Here’s what you are going to hear on the national news: housing prices are reaching new lows, and foreclosures are on their way back up. Dr. James Gaines told us as much at the Home Builder’s Association presentation last week. But don’t down the Glen Livet: Texas foreclosures are not as bad as the rest of the U.S. foreclosures, and our real estate market is still a shining star. (Note: I tried to embed the RealtyTrac foreclosure map, above, but it wouldn’t stick. Here’s a link to the site.) Still, I’m not going to paint you any pretty pictures when there are none: prices are really coming down and when I said to one expert over the weekend, gee, can they get any lower?, he said to me, “yes, you ain’t seen nothing yet.”

Was up in Illinois a couple weeks ago — sales are up over 19%, but prices are down as is inventory.

Austin metro area home prices fell by 2.3 percent in the past year, but are expected to rise by 0.3 percent by the summer of 2012, according to the Fiserv Inc. That means Austin prices will be down by just 2%. And in Arizona, you have to wonder when they are going to start GIVING homes away.  Phoenix home prices are expected to drop 10 percent next year, though I hear many second home buyers are swooping in and taking advantage of the lower pricing. The most affordable cities to buy homes in right now are places like Grand Rapids, Mich.; Memphis, Tenn.; Youngstown, Ohio; Warren, Michigan and Detroit. But few of us would buy there for fear that we have not bottomed out. I’d rather live in the most expensive cities for real estate: New York, San Francisco, Los Angeles, Orange County and Honolulu.

As far as D/FW foreclosures, you will see a tapering until after the New Year. But foreclosures will remain higher than most of us have ever known for quite some time. Foreclosures, like flat, is the new normal. (Maybe even breast implants will dwindle in popularity?) Most distressed sales are in subdivisions: from Jan to Sept. 2011 there was a 325% increase in foreclosure activity in the D/FW Metro area from 2000, but a 698% increase in Collin County foreclosure activity for the same period.

What I’m hearing inside the Loop is that with Sellers ever more realistic, homes are selling and Dallas inventory is very low. Brokers are predicting a very good spring, and that is one pretty picture I sure hope to paint.

I LOVE this column from HousingWire. As I said earlier, I think “maybe bad boy” Herman Cain is the only Repub candidate who has said anything remotely intelligent about solving the nation’s housing crisis, which is a major constipator of our economy: housing is 5 or 6% of the GDP. Nationally foreclosures are on their way up, while U.S. home prices fell in nearly three-quarters of metropolitan areas third quarter. National median home prices dropped 4.7%. The housing market is very anemic: median prices for pre-owned sold July-to-September  declined when compared with last year in 111 out of 150 metro areas tracked by the National Association of Realtors.

I laud Cain because he acknowledges that Dodd-Frank is a nightmare. A nightmare that has only just begun. The other day, I had the pleasure of hearing my favorite real estate guru, Dr. James Gaines, speak to the Home Builder’s Association of Greater Dallas. It is so fun to be around a (dwindling) bunch of home builders —

“Hey Joe, how much are you paying for metal roofs now?”

“Oh about $350 a foot.”

“Wow, who do you use?”

I always feel like I am getting inside info and I am addicted to the smell of fresh lumber! Anyhoo, Dr. Gaines made his usual stab at spreading common sense: our economy is trying to recover, but cannot because of all the uncertainty. Texas is the only state in the union with job growth. Everyone has quit spending. It’s like we are at a giant standstill. Corporate America is siting on $3 trillion in cash but no one wants to move because no one knows what crazy thing the government might do next.

Like Dodd-Frank. 240 regulations yet to be written by an entity that doesn’t even have a leader because the Senate won’t appoint anybody, says Dr. Gaines. Will the government change the mortage deduction? There has been speculation they may wipe it out completely for second homes — there goes that market.

So Kerry Curry hit it on the nose: they are all pretty much clueless, expect, I think, Cain. I thought I would barf last debate when Michele Bachman got all touchy-feely and went “Super Mom” on us, sympathizing with the Las Vegas foreclosure folks. Last night she said that Fannie Mae and Freddie Mac are destroying housing and “we need to put them back into bankruptcy and get them out of business.” Michele, they are already sort of bankrupt but they are also the only entity loaning money right now for many Americans. Do you want everyone to pay cash for homes like they did in 1915?

Then Newt Gingrich claimed that banks profit more from foreclosures than they do from short sales. This is something I have actually heard, and would love to know more about, the idea being banks repossess the home or property, then they re-sell it. But it’s still hard for me to understand how banks “profit” from millions of foreclosures or short sales.

