COMPREHENSIVE HOUSING MARKET ANALYSIS Summary Economic Conditions Source: U.S.Bureau Oflaborstatistics Figure 1
COMPREHENSIVE HOUSING MARKET ANAL YSIS Dallas, Texas
U.S. Department of Housing and Urban Development Office of Policy Development and Research As of April 1, 2006
Summary
Economy 5 years, recorded more than Housing Market Area 61,000 sales during the 12 months The Dallas HMA is undergoing ending March 2006, 10 percent an economic recovery. Following a higher than the 55,500 sales in the period of slow growth and job losses previous 12-month period. For in several sectors between 2001 and the past 12 months ending March 2003, job growth in Collin County 2006, the average home sales returned to double-digit levels in 2005. price was $204,250, an increase During the past 12 months, the of 4.5 percent compared with Oklahoma Love increase in jobs in Collin County Bryan $195,500 for the 12 months ending Texas totaled 32,300 or 15 percent. In March 2005. Recent interest rate Cooke Grayson in Denton County, the number of jobs nn
Fa increases have slowed the gains increased by 13,100 or 10 percent. in the number of homes sold, but se During the same period, Dallas Wi Denton Collin nt the annualized home sales rate Hu County recorded an increase of Rock- has been above 60,000 for the past wall 3,700 jobs, following a loss of more Tarrant Dallas 3 months. As interest rates are than 100,000 jobs from 2000 to 2005. Kaufman forecast to continue to increase, Johnson Overall, the number of jobs in the HMA Ellis sales are expected to continue to has nearly reached the 2001 level. The Dallas Housing Market Area (HMA) decrease, but not significantly, in northeast Texas includes Collin, Dal- An important economic driving force because of continued employment las, and Denton Counties. Each county growth. Housing demand esti- is treated as a separate submarket in this in the Dallas area is the Dallas/Fort mates for the HMA are displayed analysis. The city of Dallas is the 10th Worth International (DFW) airport. largest city in the nation, with more than Located on more than 18,000 acres, in Table 1. 1.2 million people. Seven other cities in the airport is home to businesses the HMA have a population of more than that employ more than 75,000 Rental Market 100,000 each, including Plano, in south- people and contribute more than Since 2003, the rental market in ern Collin County, with a population of $14 billion annually to the area the HMA has been soft. In 2004, 250,000; Denton, in Denton County, with economy. The airport is close to vacancy rates were estimated a population of 104,000; and five other both Collin and Denton Counties. at more than 10 percent in all cities in Dallas County with a population Both counties and the downtown three counties. During the past of more than 100,000. Dallas area are expected to continue 24 months, as a result of lower Market Details to be strong growth centers in the construction levels and economic HMA during the forecast period. recovery, the vacancy rates de- Economic Conditions...... 2 clined to approximately 8 percent Population and Households...... 4 Sales Market in Collin and Denton Counties. In Dallas County, the vacancy rate The home sales market in the HMA, Housing Market Trends...... 6 is estimated at nearly 13 percent. which has been robust for the past Data Profiles...... 13 D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS Summary Economic Conditions Source: U.S.Bureau ofLaborStatistics Figure 1. Labor Force & Resident Employment Source: Forecast—estimatesbyanalyst period. Underconstructionasof April 1,2006. Notes: Total demandrepresentsestimatedproductionnecessarytoachievea balancedmarketattheendofforecast Table 1. temporarily improved thevacancy ratebuthas KatrinaandRitatotheHMA from Hurricanes approximately 25,000evacuees The relocationof 1,250,100 1,350,100 1,450,100 1,550,100 1,650,100 1,750,100 1,850,100 1,950,100 2,050,100 Under Construction Total Demand
Continued
Labor Force Trends inLaborForce, ResidentEmployment,and Unemployment RateintheDallasHMA,1990to2005
1990 1992199419961998 200020022004 Ho using DemandintheDallasHMA,3-Yea
Resident Employment that, since1990,theprofessional shown inFigure1.2shows and residentemployment trendsare 3,100 jobsannually. Laborforce morethan corded anetdecreaseof 2000. Since2000,theHMAhasre approximately 1.85millionjobsin annually, ormorethan3percent,to las HMAincreasedby59,000jobs B 68,800 Sales Units 7,900 Dallas HMA farm employmentfarm intheDal etween 1990and2000,non 13,800 Rental Units 8,800
