Sure, at Broadmark Real Estate Management we’re private money lenders who offer short-term hard money for a diverse range of commercial real estate investing projects… but we also have our pulse firmly on the markets we serve throughout Colorado, Texas, Utah and Wyoming.
Otherwise, we wouldn’t be able to give our clients the best reliant funding options their projects need.
Our insight to the markets and alternative financing, helps us secure timely real estate opportunities with confidence and we stay relevant on trends, lending options and what’s best for our clients.
RECENT NEWS ARTICLES:
September New Home Sales Rise
September new home sales rose a whopping 21% YOY, with a 19% higher average sales rate and 2% more communities.
- Builders averages 2.34 sales per community nationally, which is on par with the September sales rates in 2012 and 2013 – the best in the recovery so far.
- With an easy comp to last September, all regions are enjoying YOY sales gains.
- Lower mortgage rates have clearly helped.
- Price declines were surprisingly high, contributing to the pickup in sales. 11s% of builders dropped prices month over month nationally, and 31% dropped price in California.
- Cancellations remain at normal seasonal levels.
- Builder optimism returned, with strong expectations for Q4 and Q1 sales.
Austin, Texas Market Report
The World’s Wealthiest Families Are Stockpiling Cash as Recession Fears Grow
“Private equity was the star asset class, with an average return of 16% for direct investments and 11% for funds-based investing. Real estate also performed well, returning an average 9.4%, and now makes up 17% of the average family-office portfolio, up 2.1 percentage points from last year’s survey. In the year ahead, 46% of families said they plan to put more money in direct private equity investments, with 42% devoting more to private equity funds and 34% funneling more into real estate, according to the survey.”
September Metro Analysis and Forecast Report
In the Metro Analysis and Forecast report for September, extensive data analysis reports give insight into markets, including sales and pricing conditions in our markets.
- Builders in Dallas-Fort Worth report strong average sales rates of 2–5 homes per community with flat (69%) to rising (31%) net prices. Builders were pleased with August sales and pricing conditions with the exception of North Dallas submarkets near the 380 corridor. These submarkets remain oversupplied at move-up price points, and builders continue to use incentives. Dallas ranks as the second-largest construction market in the nation, including 25K single-family and 18K multifamily permits; only Houston produces more volume. Fort Worth’s 9.8K single-family and 6.8K multifamily permits would push the Metroplex to equal Houston. Despite years of strong job and housing growth, Dallas’ single-family volume remains 22% below the prior peak. However, Dallas resale home prices have escalated to 72% above the prior peak, per our Burns Home Value Index™.
- In Denver, a combination of increased supply (resale months of supply and finished lots for new homes) and slower economic expansion (particularly job growth) are likely slowing the local housing market. Entry-level builders report solid sales at 2–3 per month but are using incentives to maintain sales paces. An increased supply of move-up product (above $600K) in south Denver yields a slower pace with large incentives, especially on inventory.
- Houston builders report strong August sales averaging 2–3.5 per month, with the highest rates at communities targeting entry-level buyers. Pricing remains flat to rising, with 33% of surveyed builders raising prices MOM. New floodplain definitions stemming from the Atlas 14 survey will reduce the supply of Harris County land that can be feasibly developed for residential use. Houston has many successful masterplans located outside of Harris County, which could see lot and home sales rise as demand pushes outward from the core. Houston’s port ranks 5th in the world in volume and economic impact, and it could see declining volume as a result of the China trade war and cooling economies internationally. The Houston Medical Center employs 106K+ people and serves 10M patients annually; however, we identified health care as a riskier sector since easy debt access has fueled expansions beyond demographic-driven needs.
Low Rates Creating Only a Minor Boost
Mortgage rates have dropped from 4.9% in late 2018 to 3.75% today, bringing housing affordability to its best level since 2016. Nevertheless, we have yet to see a material boost in housing demand (particularly in higher price points) and are sticking with our muted 2019 national growth forecasts below.
- 2% higher new home sales
- -4% decline in resale sales
- 2% home price appreciation
- Flat finished lot prices. 62% of brokers report flat lot prices this quarter. Only 32% report rising finished lot prices during Q2 versus a whopping 71% reporting finished lot price increases one year ago. Appreciation slowed considerably in 4Q18 and remains muted.
- 6% YOY finished lot price appreciation. It appears that very little of that 6% finished lot price appreciation has occurred recently. YOY appreciation estimates range from:
- 3% in Florida (where 4 of the 12 brokers said prices fell this quarter) and Southern California
Denver, Houston, Austin, San Antonio, Houston, Dallas & Fort Worth, Texas – Metro Analysis & Forecast Report for July
In the Metro Analysis and Forecast report for July, extensive data analysis reports give insight into markets, including sales and pricing conditions in our markets.
· Denver builders report healthy sales in June, with the best sales rates at communities priced under $450K. YOY price appreciation has slowed as builders introduce incentives in order to maintain their sales paces. Several large masterplans are in various stages of planning and development, which could increase lot supply in the next few years.
· Houston builders report price appreciation of 4% YOY, with 40% of builders increasing prices MOM in June and only 5% decreasing prices. 65% of Houston builders averaged 2–3 sales per community. Cost increases have stabilized and sit below year-ago levels despite tariff increases.
· Austin builders report a flat sales environment, with most selling 2–3 homes per community. YOY price appreciation of 5% exceeds the 4% national average. Cost appreciation varied significantly, ranging from 1% to 8% YOY.
· San Antonio builders report approximately 2–3 sales per month. Price appreciation is slightly below the national average of 4% because more builders are offering homes priced below $300K. Sluggish sales above $350K in desirable submarkets such as Boerne have prompted some builders to reduce their lot positions. Cost increases ranged from 2% to 4% YOY as of 2Q19.
