Home For Sale Sign Dallas

Maybe so, or maybe the market is just taking a breather while the summer heat is on before it grows legs again. According to Standard & Poor’s/Case-Shiller’s Home Price Index, Dallas has seen the smallest increase in home prices since August of last year. Still, prices are growing, at an albeit slower rate. In fact, all of the MSAs Case-Shiller surveys saw growth from April to May of this year, even beleaguered Detroit.

Regionally, home prices increased 8.6 percent in Dallas from May 2013 to May 2014, and between April and May of this year, the increase was 1.3 percent. That’s a decrease from March to April 2014, during which Dallas saw a 1.6 percent price growth. Nationally, housing prices are up 9.4 percent from May 2013, with a flat month-over-month HPI.

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CoreLogic HPI Jan 14

CoreLogic’s newest HPI report released today showed that Texas real estate professionals have good reason to blame their busy days on the hot market. Home prices in Texas are at new highs (yes, higher than pre-bubble manic market highs!), with January 2014 up 10.1 percent over a year ago, and home prices up 1.2 percent from Dec. 2013 (numbers include distressed sales).

In the Dallas-Plano-Irving MSA, home prices are up 12.2 percent year-over-year including distressed sales, and up 10.4 percent excluding distressed sales. National numbers show home prices up 12 percent year over year for January. This is the 23rd consecutive month that home prices have increased, and Texas is one of only three states that has reached a new peak in home prices after the housing bust. And despite near-record appreciation, Nevada is still 40.1 percent below peak prices, CoreLogic’s report showed. Incredible.

“Polar vortices and a string of snow storms did not manage to weaken house price appreciation in January,” said CoreLogic chief economist Mark Fleming. “The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.”

So, winter didn’t slow Dallas down, and we’re looking at a brisk spring selling season ahead. Still, real estate prices are a hyper-local economy, and while some areas are seeing hand-over-fist sales and appreciation (we’re looking at you, Lake Highlands and University Park) some areas will only see more modest gains. The key, of course, is pricing a home correctly and being flexible.

Where are you seeing break-neck appreciation and sales pace?

The good news is that home prices rose for a fourth straight month in most major U.S. cities in July, from June, no shocker because we’ve just emerged from the busiest buying season. And that includes Dallas — a whole point (.3) 3%. The bad news is that when you look at last year, home prices are still trending downward, even in Dallas. Experts are warning us, no  duh, the housing market remains precarious and depressed. (And unemployment! And Dodd-Frank!) Prices are expected to decline more in the coming months. So if you are shopping for a home, get ready, get set, dive in now.

Standard & Poor’s/Case-Shiller Home Price Index, which some regardas the Bible when it comes to real estate analysis, showed home prices increased in July from June in 17 of the 20 cities CS tracks. I would not be too giddy that Detroit, Chicago and Minneapolis posted the biggest monthly percentage gains — those cities have been on life support and really, still are. Prices are still falling in Las Vegas and Phoenix, which is not what those homeowners need to hear.

But North Texas prices were down 3.2 percent in July, 2011 from a year ago, the 13th month in a row that local home prices were trending downward. Home values in the D/FW area have been declining since federal housing tax credits for first time buyers expired in early 2010. Still, 3.2 percent not as bad as 4.1 percent, which is how much national home prices have trended downward over the last year. As someone said: it’s basically 2003.

Eighteen of the 20 major U.S. markets in Case-Shiller’s latest survey saw annual home price declines in July. Who was up over last year? Washington, D.C., Boston, Charlotte, Miami (foreign buyers), Tampa — but we are talking negligible amounts.

I’m actually beginning to think though, that this might be the bottom or very close. The reason is inventory: dwindling by the minute. Yesterday, CoreLogic, a leading provider of real estate information, analytics and business services, reported that the current residential shadow inventory as of July 2011 had declined slightly to 1.6 million units, representing a supply of 5 months. This is down from 1.9 million units, a supply of 6 months, where it was a year ago. It also follows a decline from April 2011 when shadow inventory stood at 1.7 million units.

What that means: there may be less distressed inventory coming on the market to drag down home prices. That slowdown could be driven by a a slower pace of disposing of new delinquencies, too. Keep in mind that the vast majority of distressed assets are below $500,000.

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.”