Unemployment Rate 35,800 Sales Units 3,600 Collin County Submarket common, particularlyinDallasCounty. had astronger effectonrents. Concessionsarestill r Forecast, April1,2006to April1,2009 Rental 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Units 2,000 6,900 -
Unemployment Rate - - 16,400 March 2006. the HMAfor the 12monthsending employment ineach sectorin of Figure 3provides thepercentage in theHMAarelistedTable 2. year since2003.Major employers jobs butatamuch slower rateeach Dallas Countyhascontinued tolose 3.7 percentinDentonCounty. 7.9percentinCollinCountyand of 2004, withanannual jobincrease An economicrecovery beganin in every sectorexcept government. than 130,000jobs, includinglosses and 2005,DallasCountylostmore and DentonCounties. Between 2000 growth slowed significantly inCollin trade sector. In2002and2003,job sectorand28,000inthe information 27,000jobsinthe including lossesof 80,000 jobsbetween 2001and2004, affected theHMAwithalossof The 2001recessionsignificantly only sectortolosejobs. doubled andmanufacturing was the sectorhas and businessservices Sales Units 3,300 Dallas County Submarket Rental Units 5,400 0 16,600 Sales Units 1,000 Denton County Submarket Rental Units 1,400 6,900 D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS Source: Greater Dallas Chamber Dallas-Fort Worth metropolitanarea. Note: Numberof employeesincludesall atoperationsinthe Table 2. Source: U.S.BureauofLaborStatistics Note: Currentisbasedon12-monthaveragesthroughMarch2006. Figure 2. The Kroger Company Countrywide HomeLoans Albertsons HCA NorthTexas AT&T Baylor HealthCare System Verizon Raytheon Company Texas HealthResources, Inc. Wal-Mart – 20
Name ofEmployer – 10 Major EmployersintheDallasHMA Sector Growth in the Dallas HMA, Percent Change, 1990 to Current Economic Conditions 0 corporations are headquartered, includingDr. areheadquartered, corporations in CollinCounty, major whereanumber of and residentialdevelopment growth arespurring sectors. Mixed-use town centers, businessparks, activities, andprofessionalbusinessservices increaseswerethe greatest inthetrade, financial 250,300. Althoughallsectorsrecordedincreases, jobsincreasedby32,300, or15percent,to of Denton Counties. InCollinCounty, thenumber inCollinand ing thepast12monthsoccurred The mostsignificantemployment growth dur 10 20 30 Trade Financial Activities Trade Health Services Information Health Services Information Manufacturing Health Services Trade
Employment Sector Continued 40 50 60 70 Employees Number of 11,000 11,000 12,000 13,000 14,000 14,000 16,000 16,000 17,000 29,000 80 - 90 100 ments are responsible for much of thegrowth in ments areresponsibleformuch of Texas (UNT)andbusinessresidentialdevelop North and government sectors. TheUniversity of services, trade, educationandhealthservices, intheprofessionalandbusiness growth occurred by 13,200,or10percent,to150,500.Majorjob jobsinDentonCountyincreased number of During the12monthsendingMarch2006, poration, Frito-Lay, JCPenney, andPerot Systems. Pepper/Seven-Up, ElectronicDataSystemsCor Source: U.S.Bureau ofLaborStatistics Note: Basedon12-month averagesthroughMarch 2006. Figure 3. Services 9.3% Education &Health Hospitality 9.2% Other Services2.9% 110 Business Services16.2% Professional & Leisure &
Current Employment in the Dallas HMA, by Sector Government 12.0% Government Total NonfarmEmployment Goods Producing Service Providing Natural Resources, Mining, &Construction Education &HealthServices Professional &BusinessServices Financial Activities Transportation &Utilities Trade Manufacturing Government Other Services Leisure &Hospitality Information Financial Activities9.5% Construction 5.9% Natural Resources, Mining,& Information 4.1% Manufacturing 9.9% & Utilities3.8% Transportation Trade 17.3% - - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS Economic Conditions Population andHouseholds Source: U.S.BureauofLaborStatistics Data inthousands.Numbersmaynotaddtototalsduerounding. Notes: Basedon12-monthaveragesthroughMarch2005and2006. Table 3. the firstincreasein4years. Gainsintheprofessionalandbusi 3,100jobsforthe12monthsendingMarch2006, an increaseof Dallas Countycontinued tolosejobsthrough2005butshowed nearly $500million. with itsannual expenditures of and 3,600facultystaff,contributestothelocaleconomy Denton County. UNT, whichhasmorethan33,500students Total NonfarmEmployment Service Providing Goods Producing Government Other Services Leisure &Hospitality Education &HealthServices Professional &BusinessServices Financial Activities Information Transportation &Utilities Trade Manufacturing Natural Resources, Mining,& Construction
12-Month Average Employment in the Dallas HMA, by Sector Employment Sector