· We rate sales and pricing conditions in Dallas as Slow and Fort Worth as Normal. Most builders in the metroplex report 2–3 sales per community. Excess move-up inventory in Dallas north side submarkets keeps pricing soft and our rating lower than Fort Worth. Price appreciation averaged 3% YOY in Dallas and 6% in Fort Worth. Materials and labor cost increases in DFW ranged from -2% to 15% YOY with an average of 3%.
Only 54% of Americans Can Afford a Home
In the 130 metro areas analyzed, only 54% of Americans can afford a home priced 20% below the median home price in their area—a reasonable proxy for an entry-level home¹. The recent plunge in mortgage rates to 3.7% from 4.9% in November added just 3% to that affordability figure. In California, only 34% can afford a home, with San Francisco and San Jose least affordable, at only 11% and 18%, respectively. The most affordable market is Allentown, PA-NJ, where 77.4% of residents are able to purchase a home using our criteria. Read More & See Results Where You Live
Need Help Calculating a Maximum Offer or Profit in a Fix & Flip Deal?
If you’re a house flipper or rehabber then you’ve probably got some proprietary worksheets you’ve created for calculating the maximum offer you can make on a property, or the amount of profit you’ll be left with after all associated costs. The calculator factors in criteria such as eventual sales price, improvement costs, and quiet costs like financing charges, interest rates, real estate commissions, and more. Read More
June New Home Sales Up 12% Year Over Year
June new home sales rose 12% YOY, with a 9% higher average sales rate and 3% more communities. We estimate this month’s builder survey represents 16% of new home sales annually. Click Here to Download the Burns Housing Survey from the Front Lines Report
World Trade Center Denver lands major co-developers for $300M project in RiNo
Broadmark Real Estate Management provided the Acquisition & Development Loan for this project. They also provided alternative funding for the hotel parcel mentioned in the article. Read More
Estimating Rehab Renovation Costs Just Got Easier
Whether you’re brand new to real estate investing or are an experienced fix and flipper, there’s now an easier and better way for estimating rehab renovation or repair costs. Read More
Successful Pivots as the Housing Market Runs Out of Steam
In this podcast, you’ll hear why new home sales and construction have “run out of steam,” at levels many deem to be too low. What’s different this time from prior cycles includes:
- Banks – Two banking regulation laws (Dodd-Frank and FIRREA) that have held mortgage lending and construction lending, respectively, in check
- Municipalities – Local regulations, which have significantly reduced market rate affordable housing in good locations
- New business models – An institutional class single-family rental industry whose company values already rival the largest home builders in the country, as well as the proven viability of supplemental rental income thanks to Airbnb
- Societal aspirations – A shift to living closer to work and a willingness to make compromises to do so
Denver June Home Sales
In the Metro Analysis and Forecast report for June, extensive data analysis reports give insight into markets, including sales and pricing conditions in Denver, remain normal. We are watching Denver as the underlying fundamentals, such as job growth and resale price appreciation, begin to erode. Builders report healthy sales in May, but they are using incentives to maintain pace. Incentives have increased YOY from roughly 2%–3% in the spring of 2018 to roughly 6%–7% today. Despite this, cancellations and finished inventory remain modest. Click Here to Download Your Report
Denver, Dallas, Houston – Metro Analysis & Forecast Report for June
In the Metro Analysis and Forecast report for June, extensive data analysis reports give insight into markets, including sales and pricing conditions in Denver, remain normal. We are watching
Denver as the underlying fundamentals, such as job growth and resale price appreciation, begin to erode. Builders report healthy sales in May, but they are using incentives to maintain pace. Incentives have increased YOY from roughly 2%–3% in the spring of 2018 to roughly 6%–7% today. Despite this, cancellations and finished inventory remain modest.
We rate sales and pricing conditions in Dallas as Slow and Fort Worth as Normal. Most builders report normal sales rates at 2–4 homes per community in May with mostly flat pricing MOM. Price appreciation averaging 4% YOY matches the national average. North Dallas, particularly the 380 corridor, remains oversupplied with homes priced above $500K, requiring strong incentives. In Fort Worth, builders report fair sales despite low traffic, indicating serious buyers.
In Houston, higher than typical incentives at 6%–8% allowed builders to report traffic and sales levels equating to a Normal rating. Most builders held pricing flat MOM, and none reported decreasing pricing. High lot and land prices result in deals not penciling and builders and developers walking from potential projects. This trend indicates a potential pullback in supply relative to demand in this typically supply-rich market.
An oversupply of move-up homes in San Antonio, priced in the $400K–$600K range, resulted in lower sales rates relative to entry-level homes. Homes in the $200K range remain the “sweet spot” for this market. Cost pressure from increasing labor, materials, and lot costs likely drove 44% of surveyed builders to increase prices MOM. Click Here to Download Your Report
Forecasting a Modest Year for Housing in 2019
We continue to forecast a modest year for housing in 2019, which should benefit from a slightly stronger economy and lower mortgage rates than we originally forecast. Because the decline in mortgage rates is largely driven by fears of an economic slowdown, we have even more conviction that our forecasted modest 2021 recession (0.4% job loss) is the most likely scenario for managing your business. On page 14 of the report linked to above, we show the views of 10 highly respected economic forecasts or surveys. Page 53 is the beginning of 20 pages of informative charts on forecast risks. Click Here to Download the Burns US Housing Analysis and Forecast Report
May – This is a Goldilocks Market, “not too hot and not too cold, just right.”
National prices and sales rose slightly YOY, with steady cancellations and modest unsold inventory levels, according to our survey of ~17% of all US new homes sales. Click Here to Download the Burns Housing Survey from the Front Lines Report