Dallas home values are up 3.5 percent year over year.

It’s something that Candy is working hard to ingrain upon me, but I’m sure you all know this by heart: Real estate is a local story.

So when I read the newest Housing Price Index report from CoreLogic yesterday, I’ll be honest, I kind of yawned.

Sure, it shows that Dallas home values are up 3.5 percent year over year. If you don’t count distressed sales, like short sales or *gasp* foreclosures, then home values are up 5.4 percent. That’s good news for Dallas, and really good news for Dallas residents with homes either poised or on the market.

But CoreLogic is kind of preaching to the choir, isn’t it? Houses are moving and inventory short, so of course, prices are going to inch upward. We’ve heard it first-hand from agents every time we report a story like this.

What I think is ridiculous, though, is the national summary. CoreLogic’s report shows that U.S. home values are up 1.1 percent over the past 12 months, which includes booming markets such as the Phoenix area, which is seeing amazing appreciation at 11.3 percent, and severely depressed markets, such as Chicago, which could be bottoming out with home values dropping 7.3 percent since April 2011.

What do you think? Is there such a thing as a national housing market?

Last week, we were Debbie Downer’ed by the latest Standard & Poors/Case Shiller report telling us that while Dallas homes saw a scant increase in prices from the spring, they were down overall from last year, that is, 2010. And that is the problem with Case Shiller: first of all, they do not count new home sales. I know, new home sales are also wayyyy down, even though they sure seem to be moving in Allen and Fairview. And Case Shiller also gives you no glimpse into the future. It’s like, well, do we invoke Jim Jones and drink the poisoned kool aid now or later?

Stick around. According to Local Market Monitor, things may be looking up after we ring in the New Year. What’s Local Market Monitor? Boston based research firm founded by Ingo Winzer, an MIT/BU MBA finance grad has been a well-known and highly quoted real estate value expert for more than 20 years. In 2005, he warned that many housing markets were dangerously over-priced. Ingo was a founder and Executive Vice President of First Research, an industry research company that was acquired by Dun and Bradstreet in March 2007. Local Market Monitor began as a quarterly publication, then found the Internet. Ingo developed the concept of Equilibrium Home Prices, tracking all the factors that contribute to home valuations — economic conditions, employment, population trends, which has proved valuable and correct in assessing real estate market risk during the last two economic cycles.

So I asked about Dallas/Plano/Irving. What’s in the forecast?

Home values are expected to decrease by 4 percent over the next 12 months in our area, according to the September 6 report.

But hold on. Home prices are expected to INCREASE in the long-term by 1% in the next 24 months, and increase by 4% over the next 36 months. So that means that by this time next year, we should be seeing an uptick.

In three years, it’s Miller Time.

By the way, our home prices peaked in first quarter 2009 for an average of $176,641. Our average Dallas area home value is now $166,496.

What’s our equilibrium home price? $193,681. Our home prices are 24 percent lower than the national average.

Our market, says LMM, is in equilibrium and has balanced prices. That means that all our economic indicators point to things that will positively influence the housing market — job growth, population growth, population migration, solid economy. Also, LMM gives Dallas a rental return thumbs up on investment properties, such a buying homes to lease. LMM predicts rents will increase 15%, to a monthly average of $1013, due to inflation.

When landlords start raising rents, you know what will happen: it will be cheaper to buy… as long as the banks are lending. Someone once wrote an article for D Magazine on how unfortunate we are in Dallas to have missed the real estate bubble — I hope that writer has since had his head examined.

“We did not see a significant real estate bubble in Dallas which also helps account for why this market has been relatively stable compared to other large metros across the country.” says  Carolyn Beggs, COO Local Market Monitor

I’m not going to say Dallas Real Estate is a hoppin’, but we are really hanging in there. Really. As I mentioned yesterday, I was in Southlake on Saturday, and I went to that adorable Southlake Town Center. Met a cute couple who were building a home in Colleyville because they had just sold their home in Keller in 6 days. Wow!¬† I got nosy and said, so how much did you reduce it by? Was it a fire sale? Only $2000 under asking, they said. You live out here, I asked? Nope, both work in downtown Dallas. They are in Colleyville for a new home, schools and safety.

Welcome to the suburbs, which are not as dead as the media might have you believe. Over on YouPlusMedia, my good friend and super respected home builder Brad Holden says the Frisco new home market is “experiencing a growth that has builders scrambling to get permits for new lots in their communities. This increase in new contracts over the past couple months shows me signs of buyer confidence and the fact of low interest rates slowly rising.” Case in point: Meritage Homes, he said, had 649 closings last year, so Brad wonders where Steve Brown gets his info on home starts plummeting.

Case-Shiller spoke this week, and we all grabbed our Depends. CS says Dallas-area pre-owned home prices dropped just 1.2 percent in February 2011 from a year earlier. That’s really not bad. Not trying to be Susie Sunshine, but I’d almost say they just held steady.

In fact, the decline in the LOCAL Standard & Poor‚Äôs/Case-Shiller Home Price Index was a lot better than what we’ve been hearing, especially when prices were about 3 percent or 4 percent lower than last year.

There are two ways to look at this. One, is to be Steve Brown and note that Dallas-area home prices have been down for eight consecutive months. Well, he has a point.

Or we could note, as Dr. James Gaines over at the Real Estate Center at Texas A&M University, that the diminishing is getting better.

“It could indicate a trend toward being back to even or perhaps even start a trend toward positive increases,” Gaines said Tuesday.

Did he say positive increases?

Case-Shiller said our price decline was less than half of what the rest of the nation suffered, which was about 3.3 percent. Prices were down in all of the 20 major Case Shiller markets with the exception of Washington, D.C.

Nice to know our tax dollars are helping lift that market.

‚ÄúThere is very little, if any, good news about housing,‚Äù Standard & Poor‚Äôs David Blitzer said. ‚ÄúPrices continue to weaken, while trends in sales and construction are disappointing.”

You talk to these guys, it seems that the economic recovery is moving about as fast as a slug.

Steve says Dallas-area home prices are now about 10 percent below the Case-Shiller mid-2007 peak in the Case-Shiller index. Could we be coming out of the tunnel? David Brown at Metrostudy says maybe. Brown  also thinks that the dearth of housing inventory could bring on inflation in home prices.

“For-sale housing inventory is not growing, even with sales at a low for this housing cycle,” Brown said. “Demand is likely to grow.”