|
Daily Real Estate News | September 19, 2007 Where to Find the Top Home Bargains
Source: BusinessWeek.com, Maya Roney (9/18/07) | |||
Pricey Hill Country dubbed 'Little California' by someWeb Posted: 04/12/2007 11:26 PM CDTThe hottest get-rich-quick investment in Texas is an old-fashioned one: land.Rural property prices are riding high, up by Texas-size percentages for the past four years. And the Texas Hill Country, home to some of the state's most expensive property, even has earned the nickname "Little California." That's what the economists at the Real Estate Center at Texas A&M University dubbed the region because it draws so much attention from free-spending out-of-state buyers. The economists were in town Thursday at a land market conference at the Hyatt Regency San Antonio hotel. In Bandera, Blanco, Kendall and Kerr counties together, the median price per acre topped $7,086 last year, up 22 percent since 2005, and up more than 118 percent since 2001, said Charles Gilliland, research economist at A&M.
In the San Antonio region — made up of Bexar, Atascosa, Comal, Guadalupe, Karnes and Wilson counties — median land prices jumped 35 percent last year, to $3,799 per acre. But the most desirable tracts were selling for $25,000 an acre. Sky-high prices should come as no surprise to local landowners. The San Antonio region's land prices have seen double-digit growth for six years now. The San Antonio region outpaced the rest of Texas, where overall land prices increased 23 percent last year. "It's sort of like a trip to the horse track," Gilliland said. The Trans-Pecos region, which includes far West Texas and the Big Bend area, saw the state's most whopping runup in prices last year — 71 percent. Prices in the Lower Rio Grande Valley rose 64 percent. The statewide land rush continues to defy economic history and decades of data that track the rise and fall of rural property values. It's enough to make an economist sound like he's spinning a yarn. "Sometimes you have to worry about your credibility," said Gilliland, who doesn't think people are overpaying for land yet. A variety of culprits has spurred the land frenzy. Out-of-state buyers continue pulling up stakes in overinflated markets and planting money here quickly to avoid capital gains taxes. National interest in corn-based ethanol, an alternative fuel, has increased the price of farm land, while recreational users — from hunters to baby boomers looking for a bucolic spread for retirement — have driven interest in ranch properties. Gilliland also suspects the wealthiest shoppers are snapping up the state's most attractive pieces of land, helping drive up the median prices. But so far, there's no sign the land bubble will burst. When there's uncertainty about the economy and concerns about inflation, tangible assets — such as land, precious metals and art — become more highly prized, Real Estate Center chief economist Mark Dotzour said. But some Texans — at least those who remember the boom-and-bust days of the 1970s and 1980s — are starting to get nervous. So when will Texas land prices come back to earth? "The stock market is your biggest competitor," Dotzour told the audience of rural land specialists. Plenty of investors have fled from stocks or diversified their portfolios to include real estate in the past 10 years as scandals and fraud have hit Wall Street. "There's a lot of guys who said, 'You know, I enjoy land. I even bought me a fake pair of boots,'" Dotzour said. He even joked about a guy scratching up his SUV with steel wool to quickly fake a true off-road look. When that guy starts to focus on stocks again, he said, Texas land prices will stop skyrocketing. But Dotzour doesn't think the prices will fall to previous levels when that happens. Texas land still is a bargain compared with the rest of the country, and the state continues to add new residents. Dotzour had this advice for landowners, for now: "Hang onto your land," he said. "I know we're in fairyland on land and real estate, but I don't see anything on the horizon that would change that for the next 12 months. Hold on for another year because people don't have any other option to invest in." |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Regarding the resale single family home market, – “2007 was equal to our “second best year” for resale single family home sales in In 2007 the top 10 cities that show price gains. Honolulu topped the list of 31 local market areas in the Index report with a 17.9% gain, followed by Salt Lake City (up 11.6%); Austin (up 8.6%); and – SAN ANTONIO came in the #4 position with a 7.89% gain. In addition to Resale Market It is estimated that we will end 2007 with approximately 22,700 sales of existing single family homes. As you can tell from the