Continued nual average population growth in percent, or75,300.Adecline inan annual populationgrowth was 2.8 data profile.) Duringthe1990s, the fortheDallasHMA thereport of 2006. (SeeTable DP-1attheend from 2000to3,548,000onApril1, nual 67,400, or2percent, average of T March 2005 12 Months HMA hasincreasedbyan theDallas he populationof Ending 1,785 1,505 177 103 280 215 166 164 282 169 313 51 75 71 March 2006 12 Months Ending 1,834 1,544 181 109 290 220 169 170 297 174 316 52 75 70 Change Percent – 2.1 2.5 5.3 3.5 2.8 2.1 3.0 2.2 4.0 5.6 2.8 0.0 1.2 2.6 - - - 1, 2006(seeFigure 4).Duringthe April since 2000to1,279,000asof 21,750annually,of or1.8percent, HMA hasincreasedbyanaverage householdsinthe The number of decade.HMA duringthecurrent growth inthe for thelower rateof reason theprimary downturn—is theeconomic largely asaresultof the 1990sto16,000since2000— Dallas Countyfrom36,000during base foreconomicdevelopment County border, hasbecome astrong years agoontheDallas-Tarrant 30 constructed The DFWairport, in Table 3. two 12-monthperiodsispresented sector intheHMAduringpast tunities. Average employment by cultural, andrecreationaloppor housing, tion andexpansion of more than$2billioninrehabilita Dallasisundergoing in thecityof turing sectors. Thedowntown area trade,information, andmanufac sectors offsetcontinued lossesinthe andfinancialactivities ness services more than$2billion. redevelopment totaling program just completinganexpansion and is communities. itself Theairport tial development insurrounding significant commercialandresiden property, hasinfluenced theairport airport within the18,000acresof commercial andindustrialzones andinthe located attheairport addition toattractingthebusinesses in theentiremetropolitanarea.In - - - - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS analyst Sources: 1990and2000—U.S.Census;currentforecast—estimates by Figure 5. analyst Sources: 1990 and 2000—U.S. Census; current and forecast—estimates by Figure 4.
Average Annual Change Average Annual Change 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 5,000 ComponentsofPopulationChangeintheDallas PopulationandHouseholdGrowth intheDallas 0 HMA, 1990toForecast Population andHouseholds 0 HMA, 1990toForecast 2006. (SeeTable DP-2.) annually between April1,2000and 12,200 householdsincreasedby anaverage of of 5.6 percent,duringthepast6years. Thenumber 680,000, an average 31,400, or annual increase of County isestimatedtohave apopulationof in CollinCounty. April1,2006,Collin Asof population growth intheHMAhasoccurred the Since 2000,approximately 46percentof 25,000, or2.5percent,annually. householdsgrew bynearly 1990s, thenumber of 1990 to2000 1990 to2000 Net NaturalChange Population 2000 toCurrent 2000 toCurrent
Continued Households Net Migration Current toForecast Current toForecast in Table DP-4. 2006. AdataprofileforDentonCountyisshown annually, April1, or4percent,to201,000asof householdsinthecounty increasedby7,000 of 6-year period.Duringthesameperiod,number 20,000,or4.2percent,duringthe annual gainof 432,976 inApril2000to553,000currently, an DentonCountyincreasedfrom The populationof DP-3.) rose 36,600annually, or1.8percent.(SeeTable During the1990s, theDallascountypopulation the HMAsince2000tookplaceinDallasCounty. thepopulationgrowth in Less than25percentof annually, or0.7percent,duringthepast6years. approximately 16,000 2,315,000,anincreaseof of On April1,2006,DallasCountyhadapopulation forecast dateareshown inFigure5. tion change fortheHMA from1990throughthe at 16,000annually. popula Thecomponentsof approximately thesameasduringpast6years growth inDallasCountyisexpected toremain County. Duringtheforecastperiod,population or 22,000annually, isforecasttooccurinDenton to occurinCollinCounty, andabout30 percent, the gain,morethan35,000annually, isexpected 3,770,000byApril1,2009.Nearly half a totalof crease by74,000annually over thenext 3years to theHMAisexpected toin The populationof - - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS Source: U.S.Census Bureau,BuildingPermitsSurvey Notes: Includesonly single-familyunits.Includes datathroughMarch2006. Figure 7. Figure 6. Sources: 1990and2000—U.S.Census;current—estimatesbyanalyst 10,000 12,000 14,000 2,000 4,000 6,000 8,000 100,000 120,000 140,000 160,000 180,000 200,000 20,000 40,000 60,000 80,000 0
1990 0
NumberofHouseholdsbyTenure intheCollinCounty Single-Family BuildingPermitsIssuedintheCollin County Submarket,1990to2006 1991 Submarket, 1990toCurrent Housing Market Trends 1992 Sales Market—CollinCounty
