Dallas Real Estate Market Report: Facts & Figures, Not Crane Counting

Thinking of buying a house in Dallas but wonder when the sweet spot really hits? Last week, the Financial Times blessed us with a rather simple-minded story on how much better our economy is faring in Dallas. The criteria? A crane-count. (Last time I was in Manhattan, there were a ton of cranes there, too.) The article said we learned a lot from the 1980s banking depression in Texas, which made our bankers less likely to pursue risky practices. Also, we may benefit from the recent rise in oil prices because it is a boost to our energy industry. I’ve always said the pain at the pumps is sweet news for Texas. There are other reasons I tout (not covered in the article) why Texas has escaped much of the economic pain: we limit home equity loans to 80% of the loan to ratio value, meaning we do not let homeowners go too crazy with debt. Our market bubbled in some areas, but because we have so much darn land, our homes don’t go appreciation nuts which is ONLY nice when you can sell at the top, not so nice when you sell at the bottom. Our “better” real estate market, however, continues to be tainted by the national economic gloom. So I went to a trusted local source for solid facts — economist Britt Fair, CFO at Hexter-Fair Title Company. He gave me a whole lot more than crane-counting:

(1) Interest rates remain unbelievably attractive — but here is my (Candy’s) two cents: the banks are still parsing out loans. Federal regulators are keeping a lid on residential real estate loans until banks clear out bad loans or get infused with new capital. The appraisal problems are also slowing down sales.

(2) The economy and job prospects are slowing improving in North Texas.

(3) DFW economy/jobs are recovering better than the US average.

(4) Stock market wealth effects are helping the high end recover faster than the low end, Case in point. The rich are making deals and buying like crazy. Update: Troy’s house.

(5) The housing market is improving but is up against difficult comparisons caused by comparing sales this year to last spring’s tax credit, particularly on the lower end. Case Shiller shows that D/FW home prices have been rising since 2010. Not by leaps and bounds, but rising.

(6) D/FW house prices appear to be bottoming out before other markets.

(7) The end of Fed’s “quantitative easing” program in June could dramatically impact rates, though arguments can be made for them heading either direction.

(8) Now is a pretty good time to buy because rates may go up, and because sellers will start to believe in the housing recovery come early August when the July year-over-year sales figures get published.

Thanks, Britt!