Category Archives: Bankers

The Good, Bad & Ugly About Texas Real Estate

Being a banker requires one to be a “Jack of All Trades.” Because they make loans to groups from vastly different industries, they must have expertise in many different fields. Here is “The Good, The Bad & The Ugly” of the Texas housing market, which might have been discussed at the “Texas Bankers Association’s 5th Annual Strategic Opportunities and M&A Conference” held on November 7, 2016.


“Good: Breaking Sales Records”


Property is one of the primary inputs for productivity and land purchases remain an important loan category for most successful financial institutions. The booming North Texas real estate market in 2016 was very “Good” for bankers. The unemployment rate was low and jobs were plentiful.


“Bad: Low Homeownership Rates”


During the 1990s, the Federal Reserve made a concerted effort to increases homeownership rates in the United States, using Freddie Mac, Fannie Mae and private banks. As of 2016, the United States homeownership rate was only 63% with the Texas homeownership rate, being a “Bad” 61%. Why is Texas so low?


The Houston Chronicle points out that many factors impact homeownership, including age, urban density and poverty rates. Mississippi, Utah and West Virginia all have higher homeownership rates than Texas.


“Ugly: Only Two Months Supply”


The high sales for Dallas homes is partially due to a low supply of luxury dwellings. Unlike other cities with a supply of about six months or so, Dallas only has an “Ugly” supply of two months. NexBank can help solve that problem.


NexBank President & CEO John Holt might have explained what could be done to solve these problems at the banker’s panel on “Reinventing Community Banking: Perspectives on Competing by Innovation.” Hopefully, more single family houses can be built to satisfy high demand in 2017. Bankers have the solutions.