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Trump 2020 Budget to Lower Crop Subsidies for Insurance Premiums
President Trump’s newly released budget for 2020 includes a 15 percent funding drop for the Department of Agriculture.
The plan would trim the USDA budget by $3.6 billion to $20.8 billion, lowering subsidies for crop insurance premiums to 48 percent from 62 percent, and limiting subsidies for growers who make less than $500,000 annually.
The president is seeking one of the largest-ever cuts to domestic discretionary spending in a $4.7 trillion fiscal 2020 budget proposal that also boosts defense spending and adds $8.6 billion for building a border wall.
Farm income has dropped dramatically since 2015 as can be seen the annual farm income chart above. Visit bloomberg to read the complete article, or click the following Trump to Farmers: ‘LOVE YOU!’ But I Still Want to Cut Your Subsidies
Residential Lot Prices Hit Record High
The National Association of Home Builders reports that Lot values in the West South Central region, which includes Texas, have more than doubled since the last housing boom in 2006-2007. As of 2018, half of the lots in the West South Central division sold for more than $62,000, 25% above the national median lot value for single-family spec homes of $49,500. This represents a significant jump in the division lot values since the building boom when more than half of lots were priced under $30,000 in the West South Central region.
As home builders seek to deliver starter homes which is where the majority of the demand is for new homes, higher construction costs and increased lot costs make that effort more challenging. More home builders are beginning to tip their toes into the starter home market because that is simply where the sustainable new home demand resides.
To read the complete NAHB article, visit Lot Values Hit Record Highs.
Houston Construction Projects Jump in October
October was a good month for the Houston real estate development market. According to Dodge Data & Analytics, October construction starts grew a healthy 51% over last year’s October. At $1.7 billion, most of the gain was in the non-residential sector, with an increase of $736 million, up from $276 million in 2018.
Residential projects also increased, totaling $963 million in October, up almost 15%, from $845.5 million a year ago.
Over the last five years, construction has averaged $1.5 billion a month in Houston, according to the Greater Houston Partnership.
Despite the October uptick, building starts are off about 15% year-t0-date, with $15.5 billion through October, down from $18.2 billion last year.
Contact Troy Corman for residential and commercial development land for sale in Houston and Dallas at 832-759-1523 or 214-690-9682.
When Do You Need A New Survey in a Texas Real Estate Transaction?
When it comes to property surveys, sometimes age is just a number. Sometimes it isn’t. Many folks think a survey is good indefinitely. Others believe a new one is required with every sale.
Age isn’t the only factor in determining if an existing survey may be used for a real estate transaction. There are many details in a survey and a survey affidavit that typically outweigh the age of the survey. The confusion arises because there is no absolute rule for the age of the survey to still be useful.
I get all manners of odd surveys from sellers. Even if the survey is new, a blurry cellphone shot of it is not acceptable for use. Neither is a 1940s mimeograph copy. Hand drawing on a neighborhood map isn’t going to work. Cut off copies are no good either.
For a survey to be acceptable to the title agency and lender, all the following items must appear and be legible:
- Legal Description
- Scale
- North Arrow
- Date
- Surveyor Name, RPLS#, Signature, and Seal
Back to That Age Thing
A common practice for how long you can use and rely on an existing survey is seven years. If the survey is older, some title agencies will automatically require a new one. A new survey may be required if the current one predates the current owner buying the property. The current owner might not be aware or able to disclose changes since the survey was completed since they weren’t living on the property when the survey was originally done.
By law, a surveyor is only liable for their survey for 10 years. They are typically responsible only to the individual and particular transaction for which they produced the survey. Thus, a survey more than 10 years old or from a prior owner may be questionable.
Texas Department of Insurance Rules
The Texas Department of Insurance (TDI) has a few specific rules regarding the use of existing surveys. Title companies want to ensure the land area has not been compromised by sale, altered by natural changes to the land or by development or infringement by neighbors.
Regulations require the survey to be current. “Current” refers to the existing footprint of the property being the same as shown on the survey. That includes the location of the house, fences, pool, garage, or anything else permanently affixed to the land.
TDI rules only allow the use of an existing survey contingent upon completion of a T-47 survey affidavit as well. This affidavit verifies the accuracy of the survey. The current owner must complete this form in their own handwriting and sign it with a notary. They must have actual knowledge of the physical condition of the property since the date of the existing survey and disclose any changes made to the property. That includes adding a pool, replacing a fence, building a deck or altering the footprint of the house or garage.
If the seller of the property cannot or does not complete and sign the T-47 affidavit, then a new survey is required. If additions or changes to the property are close to a boundary line, a new survey will likely be needed. On occasion, an owner may even be asked to sketch specific changes onto the survey. Any changes to the property must be minor. There is a lot of grey area in determining what is minor or major.
How Much is a Survey?
If the survey is not acceptable to the title company or buyer’s lender, a new survey typically costs $400-$650 for the average size suburban lot in our area. Every survey is unique to that piece of land and every situation is different. The only way to be sure if an existing survey may be used is to check with the title company.
Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Allegiance Title at Preston Center, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.
Dallas and Houston Ranked in Top 10 in US for Real Estate Development Sites
Beth Mattson-Teig wrote this article originally for National Real Estate Investor
Land sales can be a fickle business. Prime development sites often disappear quickly, while other parcels can languish on the market for years waiting for the right buyer and use. Land sales can also be a good barometer to show what’s ahead for development pipelines and growth opportunities within markets.
