Two new reports paint a bright picture of the housing market in Midland and Odessa now and for the next three years.

The Local Monitor Reports, released today, cite a 7 percent increase in Midland home prices over the last 12 months, which puts the average home price at $183,463. In Odessa, prices have gone up 5 percent over the last year and the current average home price is $210,980. In the last three years, home prices were up 10 percent in both markets.

The good news doesn’t stop there. Both markets are scored significantly into the “low risk investment” category. The reports predict an 8 percent increase in home values over the next 12 months in Midland—compare that a national average of 4.6 percent. In the second and third years, prices are forecast to increase 9 percent and 9 percent, respectively.

In Odessa, they predict a 7 percent increase in home values over the next 12 months, and 9 percent in both the second the third years.

Why this rosy glow around the Midland-Odessa housing market? One word: Jobs.


Midland home prices

Photo: Dan Moyle

Two new reports from Local Monitor Report are projecting big increases in home values in Midland and Odessa over the next three years, almost double the national average. Prices are predicted to rise even more.

Home values for Midland are forecast to increase by 8 percent over the next 12 months—compare that to national forecast of 4.6 percent. In the second and third years, values are forecast to increase 9 percent each year, a 26 percent increase in three years.

Midland home prices are projected to increase even more, at 30 percent over the next three years. In the last 12 months, prices have gone up by 7 percent, bringing the average home price in Midland to $183,463.

In Odessa, the report is predicting a 7 percent increase in home values over the next 12 months, and 9 percent in each of the next two years. That’s a total projected increase of at least 25 percent.

Odessa home prices are forecast to increase more, at 29 percent over the next three years. Odessa home prices have increased by 5 percent in the last 12 months, and the average home price is now $210,980.

All this adds up to a “low risk” categorization by Local Monitor Report for real estate investments in both Midland and Odessa, good news for homeowners and investors, alike.


Fracking in Mead Colo

Business Insider listed the top nine things that can cripple or kill home values, and fracking (hydraulic fracturing) was listed among foreclosure graveyards, hoarding, sex offenders, and poorly performing schools as one of the top problems that tank home values.

The threat of potentially polluted drinking water scares off buyers from their potential dream home. A study by Duke University and the nonprofit Resources for the Future confirms that fact:

Their study found Pennsylvania homeowners who use local groundwater for drinking lost up to 24 percent of their property value if they are within a mile and a quarter of a shale gas well.

But the news was far better for neighbors who get their water piped in. They saw values rise by nearly 11 percent, likely because of lease money from gas drillers and no worries about polluted water, the researchers found.

The only other real estate eyesore that trashes home values more than fracking is large unsightly billboards, which can sink a home’s appraisal by more than $30,000.

Would you buy a home with a fracking well nearby?

Dallas home values are up 3.5 percent year over year.

It’s something that Candy is working hard to ingrain upon me, but I’m sure you all know this by heart: Real estate is a local story.

So when I read the newest Housing Price Index report from CoreLogic yesterday, I’ll be honest, I kind of yawned.

Sure, it shows that Dallas home values are up 3.5 percent year over year. If you don’t count distressed sales, like short sales or *gasp* foreclosures, then home values are up 5.4 percent. That’s good news for Dallas, and really good news for Dallas residents with homes either poised or on the market.

But CoreLogic is kind of preaching to the choir, isn’t it? Houses are moving and inventory short, so of course, prices are going to inch upward. We’ve heard it first-hand from agents every time we report a story like this.

What I think is ridiculous, though, is the national summary. CoreLogic’s report shows that U.S. home values are up 1.1 percent over the past 12 months, which includes booming markets such as the Phoenix area, which is seeing amazing appreciation at 11.3 percent, and severely depressed markets, such as Chicago, which could be bottoming out with home values dropping 7.3 percent since April 2011.

What do you think? Is there such a thing as a national housing market?

The good news is that home prices rose for a fourth straight month in most major U.S. cities in July, from June, no shocker because we’ve just emerged from the busiest buying season. And that includes Dallas — a whole point (.3) 3%. The bad news is that when you look at last year, home prices are still trending downward, even in Dallas. Experts are warning us, no  duh, the housing market remains precarious and depressed. (And unemployment! And Dodd-Frank!) Prices are expected to decline more in the coming months. So if you are shopping for a home, get ready, get set, dive in now.

