David Woo The Dallas Morning News
I mean, dang! Dallas home prices are up 7.1% from last year overall. Is that not great to hear? Prices of pre-owned homes scooted up a whopping 7.1 percent in February from February 2012, a record increase. Like, the biggest increase since Case Shiller has been keeping records. Talk to the agents, they say North Texas home prices are up about 8 percent over the first three months of 2012, according to the MLS. And many sales are being made outside of the MLS.
But like Steve Brown points out, that is a bit lower than the magic some other cities did: Home price gains here are less than half what they are in places like Phoenix, San Francisco and even Detroit, at least according to Case-Shiller. Case Shiller tracks only home re-sales, not new homes, not condos or townhomes.
But that’s OK. Doesn’t bother me one bit. Not losing sleep. Phoenix real estate was in the pits, Detroit still is to a certain extent, and San Francisco is just an anomaly of a highly desirable location coupled with a whole lot of rich young people. Rich old people, too, and tech. My son just bought a home in Redwood City and it was seriously a battle. Paid more than asking.
By the way, this DMN photo by David Woo is of a house I saw Saturday in Hollywood Heights where my daughter just bought. It had a “coming soon” sign on it then — our market is so hot, we are selling off the “coming soon” signs in many neighborhoods!
Our market’s health is starting to get notice from others. When the whole country lost mega real estate value, we in Dallas lost only about 11 to 12%. We had our foreclosures, but we were not drowning in them. You know I credit our state’s home equity lending regulations for that. In some parts of the country? Folks lost 40, even 50% in price valuation drops.
Values in San Francisco don’t ever go down, even if there is an earthquake.
Here is how David Blitzer, chairman of S&P’s index committee, put it:
“In the last 10 years, when most of the country was going berserk with housing, you guys managed to keep your heads on your shoulders,” he said.
So no duh, we lost less, we will rebound at lower rates than the sink hole markets.
Let’s look back at the early and mid-2000s: home prices in many coastal and Southwestern cities exploded by double-digit annual increases. Personally, I never got why Phoenix was so hot. Phoenix is hot, but where’s the employment? Where are the jobs? Phoenix got hot because of California. It was seen as an affordable alternative once someone tripled their investment in San Diego. Make no mistake, some of our pace, too, is fueled by Californians moving to Dallas.
Since North Texas wasn’t a “bubble” market, prices here fell a lot less than in other U.S. cities when the poop hit the fan. Some no-so-brights even suggested that it was bad we missed the bubble — I disagree wholeheartedly.
Nationwide, home price values are still down about 30% from the hot tamale years of 2006, according to Case Shiller. At their worst, they were down 40%. Baby steps, OK? But this is why we need to thank Jesus (or Allah) for the hum in our market. Other markets are still not so hot. Basically, real estate is like weight gain. You know how bad it is for you to gain then lose? You are always running to the tailor, you feel bloated, etc.
“Dallas benefits in that you have less ups and downs,” said Blitzer.
Like a model’s bod.
Blitzer said that home price increases in the total Case-Shiller report are now at the highest level since May 2006. He says housing continues to be one of the brighter spots in the economy. But a couple of things to watch:
– Price increases are being fueled by low housing inventories: “Slim Pickins” reports the Wall Street Journal in Dallas, Atlanta, Los Angeles, San Francisco, Phoenix, Detroit, Seattle and Washington, D.C. See any cities on this list with price escalation?
– Overall home ownership rates are down, according to the US Census Bureau: The Census Bureau reported Tuesday that the nation’s homeownership rate slipped to 65 percent in the three months that ended in March, a decline from 65.4 percent posted in both the first and last quarters of 2012. A blip, perhaps, but home ownership rates have been declining since 2007.
–Let’s see what Washington is going to do with the home mortgage deduction!
-Home appraisals. Need I say more?