Friday, March 29, 2013
Dallas real estate market almost — almost — back to Golden Days
Dallas-area single-family home values rose 7% in January from a year earlier, according to Standard & Poor’s/Case-Shiller latest Home Price Index.
DALLAS So D’Ann Petersen told Sheryl Jean at the Dallas Morning News that home prices are rising so fast in North Texas, she’s tempted to sell her house. Petersen is a business economist for the Federal Reserve Bank of Dallas.
My question for her is this: If you sell, where would you go? Inventory is so low in Dallas, you almost have to jump on hip pockets or what I call “pre-sales” to buy a home. What with lean inventories, low interest rates, decent job growth, and way fewer distressed sales, the Dallas market is almost -- almost -- back to the Golden Days.
Yeah, it’s great out there: Dallas-area single-family home values rose 7% in January from a year earlier, according to Standard & Poor’s/Case-Shiller latest Home Price Index. Those are the gloom and doom peeps, if you recall, so when Bob Shiller says it’s good, like an 11th straight monthly gain, it’s very good. Remember, Case-Shiller only tracks re-sales of existing homes, not new home construction, or anything going vertical from the likes of Darling Homes or other large homebuilders, condos, or townhomes. So the sale of Tim Headington’s condo? Not included.
According to David Blitzer, managing director of S&P Dow Jones Indices, we are back to fall 2003 levels when it comes to values.
I wonder what hemlines were doing in 2003?
The news was really good for all 20 metropolitan areas in Case-Shiller’s index. Phoenix killed it with a 23% increase, since Phoenix was a poster child of declining values in 2007 to 2011. Eight metro areas — Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, and San Francisco — reported double-digit gains. The rest, including Dallas, rose in the 7% to 8% vicinity. U.S. residential shadow inventory — the stuff hiding in the wings to be unloaded on the market — fell 18% in January from a year ago, this in CoreLogic’s report earlier this week. Local foreclosures are all but gone: Steve Brown reported that 1.2% of Dallas-area homes with mortgages were in foreclosure last month, down slightly from a year ago. And CoreLogic estimates that 11,118 Dallas-area homes have gone through foreclosure in the 12 months ending with February. Most of those are in the peripheral areas of Dallas.
Like they used to say about General Motors, what’s good for housing is great for the U.S. economy. With mortgage balances up for 1.7 million homeowners, housing wealth has grown by $1.4 trillion and is drivings consumer spending. Taxes, too: don’t think the Dallas County Appraisal District and its nether cousins won’t be all over these price increases.
The Dallas Fed also reported this week that Texas manufacturing and service indexes showed a pickup in activity in March. U.S. single-family housing starts are still anemic, rising 0.8% in February after a decline in January, but my CandysDirt Approved home builders tell me that is about to change.
Petersen said “some of my contacts said builders want to build as fast as they can but they’re limited by some labor issues.” Well, it’s not just that all the labor packed up and left during the greatest recession since the Great Depression, but it is incredibly hard to find lots! Any home builder who picked up dirt during the bust is sitting pretty, and my guys tell me that once they go vertical, the homes are snapped up. Lots are increasing in price, too, along with housing prices making it all just more expensive.
I’m telling you: Inflation, here we come.
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