Residential real estate investors had to step back from their activities in the aftermath of the meltdown of financial markets in 2008. The subprime mortgage market bubble burst and took with it the trend of appreciating home values. Mortgage lenders came to be far more than only gun-shy. Many realtors left their businesses after taking qualified buyers to the closing table only to have the lender back out at the last minute. Not all of these issues have rectified themselves yet, but the trend is positive, so much so that manufacturers of home building products are beginning to resume operations they closed several years ago. One such manufacturer is a North Carolina location of Georgia Pacific, which makes engineered, laminated floor support timbers for the residential market. The facility ceased operations at the end of 2009
but now is preparing to resume and plans to hire a full single shift in
the fall of 2013. That company’s economic analysts believe that much of the country will follow Dallas – Fort Worth’s lead.
Local Economic Indicators
With its pro-business stance and absence of any state income tax, Texas has led the country in population growth for several years. From July 2011 to July 2012, the Metroplex led the entire country. Of the 15 fastest-growing cities in the country, Dallas was seventh and Fort Worth was tenth. Together, the Metroplex they form grew faster than any other area of the country. Some of that growth can be attributed to young adults leaving more rural areas of Texas for the cities, but most of it can be traced to a flight away from states with anti-business policies and oppressively high state income tax rates. Many of Texas’ new residents have relocated from New York and California, where personal state income tax stands at 11 percent and may be increased.
Increased population creates a need for more support businesses and employees to work in them. Many of Texas’ recent emigrants from other states are bringing their businesses with them. Combined, all positive factors result in an unemployment rate of only 6.5 percent in the Dallas – Fort Worth area, further increasing the number of people who need housing and are qualified to buy it. http://www.dallasnews.com/business/residential-real-estate/20130808-dallas-fort-worths-hot-housing-market-hits-new-highs-in-latest-local-and-national-surveys.ece
Homes in crime-ridden neighborhoods or areas where schools are less than desirable are not going to be in demand in any economy. To a lesser extent, many real estate investors seek homes in neighborhoods where they are surrounded by higher value homes that can positively affect their properties’ sales or rent prices. We extend our real estate research to include these considerations.
Crime is a fact of life in large and rapidly growing cities. Overall, the entire Metroplex is quite safe. In fact, the crime rate in one of the towns of the Metroplex, Irving, has declined for eight consecutive years and at the end of 2012 was the safest it had ever been in its recent history. The decline in Irving’s crime rate is even more astounding in light of the fact that 60 percent of Irving’s residents live in apartments. Throughout the entire Dallas – Fort Worth area, most crime is nonviolent property crime. Both the Dallas and the Fort Worth police departments provide detailed, real time information on police activity in the forms of live maps and valuable area-specific statistics. When all other factors are equal, variation in neighborhood crime rates can make all the difference for both real estate investors and their later buyers or tenants.
Schools are important as well. The Metroplex offers high quality public education in all areas, but some school districts offer amenities that others do not. Differences in graduation rates, standardized test scores and extracurricular opportunities can serve to influence buyers’ or renters’ decisions to move into a real estate investor’s property.
Neighborhood market value is an essential metric for any real estate investor. It makes no sense for a real estate investor to buy at or near the top of the market in a neighborhood, make significant renovations and then try to recoup the total investment. Our real estate research includes sales price history of the property of interest as well as the overall value of the market in a specific neighborhood. This point of research allows the real estate investor to buy well below the average market value of the neighborhood, invest in upgrades in keeping with the value of the neighborhood and then sell or rent for a meaningful profit. Some of the best schools are where there are Dallas Luxe Homes.
Market value research likely is of greater importance in the Dallas – Fort Worth area than in any other current Texas metropolitan market. In the second quarter of 2013, the national median price of an existing single-family home was $203,500. The median price of an existing single-family home in the Dallas – Fort Worth area was $181,800. This difference is one factor that makes the Metroplex so attractive for those moving to Texas from other states, but it also limits real estate investors’ ability to perform significant renovations and still gain a profit from the project. Profitably turning a property is possible and common, but the real estate investor must be aware of the neighborhood’s ability to carry a higher priced home.