Annual transaction volume on land deals is still falling well short of the pre-recession peak that reached $31.2 billion in 2007. However, sales have been fairly steady over the past five years, with annual totals ranging between $19.3 billion and $25.0 billion, according to research firm Real Capital Analytics (RCA). Buyers have taken the foot off the gas a bit in 2019, with year-to-date sales at the end of the third quarter totaling $14.3 billion, which is down 16 percent compared to the same period in 2018, according to RCA.
Overall, developers have been much more disciplined compared to past cycles when they were more aggressively grabbing land that was well ahead of growth. “We’re not seeing that now. They’re slowly marching with growth and not racing in front of it,” saysAshley Bloom, national land & development services product council chair for brokerage firm SVN in Sarasota, Fla.
“Land sales volume is difficult to track from a national perspective, but is generally flat,” notes David Adams, director and co-head of JLL Capital Markets, Americas land group, in Houston. Land sales are very location- and use-specific and individual markets have their own unique drivers. Markets that have strong employment growth and are not over supplied in various asset classes are seeing a tremendous amount of development, which closely correlates to land sales. Likewise, those growth markets are seeing a deeper buyer pool for good development sites, he adds.
According to RCA, the most active markets for development site transactions based on year-to-date sales volume through third quarter include New York City, Los Angeles, Dallas, Phoenix and San Jose, among others.
Land prices have generally been trending upward, even in markets without much development as land usually does not drop in value unless there is a major market correction, notes Adams. Even in markets where there is not much demand for development, the volume of land sales may decrease, but pricing usually does not, he adds.
Prices have remained fairly stable over the past 12 to 18 months, agrees Bloom. In the past cycle, higher land prices would result in higher rents or home costs. Now there is a lot more discipline in underwriting. Developers recognize that they can’t just tack on a higher rent or purchase price to account for a higher land cost, notes Bloom. If the land price doesn’t work with the total project cost, developers are not going to do the deal, he says.
Developers follow population growth
sales are tracking with development activity. So, it is no surprise that land zoned for industrial and multifamily uses makes up a more active segment of the market.
“Buyer interest has narrowed since the recession,” says Abbe Hohmann, CCIM, president of Site Strategies Advisory LLC in Indianapolis. Part of that is due to the fact that there was such a run-up in development going into the recession and developers have been slower to pick up the pace, particularly in retail and single-family home building, she notes. That being said, there has been explosive growth in multifamily in the past several years that has fueled demand for good building sites. Indianapolis has also seen strong demand for industrial land, given its central location and presence of a major FedEx hub, she adds.
“We have always been a sought-after market for industrial warehouse/logistics type projects, and that has only increased coming out of the recession with e-commerce and all of the trends impacting industrial,” says Hohmann. That appetite for large-scale industrial sites remains unabated. Single-family residential construction has also recovered in Central Indiana. For example, Hohmann has a 120-acre land parcel in Westfield, Ind.—about 30 miles north of Indianapolis—that is currently under contract with a housing developer that is planning to build an age-restricted residential community for seniors.
There are some signs that national homebuilders are starting to slow down a little bit in the number of lots they are willing to buy in some metros, because they are worried about an economic slowdown, notes Bloom. However, the steady demand for housing and low interest rates continue to provide a good tailwind for residential developers. Generally, land sales are following the population. “Anywhere that retirees and baby boomers are going and where we’re seeing a good flow of people, we’re also seeing land deals,” he says.
For example, Florida land investor and real estate developer BTI Partners acquired 1,400-acres about 20 miles south of downtown Orlando in August for a reported $40 million. The site has been approved for about 5,000 residential units and 2 million sq. ft. of commercial space. BTI Partners is still working on design and planning for the site, but the firm typically sells off lots in master-planned communities to residential homebuilders.
In addition, Houston-based developer Land Texas partnered with CBA Land Capital earlier this fall to acquire 856 acres for a future master-planned community in Cypress, Texas. The site, which is located about 30 miles northwest of Houston, will be able to accommodate about 2,500 single-family homes.
Location, location, location
Land sales reflect the bifurcated market that exists in terms of demand for desirable urban infill sites and the lure of lower cost parcels available in outer suburbs. “Developers are continuing to move further from urban cores, but, at the same time, we are witnessing the redevelopment and densification of most of our major markets,” says Adams. So, on the one hand, there is still high demand for good infill sites, while at the same time rising housing values in most infill locations are pushing people further out from the core to where they can afford to live, he says.
Likewise, businesses are keeping a close eye on where their employees and target labor pool is choosing to live—urban or suburban areas—and making their location decisions accordingly. In some cases, that is causing some businesses to move from the suburbs closer to central business districts, whereas in other cases, firms remain firmly rooted in the suburbs.
There has been a lot of focus on millennials and will they or won’t they move out of cities to the suburbs. “This is a key question developers and builders are focused on. There is speculation about both directions, and we will have to see how this starts playing out,” says Adams. “I assume we will see both, just like we are now—higher density housing in infill locations and continued urban sprawl.”
Apartment developers are also staying closer to the core because of financing. “If you can’t prove rents and the rental history of an area, financing is very difficult,” says Bloom. “So that constraint has definitely kept the multifamily developers from reaching further out.”
Dallas and Houston Trail Only San Francisco in Future GDP Growth Forecast
As businesses and people continue to migrate to Texas to escape high taxes and expensive real estate markets, economists at Oxford Economics expect Houston and Dallas to be the biggest beneficiaries over the next four years. Only tech-haven San Francisco is expected to have more GDP growth during the same time frame. Below is a chart forecasting the top U.S. cities for GDP growth through 2023.