Episode Transcript
[00:00:01] Speaker A: The Michael Hatfield remax team presents real estate and more.
[00:00:06] Speaker B: Bay Area real estate is different than all of America and why? What's up with buyers? What's on sellers'minds? How is the market and much, much more.
[00:00:17] Speaker A: Now here's your host, Michael Hatfield. Welcome to the real estate and more show. I'm your host, Michael Hatfield. And as we know, I like to check in with my colleagues in other parts of our great country and hear how their markets are doing compared with what we have in the San Francisco Bay Area. This morning we're going to take a quick look at the Dallas Fort Worth Arlington metro area. And recently, this location has had considerable interest, a lot of people moving in down there to enjoy the attributes. So let's ask my friend who's been there and colleague, top producing realtor Peter Baird, to tell us what markets are like in the Lone Star state. Welcome to the show, Peter.
[00:01:03] Speaker C: Mike, thanks for having me on the show. Really an honor.
[00:01:06] Speaker A: It's our pleasure, my friend. I know you practiced a long time in the San Francisco Bay Area. Then a few years back, to coin a western term, you pulled up stakes and moved your family to Dallas. What attributes of Dallas, Texas, lured you away to the Lone Star State?
[00:01:24] Speaker C: Well, Mike, I asked my wife the other day, after being here just two years and moving away from San Ramon, California, if she'd been in any traffic jams. And I held up my hand and it had five, and she said zero in two years of being here. Number one. Number two, the most original reason that we left and came here to the great state was because we sold for 700 a square and bought for 175 a square. So the cost of living is remarkably much more economically feasible. Gas prices are running in the $3 to 250 for regular.
The funny thing is, I didn't tell you this. I bought a truck before we even decided to move to Texas, and I registered it in California. It was $980. Take a wild guess what it was when I registered it this year and last year.
[00:02:21] Speaker A: Don't have a clue.
[00:02:22] Speaker C: $78.
[00:02:24] Speaker A: Whoa. Sounds wonderful.
[00:02:26] Speaker C: But the greatest resource that we found, Mike, the people here of Texas are just extraordinarily, the kindness is literally almost still shocking. So it's been a great move. But here's what I'm a California. I was born in San Francisco, as you may well know.
[00:02:41] Speaker A: Well, let's get into a little bit of real estate. The Dallas Fort Worth Arlington metropolitan area, it has a population, a large population of about 7.76 million, about the same size the state of New Hampshire, encompassing about 9286 sq mi. One could say that area is relatively spread out. So are you driving more, Peter?
[00:03:06] Speaker C: Oh my goodness. Never more. When you say you do the DFW that's called the Dallas Fort Worth metroplex and Arlington of course Irvino, tons of other plano, Frisco is all included in that. With those 8 million people I just dropped off a bunch of Thanksgiving gifts to my clients so they wouldn't get caught in the mirage of the Christmas gifts. And I put 3000 miles just driving around the metroplex in four days. So it's diversity. You're only five minutes away from beauty in Texas which is great.
[00:03:41] Speaker A: That's just great. Now you touched on it right in our introduction you said that other people are moving here in Texas to Texas. They want to downsize, they want to retire. They want to pay less taxes. They want to pay less for a home essentially have more discretionary income. Can you just briefly elaborate on that a little?
[00:04:03] Speaker C: Right. What's really shocking to me is how wonderful the buildings are in the public services when they don't have any state income tax. Now on the downside of things, the property taxes are higher. The state is so economically run well they have a $37 billion surplus that they are going to distribute back to the property owners. But regarding downsizing that's exactly what we did. We sold a 1977 home in beautiful in a very nice area. I think you may have even been there in San Ramon. And now we were forced to buy a 4000 square foot home literally almost twice the size. Because that's the Texas version of downsizing. It's hard to find something below 3000 or 2500 sqft. Which is really what my wife and I originally were targeted. It's almost like every day is Black Friday here.
[00:04:57] Speaker A: It feels like I did a show with Pavitucci and it was retire here, retire there or retire everywhere where it kind of talked about an option to where a person could have a place in Texas. They could have a little place in California. They could have one in Arizona if they wanted or they could have a little place in Portugal if they wanted. But Texas was definitely on the list and for many, many reasons I don't believe it has state income tax. Is that does it does so. So you're doing real well with that. And if you make a little money you get to keep a little money. That's always a great thing. So after living in Dallas area for a while you mentioned that you got a small 4000 square foot home of which you had to pack in twelve whole people.
