Ronda Allen's Blog

As I predicted around mid-year 2008, the biggest trend in real estate in Prosper, Texas in 2009 was leasing of large square footage single family homes.  And, we missed a lot of opportunities to do even more leasing, as people tightened their belts to stay in their homes throughout 2009 or rejected the idea of leasing out their home.  

In 2009, there were 29 residential leases in Prosper, Texas.  They ranged in terms from just a few months to a couple of years.  And, we're entering 2010 very light on leasing inventory.  We only have 15 homes for rent across all price points.  Here's the breakdown:

Leases under $2500 per month:  7 homes

Leases $2500 - $5000 per month:  6 homes

Leases $5000 - $10000 per month:  1 home

Leases $10000 - $15000 per month:  1 home

You might wonder who would lease a home for $10,000 a month in Prosper, Texas?  Typically, it's someone moving to DFW from another state, where they are used to real estate costing a whole lot more than it typically does here.  But, as we've discovered in the last few years, that perfect candidate for leasing may just be someone who wants a nice home, but doesn't want to own it.  For example, we have a big hospital population in DFW.  There are surgeons and specialists who work on a contract basis to a variety of hospitals in different states or countries each year.  They don't typically buy homes in these places.  If their contract is long enough, many of them prefer to rent a home versus an apartment.  And, by leasing in Prosper, Texas, they can service hospitals in both Dallas and Fort Worth.  This type of freelance work is very lucrative, but the opportunities come up quickly, and those clients don't have the time or inclination to stay in one place, build equity, or put down roots.  They prefer a more spontaneous lifestyle and build their wealth outside of the real estate arena.

Even though the news on the housing front is trending toward a more positive note at year's end, the economic situation hasn't improved for much of the country.  So, although I was the first agent to document the trend toward residential leasing for Prosper, TX in 2008, it doesn't take any great stretch of the imagination to know that 2010 will be another year of great demand for residential leasing.  In fact, I'd go so far as to predict the next two years will be equal to or greater than the 2009 leasing figures in Prosper. 

As demand for leasing has risen, so have rents.  The renters are, in many cases, moving into a home that they intend to purchase when their current home takes a contract.  They are willing to pay for the flexibility to get into the right home in a tenant position, in order to avoid the expense of moving twice.  Don't close your mind to leasing.  Offer your home for sale or lease, and let the needs of the market determine which listing responds best. 

Have a blessed day!

Ronda

In mid-year 2008, we began seeing a trend toward leasing of homes in Prosper that came on quick as the recession hit DFW.  As I have been saying all year, the demand for residential leasing in Prosper in 2009 has been astronomical.  I predicted a strong year of leasing, reminded the residents of Prosper throughout the year when we had greater demand than we had supply of leases, converted some homes for sale into homes for lease, and advised residents that this was no short-term trend.  It will continue into 2010.  Now that we're at year's end, we can and should look back to ensure that the prediction was correct:

Current residential lease inventory (available homes in the MLS for North Texas in the Town of Prosper as of 12-08-09):

16 homes

Price range:  $1050/month to $11,000/month

Average asking price on a lease in Prosper:  $.75 - $85/sf for a 4-bedroom, 3 bath home with 3-car garage and lot size averaging higher than .25 acres.

Current residential leases pending full lease:

1 home

There is one 6-bedroom home on Chapel Hill that is currently in negotiation of a $2600 per month lease that took less than 60 days to receive an offer. 

Current residential leased properties that went into leased status in 2009:

53 homes

Lease range of homes:  $1145/month to $5,000/month

Average leased price of a home in Prosper in 2009:  $.70/sf

Why the trend toward leasing?  The recession is over in DFW, right?  Not completely.  We can certainly see that some areas of DFW were barely grazed by the downward trend in the economy.  Some areas briefly dropped between Fall, 2008 and Spring, 2009.  We saw steady improvement in home sales all year across the region.  But, some neighborhoods still maintain higher than normal foreclosure and short sale inventory that has yet to clear out.  But, even those areas are seeing thinning of distressed inventory (and at a pretty rapid pace, too).  So, why would the trend toward leasing continue?  Because a big portion of the buyer pool in Dallas/Fort Worth each year is made up of people moving from other parts of the country who have homes to sell before they can buy here.  And, where do our buyers come from?  Other major metropolitan cities with large corporate bases, just like us.  Chicago, Los Angeles, Seattle, New York City, Tampa, Houston, and San Francisco's Bay Area are major target markets for Dallas/Fort Worth's housing market.  What do all of these cities have in common?  Their housing market is still trending downward or just starting to settle.  The recession isn't over yet. Until we see those markets rebound, the trend in DFW's housing market will be a continued demand for residential leasing.  

If you are considering selling or leasing your home in 2010, the best advice I can give you is to list the house both ways and let the market dictate what works for them.  We've worked some pretty funky customized leasing arrangements in 2009 to make the situation work for both parties.  That's actually been challenging and exciting.  The strangest lease I did in 2009 was a 5-month fixed rate lease with a 7-month term of month-to-month leasing at a higher rate.  This allowed the tenant time to get through their purchase contract in California and then gave them time to decide whether to buy the home they were renting or time to view other home options during the back half of the lease.  The tenant ended up buying the home in the 4th month of the back half of the lease.  I believe it came down to the fact that they leased a house that they would consider buying, moved in, their family got settled into schools and the neighborhood, and the thought of moving again at the end of the year just wasn't that important.  A little flexibility by the 'seller/landlord' up front was rewarded with a purchase contract before the lease was up.  Pretty cool.

Have a blessed day!

