Housing market

Last month’s pre-owned home sales in DFW rose 11 percent over March 2009. The largest monthly gain since September 2009, March’s data provided even more evidence that the housing market has seen the bottom and begun to bounce back.

In addition, the median home sales price increased 6 percent to $144,900 — the highest its been since September.

The Dallas Morning News’ Steve Brown relays a few other positive points:

• Pending pre-owned home sales in North Texas were up 22 percent at the end of March.
• The latest North Texas housing report indicates that the housing market surge is likely to continue at least for a while.
• There is currently a 6.4-month supply of homes on the market in North Texas – close to what is considered a balanced market.

For more details, visit dallasnews.com.

Economy.com, an independent provider of high-quality data about the world economy, expects that 2010 holds 12,000 more jobs for the Dallas-Fort Worth metroplex. “Not bad,” says Steve Brown of the Dallas Morning News.

Furthermore, the study predicts that North Texas’ labor market will gain 230,000 additional jobs during 2011-2013. Since the housing market is closely connected to employment rates, this is excellent news for real estate.

A recent poll by Fannie Mae reported that 64 percent of Americans now feel confident about putting savings towards real estate investments, assured that housing prices will be the same or higher over the next year.

It’s no surprise that Americans are somewhat concerned regarding other aspects of real estate, i.e. securing loans. Most of the 3,451 people surveyed said it’s more difficult for this generation to purchase houses than it was for their parents.

The Wall Street Journal summarized the report with the following information:

• Nearly two-thirds of those surveyed think it’s a good time to buy a house—nearly the same as in 2003, before the housing boom accelerated—and around one-third say it’s a very good time to make a purchase.
• Around 27% of respondents believe home prices will continue to fall this year, while 36% believe prices will stay flat and 37% believe prices will go up over the year.
• Among the obstacles to obtaining a mortgage: poor credit (22%) and income (19%) topped the list, followed by savings for a down payment (15%) and job security (15%).
• Around 65% of respondents prefer owning to renting, but non-financial reasons top the list of reasons driving the preference for owning, including safety (43%) and quality of schools (33%).

Also, Fannie Mae makes an interesting side note: the 64 percent who believe that now is the time to buy is just shy of the 66 percent who held the same beliefs in 2003 as the U.S. housing market raced higher.

To read the full Wall Street Journal article, visit wsj.com.

Dallas real estate agents are reporting positive open house activity over the past several weeks. Coupled with the latest national statistics, this information points toward housing market stability and future growth.

Two weeks ago, LeeLee Gioia and Anne Goyer were somewhat surprised by the constant flow of folks that visited 5808 Falls Road for a Sunday open house. Eager to explore the gorgeous soft contemporary, Dallasites traveled from across the Metroplex – some with an agent, but several on their own.

Because so many people are now researching properties online, they are often incredibly serious shoppers by the time they attend an open house. LeeLee and Anne were both very encouraged by visitors’ genuine interest in their high-end property.

Agent Lisa Besserer recently showcased 9024 Broken Arrow and also reported signs of housing market recovery. The four-bedroom Georgian estate was part of a ‘Great Yards for Easter Egg Hunts’ home tour, which highlighted the property’s lushly landscaped grounds, extensive patio space, and negative-edge pool. Lisa was thrilled to see several “real buyers” rather than casual browsers or drop-by neighbors.

Adding a fresh twist to the traditional open house, Tessa Mosteller and Lucinda Buford have been hosting various shows at their listings. Whether it be jewelry, monogramming, or clothing, each show gives guests a fun reason to step inside a beautiful home. Have they been successful? Most definitely. In fact, the two ladies are displaying little girl dresses tomorrow (4/7) at 4112 Hanover, a light and bright home perfect for spring. For more information, contact Tessa at 214.505.1248.

To sum it up, Dallas agents confirm that consumer confidence has improved significantly, and serious shoppers are back browsing the web, driving the streets, and even taking time to tour the homes.

Click to see this Sunday’s opportunities.

Standard & Poor/Case-Schiller released the latest Home Price Index, which measures price activity in 20 U.S. cities. According to BusinessWeek, the “housing market is stabilizing as the economy expands.”

The Up blog readily reports that Dallas’ home prices are up. The Dallas area boasts the third best year-over-year home price increase, following San Francisco and San Diego. North Texas’ prices have been rising for the past few months, but the latest 4% increase is the greatest increase since November 2009.

