dallasrealestate – Page 6 – John Angell

Vague Specifics – December 2022

On December 15th, the Federal Reserve voted to raise interest rates another .5%. While that is less than the .75% intervals it has been employing to combat inflation these last few months, it puts interest rates at their highest in 15 years (4.25%-4.5%). While mortgage interest rates will likely spike a bit in the coming weeks, they will settle again, but the Fed is not expected to lower rates until 2024 at the earliest.

Despite the strong possiblity of a recession in 2023, the DFW market will likely resemble the markets of 2018 and 2019, according to trusted economists. While they were hardly banner years, they were hardly bad years. Both enjoyed healthy price appreciation and listing inventory, although I have a feeling property values will appreciate modestly the next couple of years given what’s happened to the housing affordability index. It’s hovered a bit over the last 4 months, but the median income household can no longer afford the median-priced house in the metroplex. We’re still nowhere close to places like New York, Los Angeles and Miami, but a healthy housing market still provides access to the average homebuyer.

For our annual trip Kacie, my mom, my aunt and I were able to get away for a week in Big Sky, Montana. Like I’ve said sarcastically, don’t go there. It’s terrible. We’ll just retire there so you don’t have to. In all seriousness, its a magical place, but like so many other beautiful areas it’s been discovered by costal migrants who have just sold their shanties for $3m and throw cash at houses like Monopoly money.

Merrry Christmas!!!

MLS Statistics – November 2022

Preparing for a Recession

Bloomberg all but guaranteed the US will experience a recession in 2023

Fortunately, this recession should be more short-lived and less-extensive than the Great Recession. What are you some steps you can take to prepare?

1) Keep a Level Mindset – Recession is just a part of the economic cycle. We’ve enjoyed one of the longests period of economic growth in history, and it’s time for an adjustment. While we will have to make concessions in discretionary spending, this will not resemble the Great Recession.

2) Take Control of Your Finances – Analyze your Income, expendatures, and set aside a 3-6 month emergency fund if possible. Set a monthly budget and adhere to it. For me, Uber Eats is going to be the biggest concession, especially the way prices are now. A $7 pork tenderloin on my BIg Green Egg vs an $80 Italian food delivery. Good Lord now that I think of it I’ve really been wasting money.

3) Don’t Get Behind on Debt – Debt snowballs, and it snowballs even further when you’re behind. Pay off what debt you can going into the recessionary cycle, and do not let yourself get behind.

4) Don’t Panic-Sell Your Investments – The DOW is down around 8% from January and will likely be volatile for the foreeable future. No one has ever mistaken me for Warren Buffett, he’s only 5’10, but unless you’re in dire straits you don’t sell during a depressed market. It will rebound.

5) Keep Saving! – It’s a recession, but the rules of basic home economics still stand. If you’re able to save even 5% of your paycheck, your older self will thank you. Unless you want to work until you’re 90, that is…

6) Be Ready to Invest – While we never know the market has recovered until it’s already rebounded, the wisest investors buy at or near the bottom when others are keeping their money on the sidelines.

Architectural Corner: Foursquare

Also called the “Prairie Box”, the American Foursquare was a mass-produced, post-Victorian style that was popular from the 1890’s-1930’s. Along with the California Bungalow, it was a very popular mail-order era style of property, gracing the Sears Roebuck catalogue.

As has been almost every new style of architecture, Foursquare was a direct change-of-pace from the previous ornamentation of Victorian & Revival styles, incorporating portions of both craftsman and prairie styles. Always a huge, boxy design to maximize interior space, 2-and-a-half stories, usually featuring 4 large rooms per floor, these homes used a variety of building materials and were easily mass-produced using handcrafted woodwork A large front porch, symmetrical front fascade, and all bedrooms on the second floor were characteristic. Truly a style that has weathered the ages gracefully.

August 2022 MLS Statistics

Vague Specifics – August 2022

We’re not really sure what’s going on right now with the market, prices and the recession. There are people smarter than me (God knows there are plenty…) who can more accurately predict the next 12-24 months, but the best I can tell you is a grand “price correction” is not on the horizon. It’s possible, however, that buyers who closed this year may be in for a dose of historical context.

Back in ye olden days (ie all of recorded history up to 2020), Dallas had a comparatively sleepy market. The rule of thumb was you could expect to make a nice profit off the sale of your home if you lived in it for 3-5 years, all other variables equal. Those days may be here again for a time, and they need to remain for several years for home affordability to re-balance. The average person should be able to afford the average house (a rating of 100). We’re now standing around 76.