Ronda

This has been the hottest year for residential leasing in the DFW Metroplex that I have ever experienced.  Singles and young couples are bailing out of apartments and renting three and four bedroom homes for less than they were paying in monthly rent on an apartment.  People considering job changes are getting out of their homes and leasing while they look for jobs - so they are ready to make the move when they find the job they want.  Owners are leasing out homes rather than falling into foreclosure, as a way of holding on to their largest investment.  And, we have some people making the most of this market by selling their home and buying smaller, and using their remaining equity buying up properties to turn into investment properties.  Everyone has a different story for why they are leasing, and they are all competing with each other for a limited number of homes.  To say the leasing market is hot in DFW is an understatement this year.  It's smokin' hot.

There is a lease home for every price range.  Here is a snapshot of available lease inventory in some of our most popular suburbs, and the ranges on rents.  Note the low end of the rents.  These are 3-bedroom homes leasing for less than many 3-bedroom apartments.  Note the high end of the leases.  We actually have a shortage this year in many suburbs of luxury residential rentals (leases in the $3000-$15000 range). 

Frisco, TX:  129 homes for rent  $765 to $8950 per month
Prosper, TX:  26 homes for rent $925 to $11000 per month
McKinney, TX:  130 homes for rent $750 to $4500 per month
Plano, TX:  206 homes for rent $575 to $14,900 per month
Little Elm, TX:  40 homes for rent  $925 to $2795 per month
Aubrey, TX:  13 homes for rent $750 to $2900 per month
The Colony, TX:  30 homes for rent $895 to $2100 per month
Allen, TX:  49 homes for rent $950 to $3000 per month
Richardson, TX:  43 homes for rent $700 to $2400 per month

Whether you are looking for affordable rent, a backyard for kids and pets, flexibility to make a career change, or want to get to know an area before buying there, we have a rental home to suit your needs.  Other suburban cities and towns are available upon request.

Sellers who are not getting showing traffic on their homes for sale should seriously contemplate offering the home for sale or for lease, and letting the market determine which is the most appropriate in their area.  You may be competing with 50 other residential sales, but your lease comepetition may be down in the single digits.  That's much better odds.  And, you could just be renting out your home to the next buyer.  People hate to move twice!

Have a blessed day.

Ronda




Ronda Allen, Realtor and C.P.M.
RE/MAX Dallas Suburbs - The Keith Dobbs Team
#1 Office and #3 Team for RE/MAX in North Texas at mid-year 2009!
www.dallassuburbs.net
 

Located conveniently along Coit Road at Highway 380, Prosper now has townhome and apartment options for new residents: 

Townhomes:  The Mansions of Prosper
Location:  880 Coit Road, Prosper, TX 75078
Driving by this morning on my way to drop my Son off at school, the folks at The Mansions of Prosper were offering free breakfast to anyone pulling in to tour.  It's grand opening time!  These are luxury townhomes offering 1-4 bedroom homes with attached single or double garage options.  From 643sf-2499sf, these may be the first townhomes we're seeing in Prosper, but I don't think they'll be the last.  Expect these to go fast!  Named for wines, I am particularly impressed by the value and space of the Cabernet 2-bedroom and the Chianti 3-bedroom townhome.  Amenities include a 6,000 square foot clubhouse, resort-style swimming area, Starbucks cafe, remote-access 24-hour California Heath & Fitness Club, Private Tanning, Dry Sauna, and more.  The energy efficiency amenities are quite impressive - extra insulation and radiant barrier certainly won't leave you feeling short-changed on construction value.  In my opinion, this townhome community will rival that of other area townhome/condo options like those at Craig Ranch and Frisco Square.  Add renowned Prosper ISD to the mix, and I say 'winner, winner, chicken dinner'! 


Apartments:  The Estates of Prosper
Location:  890 Coit Road, Prosper, TX 75078
Located right next door to the Mansions, and directly across from Rogers Middle School, the Estates of Prosper offers lake views, 24-hour health club, resort-style pool and tanning deck, complimentary Starbucks coffee bar, and on-site concierge services.  Floor plans are named after flowers, starting with 1-bedroom apartments from under $650/month to 3-bedroom apartments just under $1300/month.  I love their hours, as these folks work just about as long as I do every day.  Monday - Saturday 8am-8pm and Sundays 10am-7pm. 

Have a blessed day!
Ronda




Ronda Allen - Realtor, Life Coach, and Certified Purchasing Manager
CEO of comingsoonhomes.com
Follow us on twitter:  www.twitter.com/comingsoonhomes
RE/MAX Dallas Suburbs - Keith Dobbs Team
#1 Office and #3 Team for RE/MAX in the North Texas region at mid-year 2009!
Friend me on Facebook:  Ronda Wise Allen
View all our team's listings for sale or lease at:  www.keitdobbs.com

Been up for sale for a while now, and can't chase the market with your list price to where it needs to be to sell?  That's very common right now.  You may not have been considering converting your personal home into an income-producing investment property, but it may be necessary or just good business to at least talk it over.  I am in the process of converting a home for sale in Frisco into an investment property for an owner who doesn't want to chase the market by sacrificing equity in his home.  One of the best things about a full-service brokerage firm is having a full-service Property Management Group in-house.  We handle converting the home to a rental, finding a tenant, background and credit checks, spot checks on the home, service calls, and rental payment processing.  The owner gets a check every month.  The best of investing (money) without the headaches of being a landlord.  We also go a step further and investigate refinance and/or reduction in taxes and insurance, to help ensure maximum profit potential as a home converts from a personal home to an investment property.  Demand for rentals is on the rise, and some areas of the North Dallas suburbs are currently short on choices in certain price points.  That's why we get calls on resale properties asking if the owner would consider renting.  Too much demand for rentals and not enough supply.  Basic supply and demand:  Rents are rising and landlords are achieving higher profit margins on their investments.  Investigate all your options, and know that you aren't alone.  Professional real estate agents have the know-how to find profit opportunities in any market conditions.