1993 period 2000to2003.Growth inthehousing duringthe average 9,500permits annual rateof month periodand35percenthigherthanthe 11percentcomparedwith theprevious 12- of were issuedfornearly 12,800homes, anincrease the past12monthsendingMarch2006,permits the1990s(seeFigure7).During homes forallof 66,000 homescomparedwithfewer than56,000 have2000, permits beenissuedformorethan building permits, continues tosetrecords. Since inthecounty,home construction asmeasuredby from 2000to2006(seeFigure6).Single-family County increasedfrom69percentto73 homeowners inCollin The percentage of 1990 1994
1995
1996
1997 Renter 1998
1999 2000
2000
2001 Owner
2002
2003 Current 2004
2005
2006 in-migration, creatingstrongdemand. in-migration, since jobgrowth hasresultedinhigherlevels of 1.4percent, with anestimatedvacancy rateof The salesmarketinCollinCountyisbalanced, $300,000to$500,000. County sellintherange of than $130,000; however, most new homes in Collin three bedroomsandtwo bathsaresellingforless Frisco area,new 1,250-square-foothomeswith mixed-use developments andtown centers. Inthe numerous, large single-family subdivisions and and aroundFrisco andMcKinney, whichinclude Planoandin sideof concentrated onthenorthern and Route 121.Development isparticularly County, primarily Tollway alongtheDallasNorth Collin throughoutsouthern market isoccurring for CollinCounty. housing bypriceranges duringtheforecast period demandfornew market-ratesales breakdown of Tablecurrently underconstruction. 4provides a for thenext 3years. Anestimated3,600homesare The totaldemandfornew saleshousingis 35,800 for single-family homesduringthenext 3years. theforecastdemand accounting for52percentof growth areaintheHMA, to betheprimary It isexpected thatCollin Countywillcontinue the previous 12-month period. $220,500for compared withtheaverage priceof 5percent, 12 monthswas $231,200,againof March 2004.Theaverage salespriceforthepast and 30percentabove the12monthsending 17-percent increaseover theprevious 12months than 15,500homeswere soldinCollinCounty, a during the12monthsendingMarch2006,more the Real EstateCenteratTexas A&MUniversity, datafrom According tothemultiple listingservice D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS analyst Sources: 1990and2000—U.S.Census;current—estimatesby Figure 8. 10.0 11.0 12.0 13.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Sales Market—CollinCounty Housing Market Trends
Rental Vacancy RatesintheCollin County Submarket,1990toCurrent Source: Estimatesbyanalyst Table 4. 1990 8.9 light raillinethat goestodowntown Dallas. where redevelopment islocated adjacent toa theolderdowntown areas, includingPlano,of floors. Redevelopment insome isalsooccurring andresidentialunitsontheupper floors ground used projectshave onthe retailandservices CollinCounty.McKinney areasof Thesemixed- are beingdeveloped inthePlano, Frisco, and Recently, new urbanvillages andtown centers 500,000 400,000 300,000 250,000 200,000 180,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 From Price Range($)
Estimated DemandforNewMarket- April 1,2009 County Submarket,April1,2006to Rate SalesHousingintheCollin 2000 12.3 and higher 499,999 399,999 299,999 249,999 199,999 179,999 159,999 149,999 139,999 129,999 119,999 109,999 To Continued Current Demand Units of 8.0 4,200 4,800 4,600 3,800 3,200 2,800 2,400 2,000 1,500 1,200 1,000 2,100 2,200 Percentage Figure 9. of Total Source: U.S.CensusBureau,BuildingPermitsSurvey excluding townhomeunits.IncludesdatathroughMarch2006. Notes: Includesallmultifamilyunitsinstructureswithtwoormore units, 11.7 13.4 12.8 10.6 1,000 2,000 3,000 4,000 5,000 6,000 8.9 7.8 6.7 5.6 4.2 3.4 2.8 5.9 6.1 0
1990
Multifamily BuildingPermitsIssuedintheCollin 1991 County Submarket,1990to2006 trends from1990throughMarch2006areshown highest since2001.Multifamily buildingpermit March 2006,1,635unitswere the permitted, shown inFigure8.Duringthe12monthsending percent inApril2000to8currently, as balanced. Thevacancy ratedeclinedfrom13.5 tion, therentalmarkettightenedandiscurrently construc 1999. Inresponsetothelower levels of more than4,700unitsannually from1996to 1,200 unitsayear comparedwithanaverage of during theperiodfrom2000to2006islessthan the late1990s. Theaverage construction level of during very highconstruction lowing aperiodof duringthepast6yearsCounty hasfluctuated fol rentalhousinginCollin of The construction Rental Market—CollinCounty of bedroomsis displayed inTable 5. of housing inCollin Countybyrentlevel andnumber The estimateddemandfornew market-raterental on a12-to13-monthleaseis stillfairly common. year ago, but1month’s to1.5months’free rent Concessions aredecliningfrom whattheywere a about3percentduringthepast12months. of byALNSystems,month, asreported anincrease The average rentinCollinCountyis$810per 1992 in Figure9.