76 isn’t catastrophic – Los Angeles and San Francisco are 16 and 17, respectively – but it’s still not optimal.

So where are prices going? We saw a roughly 20% increase in sales prices from January-May. A $400,000 house in January was selling for $440,000, a $440,000 house in March was selling for $480,000 in May. Where we are now is likely somewhere in between. A-Tier houses (houses perfectly updated with universal appeal) will likely hold their value going forward due to continued low supply, but B and C-Tier homes will likely sell this fall somewhere in between where they would between March and May. I know this isn’t scientific, but it’s the best anecdotically I can do.

As always, call me if you have any questions or insights. I’m never too sure of myself to not listen.

Preparing for the Coming Winter

The summer of 2022 has been brutal, and according to the Farmer’s Almanac we’re in store for a particularly cold winter. We’ll have our standard 3 weeks of beautiful DFW fall weather, followed by rain, wind and cold. Before the oven becomes a freezer put yourself to work outside and prepare.

Paint, Stain & Reseal – This covers a lot of items. The Texas summer is murder on paint, wood, caulk and sealant, especially south-facing surfaces. The winter moisture will exploit 0this, so make sure the house, fence, and decks are painted/restained and the caulked and sealed surfaces and cracks are stripped and re-sealed. This could take days; always handle the sealing/caulking first!

Replace Old Windows – Window seals are the same as all the others. The heat causes them to expand, the cold contract and lose their seals. Broken seals are typically more unsightly than inefficient, but enough of them can mean higher bills.

Clean the Gutters – Can’t be overstated the damage standing water in your gutters can do to your house, and in extreme cases it can cause the gutters to collapse. A ladder and a blower can save you thousands.

Add Insulation – Every 10-15 years your insulation compacts to the point where it needs to be supplemented. There are instances where it just makes sense to drain all the existing insulation and just start over, especially if you have rodents or squirels in the attic.

Service Your Furnace – As important as servicing your air conditioner is to keeping you cold, servicing your furnace keeps you from dying. Gas leaks can kill.

Fireplace Maintenance – It’s hard to imagine a roaring fire while it’s 100 degrees outside, but before you know it you’ll be wanting one. Make sure the dampers function properly, repair damaged masonry or brickwork, and climb on the roof to in-spect your chimney cap if you have one. If you heard birds chirping up ther during the spring, there may be a flamable abaondoned nest in the chimney!

MLS Statistics – August 2022

Architectural Corner – The American Craftsman

Inspired by the British Arts & Crafts movement and beginning in the later years of the 1800’s, American Craftsman represented a departure from the ornamentation of the Victorian Style and urban grit of the Industrial Revolution, embracing a return to countryside simplicity. It began in Southern California and spread from 1900-1929 throughout the United States, most common in California and the midwest.

Craftsman homes feature low-pitched, gabled roofs, with overhanging eaves and exposed rafters, signature front porches and tapered columns, large bay windows, and stone or stucco accents. They are almost always painted wood siding, typically with cedar shaker shingles.

Not only is the craftsman style still extremely popular with smaller-sized new construction today, thanks to their quality build they are a common target for renovators, although their small size often warrants signficant additions.

Vague Specifics – July 2022

After 2 years of inventory halfing year-over-year, the number of houses for sale is climbing rapidly and I couldn’t be happier. “But John, you stalwart yet sensitive archetype of masculinity,” I hear you ask, “isn’t this a sign prices are going to ‘adjust’?” Well, dedicated reader, I certainly don’t have a crystal ball, but even if listing inventory were to double for the next 2 years we would still be in a market similar to 2019. Was that a great year for real estate? No, but it was certainly above average. Also, consider the fact we only have 2 months of inventory. That would multipy by 3 and we’d still only be at the border of a buyers and sellers market. See the graph below which reinforces my point. We’ve got a long way to go to even get close to 2019.

It’s quite possible interest rates will end up in the 7’s by year’s end. I wouldn’t necessarily call this permanent, although since 1971 the average 30-year fixed mortgage rate is right at 8%, and once inflation is tamped down (we’re nowhere near that) they’re likely to settle, hopefully sub-5 but probably not. This is all just my speculation.

I’ve started using median numbers instead of averages on page 2 of the newsletter. After a heated discussion with one of the statisticians at Texas A&M (never argue statistics with a statistician) I’ve decided to make the change because averages tend to exagerate statistics. Also, the powers that be stopped breaking down DFW home sales into single-family, condos and townhomes so the information I’m able to supply is going to be somewhat dimished. Make all the A&M jokes you want in lieu of this information.