Last week, we were Debbie Downer’ed by the latest Standard & Poors/Case Shiller report telling us that while Dallas homes saw a scant increase in prices from the spring, they were down overall from last year, that is, 2010. And that is the problem with Case Shiller: first of all, they do not count new home sales. I know, new home sales are also wayyyy down, even though they sure seem to be moving in Allen and Fairview. And Case Shiller also gives you no glimpse into the future. It’s like, well, do we invoke Jim Jones and drink the poisoned kool aid now or later?

Stick around. According to Local Market Monitor, things may be looking up after we ring in the New Year. What’s Local Market Monitor? Boston based research firm founded by Ingo Winzer, an MIT/BU MBA finance grad has been a well-known and highly quoted real estate value expert for more than 20 years. In 2005, he warned that many housing markets were dangerously over-priced. Ingo was a founder and Executive Vice President of First Research, an industry research company that was acquired by Dun and Bradstreet in March 2007. Local Market Monitor began as a quarterly publication, then found the Internet. Ingo developed the concept of Equilibrium Home Prices, tracking all the factors that contribute to home valuations — economic conditions, employment, population trends, which has proved valuable and correct in assessing real estate market risk during the last two economic cycles.

So I asked about Dallas/Plano/Irving. What’s in the forecast?

Home values are expected to decrease by 4 percent over the next 12 months in our area, according to the September 6 report.

But hold on. Home prices are expected to INCREASE in the long-term by 1% in the next 24 months, and increase by 4% over the next 36 months. So that means that by this time next year, we should be seeing an uptick.

In three years, it’s Miller Time.

By the way, our home prices peaked in first quarter 2009 for an average of $176,641. Our average Dallas area home value is now $166,496.

What’s our equilibrium home price? $193,681. Our home prices are 24 percent lower than the national average.

Our market, says LMM, is in equilibrium and has balanced prices. That means that all our economic indicators point to things that will positively influence the housing market — job growth, population growth, population migration, solid economy. Also, LMM gives Dallas a rental return thumbs up on investment properties, such a buying homes to lease. LMM predicts rents will increase 15%, to a monthly average of $1013, due to inflation.

When landlords start raising rents, you know what will happen: it will be cheaper to buy… as long as the banks are lending. Someone once wrote an article for D Magazine on how unfortunate we are in Dallas to have missed the real estate bubble — I hope that writer has since had his head examined.

“We did not see a significant real estate bubble in Dallas which also helps account for why this market has been relatively stable compared to other large metros across the country.” says  Carolyn Beggs, COO Local Market Monitor