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006 - - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS Figure 10. Sources: 1990and 2000—U.S.Census;current—estimates byanalyst 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 50,000 0
Rental Market—CollinCounty Housing Market Trends Number ofHouseholdsbyTenure intheDallas County Submarket,1990toCurrent home prices. Between April2005andMarch low interestratesandaffordable advantage of level inthepast15years ashomebuyers take isatthehighest single-family homeconstruction Figure 10.DespitejoblossesinDallasCounty, has beenincreasingsince1990,asshown in homeowners inDallasCounty of The proportion Sales Market—DallasCounty Source: Estimatesbyanalyst Notes: Distributionaboveisnoncumulative.Demandshownatanyrentrepresentsdemandthatlevelandhigher. Table 5. Monthly Gross 1990 and higher Rent ($) 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800
Estimated Demand for New Market-Rate Rental Housing in the Collin County Submarket, April 1, 2006 to April 1, 2009 1 Bedroom Renter Demand Units of 1,000 1,250 1,750 2,250 2,750 2000 Continued 150 300 375 500 650 800 Owner Current Monthly Gross and higher Rent ($) 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 2 Bedrooms office, retail,and high-endhotels. Thisdevelop owner-occupied housing andrentalresidenceswith billion development thatwilleventually mix4,000 adjacent todowntown DallasandUptown, isa$1 Park,Victory anewly urbancenter constructed $2million. sales pricesinexcess of and new homesarebeingspeculatively builtwith downHighland Park, oldhomesarebeingtorn County, but,inareas suchasUniversity Park and County generally sellforlessthaninCollin are soldforunder$100,000.HomesinDallas area insouthwest DallasCounty, similarhomes purchased foraslittle$100,000.IntheDesoto living spaceandthreebedrooms canbe feet of areas, newly homeswith1,250square constructed In theLancasterandsoutheastDallasCounty Dallas Countyareshown inFigure11. to 2003.Single-family trendsfor buildingpermit than theannual 8,600issuedfrom2000 average of previous 12-monthperiodand25percentmore homes, 10percentabove thenumber issuedinthe were2006, permits issuedfor10,760single-family Demand Units of 1,050 1,300 1,825 2,350 3,100 150 225 300 450 675 50 Monthly Gross and higher Rent ($) 3 orMore Bedrooms 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 Demand Units of 1,050 100 150 175 250 350 450 600 850 50 75 - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS Source: U.S.CensusBureau,BuildingPermitsSurvey Notes: Includesonlysingle-familyunits.datathroughMarch2006. Figure 11. 10,000 12,000 2,000 4,000 6,000 8,000 0
1990
1991 Sales Market—DallasCounty Housing Market Trends Single-Family BuildingPermitsIssuedintheDallas County Submarket,1990to2006
1992
out-migration of 70,000people, andthemove of out-migration annually duetodecreased jobgrowth, the households intheHMAhas declinedby4,000 renter During thesametime, thenumber of family unitshave since2000. beenconstructed issued,nearlybuilding permits 26,270multi as shown inFigure12.Basedonthenumber of percent in2000tonearly 13percentcurrently, vacancy ratetoincrease from approximately 6 new rentalunitshascausedthe large number of a significantly since2000.Thecompletionof The DallasCountyrentalmarkethassoftened Rental Market—DallasCounty 1993 Texas A&MUniversity, estimatesindicatethat Based ondatafromtheReal EstateCenterat in Texas inthelate1980s. 3.3-percent ratein1990thatfollowed theoilbust vacancy rateisupfrom2000butwell below the during thepast12monthsto2.3percent.The 2006. As a result, the sales vacancy rate increased continued strongsalesmarketconditionsin of able toaddthesalesinventory inanticipation With 2006beingamildwinter, builderswere tion between late2006and2008. 1,000 residentialunitsarescheduledforcomple development hotel.Thefirst atopa33-story ments arealready soldout,includinga63-unit respectively, play. Two condominiumdevelop teams, theDallasMavericks andtheDallasStars, Center whereprofessionalbasketballandhockey ment isalsoadjacenttotheAmericanAirlines
1994
1995
1996
1997
1998 Continued 1999
2000
2001
2002
2003
2004
2005
