-high 6 percent range.

Among the firm's other projections for the remainder of the year:

  • Building contractors will complete 700,000 sf of retail space this year, less than half of the 1.6 million sf delivered in 2014. Most of the development is occurring in the northern portion of the metro, which is also ripe with home construction and employment expansion.
  • Demand will keep pace with supply additions this year. Average retail vacancy will dip 10 basis points from the end of last year to 5.8 percent. In 2014, vacancy tumbled 20 basis points on net absorption of 1.7 million sf.
  • As vacancy remains at constricted levels, the amount of quality space available for lease is diminishing. As a result, the average asking rent will rise 1.7 percent this year to $15.20 per sf. The average rent grew 0.9 percent last year.

source:  Marcus & Millichap


For anyone thinking about hiring a builder for custom work, here are some points to consider:

· Hire a good real estate attorney who has experience with new-construction contracts, knows state law, and is familiar with the issues unique to the area in which the property will be built.

· Talk to other customers. Ask how satisfied they are with the builder and how his projects have held up over time.

· Investigate. Search the builder’s name and company online and make sure that there aren’t lots of complaints about him.

· Expect him to negotiate. In this market, a potential customer should be able to expect that a builder will be flexible.

For those looking for contractor recommendations for home improvements, check out, which compiles customer comments, or, which charges $5 per month and uses credit card info to prevent multiple reviews from the same person.

If you find a contractor who looks reliable, before hiring him, do a background check. Credit bureau Experian runs, charging $13 for a full report.

Seeking face-to-face personal recommendations is also a good idea.

source: Money Magazine,


Default rates jumped in 2006 and between then and 2014 nearly 9.3 million borrowers were foreclosed on, received a deed in lieu of foreclosure, or short sold their home.  To date, nearly a million of these former owners have returned to the market and many more of these “return buyers” are already qualified, but waiting.  Overlays and credit impairment have held a significant number back and could impact thousands more potential return buyers in the coming years.   Roughly a third of formerly distressed owners will ever return to the market.

NAR Research analyzed these former owners taking into account multiple factors:

  • The time a buyer must wait to be re-eligible for a financing program with timing like the FHA
  • The time necessary to repair the distressed seller’s credit
  • Whether the distressed seller’s credit profile, at the time of purchase, was unacceptable by historic, sound underwriting standards
  • Whether the return buyer would meet credit overlays in the current stringent environment
  • The time needed to build down payment for a purchase
  • Whether the buyer has the desire to own again

This analysis revealed that the long time to repair credit scores, time to build down payment, and overlapping post-distress factors limit a former owner’s ability to return.

  • Since 2006, 950,000 of these former owners likely already purchased a home again
  • However, tight conditions in financial markets limit access to 350,000 of these FHA re-purchase eligible borrowers
  • An additional 1.5 million return-buyers will likely purchase over the next five years as they become eligible, but overlays will act as headwinds for 140,000.
  • As many 260,000 of current and future program eligible borrowers may not return as their former ownership was facilitated by excessively loose lending in the mid-2000s

At the state level,

  • California has been the largest benefactor of return buyers followed by Florida.
  • Arizona, Nevada and Georgia also made the list as markets like Phoenix, Las Vegas and Atlanta experienced sharp increases in distress among homeowners during the housing downturn.
  • Despite the relatively steady housing markets in Texas and solid price growth, the sheer size of the state put it in the top 10.

Over the coming nine years, the states expected to benefit from the trend will remain the same, though some will juxtapose rankings.  Florida will nearly catch California, Illinois and Georgia will rise modestly, while Nevada will ease closer to the bottom of the top 10.  Virginia will leave the list and be replaced by North Carolina.  The shift in the future trend will also reflect a larger share of prime borrowers that were dragged into distressed events as result of price declines and weak employment, rather than risky lending.


