|Can Opendoor cash in on Texas?||Can Opendoor cash in on Texas?||Roberson||2020-09-29T05:00:00Z||Housing|
A blank-check company led by billionaire Chamath Palihapitiya has inked a deal to merge with Opendoor, one of the largest iBuyer players in the market. The deal issued a huge vote of confidence—as well as much-needed cash—in the company despite the current economic turmoil. Palihapitiya already has high hopes for Opendoor in the near future. “Before the end of 2021, they'll be back in a really solid place to where they were and growing again," he told the Financial Times last week.
Before the COVID-19 crisis, Texas was in the crosshairs for major growth among iBuyers, with many increasing their statewide portfolios in 2019. Now with cash in hand, Opendoor seems almost ready to repeat last year's activity. But what homes will the company buy?
According to their website, Opendoor typically invests in residential homes valued between $100,000 and $500,000, depending on the market. There's a scarcity of homes in those price cohorts within the four big Texas metros. In Dallas-Fort Worth-Arlington, where Opendoor has its largest Texas presence, there's currently a one-month inventory of homes in the upper $100,000s and lower $200,000s. Most other price cohorts have less than two months of inventory.
At this point, it's uncertain how long inventories will remain. Homeowners are simply not putting their homes on the market at the rate they did in prior years. The obvious reason is the pandemic, which influenced sellers to pull their homes off the market in the first place largely for health and safety concerns.
After the initial COVID-19 shock, mortgage rates bottomed out, making staying put and refinancing a more attractive option than moving. Since refinancing isn't free, it often takes several years to recoup closing costs from the monthly savings gained.
Refinancing increases the time homeowners commit to their homes, a trend that has already been on the rise over the past decade and is not expected to change anytime soon. This phenomenon can reduce housing turnover.
Texas isn't the only market in Opendoor's sights, and iBuyer concerns about inventory haven't been ignored. At the same time, these threats aren't unique to Texas. Assuming that Opendoor can acquire homes in the current environment, the increased competition for homes in their price range will likely continue to push prices up. Higher buy-in prices come at the expense of future profits, something iBuyers have already been struggling with. Given the current state of Texas housing, it's hard to envision an optimistic outlook for iBuyers anytime soon.
For more on this, read my latest article, “You Sell, iBuy: Are Instant-Purchase Services Making a Comeback?" This topic was also featured on a recent Real Estate Red Zone podcast.
|Texas-Mexico border traffic slows to a halt during travel restrictions||Texas-Mexico border traffic slows to a halt during travel restrictions||Paige Silva||Silva||2020-06-26T05:00:00Z||Economy|
Infrastructure ＆ Transportation
International travel is just one of the many aspects of Texas’ border economy that has been hard-hit by COVID-19. The U.S., Mexico, and Canada agreed to limit all non-essential travel across borders beginning March 21, 2020. Table 1 includes certain non-essential and essential activities.
These measures were originally set to expire after 30 days but have since been renewed multiple times with the latest extension to July 21, 2020. While the number of new COVID-19 cases in Canada is falling daily, the opposite is happening in the U.S. and Mexico. Furthermore, Mexico’s federal government has taken a weak stance against the spread of COVID-19 by ruling out mass testing and contact tracing. It is unlikely that the travel restrictions will be recalled any time soon.
Texas’ Metropolitan Statistical Areas (MSAs) along the border (Brownsville-Harlingen, El Paso, Laredo, and McAllen-Edinburg-Mission) rely on purchases of goods and services by Mexican nationals, which the travel restrictions prevent. By using border crossing data from the U.S. Bureau of Transportation Statistics, we can track monthly traffic from Mexico to U.S. ports. Pedestrian and personal vehicle numbers are good measures for estimating how retail sales in the border MSAs might be faring (see Tables 2-5). Figures 1 and 2 shows the trend-cycle component for each port’s measure of traffic. The Port of Hidalgo represents cross-border trade between Reynosa and McAllen.
The data show that since travel restrictions were implemented in March, overall pedestrian and personal vehicle crossings have declined greatly along the border. We can expect to see levels remain low until non-essential travel restrictions are lifted. Even then, traffic may remain below February levels until the spread of COVID-19 is contained. (For additional commentary and statistics regarding Texas’ border economy, see Texas Border Economy).
|Texas small businesses weathering COVID-19 better than other large states||Texas small businesses weathering COVID-19 better than other large states||Josh Roberson||Roberson||2020-05-19T05:00:00Z||Economy|
Compared with other large-population states, Texas appears to have been less impacted by COVID-19's devastating economic effects, but that is not saying much.
