Wednesday, October 8, 2008

Good News for the Dallas/Ft. Worth Housing Market

With the media inundating us with negative news and not-much-better forecasts for the future, it's nice to read some positive stats from a recent Dallas Morning News article written by Steve Brown.

A local housing market pining for some good news will get a boost from the latest home sales and inventory numbers.

North Texas pre-owned home sales eked out a 2 percent gain in September – the first such increase in over a year.

And while new-home purchases have continued to plunge, the number of vacant new houses on the market is down sharply, the latest industry report shows.

"Yes, the folks in North Texas should feel somewhat better, but the news should be tempered by what's happening – or not happening – in the capital markets," said economist James Gaines of Texas A&M University's Real Estate Center

Still, the improvement in the local home sales numbers "means the market is in better balance with a reasonable inventory and enough activity to keep prices from falling dramatically," Dr. Gaines said.

September's rise comes after a long string of monthly sales declines. The last time monthly home sales in the area were up from the same time the previous year was in January 2007.

Dallas housing analyst Ted Wilson said he's optimistic that housing demand and supply are more in balance.

"I think the wild card is the current economic turmoil," said Mr. Wilson of Residential Strategies Inc. "If the credit crisis derails our local economy or again ratchets up the requirements on getting a new mortgage, then the slide would continue."

Despite last month's small gain in sales totals, median home prices in September were 2 percent lower than a year earlier at $142,500.

About 41,000 pre-owned single-family homes are for sale in the 29-county area, down 15 percent from September 2007.

September's pre-owned home sales gain follows an 18 percent decline in August compared with August 2007.

So far this year, real estate agents have sold about 53,000 pre-owned homes in the area, a drop of 12 percent from the first nine months of 2008.

About a six-month supply of houses is listed for sale by North Texas Realtors.

However, multiple listing service inventories may not reflect total homes for sale. Many foreclosed properties are being sold at auction and are not included in Realtor numbers.

Also, the decline in Realtor home sales listings could indicate that some sellers have decided to sit it out and have taken their homes off the market.

In the new-home market, starts are down almost 35 percent from a year ago, but the number empty new houses is falling.

At the end of the third quarter, about 7,600 vacant new homes were sitting in the Dallas-Fort Worth area, housing analyst MetroStudy said Tuesday.

"Inventory is down 27 percent from a year ago – that's great news," said David Brown, who heads MetroStudy's Dallas office. "That needs to come down to about 4,000, but it's going to take a little while to get there."

Local builders started just over 5,500 single-family homes in the third quarter, the lowest start count in more than a decade.

Quarterly new-home sales totaled 7,185 units, down about 29 percent from third quarter 2007, according to MetroStudy.

"It is my opinion that the drop in new-home construction is going to hit bottom between now and next summer," said Mark Dotzour, chief economist and director of research at A&M's Real Estate Center. "The fact that new-home construction in the D-FW area has fallen off so precipitously in the past two years is going to shield the metro area from significant price declines."

Comparisons of September pre-owned home sales and prices in the North Texas with year-earlier statistics:
Single-family home resales 6,392 2%
Median price $142,500 -2%
Average days on market 79 7%
Pending sales 5,410 -16%
Listed for sale 41,604 -15%
Condo-townhome resales 358 -13%
Median price $129,500 -7%
Average days on market 104 27%
Pending sales 305 -18%
Listed for sale 3,807 -10%
SOURCES: Texas A&M University Real Estate Center, North Texas Real Estate Information Systems Inc.

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