- 2006 - - - price ranges isdisplayed inTable 6. new market-ratesaleshousinginDallasCountyby during thesameperiod.Theestimateddemandfor cent; unsoldinventory increasedabout3percent 4per age priceisestimatedat$195,000,againof in March2005.For thepast12months, theaver up 7percentcomparedwiththe12monthsending County duringthe12monthsendingMarch2006, more than36,000homeswere soldinDallas were balanced. the market County, atleast20,000morethan if 53,000 vacant units areavailable forrentinDallas pected during2006and2007. Currently, morethan pipeline withcompletionex the construction Approximately 5,400multifamily units remainin Dallas Countyareshown inFigure13. Multifamily trends since1990for buildingpermit households annually between 1990and2000. 4,400rental is comparedwithanaverage gainof renterstohomeownership. Thisdecline ment of Source: Estimatesbyanalyst Table 6. 500,000 400,000 300,000 250,000 200,000 180,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 From Price Range($)
Estimated DemandforNewMarket- April 1,2009 County Submarket,April1,2006to Rate SalesHousingintheDallas and higher 499,999 399,999 299,999 249,999 199,999 179,999 159,999 149,999 139,999 129,999 119,999 109,999 To Demand Units of 1,200 1,600 2,000 1,800 1,600 1,400 1,200 1,100 1,000 1,000 900 700 900 Percentage of Total 12.2 11.0 5.5 4.3 5.5 7.3 9.8 9.8 8.5 7.3 6.7 6.1 6.1 - - - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS 10 Figure 14. Sources: 1990and 2000—U.S.Census;current—estimates byanalyst Figure 13. Source: U.S.CensusBureau,BuildingPermitsSurvey Includes datathroughMarch2006. Notes: Includesallmultifamilyunitsinstructureswithtwoormoreunits. 10,000 100,000 120,000 140,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 40,000 60,000 80,000 20,000 0 0
1990 NumberofHouseholdsbyTenure intheDenton Rental Market—DallasCounty Housing Market Trends County Submarket,1990toCurrent 1991 Multifamily BuildingPermitsIssuedintheDallas County Submarket,1990to2006
1992 of 5,225ayear from1998to2001.Duringthe of homes ayear, or22percentbelow theaverage were 4,300 2005, permits issuedforanaverage of from 1998to2001(seeFigure15).From 2001to past several years follows recordbuildinglevels duringthe single-family homeconstruction of as shown inFigure14.Theslightly slower level increasing byasignificantamountsince1990, In DentonCounty, homeownership hasbeen Sales Market—DentonCounty vacancy ratehasincreasedslowly sinceSep absorbed approximately 10,000rentalunits. The Rita KatrinaandlaterHurricane Hurricane 2005,evacueesShortly afterSeptember from 1993 1990
1994
1995
1996
Renter 1997
1998 2000 Continued 1999
2000 Owner 2001
2002
2003 Current
2004
2005 -
2006 next 3years. for additionalmarket-raterentalunitsduringthe estimatesindicatenodemand under construction, rentalhousingavailable and cast andthesupply of to homeownership eachyear. Basedonthisfore and anestimated3,000renterhouseholdsmoving significant growth inhouseholdsDallasCounty The forecastforDallasCountyestimatesno than 3years. month inMarch2006,thefirstincreasemore 2005to$715a from $702amonthinSeptember made otherarrangements. Average rentsincreased tember, however, asevacuees have lefttheareaor 12 months. As of the current date, the current theaverage12 months. Asof 9 percentmorethanthetotal soldintheprevious than 8,700homeswere soldinDentonCounty, during the12monthsending March2006more the Real EstateCenteratTexas A&MUniversity, datafrom According tothemultiple listingservice $180,000to$350,000. range of Most new homesinDentonCountysellthe and two bathsareavailable forlessthan$110,000. 1,250-square-foot homeswiththreebedrooms County lines. Inseveral areasinthecounty, new theDallasandTarrant of and areasjustnorth Denton, states 35Wand35E,aroundthecityof DentonCounty,southern primarily alongInter The homesalesmarketisgrowing throughout homes have dampenedthesalesmarket. unsold est rateincreasesandhigherinventories of considerably lessthaninCollinCounty, andinter Incomes andhomepricesinDentonCountyare the number issuedduringtheprevious 12months. 7percentcomparedwith homes, adecreaseof past 12months, for3,788 thecountyissuespermits - - - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS 11 Source: U.S.CensusBureau,BuildingPermitsSurvey Notes: Includesonlysingle-familyunits.datathroughMarch2006. Figure 15. 1,000 2,000 3,000 4,000 5,000 6,000 0
1990
1991 Sales Market—DentonCounty Housing Market Trends Single-Family BuildingPermitsIssuedinthe Denton CountySubmarket,1990to2006
1992