According to a recent Census Bureau Small Business Pulse Survey, almost half of Texas small business respondents said the pandemic has had a large negative effect on business.
Unsurprisingly, that's better than Michigan, New York, and California due to the massive difference in business restrictions.
Texas sits at the average of state responses with large negative effects at 48 percent.
Around a fifth of Texas small businesses had to reduce the number of employees on their payrolls. While the number seems low, it is because the inaugural survey period was the week ending May 2, several weeks after the peak unemployment claims.
Almost 50 percent of Texas small businesses had to continue reducing remaining employee hours. Since March 13, more than 77 percent of respondents stated that they had requested assistance from the Payment Protection Program, but only 48 percent said they received that assistance.
A quarter of respondents said they had less than two week's worth of cash to keep business operations going. A majority of businesses—close to 90 percent both in Texas and nationwide—have avoided missing loan payments.
Retail and accommodation/food services sectors were more likely to be short on cash.
Even with lifted restrictions in Texas, these industries have a long road to recovery ahead of them. On top of normal operating costs, these businesses will have to face increased cleaning costs and limited capacity.
The overall sentiment among Texas small business owners is positive compared with the nation as a whole. Around 26 percent think business will return to normal within two to three months, while another 28 percent think four to six months. Around 29 percent believe that it would take longer than six months before normal comes back around.
Oil-dependent metros in Texas will likely see a different recovery timeline than other cities.
The Small Business Pulse Survey seeks the opinion of single-location small businesses with fewer than 500 employees and at least $1,000 in receipts. Survey responses are aggregated by nation, industry sector, and state.
|Don’t let holiday shopping tangle your tinsel||Don’t let holiday shopping tangle your tinsel||Rieder||2019-11-21T06:00:00Z||Retail|
With Black Friday just around the corner, shoppers across the U.S. are preparing for the 2019 holiday shopping season. Last year, the average American shopper spent over $1,000 on gifts, decoration, food, and other holiday items. Total retail spending increased 4.3 percent in 2018 to $717.5 billion.
The National Retail Federation expects more than 165 million people will shop over the five-day Thanksgiving weekend, and spending is predicted to increase about 4 percent this year.
Many shoppers save up or use credit cards for their holiday shopping. Regardless, sticking to a budget is important. To help manage shopping expectations, WalletHub calculated the maximum holiday budget for each of 570 U.S. cities.
Three Texas cities ranked in the top ten cities with the biggest holiday budgets. Flower Mound spenders have the third-largest holiday budget in the nation, totaling $2,937. Residents of No. 6 Frisco and No. 7 The Woodlands spend $2,836 and $2,833, respectively. Sugar Land, Cedar Park, and Allen also made appearances in the top 25.
How can Texans avoid breaking the bank this season?
Research your prices. Many websites post Black Friday ads a few days before Thanksgiving. Compare and contrast prices, and remember that just because something is on sale does not mean it's a good deal.
Budget for yourself. Avoid impulse shopping by setting aside money to treat yourself. You're tackling the Black Friday crowds, so you deserve something, too! Just make sure your treat doesn't push you over budget.
Prioritize your shopping list. When compiling your shopping list, write items out first by store then by order of importance. That way, you can focus on your “must find" items.
Avoid using a cart. You're less likely to pick up unnecessary purchases if you're carrying around reusable shopping bags instead of a cart. You can't pick up that impulse-buy item if you can't haul it around the store.
Follow your budget. Use cash and leave your credit cards at home to prevent overspending.
|We're renovating Tierra Grande!||We're renovating Tierra Grande!||Bryan Pope||Pope||2019-11-13T06:00:00Z||Center News|
You spoke. We listened. In response to recent reader feedback, we’re making some changes to our flagship magazine, Tierra Grande. Starting with the January 2020 issue, you’ll notice:
The name. This is probably the first change you'll notice when your January issue arrives. Tierra Grande will now go simply by TG, a nickname we’ve used in-house for years.
More targeted content. If you’re an agent or a broker (and most of our subscribers are), the magazine will have a wider variety of articles geared toward you.
