We did it again: Dallas, well, North Texas, made it as one of the highest appreciating real estate markets in the country, according to the folks at the Real Estate oracle of nationwide comparison, Standard & Poor’s/Case-Shiller Home Price Index.
Dallas area home prices were 9 percent higher this May (2016) than they were a year ago May (2015). And it was the biggest chunk of price gain since February.
“Home prices continue to appreciate across the country,” S&P’s David M. Blitzer said in the report. “Overall, housing is doing quite well.”
Quite. The nation’s home prices across the board were up 5 percent from May 2015. So yes, Blitzer is correct: the nation’s housing market is healthy. It’s just that, with prices rising so much, it makes it more difficult for people on limited incomes or first time buyers or buyers saddled with college debt to get in.
Dallas area real estate prices have been rising 8 to 10 percent now annually for more than a year, due mostly to a dearth of inventory. Well-priced homes in certain price segment sell within days of being listed or sometimes, even before.
“In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains,” said the veteran real estate indexer.
The forecast calls for home prices to hold strong and continue upward, though at a slightly slower rate.
Dallas had the fourth largest annual home price gain in the country, and the largest gains in Texas. We are behind Portland, Oregon, where home prices catapulted up 12.7 percent from a year ago. (Jeeze!) Home prices rose 10.7 percent in Seattle and 9.5 percent in Denver… Rocky Mt. High!
We even beat the peak we attained during the housing boom of 205-2007 by more than 25%.
Oh yes: the median sales price of a Dallas area home is now a whopping $237,500.
June was a real estate party with caviar smeared on imported Alaskan salmon. The National Association of Realtors® reported Tuesday that June’s seasonally adjusted pending sales index came in at 111.0, a slight increase of 0.2 percent from May’s unrevised 110.8. The increase was lower than the consensus expectation of a 1.3 percent rebound following the 3.6 decline last month. But we still have topped the top of the 2006/2007 peak.
NAR’s Chief Economist Jonathan Smoke says:
Today’s pending home sales figures were the highest for June on a non-seasonally adjusted basis since June 2005 – even higher than in June 2006, the peak of the housing boom. We also saw the second-highest seasonally adjusted pace of sales in the last 12 months. June’s gains in existing, new, and pending home sales closed out a strong spring and first half of 2016 for the housing market.
We are now entering the time of the year when sales usually decline because of the real estate market’s highly seasonal nature. Inventory will likely remain tight for the foreseeable future, but buyers in late summer and fall should face less competition compared to the spring. This year is following the normal seasonal pattern with a bit more strength in June, presumably powered by very low mortgage rates.
That may explain why, lately, I have been hearing from several agents that things have been eeerily quiet in July. One agent said they haven’t even made HALF the numbers in his Flower Mound office in July that they did in June. And June was his office’s most profitable EVER. I am also hearing that once you get above the $700,000 to $800,000 range, homes are NOT flying off the shelves: see this Dallas Morning News chart showing declining pricing in all the higher-priced ‘hoods. In other words, the luxury homes are staying on the market a bit longer.
I’ll be talking at David Griffins office on this Friday morning, by the way. There seems to have been a rapid slowdown in the number of closings… is this seasonal? Is it the crazy election where both parties are more divided than united? Is it all the crime and shootings? What do you think?
(Is it time to drink?)