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NAR TO DFW: HOUSING LOOKING UP

DALLAS-FORT WORTH (Dallas Morning News) – Area home sales were essentially flat in the second quarter following a long period of declines, according to the National Association of Realtors (NAR).

The second-quarter survey indicated that North Texas experienced a 0.2 percent decrease from a year earlier in the median price of homes. Nationwide, median prices fell by 15.6 percent.

DFW’s second-quarter drop represented the smallest in over a year, welcome news after a nearly 5 percent drop in the first quarter.

The NAR report has supported recent housing data pointing to a flattening of the North Texas home market.

“We are beginning to see some more positive trends in the housing market, which is great news,” said David Brown, head of the Dallas Metrostudy office. “Although it is a short trend, both the new home and resale closings during the last quarter suggest the market is bottoming out in sales volume.”

NOW’S THE TIME TO BUY, IF . . .

I thought this was extremely interesting and wanted to share with you.

COLLEGE STATION— “It appears we are at the bottom of the housing market in most Texas cities,” said Real Estate Center Director Mark Dotzour after reviewing the state’s latest home sale numbers.

Dotzour mentioned two years ago that new home construction needed to fall dramatically to avoid the level of overbuilding that could damage Texas housing markets. He even picked summer 2009 as the bottom of the housing cycle because bankers would constrain credit to homebuilders and developers.

Apparently he was right on all counts. The Texas inventory of unsold new and existing homes is in good shape.

“I feel now is the time to buy a house in most Texas cities,” he said. “Housing affordability has never been higher, and I never thought I would see 5 percent mortgages in my lifetime. If you plan to live in the house for at least two or three years, now is the time to buy.

“If you are planning to build a home to retire to in the near future, now is a great time to do it. Contractors are plentiful, construction costs are lower and mortgage money is cheap,” he said.

Dotzour said mortgage rates should remain low as long as the federal government continues to purchase almost all residential mortgages. When they stop, rates will move up.

The Center’s chief economist is quick to note, however, that everything hinges on one crucial assumption — “that the federal government doesn’t cause further damage to the U.S. economy with higher levels of intervention in health care, taxation, cap and trade and rewriting accounting and legal standards.”

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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