JUNE 2015

In This Issue

Dallas-area tops U.S. in home price increases

by Dallas Morning News


The Dallas-area led the country in home price gains in April.

Dallas home prices were 10.3 percent higher than in April 2014, according to the latest report from CoreLogic Inc.


Houston was second with a 9.5 percent gain.

Nationwide prices were 6.8 percent higher during the same period.



"Old fashion supply and demand, fueled by historically low mortgage rates and improving consumer finances and confidence, continue to push home prices up," said Anand Nallathambi, president and CEO of CoreLogic. "We expect continued price appreciation throughout 2015 and into next year."

North Texas home prices are now at a record high and about 15 percent ahead of where they were before the recession.




North Texas home prices, sales set new records in May
by Dallas Morning News



North Texas home prices jumped by 14 percent in May - one of the largest year-over-year gains ever for the area.


Median home sales prices hit a record $215,000 last month for pre-owned single-family homes sold by real estate agents.  Home sales were up 6 percent from May 2014 with 9,484 properties sold.


It was the largest one-month sales total ever for North Texas, according to data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.


With the strong sales, the number of homes listed with real estate agents in the area dropped 15 percent from this same time in 2014. There was a 2.4-month supply of homes in real estate agents' multiple listing service, less than half of what is considered a normal inventory.


May's strong home sales and price spike will put more pressure on the local housing market which is stretched with more buyers than sellers.


National surveys show that the Dallas-Fort Worth area is seeing the largest annual home price gains in the country. Prices here are rising at about three times the long-term average rate of residential appreciation for the area.


North Texas home prices have shot up by more than 40 percent during the last five years thanks to record economic growth in the region and an historic shortage of properties to purchase.


Pay attention to the chaos in the bond market
by CNN Money


That hissing sound you just heard is more air coming out of the bubble in

the global bond market.From Germany to the U.S., fixed income prices

tanked last week, sending yields way up.The turmoil is a clear signal that

investors are bracing for higher interest rates -- whether the Federal Reserve

is ready for its first rate hike in a decade or not.


Investors are betting on higher rates after mounting evidence that the U.S.

economy is bouncing back from a first quarter slump. Just look at Friday's

report showing the U.S. economy added 280,000 jobs in May: Anything over

 200,000 is good. Anything over 250,000 is excellent.


The clock is now ticking on Janet Yellen and her Fed colleagues to act --

before the bond market acts for them. "Central bank interest rate

suppression has reached its limit. The U.S. Treasury market ... is calling

out the Fed. Are they listening?" Peter Boockvar, chief market analyst at

The Lindsey Group, wrote in a note to clients.


Time for liftoff? Just look at the rout in the market for government debt.

Ten-year German bund yields nearly doubled last week to 0.85%. That

means bond prices fell a lot. In the U.S., the 10-year Treasury yield surged

to a 2015 high of 2.44% on Friday. That's up dramatically from just 2.13%

the week before.


In other words, the bond markets are already "raising rates," albeit to levels

that are still pretty tame. "The markets have imposed 'liftoff' already, ahead

of the Fed's likely move this fall," Greg Valliere, chief political strategist at

Potomac Research Group, wrote in a note to clients.


Investors are yanking cash out of the fixed income market. Government

bonds experienced a sixth-straight week of outflows, according to Bank of

America Merrill Lynch. Emerging market debt, a big beneficiary of extremely

low U.S. interest rates, suffered the biggest outflow in nearly five months.


The good news is the stock market weathered the storm admirably.

The S&P 500 retreated less than 1% last week and remains in striking

distance of all-time highs.


"The market isn't going bonkers," said Marc Chandler, global head of

currency strategy at Brown Brothers Harriman.


Bonds sell-off = better economy: The reason is simple: Investors realize

that a good economy can be good for businesses (and stocks) too.

There's a lot to celebrate in the latest jobs report. Not only did May payrolls

rise by a lot more than expected, but the government raised its estimate for

March job gains. Also, the unemployment rate rose to 5.5% for the "right"

reasons: A healthier jobs market drew in more potential workers off the


janet yellin time

Incredibly, the 5.6 million jobs created in the past 24 months is greater than

the combined total created in the 13 years before, according to BlackRock.


"We can clearly see the evidence for an employment landscape that is,

arguably, stronger than at any time over the past 20 years," Rick Rieder,

chief investment officer of fundamental fixed income at BlackRock,

wrote in a note.


Wage growth -- the missing link during the last few years of the recovery --

is also showing signs of life. Wages jumped 2.3% in May from the year

before, the best rate in nearly two years.


'Window of opportunity' It's not just the labor market that looks better.

Closely-watched auto sales revved to the best pace since 2005 in May

despite lingering concerns about consumer spending. 


"It is increasingly clear that the Fed's initial policy rate liftoff should begin in

September," Rieder wrote. He believes the Fed has a "window of opportunity

to move" given the fact that the markets are stable, payroll  growth is robust

and foreign central banks in Europe and Japan "are taking the reins of policy



Forcing the Fed's hand? The problem for the Fed is that it could lose

control of the situation -- and risk a loss of credibility -- if it chooses not to act.


"Many doves have cited the fact that if the Fed raises rates too soon, and

then has to reverse, its credibility could be damaged," Rieder wrote. "We

would suggest that when it comes to central banking, credibility cuts

both ways."