There's other benefits of fun things to do down there. Are you into the rodeo, Peter? You do any of that ride horses?
[00:05:57] Speaker C: No, I don't. But my cousin has a ranch. And one of the other reasons that we did move here is that my wife's brother in law is only nine minutes away in a beautiful suburb called Flower Mound, which is remarkably popular, I'd say, from a socioeconomic. For your California listeners, it's very similar to the San Ramon Danville area in terms of those.
It's. So we've got friends and family here. We're going to have our granddaughter come here and she's going to be taking some writing classes. So that's fun. But at my age, I don't need to break anything. I've done that enough.
[00:06:32] Speaker A: You know, Peter, I tell you a funny story. Sold this ranch to a guy, 67 years old, a doctor, and it had eight longhorns on it. It was a big ranch in the Cape Valley. And he decided, I'm going to ride one of those things. And guess what? I have a little video of him getting on one of those longhorns. I think it was crazy to do it, but people like what they like to do. Hey, can you get a nice home down in your area for, say, $400,000?
[00:07:03] Speaker C: That's a great starter home. We're trying to convince my daughter to move here and that's kind of her range. And so we'll be looking at those at the end of Christmas when she gets here on the 26th. But, yeah, absolutely. You'd be absolutely shocked. And those are definitely a little bit smaller in terms of not the 4000 sqft.
[00:07:24] Speaker A: Would that be like in Arlington?
[00:07:27] Speaker C: Arlington is a great value. Actually, you keep bringing that up and I will tell you Arlington is one of the better values. The area there that in a sub area called Grapevine is very know, you'd be surprised. There's a lot of lakes in the Dallas Fort Worth area.
Grapevine lakes about maybe a fourth the size of Tahoe for juxtaposition there. And then there's Lake Lewisville. That's not too far from me. So there's a lot of. Really. So as you know, the weather here. There's a great saying that we did learn in Texas, Mike, is that if you don't like the weather, just wait ten minutes. I think the only thing I can correct is just wait five minutes. Yeah, but $400,000 can definitely get you into a nice, say, 25, 2700 square foot home in a nice area maybe 15 to 20 minutes from central Dallas.
[00:08:23] Speaker A: Now let's talk about house property taxes. Down in the Lone Star State, property taxes are based on an appraised value. But in Texas, all taxable property must be appraised at 100% of the fair market value as of January 1 each year. Then the market value is the price that it would sell for under the current market conditions. So I imagine the tax assessor is pretty busy all the time, and if you had a $400,000 home, roughly, by my calculations, it would be about $6,400 a year in property taxes. Does that sound right to you?
[00:08:58] Speaker C: Well, depending on the area, because they have what's called the ISD, which are the school districts, and depending on the school, we did find out that over 50% of those actually goes to the schools. And if you've ever seen the movie or the series Friday night lights, you'd see these stadiums for the Friday Night Football's mike. That would really pale in comparison or make these large college stadiums blush. Whereas you're looking anywhere from a minimum to one seven five to up to 2.25.
So you could be a full percentage higher. So you've got to really do some economics. And for clients that we do have, I have a software program that I use that really analyzes that to make sure it makes economic sense to downsize, too, for that exact reason.
[00:09:52] Speaker A: So you'd be $64 to $7,000 per year on a $400,000 home, whereas in California, at a $400,000 home, if you can find one, you'd be paying roughly 43 4400. You know, the one that's really cheap to keep in the back of your mind, and I know you wouldn't mind going there, is Hawaii. They have the least expensive property taxes in the country. On a million dollar home, it'd be like about $3,900 per year. Can you believe that? That's just unbelievable. But then again, in Texas, think about it this way. You're not paying state income taxes, so you don't mind paying higher on your home. What about sales taxes, Peter? Talk to me about those.
[00:10:39] Speaker C: Yeah, they're about the same. I don't want to misquote them, because I don't know what they are exactly, but they're about the same.
Yeah, but everything's less.
It's really impressive. You go out and you go, oh, my God, we're still used to paying a couple of $100 for four or five people to go out. When we go to California here, I'd say easily your cost of living is a third less than it is.
[00:11:05] Speaker A: Now back on the sales taxes. By what I've been able to ascertain, it's about 8.2%. As an average of which, maximum local sales tax can be up to 2% there.