New content. Speaking of agents and brokers, we’ll roll out a new Q&A column explaining common legal issues you may encounter. You'll find it on the last page of each issue.
"You took away my 'Takeaway'?" You'll be happy to know we didn't. After receiving the October issue, one astute reader noticed our usual black boxes with a one-paragraph summary were no longer at the end of each article. Were they gone for good, she asked? No, we simply moved them to the beginning in hopes of catching more readers' eyes. Same summarization, but new location and no black box labeled "The Takeaway."
What’s not changing? The high-quality photos and design you enjoy and, most importantly, the reliable research you’ve come to expect from the Real Estate Center.
We'll be anxious to hear what you think.
|Taxes, tariffs, and Texas migration||Taxes, tariffs, and Texas migration||Josh Roberson||Roberson||2019-11-05T06:00:00Z||Demographics|
New data from the U.S. Census Bureau reveal 2018 migration patterns. As usual, top migration inflows into Texas came from either highly populated coastal states such as New York, Florida, and California or adjacent states like Oklahoma and Louisiana.
California remains the top source of Texas net migration, and last year was an exceptional year compared with prior years reported by the Census Bureau (Figure 1). In 2018, just over 86,160 moved to Texas from the Golden State. After accounting for migration outflows from Texas to California, the net migration between the two states still favors Texas by almost 50,000. Migration from Florida was a distant second with about 37,270 making the move to Texas (after adjusting for outflows, the net migration was less than 15,000).
The sudden uptick of California migrants follows the passing of the Tax Cuts and Jobs Act of 2017 (TCJA), which holds many implications for residents living in high tax states. Part of that legislation caps the deduction limits of state and local income taxes at $10,000 where formerly there was no limit.
The TCJA also reduced the mortgage interest deduction limit on new home purchases, which many real estate professionals initially believed would have a negative impact on housing activity, particularly for high-end homes. That does not appear to be the case in Texas as luxury home sales (homes priced at or above $1,000,000) expanded greatly in 2017, 2018, and so far into 2019 (Figure 2). Since the uptick in luxury home sales began months before passing TCJA, the tax reform law may instead help explain the sustained growth of high-end home sales.
While high-income homebuyers may miss out some on the mortgage interest deduction, the net effect from other aspects of the bill may have been enough to provide a net positive impact for the luxury housing market. For California buyers, the net impact may have also been enough to overcome even the capital gains bite from selling their homes back on the West Coast.
Finally, migration to Texas from outside the U.S. fell for the second consecutive year after peaking in 2016 (Figure 3). This is largely because of federal policy’s aim to curb both legal and illegal immigration since Texas follows the national trend of decreased foreign immigration.
Latin America has been in the spotlight both nationally and in Texas. Migration from Central and South America to Texas has been on the rise since the start of the decade while migration from Mexico was already in decline since at least 2013.
The newly released Census Bureau data group all foreign migration together, but previously released data are available by country. These older data reveal major immigration growth from countries such as El Salvador, Guatemala, and Honduras (Figure 4). Rapid immigration growth in prior years from this region may also explain the sudden decrease reported for 2018 in relation to immigration policy.
In addition, there has been major immigration growth up to 2017 from China, which has garnered a lot of media attention due to the exchange of tariffs between the U.S. and China. Given the increased friction between these two countries in 2018, Texas could see a decreased flow of Chinese immigrants in upcoming country-level Census Bureau data releases.
|When looking at housing data, don't jump to conclusions||When looking at housing data, don't jump to conclusions||Paige Silva||Silva||2019-11-04T06:00:00Z||Housing|
Last week, the U.S. Census Bureau released third quarter 2019 homeownership rates, and one surprising number caught my attention—the rate for San Antonio. From 3Q2018 to 3Q2019, homeownership there dropped 3.2 percentage points from 63.4 to 60.2 percent. Compare this with Texas’ homeownership rate, which increased from 62.7 to 63 percent during the same period.
San Antonio’s homeownership rate typically trends higher than the statewide average because of the metro’s older population. There are many factors that could explain the sudden drop in the homeownership rate, such as change in preference of the population from buying to renting, an influx of younger residents who can't afford to buy, uncertainty regarding future economic conditions that may hinder prospective buyers from making the leap, etc.
