By James P. Gaines, Luis B. Torres, Wesley Miller, and Paige Woodson

June 2018 Summary

Texas housing sales fell 3.2 percent as activity slowed, especially in the $200,000-$300,000 price range. Housing demand, however, remained particularly strong amid the state’s continued economic expansion. Developers accelerated supply-side activity but struggled to match demand. The rate of single-family housing construction significantly lags pre-recessionary peak levels. Homebuilders continued to grapple with increased land, labor, and lumber costs, as well as increased regulations. A flood of new listings across the price spectrum (except for those below $200,000) provided marginal, yet necessary, relief to inventories after stalling last year. While the pause in sales activity moderated price pressures, housing affordability worsened across the state. Overall, the housing market fundamentals were unchanged in Texas, characterized by lagging supply and robust demand.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, reached its highest level since 2008 as construction employment and wages elevated. This momentum should continue through the summer as the Texas Residential Construction Leading Index (RCLI) extended its upward climb amid gains in single-family housing starts and weighted building permits.

In response to housing shortages (primarily for homes priced under $300,000), Texas developers increased supply activity at the earliest stage of the construction cycle. The inventory of vacant developed lots (VDLs) rose 1 percent quarter over quarter (QOQ) in the Texas Urban Triangle, led mostly by 3.3 percent growth in Dallas-Fort Worth (DFW). The VDL inventory flattened in Houston and San Antonio and fell 10.9 percent year to date (YTD) in Austin.

Despite the overall uptick in lot development, single-family housing construction permits (unweighted) fell 1.8 percent in the second quarter, slowing YTD growth to 2.2 percent. Texas remained the national leader with 11,132 nonseasonally adjusted permits issued, accounting for 16 percent of the national total. Houston topped the metropolitan rankings, issuing 3,681 permits, followed by Dallas-Fort Worth at 3,295. Permit activity fell by more than 5 percent QOQ in both of the major metros. Austin held fifth place with 1,726 monthly permits after a 13.7 percent second-quarter increase. The San Antonio MSA, which has 358,000 more residents than Austin, issued just 759 permits.

Total Texas housing starts inched closer to pre-recessionary levels after stepping back in May. Single-family housing starts surged in the major metros, recording double-digit growth YTD across the board. In addition, multifamily investment continued to pour into the North Texas market.

Despite upward trending VDLs and housing starts, single-family private construction values fell 3.7 percent in the second quarter. Construction values dropped 6.9 and 5.4 percent QOQ in DFW and San Antonio, respectively, followed by Houston at 0.1 percent. On the other hand, Austin posted a 2.7 percent quarterly increase, pushing YTD growth above 4 percent.

The Texas months of inventory (MOI) remained constrained but posted its fourth consecutive uptick to 3.7 months. Around six months of inventory is considered a balanced housing market. The recent pause in sales activity and a flood of new MLS listings provided marginal relief to inventory constraints. Housing market imbalances, however, are far from over as demand outpaced the rate of single-family residential development. The recent inventory improvements occurred primarily for homes priced above $300,000 where supply is more stable. In the $200,000-$300,000 price range, the MOI held at 3.1 months, while the MOI for homes priced below $200,000 sank to an all-time low of 2.7 months.

The wave of new listings lifted the MOI across the major metros. Fort Worth maintained the lowest MOI at 2.4 months but reached its highest point in over two and a half years. Austin and Dallas hit YTD highs at 2.6 and 2.9 months, respectively, followed by San Antonio at 3.4 months. Houston was the exception, where steady sales volumes pressured the MOI down to 3.8 months after a three-month increase.

Demand

Housing sales fell 3.2 percent in June, pulling the YTD total down 1.9 percent. The softening occurred primarily for homes priced below $300,000, which accounted for two-thirds of sales through Multiple Listing Services (MLS). Sales on homes priced below $200,000 have slid since 2013, but the $200,000-$300,000 price range flourished until this year’s plateau.