the next 18months. expected tomeetthedemandfornew rentalsfor rentalproductionis pipelineof The current 3.4percentinthepast12months. an increaseof bly. Theaverage rentinMarch2006was $755, market hasseenrentsbegintoincreaseapprecia to experiencing lower vacancy rates, therental 8-percentrate.2005 tothecurrent Inaddition the rentalvacancy ratefrom12percentduring population growth contributedtoadecreasein date. andincreased construction Lower levels of vacancy ratesin1990,2000,andthecurrent overbuilding. SeeFigure16for as aresultof vacancy rateincreasedtomorethan15percent tions duringthe2001-to-2004periodwhen in DentonCounty, afterextremely softcondi Rental marketconditionsarecurrently balanced Rental Market—DentonCounty 1993 displayed inTable 7. housing inDentonCountybypriceranges is The estimateddemandfornew market-ratesales percent, butthesalesmarketremainsbalanced. March 2006,theunsoldinventory increased5 a year ago. Duringthe12-monthperiodending sales pricewas $192,000,a4-percentgainfrom
1994
1995
1996
1997
1998
1999 Continued
2000
2001
2002
2003
2004
2005
- 2006 - ber of bedroomsisdisplayed inTable 8. ber of housing inDentonCountyby rentlevel and num The estimateddemandfornew market-rate rental are shown inFigure17. multifamily for DentonCounty buildingpermits increased againto1,449.Trends intheissuanceof unitspermitted to 985.In2005,thenumber of 1,675ayear and,in2004,thenumber declined of issued increasedtoanaverage permits number of decreased toonly 644.From 2001to2003,the averagedpermitted 1,850annually; in2000permits activity. Between 1996and1999,multifamily units greatly reduced followedconstruction byayear of highlevelsthe pastdecadewithseveral of years of issued,hasfollowedpermits over asimilarpattern County, building asmeasuredbythenumber of rentalhousinginDenton of The construction Source: Estimatesbyanalyst Table 7. 300,000 250,000 200,000 180,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 500,000 400,000 From Price Range($)
Estimated DemandforNewMarket- April 1,2009 County Submarket,April1,2006to Rate SalesHousingintheDenton and higher 399,999 299,999 249,999 199,999 179,999 159,999 149,999 139,999 129,999 119,999 109,999 499,999 To Demand Units of 1,500 1,700 1,800 1,600 1,400 1,300 1,200 1,100 1,100 1,000 1,000 1,000 900 Percentage of Total 10.2 10.8 6.0 5.4 9.0 9.6 8.4 7.8 7.2 6.6 6.6 6.0 6.0 - D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS 1 2 Rental Market—DentonCounty Housing Market Trends Source: Estimates byanalyst at thatleveland higher. Notes: Distribution aboveisnoncumulative.Demand shownatanyrentrepresents demand Table 8. Figure 17. analyst Sources: 1990and2000—U.S.Census;current—estimatesby Figure 16. Source: U.S.CensusBureau,BuildingPermitsSurvey Includes datathroughMarch2006. Notes: Includesallmultifamilyunitsinstructureswithtwoormoreunits. 1,000 1,500 2,000 2,500 Monthly Gross 10.0 500 and higher 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 0 Rent ($) 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800
1 Bedroom 1990
Estimated Demand for New Market-Rate Rental Housing in the Denton County Submarket, April 1, 2006 to April 1, 2009
1991 Multifamily BuildingPermitsIssuedintheDenton Rental Vacancy RatesintheDenton County Submarket,1990to2006 County Submarket,1990toCurrent 1990 1992 9.9 Demand Units of
1,000 1,250 1,750 2,250 2,750 1993
150 300 375 500 650 800 1994 Continued
1995 Monthly Gross 2000
1996 7.7 and higher Rent ($)
2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 1997 2 Bedrooms
1998
1999
2000 Current 8.0 Demand Units of
1,050 1,300 1,825 2,350 3,100 2001 150 225 300 450 675 50 2002
2003 Monthly Gross 3 orMore Bedrooms and higher 2004 Rent ($) 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 2005
2006 Demand Units of 1,050 100 150 175 250 350 450 600 850 50 75 D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS 1 3 Data Profiles estimates byanalyst Sources: U.S.BureauofLaborStatistics;CensusBureau; DepartmentofHousingandUrbanDevelopment; Note: Medianfamilyincomedataarefor1989,1999,and2006. Table DP–2. estimates byanalyst Sources: U.S.BureauofLaborStatistics;CensusBureau;DepartmentHousingandUrbanDevelopment; Note: Medianfamilyincomedataarefor1989,1999,and2006. Table DP–1. Median FamilyIncome Rental Vacancy Rate(%) Owner Vacancy Rate(%) Total HousingUnits Percent Renter(%) Rental Households Percent Owner(%) Owner Households Total Households Total Population Median FamilyIncome Rental Vacancy Rate(%) Owner Vacancy Rate(%) Total HousingUnits Percent Renter(%) Renter Households Percent Owner(%) Owner Households Total Households Total Population Covered Employment Unemployment Rate(%) Total ResidentEmployment CollinCountySubmarketDataProfile, 1990toCurrent DallasHMADataProfile, 1990toCurrent