Why the Spring Real Estate Market has Been Awful for Buyers 
by Dallas Morning News

N EW YORK ( MainStreet ) - This spring has been a great time to sell a home, but not such a fine season for buyers.

According to the National Association of Realtors, existing-home sales dropped 3.3% from March to April, but April sales were still 6.1% higher than they were a year before. Unsold inventory was actually 1% less than it was a year ago, though, with a 5.3-month supply of homes still lagging behind the ideal housing supply of little more than six months. The median price of existing homes of all types in April was $219,400, which is 8.9% higher than it was a year before. Housing prices have been increasing for more than three years, but the jump in prices in April was the highest since a 10.1% uptick in January 2014.


"We know that a combination of low supply and high demand increases prices," says Curt VanderZanden, a loan officer with  Mortgage Express  in Portland, Ore. "That, of course, is just one reason values in all states rose at a healthy pace last year."



In this climate, 2.2 million existing homes just aren't enough. Houses sold faster in April (at an average of 39 days after listing) than at any time since July 2013 (42 days) and the second shortest time (37 days in June 2013) since NAR began tracking in May 2011.


"Housing inventory declined from last year, and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Lawrence Yun, chief economist for NAR. "To put it in perspective, roughly 40% of properties sold [in April] went at or above asking price, the highest since NAR began tracking this monthly data in December 2012."


Depending on where buyers are looking, that supply may be healthier than it looks. Distressed sales - which included foreclosures and short sales - made up just 10% of sales in April. That's down from 15% percent share a year ago and, according to real estate data firm RealtyTrac, that's in line with national foreclosure numbers from earlier this year that were the lowest the nation has seen since July 2006.


"Given that August 2006 was the peak of the housing bubble, this eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year - and is possibly even headed below historic norms given the skinny-jeans-tight lending standards over the past five years," said Daren Blomquist, vice president at RealtyTrac. "In markets where foreclosures were processed more efficiently we are seeing foreclosure numbers now below pre-crisis levels in some cases. Conversely, the cleanup of deferred distress is continuing in markets where a logjam of in-limbo foreclosures is still lingering from the housing crisis - as evidenced by rebounding foreclosure activity in those markets."


Roughly two dozen states have seen an uptick in overall foreclosure activity. Nevada, Massachusetts and Texas are among states that have seen an increase in homes entering the foreclosure process. Meanwhile, New York, New Jersey and Washington are among states that saw an uptick in foreclosure auctions earlier this year.


Meanwhile, homebuilders and new homes are starting to make a comeback. The National Association of Homebuilders notes that May's 733,000 new housing starts are up 16.9% from a year earlier. Meanwhile, the Census Bureau and Department of Housing and Urban Development noted that the sale of new single-family homes increased a whopping 26% from a year earlier. But a low 4.8-month supply (down from a 6.1-month stockpile in July) has kept average sale prices fairly lofty at $341,000. With the economy recovering, the employment picture looking brighter and Freddie Mac 's average interest rate for a 30-year fixed-rate mortgage still below 4%, there's plenty of incentive to go out house hunting. Until more of those new homes are built or more foreclosures hit the market, however, the housing market will be tilted toward the sellers.


"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices," NAR's Yun says. "However, the overall data and feedback we're hearing from Realtors continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."




Invest Your Tax Return into Your Biggest Asset
by Home Advisor

Come tax season, many people choose to invest their tax returns in their

homes. What's the primary reason they remodel? According to our research,

48 percent take on remodeling projects that will make their home more

comfortable. And while this seems to represent a shift away from remodeling

to increase a home's value, it doesn't mean one should ignore a project's ROI

potential. Here are a few projects that can make your home more livable and



While not nearly as exciting as a kitchen remodel, investing in a few key

aesthetic upgrades can yield significant returns on your home improvement investments. For example, replacing your front door, siding and garage door

can yield some of the highest ROIs. And while neither project is as "fun" as a

kitchen remodel, all are smart investments that will improve the look and value

of your home. If your exterior could use an upgrade, we've got door and

siding pros who are ready to help.


Adding a wood deck is an investment that will add value to your home while

improving your outdoor living space. The key here is to not over-invest in the

project. Composite decking might be more resilient, but with a significantly

higher average cost and drastically lower ROI, it isn't nearly as smart an


Besides improving the look and comfort of your home, new windows can

have a dramatic effect on your utility bills. When it comes to replacing your

windows, you have two choices: wood or vinyl. Both are good investments,

though wood windows usually have a slightly higher ROI. Get quotes from

screened and rated window pros. 


Finally, the room every homeowner dreams of remodeling: the kitchen. You'd

be hard pressed to find a home improvement expert or realtor who doesn't

think a kitchen remodel is a worthwhile investment. And, for the most part,

they're right. The key is to invest in the right remodel. You might daydream

about upgrading your kitchen with commercial-grade appliances, exotic

hardwood flooring, and other costly splurges. However, don't make the

mistake of thinking they'll return more because they cost more. To get the

most bang for your buck go with a minor, mid-range remodel. Want to check

out kitchen remodeling costs in your area? Our True Cost Guide will tell you

what you can expect to spend.

Luxury Kitchen


Last but not least, before starting any remodeling project it's important to

keep a couple of things in mind. One, if you're planning on moving within five

years, stick to smaller remodeling projects as they typically have shorter

payback periods. Second, and perhaps more important, never spend more

than 25% of the home's value on renovations.