This same price cohort hindered the markets in Austin, Dallas, and Fort Worth, where housing affordability declined substantially over the past year. Through the first six months of 2018, total housing sales dropped 9.2 percent in Austin, 5.7 percent in Dallas, and 4.1 percent in Fort Worth. Most of the North Texas decline, however, occurred in the resale market. New-home sales in the second quarter jumped 7.3 percent in DFW, approaching a decade-high. Austin’s new-home sales ticked down 1.2 percent QOQ but hovered closest to pre-recessionary levels. Total sales calmed in San Antonio after reaching record levels in May. In Houston, total sales increased 2.2 percent YTD amid a second-quarter boom in the new-home market.

Despite the pause in closed listings, Texas’ economic expansion bolstered housing demand. The average days on market(DOM) sank below 56 days for the first time since 2015. Austin, Houston, and San Antonio faced similar demand conditions with DOM at 53, 54, and 56 days, respectively. The Dallas DOM fell under 42 days after inching up over the past year, while Fort Worth homes flew off the market at an average of just 38 days.

Statewide, homes priced from $200,000 to $300,000 averaged 50 days on the market, corroborating that housing shortages, not demand, are hindering the market. Demand spilled into this price range as homebuyers struggled to find options priced below $200,000. The bottom price cohort (below $200,000) accounted for the largest proportion of sales through an MLS at 34 percent. In 2011, more than 72 percent of sales fell in this price range. Demand also heightened on the upper-end of the market (above $500,000) where the DOM reached a record low 78 days.

Concerns regarding international trade pulled investments into safe assets, offsetting robust economic data and weighing on interest rates after they reached multiyear highs in May. The ten-year U.S. Treasury bond yield ticked down 7 basis points to 2.91 percent, despite the Federal Reserve’s 25-basis-point increase in the federal funds rate. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate balanced below 4.6 percent after an eight-month climb. Despite the recent run, mortgage rates have held historically low since the Great Recession.

Prices

Texas builders reduced home sizes to combat rising land, labor, and lumber costs. The median square footage (sf) of new homes sold through an MLS fell to 2,283 sf, the smallest since 2011. Smaller homes for sale, combined with upticks in inventory, calmed home price appreciation. The Texas median home price fell to a six-month low below $229,000. The median price per square foot (ppsf), however, rose for the 13^th consecutive month to a record high $115.53.

Austin led the state with a median price above $306,000, despite having a median square footage of just 2,187 sf for new homes—the lowest of any major Texas metro. As a result, the median ppsf increased $3.84 this year alone to $153.63. Dallas’ median price ($281,348) and ppsf ($131.45) flattened on the year as new-home square footage continued a yearlong slide. A similar phenomenon occurred in Houston, holding the median price and ppsf around $230,000 and $108.35, respectively. Fort Worth’s shift towards smaller homes was even more drastic, pushing the median ppsf above $119.25. Rampant demand and pronounced shortages, however, more than offset the adjustment as the median price increased 8 percent year over year to $233,475. San Antonio maintained the lowest median price of the major metros at $220,100, but its ppsf rose to $113.84.

Despite softening price pressures, the Texas Housing Affordability Index sank below 1.50 in the second quarter, the lowest level since the housing crisis. The index indicated that a Texas family earning the median income could no longer afford homes priced 50 percent above the median sale price. For much of the past decade, Texans enjoyed the capability of affording homes priced nearly twice that of the median. The Dallas index settled at 1.39, the lowest of the major metros, followed by Austin at 1.40. Fort Worth had the largest decline in affordability, matching Houston at 1.63. In San Antonio, the affordability index sank six points to 1.50 in the second quarter.