1,011,603 2,390,371 1,322,133 1,329,401 414,257 485,218 899,475 $42,200 1990 $52,987 103,827 264,036 31,956 63,849 95,805 1990 13.6 46.1 53.9 3.3 5.0 33.4 66.6 8.9 3.4 1,217,080 1,148,494 3,143,550 1,853,265 1,691,329 496,322 652,172 $57,700 $81,856 194,892 124,916 181,970 491,675 2000 57,054 2000 43.2 56.8 12.3 31.4 68.6 7.2 1.5 3.6 1.7 $86,500 267,400 185,100 255,000 680,000 1,405,600 1,279,000 3,548,000 1,834,000 1,758,000 Current Current 69,900 502,100 776,900 $60,500 27.4 72.6 8.0 1.4 11.6 39.3 60.7 2.0 5.1
1990 to2000 1990 to2000 Average AnnualChange(%) Average AnnualChange(%) 1.9 1.8 3.0 2.5 2.8 3.4 2.4 3.2 4.4 6.5 6.0 6.9 6.6 6.4 2000 toCurrent 2000 toCurrent – 0.2 0.8 2.4 0.2 3.0 1.8 2.0 0.6 0.9 5.4 3.4 6.8 5.8 5.6 D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS 1 4 Data Profiles estimates byanalyst Sources: U.S.BureauofLaborStatistics;CensusBureau;DepartmentHousingandUrbanDevelopment; Note: Medianfamilyincomedataarefor1989,1999,and2006. Table DP–3. Table DP–4. estimates byanalyst Sources: U.S.BureauofLaborStatistics;CensusBureau; DepartmentofHousingandUrbanDevelopment; Note: Medianfamilyincomedataarefor1989,1999,and2006. Median FamilyIncome Rental Vacancy Rate(%) Owner Vacancy Rate(%) Total HousingUnits Percent Renter(%) Rental Households Percent Owner(%) Owner Households Total Households Total Population Median FamilyIncome Rental Vacancy Rate(%) Owner Vacancy Rate(%) Total HousingUnits Percent Renter(%) Rental Households Percent Owner(%) Owner Households Total Households Total Population
Continued DallasCountySubmarketDataProfile, 1990toCurrent DentonCountySubmarketDataProfile, 1990toCurrent
1,852,810 $36,982 795,513 338,905 362,781 701,686 $44,945 112,263 101,984 273,525 43,396 58,588 1990 1990 14.5 48.3 51.7 42.6 57.4 3.3 9.9 3.6 2,218,899 $69,292 168,069 102,409 158,903 432,976 $49,000 854,119 382,774 424,847 807,621 56,494 2000 2000 35.6 64.4 47.4 52.6 7.7 2.0 6.3 1.3 2,315,000 Current $74,500 212,100 131,600 201,000 553,000 Current $49,000 926,100 362,800 460,200 823,000 69,400 34.5 65.5 12.9 44.1 55.9 8.0 1.8 2.3
1990 to2000 1990 to2000 Average AnnualChange(%) Average AnnualChange(%) 2.9 0.7 1.2 1.6 1.4 1.8 4.4 4.1 2.7 5.7 4.5 4.7 2000 toCurrent 2000 toCurrent – 0.9 0.0 1.4 1.3 0.3 0.7 1.2 4.0 3.5 4.3 4.0 4.2 D a l l a s , T X • COMPREHENSIVE HOUSING MARKET ANALYSIS 1 5 publications/pdf/CMARtables_DallasTX.pdf market forthisHMA,goto: For tothehousing additionaldatapertaining the development pipeline. orunitsin for unitscurrently underconstruction excess vacancies. Theestimatesdonotaccount theanalysis, growth, losses, and dateof the as-of the3-year forecastperiodgiven conditionson of needed toachieve abalancedmarketattheend thetotalhousing production the estimatesof buildingactivity.are notaforecastof Theyare Demand: Thedemandestimatesintheanalysis estimates Forecast period:4/1/2006–4/1/2009—Analyst’s date:4/1/2006—Analyst’sCurrent estimates 2000: 4/1/2000—U.S. DecennialCensus 1990: 4/1/1990—U.S. DecennialCensus Data DefinitionsandSources www.huduser.org/publications/econdev/mkt_analysis.html For on othermarketareas, additionalreports pleasego to www.huduser.org/ . mortgage insuranceproposalsthatmaymortgage beunder any of regardingtheacceptability determinations trends. tomake Theanalysis doesnotpurport with localhousingmarketconditionsand to builders, mortgagees, andothersconcerned findings, andconclusionsmay alsobe useful in itsoperations. Thefactualinformation, HousingandUrbanDevelopment (HUD) of theU.S.assistance andguidanceof Department This analysis forthe hasbeenprepared [email protected] 817–978–9417 Fort Worth HUDFieldOffice Donald L.Darling, Regional Economist Contact Information and housingmarketconditions. provided onlocaleconomic dataandinformation and statelocalgovernment officials who sources express itsappreciation tothoseindustry by subsequentdevelopments. HUDwishesto such, findingsorconclusionsmay bemodified datefromlocalandnational sources. As as-of availableas possiblebasedoninformation onthe analysis andfindingsareasthoroughcurrent Economic andMarketAnalysis Division. The the guidelinesandmethodsdeveloped byHUD’s The factualframework forthisanalysis follows consideration bytheDepartment. .