And then they have a 6.25 state sales tax rate. Makes you about eight and a quarter thereabouts. Not too bad. Here in contra Costa, we're paying a lot in sales tax. And to me, it's just kind of crazy. Not to mention that you mentioned fuel costs. Look at the fuel costs. We're paying $5.49 a gallon here, Peter. Unbelievable. So that's one of the forces, I think, that take people and have them pull up stakes and move to other areas in the country, such as Texas. That's the way I see it, anyway, the sense of community. When I grew up, someone came to my parents door, and it could be 07:00 in the morning, and mom would have her big curlers in her hair with a hair net on, and they'd knock on the door, and she'd go right to the door. She'd open that door. Well, come right on in. And that sense of neighborly hospitality and sense of neighborhood is really important to people's well beings. In fact, studies today are saying if you have people that you can talk with, people that you can relate to, people that you can share in mutual purpose, then your health is going to be so much greater. Tell me about Texas. You mentioned people are so kind there.
[00:12:41] Speaker C: So sense of community. Oh, my goodness. The second we got in here, we got blueberry muffins, cornbread, people coming in, inviting us. I mean, the only profession I wouldn't want to be in Texas, Mike, is a locksmith because nobody needs to lock their doors. Crime is basically know it always is in certain areas. But just the sense of. And you feel so comfortable walking down the street at night. And I can tell you invariably, that even no matter where you are in Texas, you're driving down the street and somebody's pushing a baby cart or walking a dog, and you raise your hand to wave. And everybody waves. Everybody waves. You could pull over and have the nicest conversation. So, I mean, the serendipitous events that we've had was nothing short of miraculous. So we know that it was divine energy that certainly got us in the location that we did, and we couldn't be happier. But I think that's the greatest resource. And the thing that surprised us most was the kindness and that sense of community that you noted.
[00:13:43] Speaker A: Texas does have some interesting weather. Back in my airline days. There was a pilot base in DFW with the airline that I worked with, and a storm came through and they usually kind of blow up from the southwest and then they twisters and everything else came. But it was such a severe line of thunderstorms that it pounded. I think it was 26 American Airlines jets. And it made some of them look from the hail. It made some of them look like they've been hit on the wings with ball peen hammers. And I'll never forget seeing those airplanes that closed the entire airport down. And it was just one mess. We didn't go out until like later on in the afternoon. Unfortunately, the airplane that we took out was one that was coming in, so it was one of those. But you can have some real severe weather down there in the Lone Star estate.
[00:14:41] Speaker C: Well, to tie that weather comment, you're spot on with real estate. Normally you'll never see a 40 year architectural comp, four dimension roof. You won't because they don't last that long. So roofs are 20 year roofs because they come and go based on those hailstorms. And they can be pretty dramatic. And you're right. So you have to know where you're at. It is a challenge. That's something that's not maybe on the chamber of commerce. Top ten reasons to move to Dallas Fort Worth, but it's a reality that you've got to think about. But I will tell you, summer weather, when people talk about humidity, the humidity in the DFW Dallas Fort Worth area, Mike, is nothing compared to being closer to the Gulf and the coast. Houston is just brutal. So we have neighbors on both sides of us that moved up specifically from Houston to be in less humidity. But the weather at night and then being able to walk your dog at night at 10:00 at night at 85 degrees is really nice, too.
[00:15:45] Speaker A: We're going to take a short break. We'll be right back.
[00:15:51] Speaker D: Welcome to the real estate minute with remax expert Michael Hatfield. Michael, what traits should we look for in selecting an agent?
[00:15:58] Speaker A: Look for a deal maker with a.
[00:15:59] Speaker E: Positive attitude who will work tirelessly for you. An agent who is adept in multiple offer situations, drafting contracts, marketing and advertising. A client's home is familiar with multiple cultures, experienced in mortgage financing, inspections and escrow is a huge asset to his client.
[00:16:18] Speaker D: What can you do as a plus for clients?
[00:16:20] Speaker E: Your agent is your eyes and your ears, one who works behind the scenes on your behalf. A great attitude, working well with others and keeping clients priorities. Number one is a given for us.
[00:16:31] Speaker D: Call 925-32-2775 now to schedule an appointment or complimentary home analysis for excellence in real estate, call the Michael Hatfield remax team at 925-322-7775 or go to michaelhatfieldhomes.com.
[00:16:48] Speaker A: Now back to our show.