Across the nation, the year-over-year home prices saw the smallest annual decline (0.7%) in almost three years, and were still 4% higher than May 2009’s bottom. While six of the 20 cities improved since January 2009, month-to-month measurements continued to fall in 12 cities such as Las Vegas and Tampa. The overall average was a 0.3% increase from December to January.

Another report shows that consumer confidence strengthened from 46.4 in February to 52.5 in March.

To read more about the local data, visit Steve Brown’s report at dallasnews.com. For a national overview of the data, visit businessweek.com.

The Texas economy continues to buck national trends thanks to the strength of the residential real estate market. Four of the nine cities that made the Gadberry Group’s new list of most notable high-growth areas in the nation are in the Lone Star State.  Two Dallas suburbs — Frisco and McKinney — also made the list of 25 finalists. Industry research indicates that the state’s comparatively stable housing market is likely a contributing factor in the strong rankings, says Larry Martin, principal of Little Rock-based Gadberry.

Mansfield came in at number seven as the number of households more than doubled in the last nine years. It added 15 percent of its total households last year alone. Also on the list is Wylie, which has had an impressive 163 percent increase in the number of households since 2000. According to the report, most of the new households are located in one of Wylie’s eight “Emerging Blocks.”

Other Texas cities that made the list are Atascocita and Katy, both located near Houston. Here’s the complete list of 9 from 2009:

• Braselton, Georgia (Atlanta suburb)
• Atascocita, Texas (Houston suburb)
• Spring Hill, Tennessee (Nashville suburb)
• Lincoln, California (Sacramento suburb)
• Katy, Texas (Houston suburb)
• Wake Forest, North Carolina (in the Raleigh-Durham triangle)
• Mansfield, Texas (Dallas suburb)
• Wylie, Texas (Dallas suburb)
• Buckeye, Arizona (Phoenix suburb)

According to the latest data, troubled homeowners are finding more success in restructuring their mortgages. The Wall Street Journal reports,

Some 18.7% of loans modified in the second quarter of 2009 were at least 60 days past due three months later, according to the report, by the Office of Comptroller of the Currency and the Office of Thrift Supervision. That compares with a redefault rate of 30% or more after three months for loans modified in the previous four quarters.

What has caused the improvement? Approximately 80% of loans restructured in the 2nd and 3rd quarters of 2009 resulted in lower monthly payments — helpful adjustments that weren’t being made in earlier quarters. The Obama administration, whose foreclosure-prevention strategy centers around affordibility, is encouraged to see that monthly payments have dropped an average of 35% for borrowers in the Obama program.

Despite the declining redefault rates, borrowers with good credit have been increasingly unable to pay their mortgages, resulting in more 3Q troubled loans.

For further information, visit WSJ.com.

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.

30-year and 15-year mortgage rates have fallen for five straight weeks, and now 30-year rates have reached their lowest level in 38 years.

The Wall Street Journal reports,

The 30-year fixed-rate mortgage averaged 4.71% for the week ended Thursday, down from last week’s 4.78% average and 5.53% a year ago. Rates on 15-year fixed-rate mortgages were 4.27%, down from last week’s prior low of 4.29% and 5.77% a year earlier.

In the video below, Amy Hoak and the News Hub discuss these record-breaking interest rates and the other favorable market conditions that today’s homebuyers will encounter.

For more information, visit wsj.com.

The latest survey from the National Association of Realtors reports that sales are up in four major regions of the U.S., and scattered markets are even experiencing bidding wars. Realtytimes.com reports, “Sales of single family homes, townhouses, condos, and co-ops surged by a little over 10 percent in October, and were 24 percent above where they were a year before.” Furthermore, closed transactions also have risen significantly: nearly 12% in the Northeast, 14.4% in the Midwest, 12.7% in the South, and 1.6% in the West.

Why the sudden increase in activity?

• Of course, the government tax credit has provided a powerful incentive for renters to enter the world of homeownership.
• Another factor is the record-breaking affordability of houses right now. Measured by comparing home prices with household incomes and mortgage interest rates, housing affordability is at its most favorable point since 1970.
• Many buyers want to take advantage of record-low interest rates, which are expected to spike in 2010. Rates on 30-year fixed loans recently dropped into the upper 4% range — much lower than last year’s 6.2% rates.

Several economists believe now is a good time to buy, as prices are flattening out and the housing inventory (now at a 7-month supply) is not far from a balanced market. It is likely that interest rates will rise in the spring if the Fed does indeed phase out its extensive investments in mortgage securities.