Ron Paul is a physician and has his home on the market so should not be so clueless: “prices on mortgages are too high, and that’s being done to prop up the banks.” GMAB: interest rates are at their lowest in years, as Dr. Gaines pointed out Tuesday at HBA. He expects them to continue to be low at least through 2013.

Kerry liked  former U.S. Ambassador to China Jon Huntsman, who felt the pain in better words than the other candidates:

“Let me just say, on the housing discussion here, lost in all of this debate is the fact that there are people tuning in tonight who are upside down in terms of the financing of their homes. They are feeling real pain. People who probably heard today that they lost a job. These issues are very real. They are complicated. For us to say that there is an easy solution to housing, that’s just not right, and that’s not fair.”

Yes, sounds sympathetic, but a solution? One? Two? The Obama administration has none, and neither do any of these candidates. Except, of course, for Cain, once he stops blabbing about his “9-9-9”. He points out that government policy, which got us into to this mess in the first place, sure isn’t getting us out.

P.S: How deft is Rick Perry? While he had that brain fart about which government agency he would eliminate, why didn’t he jump in to talk about what Texas has done to remain one of the few housing bright spots in the nation? Surely it’s our economy, employment stats, lack of regulations, but for one: the Texas legislature passed the RIGHT sort of regulastion when it limited home owners to borrowing 80% loan to value on their homes with HELOCs.

We know from the cranes: apartments are going up in Dallas like crazy.

More than 7,200 apartments are being built in North Texas right now to satisfy the need for more rental housing. Most construction projects, like homes, are almost non-existent, the Home Builders Association has lost almost a third of its members, but construction workers are hammering away on multi-family projects.

Steve Brown reports that “Dallas-Fort Worth apartment starts are up more than 80 percent this year, while single-family home construction continues to fall. And the area leads the country in apartment building.”

We need the nation in home sales, now Texas leads in apartment construction. Texas really is like it’s own country! Experts tell Steve we will stay put as the number one building center for a while: tenants are knocking the leasing office doors down and apartment occupancies are at all-time highs. Will we overbuild? Probably, but apartment building in Dallas-Fort Worth is still less than half of what it was before the recession and credit crunch.

Net leasing has outpaced apartment completions in North Texas for more than two years. Mike Puls of Foley & Puls says demand is better than we have seen since the 1980s, since there are fewer young people today who can afford a home and more people moving to Texas. He called it a structural change in the mindset of the consumer: older households don’t want to own anymore because they don’t see the value in the investment. Younger people can’t get jobs and move in with  mom and dad.

I know of a very smart couple who shed their home not too long ago.

“I am paying $3000 a month for rent and they have to cover all the repairs,” he told me. “I love it. In my home I was paying twice that per month and where was it going?”

But these tenants are a sophisticated crowd: developers know they have to provide a higher-quality product to attract and maintain renters. The market is too competitive to be be cutting corners, says Brian Tusa, managing director with builder Alliance Residential, who is building in Dallas like there’s no tomorrow.

One of the most expensive Alliance projects to date is a 303-unit apartment building under construction on Market Center Boulevard in Dallas’ Design District — my husband asked me about it when we were going downtown the other day.

Alliance has other projects across the area: Lewisville, North Fort Worth, and the Medical District near Parkland Hospital, which is exploding, as I reported about a year ago.  JLB Partner’s is building on Maple Avenue, and just opened a 281-unit apartment project on University Drive east of Southern Methodist University: already 50 percent leased.

JLB is also hammering away at a 372-unit apartment complex east of downtown on Ross Avenue, and has started 300 units on North Central Expressway in Cityplace.

Everyone, said Sherwood,  wants to come to Texas to do something. But with tougher lending standards, he doubts that all the proposed projects will actually get built.  Of 15,000 to 16,000 units on the planning sheet, Sherwood says maybe 8,000 to 10,000 could actually be completed.

One thing for sure: rents are and will continue to go up. Average D-FW rents have risen about 9 percent since the end of 2009, and are forecast to increase 4.4 percent. The average Dallas apartment rent is $800 a month, but these snazzier units go for much more — $1500 to $3000 a month. Most experts agree that as rents go up from higher and higher demand, buying a home will look better and better.

But we have problems with that.

One, financing is much harder to get and shows no sign of easing.

Two, 20% down is the new down payment norm. That means a young couple buying a $300,000 home need to have $60,000 saved up for a downpayment.

Three, the unemployment rate exceeds 17 percent for the younger Gen Y’ers, compared to 7 or 7.5% wth Baby Boomers.

Four, Gen Y is more mobile and may prefer leasing over buying after seeing parents and older sibs with underwater mortgages. We are becoming a renter nation, and the smart commercial multi-family builders are all over it.