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RECON for November 15, 2022RECON for November 15, 20222022-11-15T06:00:00Z2022-11-15T06:00:00Z
RECON Texas Real Estate Research Center
Tornadic supercell near Vega, Texas
The frequency and intensity of natural disasters are forecast to increase throughout the decade, exposing more people and places to these destructive events. Given these risks, the Texas Real Estate Research Center is launching “When Disaster Strikes,” a blog series to better inform Texans of the costs and consequences of natural disasters. Learn more about the series, which debuts Thursday, Nov. 17. (Photo from Center files.)
November 15, 2022

Rising interest rates, inflation hindering manufactured housing demand

COLLEGE STATION (Texas Real Estate Research Center) – General business activity cooled for the seventh consecutive month, according to the October edition of the Texas Manufactured Housing Survey (TMHS).

Sales and production continued to correct as higher interest rates chilled demand after a two-year pandemic boom. Decreased demand pulled the price of finished homes downward, but inflation and borrowing costs hindered affordability.

"Mortgage rates have elevated significantly as a result of the Federal Reserve’s rate increases," said Dr. Harold Hunt, research economist for the Texas Real Estate Research Center. "The result has been a real hit to affordability across the housing sector. Although interest rates are typically higher for manufactured homes compared with site-built product, the much lower purchase price still gives manufactured housing a strong advantage in the affordable-housing niche."

While long-term fundamentals remain favorable to the manufactured housing industry, the fourth quarter is poised to be painful. The TMHS employment index declined for the fourth straight month, illustrating how companies have adjusted to decreased activity. For employees still on payroll, the average hours worked has declined for the past two quarters. These movements held labor costs constant after at least 28 consecutive months of increases (the TMHS was launched in June 2020).

"After reducing their headcount and total hours of operation, manufacturers have slowed production to better match their current order flow," according to Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. "The four-month stretch from November through February is typically the seasonal low for retail sales, but manufacturers are hoping orders start picking back up with the start of the March selling season."

The TMHS expected-sales index reflected this sentiment, inching positive for the first time since April. Moreover, respondents believe business activity, economic uncertainty, and the overall outlook will stabilize in the spring. This optimism may be in anticipation of looser financial conditions, but the risk of a U.S. recession by the end of 2023 remains a forceful headwind.
Annual Report + 2023 Calendar Giveaway
The Center's Annual Report + Calendar giveaway is back again! For a chance to get your hands on the 2023 edition of the always popular calendar (while supplies last), take a three-question survey by Friday, Dec. 2. Enter here.

Share of first-time buyers smallest ever in 2022

WASHINGTON (National Association of Realtors) – The National Association of Realtors (NAR) has released its 2022 Profile of Home Buyers and Sellers report, which analyzes sales made between July 2021 and June 2022.

First-time buyers made up 26 percent of all buyers, down from 34 percent in 2021 and the lowest share since data collection began.

The age of typical first-time and repeat homebuyers climbed to all-time highs at 36 and 59 years old, respectively.

The median expected home tenure for first-time buyers was 18 years, the highest ever recorded and up from ten years in 2021.

The median distance recent buyers moved was 50 miles, the highest ever recorded. From 2018 through 2021, the median distance moved was just 15 miles.

The shares of buyers who purchased homes in small towns (29 percent) and rural areas (19 percent) were the highest ever recorded. Homes purchased in suburban (39 percent) and urban (10 percent) locations declined over the year.

​This year, 88 percent of buyers were white and 8 percent were Hispanic/Latino, both higher than in 2021. Three percent were black, 2 percent were Asian/Pacific Islander, and 3 percent identified as other.

At 22 percent, the primary reason for purchasing a home was the desire to own a home of their own. For first-time buyers, this number jumps to 62 percent.

The median number of weeks that buyers searched for a home was ten, an increase from eight weeks in 2020 and 2021. Home buyers typically purchased their homes for 100 percent of the asking price, with 28 percent purchasing for more than asking price.

Seventy-eight percent of recent buyers financed their home purchase, down nine percentage points from last year and driven by the increased share of repeat buyers who paid all cash. The typical down payments for first-time and repeat buyers were 6 and 17 percent, respectively.

The median age of home sellers was 60 years, up from 56 years one year ago. Sellers typically lived in their home for ten years before selling.  

The majority of buyers (86 percent) and sellers (87 percent) hired a real estate agent or broker to purchase or sell their homes. Nine in ten buyers said they were very satisfied with their agent's knowledge of the purchase process, and their agent's honesty, integrity, and knowledge of the real estate market.