________________

^*All monthly measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

 

Original article: https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

 

 

 

1. Develop a DESIRE to achieve the goal. The desire must be intense. How do you intensify desire? Sit down and write out all the benefits and advantages of achieving your goal. Once the list goes between 50 and 100 your goal becomes unstoppable.
2. WRITE your goal down. Once it goes into writing it becomes substantial and starts etching itself into your subconscious.
3. DEADLINE your goal. Analyze where you are now in relation to the goal and then measure how long you will reasonably need to complete the goal. Then set the latest outside date.
4. IDENTIFY 1) the obstacles you will need to overcome, 2) the help you will need to acquire, e.g. knowledge, people, organizations. In each case write them out in a clear list and analyze them.
5. Take all the details of steps 3 and 4 and make a PLAN. List all the activities and prioritize them. Rewrite the list, optimize it, perfect it.
6. Get a clear MENTAL PICTURE of the goal already accomplished. Make the mental image crystal clear, vivid in the mind’s eye. Play that picture over and over in your mind.
7. Back your plan with PERSISTENCE and resolve. Never, never, never give up even when you hit setbacks.

 

Follow those steps religiously and you will be a high achiever.

DANGER – You can read this and think, “That sounds interesting. I must try that sometime”.

 

Intense Desire – Rocket Fuel For Your Goals!
Goal Setting Step 1

Have you set personal or business goals and failed to achieve them?

Here is a crucial question: WHY?

The answer is simple:

Because we did not have a strong enough desire.

Some may argue with that. “But I did have a strong desire and still I didn’t get there.”

Sorry, but the desire was still not strong enough.

This article is about INTENSE desire. In other words, a PASSION.

Rocket fuel is powerful. The energy it releases boggles the mind.

Intense desire can do the same for human achievement.

Are you working on a goal right now?

Is it faltering or not progressing as fast as you would like?

Analyze the intensity of your desire.

How do you identify intense desire, passion?

It’s what keeps people working all hours, up early, late to bed.

It’s what fueled Stephen Spielberg from the age of 13 to be a movie director.

It’s what powered Whoopi Goldberg from childhood out of impossible circumstances to be a very successful actress.

The desire dominates conversation, thinking, actions.

How do you intensify desire? This article will show how.

Question: Where do desires start? How do they form?

Unlike animals with their internal programming we call instinct, the human mind has the colossal potential for reasoning, coming to conclusions, thinking things through.

So desires start in the mind.

Research has shown that impulses are transmitted through electro chemical processes across the synapses, tiny spaces less than one millionth of an inch across, which separate the brain cells or neurons.

Patterns and tracks are formed in our thinking processes. Think the same thought regularly and it becomes a habit forming a deep track like a well-used path across a field.

On the other hand, an occasional thought may pass through the mind and be forgotten just like a path seldom used which becomes overgrown.

Now apply this information to desires

A desire may come into the mind and soon be forgotten in the everyday hum drum of life.

But keep thinking about it, keep your mind focused on it and what happens?

The desire becomes strong, very strong. Then?

Action follows right after.

So back to our original question – how to intensify desire?

Take as an illustration a work of art. After many years the picture suffers from pollution and discoloration. It may only be a shadow of its original glory.

But after it has gone through a meticulous restoration process what happens?

The picture breathes life and vibrancy again. Why?

Because now you see the detail. There are moods, objects, expressions in that picture you never saw or felt before.

Detail makes the difference.

How then can we intensify desire?

By listing details, particularly benefits!

Once the list gets past 20 or 30 benefits your goal becomes unstoppable.

Why not do this exercise today with one of your goals.

Have you set a goal for your business to make $X this month?

Making money for the sake of it after a while becomes mundane. There has to be something more.

Make a list of all the benefits from using that money.

What difference will it make to your family, your lifestyle, your enjoyment of life, your business growth?

What if one of your goals is to develop a skill or awaken a dormant talent or ability?

Write down a huge list of the benefits this will bring you and your loved ones, or your business.

The more you write, the more details your mind conjures up, the greater the intensity of desire becomes.

This is the first step of goal achievement and the foundation.