Standard & Poor’s/Case-Shiller Home Price Index, which some regardas the Bible when it comes to real estate analysis, showed home prices increased in July from June in 17 of the 20 cities CS tracks. I would not be too giddy that Detroit, Chicago and Minneapolis posted the biggest monthly percentage gains — those cities have been on life support and really, still are. Prices are still falling in Las Vegas and Phoenix, which is not what those homeowners need to hear.

But North Texas prices were down 3.2 percent in July, 2011 from a year ago, the 13th month in a row that local home prices were trending downward. Home values in the D/FW area have been declining since federal housing tax credits for first time buyers expired in early 2010. Still, 3.2 percent not as bad as 4.1 percent, which is how much national home prices have trended downward over the last year. As someone said: it’s basically 2003.

Eighteen of the 20 major U.S. markets in Case-Shiller’s latest survey saw annual home price declines in July. Who was up over last year? Washington, D.C., Boston, Charlotte, Miami (foreign buyers), Tampa — but we are talking negligible amounts.

I’m actually beginning to think though, that this might be the bottom or very close. The reason is inventory: dwindling by the minute. Yesterday, CoreLogic, a leading provider of real estate information, analytics and business services, reported that the current residential shadow inventory as of July 2011 had declined slightly to 1.6 million units, representing a supply of 5 months. This is down from 1.9 million units, a supply of 6 months, where it was a year ago. It also follows a decline from April 2011 when shadow inventory stood at 1.7 million units.

What that means: there may be less distressed inventory coming on the market to drag down home prices. That slowdown could be driven by a a slower pace of disposing of new delinquencies, too. Keep in mind that the vast majority of distressed assets are below $500,000.

Texas Realtors are getting more optimistic. According to one of my favorite sources, HomeGain, three quarters of Texas real estate professionals and homeowners expect home prices (in Texas) to rise or stay the same in the coming six months. That’s pretty good news and the most positive they’ve been in awhile.

HomeGain’s second quarter 2011 nationwide home values survey of more than 750 HomeGain current and former members — Realtors —  and more than 2600 home owners, sought opinions on home prices. They also asked Realtors what they thought of President Obama’s performance as President.

That news may not be so hot.

The realities of the market are finally sinking in with sellers. In a nutshell, 53% of agents say clients’ home values have declined over the last year — slightly more homeowners, 56%,  than Realtors, 53%, seem to realize this.

Most homeowners still think their homes are worth more than they are. Almost half of the agents in Texas, 44%, say homeowners think their homes are worth 10 to 20% more than they actually are.

Don’t expect whopping appreciation. In the next six months, 47% of Texas Realtors think home prices will stay the same — 28% believe prices will increase, 25% say they will decrease, so almost an even split.

And don’t ask Texas Realtors to rate President Obama’s job in steadying the housing market: 46% strongly dissapprove of how he has served as President thus far, this after we got Bin Laden. But that’s a higher opinion of both the market and our fearless leader than what the nation’s Realtors believe. Fifty percent of surveyed real estate professionals nationwide expect home values to decrease over the next six months, and 65% percent disapprove of Obama’s performance as President.

Nationally, most real estate professionals and homeowners continue to expect home values to decrease or stay the same through the middle of the year. Fifty percent of agents and brokers and 42% of homeowners think that home values will decrease over the next six months.

“The current survey reflects that real estate professionals are resigned to accepting a market with declining prices being the norm rather than the exception. The past few years have been particularly harsh on the real estate industry and the majority of real estate professionals don’t expect much improvement in the coming six months.” said Louis Cammarosano, General Manager of HomeGain.

Sales of existing single-family homes in North Texas slid 11 percent in January, or so everyone is reporting, but here’s the good news: the median home price rose 8 percent, this from the Texas A&M Real Estate Center said Tuesday.I think we need to keep our eye on that ball.

In January 2011, 3,073 homes were sold in the 29-county region, down from 3,330 in January 2010, the Center said. But remember that January 2010 number was inflated by the first-time homebuyer’s program.

So it was the eighth straight month that home sales were down from a year earlier, but I see that as no cause for concern other than to ask, again, why are the banks not loaning out money? In fact, instead of another first-time homebuyer’s program, why don’t we have a first-time home borrower program? I hear story after story of wealthy people with great credit who cannot get loans simply because they do not have a W-2. We bailed out the banks, but here we are, two plus years into this recession, still no loosening of the loan strings.

On a very positive note, I think, the median home price was up 8% in January to $140,010 from January 2010. That may have happened because of a flux of high-end home sales, such as that of the Jonas Brothers K2. The best case scenario is that if we can hold home values steady for a few years ’till the banks loosen up, people will get loans and then start buying all over.