Less than 1 percent of sellers sold their home to an iBuyer. 
Two people holding houses
Like-kind exchanges are popular as many people are interested in deferring the tax on sale of property. Several variations on conventional like-kind exchanges can achieve desired tax results. A Texas tax attorney explains on the Center's website.

Greenpark One MOB swaps hands

​​​HOUSTON (Connect CRE) – Big Sky Medical has acquired Greenpark One, a 134,910-sf medical office building.

The eight-story building’s tenants include Memorial Hermann Surgery, Texas Oncology Center, Eating Recovery Center, and DemSurgery Associates, among others.

​​​The new owner will implement a ​capital improvement plan.

Transwestern will oversee leasing at the property.

Big Sky Medical financed the purchase of both this property and the Westinghouse Building at Providence Park in College Station with a $190 million loan through Capital One. ​
NewsTalk Texas logoHungry for more Texas real estate news? Then feast your eyes on NewsTalk Texas, our online news database. Here are a few of the stories you'll find there this week: NewsTalk Texas is updated each weekday, throughout the day. 

Axonic picks up SA multifamily portfolio

​​SAN ANTONIO (Connect CRE) – Axonic Properties LLC has acquired two affordable housing complexes from NRP Group.

The 250-unit Costa Biscaya is at 5100 Eisenhower Rd. The 172-unit Costa Cadiz is at 2819 S. WW White Rd.

Both properties have one-, two, and three-bedroom units ranging from 770 to 1,261 sf.​

Amenities include a pool, clubhouse, fitness center, business center, activity center, access gates, and multiple playgrounds.

KeyBank Real Estate Capital provided $33.6 million in financing.
Mark your calendars: the 32nd Annual Outlook for Texas Land Markets conference will be April 13-14, 2023, in San Antonio. Registration opens early next year, so stay tuned.

$53.1 million expansion coming to St. David's Medical Center

​ROUND ROCK (Connect CRE) – The St. David's Round Rock Medical Center at 2400 Round Rock Ave. is receiving a $53.1 million expansion that​ will add two floors to the hospital.

Additions will include a 34-bed patient care unit, four operating rooms, and support spaces.

Once complete, the hospital will have five stories, 200 beds, and 11 operating rooms.

Construction finishes in 2023. The project is part of a $953 million​ multi-phase expansion.
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California investor picks up McKinney logistics building

​​​​​McKINNEY (REBusiness Online) – Building B at Logistics Center, a 301,796-sf rear-load building at 350 Cypress Hill Dr., has been sold.

Built in 2021 on 17 acres, the property has 32-ft clear heights, 130-ft truck court depths, 52 overhead doors, two drive-in doors, and 190 parking spaces.

JLL represented the seller, a joint venture between Thor Equities and Morgan Stanley. California-based AC Industrial Properties LLC acquired the asset.
Magnifying glass in librarySearching for reliable and accurate real estate and economic papers can be time consuming. The Texas Real Estate Research Center is here to help. Access our Research Library for a nearly endless database of economic reports, research articles, and technical papers. Get it all in one place completely free. 

Frisco's Project X gets greenlight

​​​FRISCO (Connect CRE) – The town ​planning and zoning commission has approved a Project X, a mixed-use community on the site of​​ the failed Wade Park​ project.​

The 112-acre development will include 700 hotel rooms; 2,800 multifamily​, townhome, and condo units; 1.9 million sf of office space; and 455,000 sf of retail space.

JVP Management is the developer. Torti Gallas + Partners is the architect. 

Construction begins next year.

Helping Texans make the best real estate decisions since 1971.

Logistics project slated for Austin

​​AUSTIN (Austin Business Journal) – Atlanta-based MDH Partners LLC is developing MDH Logistics Center, a 215,0​00-sf industrial project at 4777 E. SH 71.

Construction on the $16 million project begins in April 2023 and wraps up in November 2023.

ADB Design Services is the designer.
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Material herein is published according to the fair-use doctrine of U.S. copyright laws related to non-profit, educational institutions. Items attributed to sources other than the Texas Real Estate Research Center at Texas A&M University should not be reprinted without permission of the original source. To send news items for consideration, e-mail Hayley Rieder Wiley. The Texas Real Estate Research Center is part of the Division of Academic and Strategic Collaborations at Texas A&M University in College Station - the heart of the Research Valley. 

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