With intense desire fueling your goals you have every chance of rocketing to success!

 

Goal Setting Step 2

The smiling face of someone close to you.

The classroom on your first day at school.

The first automobile you owned.

That beautiful sunset on your last vacation.

These sentences immediately bring pictures to your mind.

The brain often thinks in pictures.

The human eye captures an incredible amount of information with just one glance and relays it all to the brain which then translates that information into a form we ‘see’.

It would be more accurate to say we see with our brains than with our eyes.

But here is a point that gets more exciting the more you think about it.

The brain does not need to receive information through the eyes to see every time.

It can recall from memory sights, sounds and feelings and put the whole sequence together and run it like a movie all inside our head.

Where is all this leading us?

If we could construct our own movie casting ourselves in the starring role acting out the scene as if we have achieved our goal and play it over and over in our minds what would be the result?

Answer:

SENSATIONAL!

A movie is made by a lot of people but a key figure is the director.

His job is to visualize the script and guide the production crew and actors.

So be your own director.

Visualize yourself enjoying the benefits of having reached your goal.

This may sound a little ‘off the wall’ but many find this technique works!

In your mind create your own movie theater.

Imagine it now. Imagine the walls, the seats, the stage, the screen. Put yourself in the front row. Sit back, press a button and start the movie.

See yourself up there in vivid color enjoying whatever it is you were seeking.

Rewind. Play it again!

Every time you want to feel a surge of motivation, in your mind, slip into your own movie theater and just play it again.

This mental imaging merely cooperates with the way our brain works.

And what goes on in our minds has a direct bearing on our actions and results we produce in our lives.

So go ahead!

Visualize your goal, create the mental picture and put an MGM studio in your head!

 

 

 

The Remaining 90% – Sheer Persistence
Goal Setting Step 3

In 1915 Ty Cobb set up an amazing baseball record of stealing 96 bases.

Seven years later Max Carey set the second-best record with 51 stolen bases.

Was Cobb twice as good as Carey?

Consider this: Cobb made 134 attempts. Carey made 53.

So Carey’s average was much better.

Cobb however made 81 more tries and was rewarded with 44 more stolen bases.

When you get behind the big success stories in any given field, you often find the most successful have made more attempts and spent longer hours at the given task than anyone else.

In other words, they give the law of averages a chance to work in their favor! They just keep on striking out, often against all odds.

In goal achievement this sterling quality of persistence and its bed-fellow perseverance, is absolutely essential.

You must just keep at it day in day out. Then you are GUARANTEED results – eventually! To maintain this kind of momentum you have to develop mental toughness.

To be mentally tough means you minimize the effects of discouragement and you turn negatives into positives.

Whenever a negative thought comes into your mind or when others make negative comments, say to yourself, “Delete that Program” and replace it with a positive thought.
For example, when you catch yourself thinking, “This is just not working, this is useless and a waste of time”, trigger mental toughness by saying “DELETE THAT PROGRAMME”.

Instead think: “What do I need to do to make this work!”

Admittedly, negative mental habits are hard to break.

It takes time and persistence but oh my, the rewards when you do!

Do we understand then why the title of this final session is:

“The Remaining 90% – Sheer Persistence”?

It really does come down to that.

Just keep on going, persist, persist, persist, and let the good old law of averages work for you.

Have you clearly set in your mind what you want to accomplish in the next six months, next year, next 3 years? People who don’t can’t expect to get anywhere fast.

Get yourself organized, focused, passionately driven toward your goals today.

 

5 Elements of a Useful Goal

 

• SPECIFIC: Describes what you want to accomplish with as much detail as possible.

 

• MEASURABLE: Describes your goal in terms that can clearly be evaluated.

 

• CHALLENGING: Takes energy and discipline to accomplish.

 

• REALISTIC: A goal you know you are actually capable of obtaining.

 

• STATED COMPLETION DATE: Goals that break longer term goals into shorter pieces and clearly specify target completion dates