However, there is another possibility, one rooted in the data. Because San Antonio’s homeownership rate is relatively volatile, the margin of error this quarter was 5.9 percent with a 90 percent confidence interval. In other words, the Census Bureau estimate is expected to be within 5.9 percentage points of the real value 90 percent of the time. The 3.2 percentage point change from 3Q2018 to 3Q2019 is within the margin of error. This means that there is a chance the homeownership rate may have increased rather than decreased.
When looking at data, keep in mind the limitations before jumping to wild conclusions. That's not to say we should ignore the decrease in San Antonio’s homeownership rate, especially if the metro’s homeownership rate continues to trend downward, or that the possible reasons I mentioned have no truth here. Rather, we should explore all scenarios and explanations before settling on the worst.
|Eek! These terrifying Texas properties will give you the heebie-jeebies||Eek! These terrifying Texas properties will give you the heebie-jeebies||Rieder||2019-10-31T05:00:00Z||Mixed-Use|
Texas is known for its rich history. However, much of that history is more sinister than it seems. In honor of Halloween, we've compiled a list of some of the state's most haunted historical properties.
3. Presidio La Bahía – Goliad
Constructed in 1747, this South Texas Spanish fort is known for the part it played in the Texas Revolution—namely the Battle of Goliad and the Goliad Massacre. It became a National Historic Landmark in 1967.
But the fort's brutal history has led to rumors of several apparitions haunting the property. A woman in mourning attire is said to appear at the offering table of the fort's Our Lady of Loreto chapel, while another woman in white wanders the courtyard, searching the graves for a loved one's name.
A robed friar also patrols the chapel, which is haunted by the sounds of crying babies, a church organ, a women's choir, and randomly sounding bells.
Other spirits in the presidio include phantoms in the officers' quarters, particularly Texas Colonel James Fannin, who was killed while held prisoner by Mexican General José de Urrea. At sunset, some have seen spirits on the quad where Fannin and his men were executed. Vultures still flock to this area inexplicably.
2. The White Sanitarium – Wichita Falls
Some of the creepiest stories at least partially take place in psychiatric hospitals, like Shutter Island, "American Horror Story: Asylum," and A Clockwork Orange. But what's even scarier is this real-life horror show.
Frank S. White opened his sanitarium in Wichita Falls in 1926. His outlook on mental health was actually quite modern, as he believed his facility should be a home, not a prison. However, it has long been rumored that strange experiments were conducted there until it closed in the 1950s.
Years later, the building became a frequent haunt for teenagers, who claimed to see crazy-looking apparitions in the windows or floating, smoking ends of lit cigarettes in the halls. Visitors say they've seen ghosts playing cards or flickering lights (though that may be due to old electric wiring). Others have heard crying women and laughing children.
The Jazz Age building is now an apartment complex; those residents must be brave to sleep in such a haunted property!
1. Yorktown Memorial Hospital - Yorktown
Yorktown in DeWitt County is a charming little city with a plethora of historic sites. One of them is the Yorktown Memorial Hospital, a foreboding structure known as one of the state's most haunted buildings.
Opened by the Felician Sisters of the Roman Catholic Church in 1951, the hospital was eventually put out of business by another hospital that opened in Cuero. It later served a short two-year stint as a drug rehabilitation center until its closure in 1988.
The hospital was said to have lost over 500 patients in a six-year span and 2,000 during its 35-plus-year operation. One of the doctors was known for his fatal mistakes during operations, and some believe those errors weren't always accidents.
Apparitions in the building include a mechanic named Doug Richards and TJ, a drug addict who died on the steps of the building while seeking help. There are also rumors of a love triangle that turned deadly in the boiler room. The most violent of the spirits are the nuns, who are known to choke, scratch, or bite visitors, particularly those with tattoos.
However, not all the specters are nefarious. Stacy, a friendly little girl, can be seen and heard playing in the basement hallways. She can also be enticed to enter the library with her favorite book, The Pokey Little Puppy.
There are many more Texas ghost stories, but we'll end it there. If you're looking for more spooky stories, check out another Mixed-Use blog post, “Three haunted Texas properties that'll make your spine tingle."
What haunted Texas property is your favorite? Let us know by tweeting us @TexRec or commenting on our Facebook page. We hope you have a safe and happy Halloween!
Source: Haunted Rooms America