So back into the real estate thing. Are you seeing any decreasing amount of buyer interest since the stairstepping of the rates which began, I guess in April of 22?
[00:17:02] Speaker C: Absolutely.
[00:17:03] Speaker A: Yeah. Kind of smoothed it out a little bit. Is it a buyer market? Seller market? How does it feel right now?
[00:17:10] Speaker C: It's almost balanced. In fact, I ran some numbers based on before we got on the call, both in Danville and here. And we've had, as you know, the most protracted seller's market because of the artificially low interest rates and then the starved inventory based as a result of COVID and somewhat that's surprisingly we haven't had a correction or adjustment because that's been extended. Because this is what people aren't talking about is that we have starved inventory specifically because the people that want to downsize and move, they can't justify it from an economic basis because sure they could sell their large home, they're empty nesters and they want to trade down. But 60% of Americans have a three or a two in their mortgage payment. So there's no reason financially for them to do so. It's not only so I wanted to bring that up because it's not only affected the buyers and reduced them, it's actually affected the inventory. So that's why you see the volume of sales slower as I'm sure it's probably affected your area as well.
[00:18:15] Speaker A: Just the number of transactions. It's still, as you say, it's in equilibrium here. But anyway, we've got a few more questions I got to get to before we run out of time. Peter, number one is what is your percentage of cash buyers down there as opposed to ones that buy with loans mortgage know?
[00:18:32] Speaker C: Well, it's surprisingly high because of those people mostly coming from out of state that have much higher. In fact, that was our biggest challenge getting a home was we were competing against other people from California as well.
[00:18:45] Speaker A: I understand.
[00:18:45] Speaker C: Or we're just paying. Ridiculous. So yeah, it's surprisingly high again because of 50% of all buyers are still from out of state, which is pretty extraordinary.
[00:18:56] Speaker A: Yes, I totally agree. So moving forward, do you see home appreciation continuing to go up because of the lack of homes available for sale or housing inventory, so to speak, down in that area?
[00:19:10] Speaker C: Well, I see it stabilizing, but I ran a lot of economics on forecasting in the market, and I do think it's just a remarkable time to talk to people about selling. Because, Mike, if you look at it this way, from a macroeconomic basis, the last 40 years, America has basically appreciated 3.8% over that last 40 years. Then with COVID starving the inventory. So you have. Adam Smith is alive and well, isn't he? Supply and demand economics. We had the inventory being starved because sellers were very unsure what the pandemic was going to do and offer them, while at the same time, we had artificially low interest rates that skyrocketed demand. So you had this extraordinary appreciation of 21 and 19%, respectively, in 2020 and 21. So that's 40% in those two years, which is ten x over that 4%. So I tell my people, if you want to sell, this is like being in Vegas and hitting the jackpot and going to the buffet. Take your money off the table, because, in essence, if you look back, it's the equivalent of selling at 2033 levels as opposed. So I don't think it's going to come down much. I just think those prices are going to stabilize, but it's quite an opportunity for people that want to sell. But then again, you got to add the financing and the cost of funds into that equation. Is it worth it to extract that extra profit? If you do want to downsize, but then have to take the hit with paying almost twice the amount on the same, or potentially a reduced, now, if those people have enough equity to be able to downsize and then pay cash, then the cost of funds is a non issue. So there's a lot of discussions that I'm having with my client running those analytics for, you know, I'm a numbers cruncher, so I love having these conversations.
[00:21:09] Speaker A: Yeah, I feel that here in the Bay area, the prices are going up. The inventory is not coming out the way that you might be reading it. It's just not coming out there. The people are in retirement age. If they haven't already moved to Texas or Nevada or somewhere else, they're thinking, well, I'm sitting here on this 3% interest rate, or I paid my home off. Why should I sell and pay 6% somewhere else unless it's all cash? That was the intent of my question about, you have a lot of cash buyers down there as a percentage. Do you know what the percentage would be? I know overall it's 28%, but probably a little bit more. If you got a big people moving.
[00:21:51] Speaker C: In down there, I'd say 40 plus, maybe 42 to 45. It's extraordinary, right?
[00:21:57] Speaker A: So you've now lived in Texas for a few years. What do you see as the main difference in lifestyle? If you were to say, what are the main differences?
Ab costs, expenses.
You get up, you still have your same cocktail hour, don't you?
[00:22:20] Speaker C: It's always 05:00 somewhere, right?
