What Housing Crisis?
Prices are up, inventory is down: 5 truths about Dallas real estate
The real estate forecast is sunny in North Texas. Despite a little depreciation a couple of years ago, home prices are back on the rise, new home sales are up and we continue to build equity. Here’s the 411.
Dallas real estate never took a nose dive
Our Dallas market never swam with the fishes like the sand states did — those bad boys of Florida, Nevada and Arizona. Texas laws regulate how much Texans can borrow on home equity loans, and it saved our butts when the markets crashed. Still, like everyone, we saw some depreciation and a slew of foreclosures, mostly in the outlying areas. In fact, South Dallas and Lancaster were about the only places where sales were down when compared to last year.
Neighborhoods like Park Cities, Preston Hollow and Lakewood are hot (of course)
Dallas real estate is downright cooking in some neighborhoods: Park Cities, Lakewood and, now, Preston Hollow. If you find a home there you like, don’t dilly-dally, because you may not get it. I’ve seen multiple offers and firming prices, and homes between $250,000 and $750,000 are flying.
Home prices are up
Dallas home prices are increasing. The latest S&P/Case-Shiller Home Price Index shows Dallas as the only Texas city on the index with a 3.68 percent increase in prices, from June 2011 to June 2012. Prices are up, and so are existing home sales in North Texas. The North Texas Real Estate Information Systems (NTREIS) says North Texas had an 18 percent increase in pre-owned home sales for the jolly month of August. Park Cities sales were up 55 percent from last August, and North Dallas was up 35 percent. In Trophy Club-Westlake sales were up 86 percent!
But the number of homes for sale is down
We have a shortage of inventory. When prices went south — not to Argentina, only to San Antonio — folks decided not to sell or leased out their homes long-term instead. That chopped our inventory. At the same time, builders hit the brakes because they couldn’t get financing, and the era of the spec home came to an abrupt halt. That left us with 34,580 homes on the MLS in August 2012, compared to 54,406 in August 2010 and 45,538 in August 2011. Currently there is a five-month supply of homes on the market. Last August, there was an eight-month supply.
We have more equity in our homes
Our homes continue to be some of the most affordable in the nation: The MLS median sales price of $162,500 is up from $158,000 two years ago. And we have more equity in our homes. Second quarter 2012, only 10.9 percent of Dallas-area residents owed more than their homes were worth. That’s less than half the national rate of 22.3 percent of homeowners under water on their mortgages.
That’s a huge improvement from 2009, when a whopping 30 percent of Dallas homeowners were upside down on their mortgages. We can thank the lack of inventory, firming prices and those multiple offers. The average upside-down U.S. borrower owes about $84,000 more than his or her home’s appraised value. What happens when people have equity in their homes? They feel good, they feel rich, they smile and they go spend money — hence our healthier Dallas economy. See you at NorthPark!