The Texas economy continues to outperform the U.S. economy in the current recovery, according to the Real Estate Center’s latest monthly economic review.
The stateâ€™s economy gained 194,400 jobs from November 2009 to November 2010, an annual growth rate of 1.9 percent, compared with the nationâ€™s 842,000 jobs, an annual growth rate of 0.6 percent.
Texasâ€™ private sector continues to play a key role in job creation. The stateâ€™s private sector posted an annual employment growth rate of 2.2 percent compared with 1 percent for the U.S. private sector from November 2009 to November 2010.
The stateâ€™s seasonally adjusted unemployment rate was 8.2 percent in November 2010, the same as in November 2009, while the nationâ€™s rate decreased from 10.0 to 9.3 percent over the same period.
All Texas industries except the trade and information industries had more jobs in November 2010 than in November 2009. The stateâ€™s mining and logging industry ranked first in job creation followed by professional and business services, education and health services and manufacturing.
All Texas metro areas had more jobs in November 2010 than in November 2009. McAllen-Edinburg-Mission ranked first in job creation followed by Brownsville-Harlingen and Austin-Round Rock-San Marcos.
The stateâ€™s actual unemployment rate in November 2010 was 8.3 percent. Midland had the lowest unemployment rate followed by Amarillo, Lubbock, College Station-Bryan and Abilene.
Housing was more affordable in November than at any time in the last 40 years. So it should come as no surprise that Existing Home Sales were UP 5.6% for November, bringing them to an annual rate of 4.68 million, a tad above the expected 4.65 million rate. Sales were up for single-family homes, although down for condos and coops, and all regions of the country registered gains.
The median price increased to $170,600 in November (not seasonally adjusted) and that figure is UP 0.4% over a year ago. The FHFA index of prices for homes bought with conforming mortgages also was up 0.7% in October (seasonally-adjusted), its first gain since May. The months’ supply dipped to 9.5, with a decline in overall inventories.
Thursday saw new single-family home sales UP 5.5% for November, to a 290,000 annual rate, a little short of expectations. The months’ supply of new homes dropped to 8.2 from October’s 8.8 level. The new homes inventory is now down to 197,000, 65.6% off its 2006 peak, and the lowest inventory level going back to 1968. The median selling price went up to $213,000, after dipping under $200,000 in October.
Last Thursday it was good to see that Housing Starts picked up for November, rising 3.9% for the month to an annual rate of 555,000 units. This beat expectations and was especially gratifying because all the gain came from a 6.9% increase in single-family starts. These have now been up three out of the last four months.
Multi-family starts were down for the fourth month in a row, but these are very volatile on a monthly basis. In fact, the 12-month moving average for multi-family starts is still trending higher, up 5.9% compared to a year ago. The demand for multi-unit residences should continue to grow, which is why some observers foresee a large rebound in multi-unit construction in the new few months. Although there are still excess housing inventories, they are falling quickly and experts expect them to drop further, even with a home building recovery.
Addison-based Foreclosure Listing Service’s newly released figures show that the number of foreclosed Dallas-Fort Worth area homes up for auction in January is 6 percent lower compared with last year.
According to the figures, 5,543 homes are ready for the January 2011 auction, down from 5,894 a year earlier.
Even so, Foreclosure Listing Service CEO George Roddy Sr. said not to expect big declines in foreclosures until employment picks up.
â€œDFW residential foreclosure posting activity for January remained on the extreme high end in this foreclosure cycle,â€ Roddy said. â€œUntil a significant amount of workers begin to be re-employed, there is simply no reason for foreclosure postings to decline. Even re-employment in todayâ€™s market does not assure that a familyâ€™s bills will be paid because many workers are being hired at wages far lower than at their previous jobs.â€
Nine of the top ten most cost-effective projects in terms of value recouped are exterior replacement projects, according to the National Association of Realtors 2010â€“11 Remodeling Cost vs. Value Report.
Among the report’s findings:
* The steel entry door replacement is the project that returned the most money, with an estimated 102.1 percent of cost recouped when the home is sold.
* The midrange garage door replacement is expected to recoup 83.9 percent of costs.
* Upscale fiber-cement siding replacement was deemed the most cost-effective among siding projects, recouping 80 percent of costs.
* Upscale vinyl window replacements were expected to recoup the most among window replacement projects, at 72.6 percent.
* Wood decks tied with a minor kitchen remodel for the fourth most profitable project, recouping an estimated 72.8 percent of costs.
Meanwhile, here’s what the study found inside the house:
* An attic bedroom addition costs more than $51,000 and recoups an estimated 72.2 percent.
* A basement remodel costs more than $64,000 and recoups an estimated 70 percent.
* Improvement projects that are expected to return the least are a midrange home office remodel, recouping an estimated 45.8 percent; a backup power generator, recouping 48.5 percent; and a sunroom addition, recouping 48.6 percent of costs.
In addition, the study found that Texas was among the regions that were consistently estimated to return a higher percentage of remodeling costs when a home is sold.
About 2,200 condominium projects nationwide have lost their eligibility for FHA-guaranteed sales and refinancing, and 23,000 more could follow.
Loss of eligibility means people hoping to buy units in these buildings won’t qualify for FHA financing.
Last year, the FHA set standards requiring that condo projects approved for FHA financing before 2007 have their approvals renewed by Dec. 7, 2010. About 25,000 projects missed the cutoff.
FHA extended the deadline, setting new deadlines throughout 2011. However, the 2,200 projects with the oldest approvals still lost their eligibility.
The FHA urges all condominium owners to get in touch with their associations and push them to meet the revised deadlines.
More information, including a search engine that allows you to check the status of a condo project, is available online.
There wasn’t a ton of news impacting the housing market last week, but we did get more talk about the move up in mortgage rates. Freddie Mac’s weekly survey of conforming mortgages showed the average rate on a 30-year fixed-rate mortgage back at the level it was last June. That still puts mortgage rates below where they were a year ago when everyone was happy to get in on those bargains. So none of this is bad news in the absolute sense but the trend should be noted. People who want to buy or refinance should not drag their feet!
It was encouraging to see new construction spending UP in October, now two months in a row, and the gain mostly came from a rise in residential construction. The U.S. Census Bureau put residential construction UP 2.4% in October to an annual rate of $240.3 billion. Though headed in the right direction, residential construction is still down 8% from a year ago.