How Hot Is the Dallas Real Estate Market? Hot Enough to Fry an Egg on the Sidewalk?

If you are a regular reader of this blog, which I hope you are, you know how hot our market is. I am afraid to postpone writing about a great property because it will be sold. I do not understand how you can write about homes now in print, especially magazine. It takes 30 days to publish a print book and in that time, a home could have flipped TWICE.

Just last month, April, we enjoyed a 30 percent increase in sales of pre-owned homes in North Texas. That’s the second largest gain this area has seen since 1998.

And the 14 percent increase in prices in one mere year, from April 2012, is another record setter — one of the largest percentage increases for our homes ever in North Texas.

According to the Real Estate Center at Texas A&M University, and our friends at NTREIS, the North Texas Real Estate Information Systems,  agents sold 8,288 houses in North Texas last month. That’s the largest chunck since mid-2007,  when the market was red-hot.

Then came Lehman Brothers and the market crash of 2008, and stillness set upon real estate.

Keep in mind a few things about those numbers:

1. Those juicy numbers are pre-owned homes. If you count in new construction and condos, the figures are even higher.

2. Those are MLS numbers and at some brokerages today, almost 30% of transactions happen without the homes ever hitting the market. Last week I was on a radio show with Dallas City Center director Kevin Caskey, who told me that in general, hip pocket sales (sales that happen outside MLS, or without formally listing the home) account for about 10 to 15% of all sales. Agents are supposed to record hip pocket sales in MLS after the sale, but not all do.

3. Today I was over at Republic Property Group, the folks who bring you Lantana, Phillips Creek Ranch, and Light Farms in Celina. 73 homes sold in Lantana this year-to-date compared to 64 in all of 2012. Phillips Creek Ranch is just killing it — 114 sales this year to date and the development just opened about a month ago. My point is none of these sales (or similar sales at other developments) are in MLS, so NTREIS numbers are conservative.

4. Agents tell me comps are still not where they need to be in the higher end market. So you can get a buyer, only to have the appraisals come in a little short.

5. Talking to a mortgage banker the other day, he offered me this future scenario: interest rates are so low right now, mortgages are practically free. Come five years down the road, the fed changes policy dramatically, interest rates rise. Who is going to want to move? Everyone is going to want to stay put in their homes because of those low mortgage rates. No one will move unless they absolutely have to. What will that do to the market?

6. Inventory will be increasing as people see their homes as fatter piggybanks. At an open house the other day, a man came up to a local agent and said “hi, want to meet you, I hear this is a good time to put our house on the market and make a s#*tload of money on it. When can you come look at it?” My question to the seller: where will you move?

The moral: make hay while the sun shines, and while mortgage rates are low. And maybe think about making that buy a ten-year home.