affordable housing

To everything, there is a season – and in real estate there’s a time to buy, and a time to sell. But how do we know when one season is ending, and another has begun? M. Anthony Carr of realtytimes.com comments, “We’ve been watching a buyer’s market for so long, we’ve almost forgotten how to see the signs of the building of a seller’s market.” Just as nature provides several indicators of seasonal transitions, the housing market gives buyers and sellers little hints that the times, they are a’changin.

A buyer’s market can hit overnight, but a seller’s market usually builds gradually over multiple months. While national averages and trends can give buyers and sellers a good overview, that data won’t help much with determining when local markets have bottomed. Instead, keep an eye on these signals:

1. Housing Inventory: When inventory numbers drop, the market is likely switching from a buyer’s market to a seller’s market.

What this means for Dallas? At the end of October, Dallas had 33,981 houses on the market — a 16% decline from October 2008. This put Dallas at just under a six months’ supply of homes, which is considered a balanced market.

2. Home Pricing: To locate the bottom of the market, watch month-to-month pricing rather than annual changes. Carr warns, “A market can experience price increases month after month while still showing lower prices than a year before – thus the buyer, while waiting for signs that prices are moving up over last year, may have missed the bottom on pricing.”

What this means for Dallas? Dallas’ average home prices climbed consistently from February 2009 through August 2009, then dipped slightly (.7%) in September. The latest Standard & Poor/Case-Shiller’s home price index ranked Dallas and Denver as the healthiest U.S. markets.

3. Days on Market: When prices hit bottom, buyer activity increases. With this rise in competition, the average days on market drops.

What this means for Dallas? At the end of October, homes were on the market for an average of 76 days, which was 6% lower than a year ago.

As this data reveals, Dallas’ residential real estate sector – fortunate to evade the extreme boom and bust that plagued other markets – has taken significant steps toward stability over the last several months. Homebuyers and sellers are wise to watch local reports as we wait to see what’s in store.

For more information, visit realtytimes.com.

Home shoppers who buy before January 1 will receive many tax advantages: 

• Texas offers a homestead exemption that removes up to 20% of the home’s value from taxation – especially beneficial for those moving “up” in value.
  
  
• First-time buyers (those who have not owned a home in the past three years) are still eligible for a tax credit of up to $8,000. In addition, repeat buyers who have lived in the same principal residence for five consecutive years can receive up to $6,500. Homebuyer tax credits that apply to purchases made in 2009 may be claimed on 2008 returns.
  
  
• This year’s interest rates are incredibly low, now hovering around 5%. Rates will likely rise significantly as soon as the Federal Reserve stops purchasing large amounts of mortgage-backed securities.
  

For further information, contact Jonathan Doddridge at Ascent Financial Services, LLC (972-877-9787) or visit irs.gov.