The large number of return buyers coming to the market will continue to play an important role in the market.  This demand is in addition to nascent household formation and the normal baseline demand from trade-up buyers.  While overlays will hamper some borrowers, those overlays will likely normalize in the future.  Mitigating some risk to Federal programs is a stronger regime of regulation on underwriting and the fact that most return buyers are of prime quality.  New credit scoring models that utilize rent and utility payments can help shed light on the risk posed by these return buyers.  These innovations will improve the propensity of these borrowers to return and gain access, while reducing their risk to the FHA, VA, GSEs,  and private mortgage insurers.

The country and housing market are still healing from the collapse of the foreclosure and distress sale wave.  As home prices rise and the economy improves, these trends will abate, but there remains a large reserve of former owners who have the desire and ability to return to the market.  New credit models and financing opportunities combined with fundamental changes to the mortgage origination process will help to ensure that soundness of the market as these borrowers return.

source:  NAR


Borrowers rushed to secure financing last week, sending mortgage applications climbing 25.5 percent week-over-week before the "Know Before You Owe" disclosure rules took effect last Saturday.

The Mortgage Bankers Association reported that for the week ending Oct. 2, refinance applications spiked 24 percent on a seasonally adjusted basis while applications for home purchases rose 27 percent. Purchase applications, which are viewed as a leading gauge of home buying activity, are now 49 percent higher than a year ago and are at the highest level in five years.

"The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and many applications being filed prior to the TILA-RESPA regulatory change," says Lynn Fisher, MBA's vice president of research and economics.

Starting last Saturday, the TILA-RESPA Integrated Disclosure rule went into effect, which merged the HUD-1 Settlement Statement, the Good Faith Estimate, and the Truth-in-Lending disclosure form into two new closing forms: a Loan Estimate and a Closing Disclosure. The new rule aims to provide consumers with more time to review the total costs of their mortgage prior to closing. The Loan Estimate form is due to consumers three days after they apply for a loan, while the Closing Disclosure form is due three days prior to closing. Lenders have predicted some possible delays to closing as they transition to the new forms.

While the latest week shows a significant jump in the volume of mortgage applications, they remain low overall by historical standards. Purchase-application volume is still less than half of what it was during the housing boom of 2005 to 2007 and is at comparable levels to the late 1990s, MBA reports.

MBA also reported that the average 30-year fixed-rate mortgage fell to 3.99 percent last week, the lowest average since May.

source:  CNBC


Contracts to buy homes dropped nationwide in August, as home prices continued to inch upward, the National Association of REALTORS® reports. Modest increases in pending home sales in the West were offset by declines in all other regions last month.

NAR’s Pending Home Sales Index – a forward-looking indicator based on contract signings – retreated 1.4 percent in August to a 109.4 reading. Despite the drop, pending home sales remain 6.1 percent above August 2014 levels.

Buyer demand is continuing to outpace the housing supply and it’s also prompting home prices to increase in many markets across the country, says Lawrence Yun, NAR’s chief economist.

“Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” Yun says. “Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”

Yun predicts that sales will maintain their current pace in the months ahead. But, he cautions, there are several headwinds that could impact housing.

“The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being,” Yun says. “Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales.”

Still, NAR says the national median existing-home price will likely rise 5.8 percent this year, reaching $220,300. Also, existing-home sales likely will rise 7 percent to around 5.28 million – 25 percent below the prior peak set in 2005.

Pending Home Sales By Region

  • Northeast: pending home sales dropped 5.6 percent to 93.3 last month, but remain 8.9 percent above a year ago.
  • Midwest: pending home sales were down 0.4 percent to 107.4 in August, but are 6.5 percent above August 2014 levels.
  • South: pending home sales dropped 2.2 percent to an index reading of 121.5, but are 4.1 percent above year ago levels.
  • West: pending home sales increased 1.8 percent in August to 104.9, and are 7.6 percent above a year ago.

source:  National Association of REALTORS®


More home owners who want to trade in their current home to buy a larger one are holding off, feeling trapped by a housing market andnotenough equity in their current home, The Los Angeles Times reports. 

