Dallas Skyline

Holy crown moulding, Batman! Can you believe this? Bloomberg News just published a story saying that of the top 20 housing markets in the good ‘ol US of A, Dallas performs better than every single one of them!

Since the loud pop of the national housing bubble bursting, Dallas has recovered and gone on to thrive, the story says:

“We didn’t have a bubble in the first place, so there was no real collapse in prices,” said Mark Dotzour, chief economist at the real estate center at Texas A&M University in College Station,Texas. “I expect we’ll be in this seller’s market that’ll lead to higher appreciation than normal this year and next.”

Dallas is the Case-Shiller index’s only city in Texas, a state where the housing industry has flourished amid economic growth, few environmental constraints and abundant land. The Dallas-Fort Worth area added 104,900 non-farm jobs in April from a year earlier, the most after the New York City area’s 160,000 jobs and Houston’s 111,200, according to the Bureau of Labor Statistics.

“Underpinning the housing sector’s gains is a broad-based expansion of the overall Texas economy,” according to a June 13 paper by D’Ann Petersen, a Federal Reserve Bank of Dallas economist, and Christina Daly, a research analyst. “Stronger-than-average employment growth and consistent in-migration should continue boosting demand for homes and apartments.”

Agents, are you having your best sales year ever? Tell us about it in the comments!

Dallas Skyline

Holy crown moulding, Batman! Can you believe this? Bloomberg News just published a story saying that of the top 20 housing markets in the good ‘ol US of A, Dallas performs better than every single one of them!

Since the loud pop of the national housing bubble bursting, Dallas has recovered and gone on to thrive, the story says:

“We didn’t have a bubble in the first place, so there was no real collapse in prices,” said Mark Dotzour, chief economist at the real estate center at Texas A&M University in College Station,Texas. “I expect we’ll be in this seller’s market that’ll lead to higher appreciation than normal this year and next.”

Dallas is the Case-Shiller index’s only city in Texas, a state where the housing industry has flourished amid economic growth, few environmental constraints and abundant land. The Dallas-Fort Worth area added 104,900 non-farm jobs in April from a year earlier, the most after the New York City area’s 160,000 jobs and Houston’s 111,200, according to the Bureau of Labor Statistics.

“Underpinning the housing sector’s gains is a broad-based expansion of the overall Texas economy,” according to a June 13 paper by D’Ann Petersen, a Federal Reserve Bank of Dallas economist, and Christina Daly, a research analyst. “Stronger-than-average employment growth and consistent in-migration should continue boosting demand for homes and apartments.”

Agents, are you having your best sales year ever? Tell us about it in the comments!

Home Equity Economy

Don’t get me wrong, I am thrilled to see Case-Schiller reporting double-digit annual growth across all composites in their latest report. The 10- and 20-city composites showed gains of 10.3 and 10.9 percent through the year ending in March 2013.

For the Dallas area Home Price Level Index, the year-over-year growth according to Case-Schiller’s indicies was a very healthy 7.94 (117.02 in 3/12 and 124.96 in 3/13). So yes, we’re experiencing growth, but why is our total economic recovery so slow?

Mark Dotzour, chief economis at the Real Estate Center at Texas A&M University, explains it this way:

We are witnessing a recovery in the housing market. Housing prices are increasing, and new residential construction is picking up. The increase in home prices has a positive effect on economic activity in two ways.

First, an increase in housing prices gives way to investment in new housing construction. Second, the “housing wealth effect” is magnified as an increase in residential prices causes some households to increase their expenditures on home improvement, consumption or both. But to do so, they must first get a loan from a financial institution. This is extremely difficult to achieve under current borrowing constraints and behavioral biases.

As discussed earlier, households have been deleveraging from high debt levels as they attempt to manage debt. Conditions are tight; banks are not willing to lend easily. Uncertainty about job retention and professional growth is another factor that lowers the probability households will increase their debt burden.

Dotzour goes on to add that homeowners with less-than-stellar credit are less likely to capitalize from the recovery of the housing market. It’s those homeowners who have pristine credit, high levels of equity, and very little debt who are able to make money from the process of selling their home.

So what amounts to a full economic recovery? Well, it’s bigger than the housing market, Dotzour says. Sure, a sharp decline in the housing market can tank the economy, but home prices and construction alone won’t revive it.

If household debt decreases and technological gains increase, then employment increases, and, therefore, household income rebounds, Dotzour adds. So while it’s good to be optimistic about the housing market, our economic recovery is still waiting in the wings.

 

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Dallas, be grateful! We are rebounding! Things are looking up!

That is, according to the Jan. 31 Local Market Monitor report for the Dallas-Plano-Irving market. For me, this just re-affirms what Realtors and sellers are telling us: Well-staged homes that are priced right are flying off the market in record time. And we’re head-and-shoulders above the national market, too!

Home values for Dallas- Plano- Irving are forecast to increase by 2 percent over the next 12 months. Nationally, prices are forecast to increase by 1.2 percent. In the second and third year, prices are forecast to increase 5% and 7%, respectively.

To what do we owe this success? Well, it’s a mixed bag, but a lot of it has to do with job growth and economic recovery. There has been a 2.5 percent increase in overall job growth, with sectors such as finance experiencing a renaissance of sorts.

According to economist Mark Dotzour at the Real Estate Center at Texas A&M University, corporations are moving to more business-friendly climates and taking their jobs with them:

Let’s face it. Employers come to Texas and other southern locations because they feel that they can make a higher profit. Taxes are a major consideration. So is the cost of labor. Clearly businesses are moving away from areas with a high concentration of unionized labor.

Does this ring true for you? What do you think is the reason for our uptick in sales and existing home prices?