[00:22:22] Speaker A: Absolutely.
[00:22:23] Speaker C: Yeah. That's a really good question. I wish you would have told me that earlier, because there's a lot to go into, but I think we've covered it.
It's the sense of community is so different and so special that, remember that scene in miracle on 34th street? One of my favorite things is that the Santa was the real Santa. And when the lady would come up and ask a special toy that her son wanted, he went ahead and said, oh, you can't get it here. But I know there's a sale at Bloomingdale's, and all of a sudden Macy's business skyrocketed because they were just that way with everybody. Well, I feel that that's almost the ethos of the way the Texans are. They're so unbelievably kind. And I've had that experience just at every walk of life, and I'm always shocked at the kindness of way people treat us here and that, including in our profession with title companies, they go out of their way. Everybody checks their ego at the door. There's a lot of wealth here in Texas. A lot of wealth. You could see a guy driving up to a place in a 48 Ford truck, and he's a multibillionaire, but he's the kindest with zero pretension. And so that's just, you get to know people for who they are. And again, this is nothing about California, but you asked about that, and I'd say it makes you feel like you can kick your shoes off and really be yourself. And there's no pretense at all. So that, to me, is a great way to live life. In all your interactions with people, whether going to the market or just going to church or just jumping down the street, walking your dog, bumping new neighbors that you haven't met before, it's just wonderful.
[00:24:05] Speaker A: I was just a kid of about 20, and I was flying charters, and I'd spend a bit of time down in Texas. They'd be there for a couple of days before we'd pick know the outbound passengers and corporate jet stuff. And I remember going to Billy Bob's, Texas, and I jumped on one of those mechanical bulls, and I was riding it like crazy. And all of a sudden it just bounced me off like there was no tomorrow. And good thing I had a big bumpside at that time because it was helpful the way I hit. But I remember some of those cowboys had come up and say, not a bad deal for a city boy and to help you up off of the mat. And I remember that very clearly because there was not being, looking at the guy saying a guy's from the city and we're cowboys and we're better. It was just nice, nice people. So moving ahead, looking at your crystal ball, do you see Texas faring well with other states as its package of benefits for people that live there, their lifestyle, the taxes, is a great place to live. Do you see it faring very well moving forward? Or has this been like a flash in the pan where people have moved out of California or Illinois to go to a kinder environment? What do you think moving ahead?
[00:25:20] Speaker C: Peter, that's a great question. And I think the other thing you remember when you have zero interest rates, excuse me, zero taxes for income, also, there's a benefit for all the businesses. The growth here, Mike, is extraordinary. There's skyscrapers in downtown Fort Worth. There's skyscrapers in big cranes in both Dallas. And even plano is really something that we didn't talk about. That's actually becoming kind of the new area because it's newer infrastructure. And then there's in Frisco, that's where the big star is, where the Dallas cowboy training facility is. And the growth around there is they're building thousands and thousands of homes and driving in our area. And where I live at the very edge of suburban sprawl, which is next. And there's a lot of the large ranches. In fact, I was in a real estate class today and found out about a new 2000 acre ranch that finally got approved for several thousand homes.
A lot of growth. So the economic opportunities, the incomes aren't that much less, if at all right. They're still getting top, top people. So, yeah, I think the prospects of Texas are only straight up. It's really exciting to be part of.
[00:26:35] Speaker A: I just, I've always liked Texas and I've always liked to ride horses and enjoy the out of doors. And Texas has always had a wonderful place. Maybe that's something in my future, moving ahead, I don't know. But I have to say Peter Baird, great guy, great realtor. I've known him for several years.
He's still got one little foot in I. But I don't really regard him as being too much competition. I think his heart's down there in the Dallas Fort Worth Arlington area. I think he's become a member of the Lone Star State. So at this point, I have to say we've really enjoyed having you on this show. Peter, thank you for being on. You're a great guy.
[00:27:18] Speaker C: Well, Mike will always leave the light on for you and your wife.
[00:27:22] Speaker A: We might just show up one of these days. It's time for a short break. You've been listening to real estate and more interesting people like Mr. Baird, topics of the day like Dallas real estate and of course more about real estate. You can listen to archive real estate and more shows at Forward Slash radio. That's michaelhatfieldhomes.com radio. Also real estate and more show is now podcast and all major directories. I'm your host Michael Hatfield. We'll be right back with our next special guest. Stay tuned.