graph, this compares to 25,069 sales in 2006 (our banner year); 23,043 sales in 2005; and 19,527 sales in 2004. These current numbers put (Inventory: Resale Market): Next, let’s look at inventory. A contributing factor to price appreciation is housing supply and demand – defined as how many homes are on the market in relationship to the average number of sales occurring in the marketplace. The benchmark of a 6.5 month supply in housing is a strong indicator of continued price appreciation. As you can tell from this graphic, our 2005 average for months inventory was 4.5. (chart) January 4.9 February 4.9 March 5.0 May 4.9 July 4.8 August 4.4 September 4.2 October 4.1 November 3.9 December 3.8 In 2006, our average was down to 4.1 months. February 3.9 March 3.9 May 4.0 July 4.0 August 4.1 September 4.2 October 4.4 November 4.3 December 4.2 In 2007, our average was up to 5.7 months. (based on 11 months of data – January – November): (chart) January 4.4 February 4.8 March 5.0 May 5.7 July 6.1 August 6.1 September 6.2 October 6.4 November 6.3 Based on the graphs, inventory levels play an important factor in our housing forecast. At year end 2007, MLS showed an inventory of 12,000 listings Compare this to 2006 levels, that showed an inventory of 9,300 listings at year end. This shows an increase in the listing inventory of existing/resale homes of approximately 29% Prices of Existing/Resale Homes: Next, the 2007 price distribution of resale/existing single family home sales this past year. As we categorize all price ranges, let’s look at the breakdown in this next screen. As you can see, our largest price category is in the $100,000 - $179,999 range at 43.5% of the MLS sales. What’s also important to note is that 21.7% of the MLS sales are in the under $100,000 category – making 65.2% of the resale market under $180,000. (Chart) Up to $100,000 21.7% of the sales $100,000 - 179,999 43.5% (the largest price category) $180,000 - 249,999 16.6% $250,000 – 399,999 12.5% $400,000 – 549,999 3.3% $550,000 – 749,999 1.4% $750,000 – 999,999 .6% $1million + .4% What’s noteworthy in this next slide is that the single largest subset in the price distribution chart is in the price range of $120,000 - $139,999 at 12.8% of the sales. As we look at this breakdown, please note that The median sales price for 2007 is $150,100 - - an increase from $142,200 in 2006. As you can tell from this next graph, , (SLIDE OF AVERAGE PRICE INCREASES FROM 2002 TO 2007) 2002 $131,200 …… to 2003 $138,600 …… to 2004 $144,000 …… to 2005 $157,583 …… to 2006 $171,650….. to 2007 $183,080 Highest Average Sales Price by Area: (Resale Market) Geographically, if we look at our MLS map areas to determine the locations of areas that had the highest average sales price during 2007, we find that: n Area 10 (NW San Antonio – North of Loop 1604, east and west areas of I-10) came in the #1 position – with an average price of $369,018. n Area 25 ( n Area 18 (the Stone Oak area) had the 3rd highest average sales price at $283,369. Largest # of Sales by Area: (Resale Market) Looking at our map area to determine locations around our city that had the largest number of sales in 2007, we find: n North Central Area 18 (Stone Oak) had the largest number of sales; n NE Area 27 (Schertz – n NW Areas 1, 2 and 3 followed with the next highest numbers. (charts should depict estimated numbers for 2007: Source San Antonio MLS): Area 18 2,361 sales Area 27 1,616 sales Area 2 1,453 sales Area 3 1,399 sales Area 1 1,396 sales As mentioned earlier, we may have experienced fewer sales of existing single family homes in the Analyzing the value of various n n The 2007 average sales price for the NC neighborhood of Bluffview was $481,571 ($125 per square foot); an increase of approximately 8%. n In Deerfield (NC), the average sales price increased to $317,809 in 2007 – with a $105 per square foot value. Comparing this square foot value to 2005, we see a 14% increase. n The NW neighborhood of Braun Station showed a square foot value of $82, compared to $73 in 2005 – a 12% increase. n The North Central neighborhood of Hunters Creek showed a square foot value of $103, compared to $88 in 2005 – a 17% increase. n Coming in at $208 per square foot (or an average sales price of $656,875) – n The NE neighborhood of n In Shavano Park (NC), the average sales price in 2007 was $593,389 ($164 per square foot), showing a 21% increase in price from 2006; and …. n In the Dominion, the 2007 average square foot price of $184, with an average sales price of $820,019 is a 15 % increase from 2006. Based on the number of sales and price appreciation in 2007, we saw an increased demand in properties South of Loop 1604. Part of this could be the desire to move closer in to avoid traffic congestion and commute time.
|