“Potential move-up buyers ... are largely sitting on the sidelines these days, leaving a key part of the housing market stuck in neutral,” The Los Angeles Times' article notes. “The promise of rising prices and upward mobility, once a powerful force in the American housing narrative, has been all but shattered by the downturn.” 

Move-up buyers are often classified as home shoppers looking in the $300,000 to $800,000 price range, according to the research firm DataQuick. The “move-up” category creates a chain of buyers and sellers that is important for a healthy real estate market, since trading up “fuels price gains and helps home owners to build equity,” The Los Angeles Times' article notes. 

"The way to think about [it] is a chain of trades that normally occurs, and if that chain is broken at any point, or it doesn't begin because you don't have enough entry-level buyers, then the whole dynamic of the marketplace is affected and the level of resales is going to be very small," says Ed Leamer, director of the UCLA Anderson Forecast.

source:  Los Angeles Times


It's a quandary that Dr. Spock didn't address: How should parents handle adult children coming back home to live?

Given the economic conditions, boomerangs may be turning up on your own doorstep soon. And with them come a host of unusual economic --and parenting --questions that you may not have considered.

Such as "Should You Charge Rent? 

Theories vary widely and wildly. The issue, as Linda J. Abrahams, a lawyer in Northbrook, Ill., and a mother of a boomeranger, put it, isn't so much whether you charge. It's why the child has moved home in the first place. 

For more, click here.

source:  NY Times


How much house can you afford in the top 100 metros? NerdWallet sought to find out, evaluating how much house a typical family in each of the country's top 100 metro areas could comfortably afford. The site crunched data on debt, median income, housing costs and prices to determine how much families could spend while still staying in what is considered "healthy budget parameters."

There's a large variance in home affordability across the country. For example, median incomes in the Los Angeles, Calif., and Cleveland metro areas are about $85,000. Residents in Cleveland are able to purchase a 3,503 square foot home on that salary while in Los Angeles, residents can only comfortably afford 757 square feet on that salary.

NerdWallet found the most affordable state was Ohio, with families being able to afford larger homes. On metro level, however, Indianapolis, Ind., topped the list, which had the best combination of affordability and home size, according to NerdWallet's study.

On the other hand, in about a dozen metro areas, families were found to be able to afford 1,500 square feet of housing or less.

The least affordable states were California and Florida. In San Francisco, San Jose, and Honolulu, the price per square foot was more than $400 last year (compared to the median price for the top 100 metro areas which is $107).

View the full rankings for the top 100 metro areas at

source:  NerdWallet


An index that measures home values, home equity, and mortgage debt for home owners 62 and older surged to an all-time high in the second quarter of this year, surpassing a prior record in the fourth quarter of 2006.

The National Reverse Mortgage Lenders Association/RiskSpan Reverse Mortgage Market Index reached a record high of 195.29 in the second quarter of this year compared to the previous high of 192.03 in 2006. On a quarter-to-quarter basis, senior home equity has increased by $117.1 billion.

"The strong gains in housing wealth among America's seniors are an encouraging economic indicator for the millions of boomers who weathered the recession on the cusp of their retirement years," says NRMLA President Peter Bell. "The home equity they've worked so hard to build up can serve as a valuable financial management tool for years to come."

According to the index, the increase in senior home equity compared to the first quarter was driven by an estimated $122.8 billion rise in the aggregate value of senior housing, which helped to offset a $5.7 billion increase in senior-held mortgage debt.

The second quarter marked the thirteenth consecutive quarter for index rises. An estimated $4.08 trillion in the aggregate value of senior home equity represents a 38 percent recovery from the post-Recession trough in the second quarter of 2011, when senior equity levels had dropped to an estimated $3 trillion, according to NRMLA.

source:  National Reverse Mortgage Lenders Association and HousingWire