February 2009

The Truth About our Local Economy and the Effect on Housing

So you think the economy is terrible and it is a horrible time to buy?

Here is what is really going on in the DFW area …

• Texas leads the nation in job creation. In 2008, 231,400 net new jobs were created in Texas through October 2008.

• The DFW area ranked highest in the country for new job creation. The DFW area added 230 new jobs per day for the latest reporting period through August 2008. Four other Texas metropolitan areas were in the top 10.

• The DFW area ranks the lowest in potential risk for further price decline in all 50 metro areas studied! In January 2009, the PMI Group (Private Mortgage Insurance) released a study measuring the riskiness of the top 50 metro areas for further price declines in home prices in the next 2 years.

• In all of 2008 only 25 banks were closed. That”””””””’’s not so bad considering that even during the S&I crisis of the 1980”””””””’’s, 535 banks were closed. During the Great Depression, 9,000 banks closed.

• The Case-Shiller index shows a net decline in housing prices in the DFW area of only 3% as published in December 2008! The Case-Shiller index measures changes in housing prices in 20 major US metro areas (based on a running 3 month average.) Period measured was October 2007 to October 2008. This was the smallest drop of all metro areas studied.

• Interest rates are at a 40 year low.

• Common sense says to buy when the market is down and sell when the market is up. There has not been a better time to invest in real estate in recent years. When has the bottom of the market been reached? The only way to tell is when prices start to increase and then you are too late.

• Real estate is a great wealth builder. You reap the effects of inflationary price increases on the total value of your investment and have expended just a small amount of cash with the leveraging power of a mortgage. What other commodity offers you this kind of return? Inflationary pressures are predicted to rise with the government’’s increase in spending and historically this has been very good for the values of commodities such as gold, oil and real estate.

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