Photo courtesy Brian Dooley via Creative Commons

Photo courtesy Brian Dooley via Creative Commons

Strong economic factors, job gains, and population increases have experts predicting strong growth in North Texas home prices in 2015, and a 35 percent increase in home prices over the next three years in the Dallas-Plano-Irving areas.

Local Market Monitor, Inc. released its December 2014 local market reports for North Texas, looking at factors like jobs, migration, housing permits, local market risk premium, and average home prices. Based on those analytics, they say home prices will likely grow 11 percent in the eastern counties of North Texas and 8 percent in the western counties over the next 12 months. Nationally, prices are forecast to increase by 6.3 percent.

They’ve extended their forecast two and three years, as well. In the eastern DFW counties, home values are predicted to increase 11 percent in 2016 and 10 percent in 2017.

In the western counties, home values are expected to increase 8 percent in both 2016 and 2017. The report predicts home prices to increase 25 percent over the next three years, noting that market is currently underpriced 17 percent relative to income.

County level forecast for Home Values

These reports echo the sentiments of local realtors and real estate experts, who have been crowing about strong North Texas job growth, more buyer and seller confidence, continued low interest rates, and investor demand. Jump to read more!


Photo courtesy Charleston's TheDigitel via Creative Commons

Photo courtesy Charleston’s TheDigitel via Creative Commons

DFW rents were 6.2 higher last year, averaging $919 per month, but demand still soared, with North Texas leading the nation in apartment rentals, and vacancies at a 13-year low, according to new real estate research from Zillow and MPF Research.

The increased rent translated to an extra $600 million paid to landlords last year, Zillow reported. For North Texans, that meant a median increase of $35 a month, higher than the nationwide rate of $26.

Rising rents are nothing new, said Zillow Chief Economist Stan Humphries.

“Over the past 14 years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing,” he said. “This has created real opportunities for rental housing owners and investors, but has also been a bitter pill to swallow for tenants, particularly those on an entry-level salary and those would-be buyers struggling to save for a down payment on a home of their own.”

For 2015, expect more of the same.


Homeowners who owe more than $1 million on their homes are under intensified scrutiny by the IRS now. Why? Because of so much confusion over deducting the interest on those over $1 million mortgages. And you can do the math — if your mortgage is more than a million, you are likely deducting a boatload of mortgage interest so pay attention because this could mean good deduction news, something we need a whole lot more of right now. I’d say only your CPA knows for sure but that may not really be the case!

Here’s the deal — as is usual, the tax code is so dang complex everyone is confused, even the IRS themselves and those advising us, CPA’s.¬† At issue is how much interest can be deducted, and it is based on what kind of debt the homeowner holds. I will tell you that the Alternative Minimum tax can make this a moot question for many, which is frustrating.

Tax rules distinguish between two kinds of home debt. There is home acquisition debt, which is a loan used to acquire, construct or substantially improve a qualified home, and is secured by the home. This would be your mortgage.

Then there is home equity debt, which is any other kind of loan that is also secured by the home, but used to pay off credit card debt or for general consumer spending.

The controversy centers on how this was all interpreted. Some tax advisers and agents were telling clients it was acceptable to deduct all interest on a single mortgage of up to $1.1 million. Others said no,  the limit for mortgages was $1 million, but they could also deduct interest on another $100,000 (up to $100,000) in a home equity loan.

IRS said last spring acquisition loans over $1 million may also qualify as home equity indebtedness. And the taxpayer can deduct interest on the full $1.1 million, even if he has only one loan.

But throw a few re-fi’s into the mix, and the rules can get ‚Äúcomplex”. Or second homes. If a taxpayer owns several homes, say a house in upstate New York and a condominium in New York, they may also be subject to paying New York state and city income tax if they are there for more than 180 days/year.

There’s a reason why we call this blog second shelters: tax rules generally allow deductions on a first and second home, but not a third or more. Of course, most folks pop those into limited liability partnerships, especially if they are income-producing, and the entity files a tax return that flows down to the taxpayer.

And if you are thinking ha, it’s those rich SOBs again, let them pay up… think again. Many people buy in areas where home prices are not what they are in Texas, and they have no choice but to take on huge mortgages. I am also finally reading Michael Lewis’ The Big Short, which is amazing and spells out how banks wanted to over-extend loans to consumers, many of them 100% loans on, yes, million dollar properties.