The Lone Star State isn’t the same place as it was during the big 1980s oil bust, and  is better weathering falling oil prices, but further price plunges and worker layoffs could negatively impact home sales and construction.

This is according to new research by Texas A&M Real Estate Center research economist James Gaines, who published Texas 2015 Housing Market and the Price of Oil last week. The six-page report explains that Texas’ economy has diversified significantly since the 80s bust, relying much more on healthcare, technology, and other sectors.

Here’s the takeaway:

The price of Texas oil and the upstream energy sector is a prime cause of concern for Texas’ 2015 economy and housing market. History shows that Texas’ housing does not depend on high oil prices. In fact, the state’s housing market has thrived at prices within a wide range of oil prices lower than those experienced in 2013 and the first half of 2014.

The saving grace for Texas right now is that the state didn’t go overboard in its response to rising oil prices in 2013 and 2014, a stark contrast to the 1980s, when there was huge overspending and overbuilding, Gaines writes.


Corelogic Housing-market-map May 2013We have been telling you this for months now: home prices around North Texas have never been higher. Sales of pre-owned home in the first half of 2013 are running more than 20 percent higher than in the same period of 2012. In fact, that is a new North Texas sales record for a single six-month period.

Deja vue 2006!

Steve Brown says, and I agree, that some Dallas neighborhoods are experiencing the largest home price gains this area has seen since the early 1980s. Park Cities would be one, Lakewood two, Bluffview three, Preston Hollow four, and Frisco, yes Frisco, five.

And it looks like prices will continue to rise, at least until next year, even with creeping mortgage rates that mostly affect home sales below a million. Why is our market doing so well while others are not?

Jobs and our strong Texas economy.

“The increase of sales we are seeing is a pure function of economics,” said Ted Jones, chief economist for Stewart Title Co. “This is not false hopes.”

When people move into an area, they need a place to live. D/FW created 104,600 new jobs in the last 12 months, said Jones, which led to 34,720 residential building permits being issued. Jones also says we could have built twice as many home and apartments and still not overbuilt this market.

That’s because we have a shortage of homes for sale. Builders froze during the deep recession, and financing was scarce. Which has led to our dwindling home inventory: 1.5 to 3 month supplies of homes for sale. Normal is considered 6 months.

And according to Core-Logic, WE are back to our pre-2006 price value levels. That means that if you purchased your home at the tip top of the market in 2006, your values have more or less inched back up there, depending, of course, on the condition of your home. Interesting to see that even the pricey highly sought markets like San Francisco and Boston, have still not reached 2006 levels. But Dallas Texas, Oklahoma, Nebraska and South Dakota are back to 2006 levels while every other state is in the negative, still!

All this makes people here feel more secure. Rich, even. And it spurs some people to sell.

If folks are selling in higher priced states and moving here, they almost have an “O” when they see what all their money can buy. James Gaines over at Texas A&M says our advantage is and always has been our reasonably priced homes:

“Texas enjoys a comparative housing advantage to other high-growth states,” said James Gaines, an economist with the Real Estate Center at Texas A&M University. “Prices here are significantly below those in other states that people are now leaving.”

The median Dallas pre-owned sales price is now close to $186,000. The median cost of a home in Frisco is a sweet spot of about $280,000 to $300,000, a community where most transplants settle. A whole world of outsiders is moving there, says Redfin agent Connie Durnal, who specializes in Frisco sales. They do their research on the web and they land on Frisco.

“It has proximity to downtown Dallas and D/FW, the infrastructure, the schools, ” says Durnal. “You can buy a home in Frisco for $125,000 or pay over a million dollars.”

Transplants from other more congested parts of the U.S. don’t fret over the commute to downtown Dallas, says Connie. Some may be more interested in D/FW than downtown, like the pilot she just helped snag a home in Little Elm.

Yes, even Little Elm is hot again.

4815 Royal lane ext frontAs for the luxury market, it’s cooking, too, if homes are well-priced and attractive. Let’s look at 4815 Royal Lane as a great example. I loved this house so much when I wrote about it, it truly reminds me of the “Home Alone” house. It is on Royal Lane, true, but the setback and generous lot more than make up for any busy street negativity. The 6871 square foot home was built in 1985 but, like Demi Moore, was kept up beautifully and very open to younger lovers owners. The walk-in master closet rivals those I’ve seen in $10 million dollar homes. Originally listed at $1,695,000, Doris Jacobs just sold it for $1.460,000. Perfect example, this home.

That, my dear readers, is the story of Dallas luxury real estate, at least this week!4815 Royal Lane kitchen 4815 Royal lane study 4815 Royal LR 4815 Royal pool



I LOVE this column from HousingWire. As I said earlier, I think “maybe bad boy” Herman Cain is the only Repub candidate who has said anything remotely intelligent about solving the nation’s housing crisis, which is a major constipator of our economy: housing is 5 or 6% of the GDP. Nationally foreclosures are on their way up, while U.S. home prices fell in nearly three-quarters of metropolitan areas third quarter. National median home prices dropped 4.7%. The housing market is very anemic: median prices for pre-owned sold July-to-September  declined when compared with last year in 111 out of 150 metro areas tracked by the National Association of Realtors.

I laud Cain because he acknowledges that Dodd-Frank is a nightmare. A nightmare that has only just begun. The other day, I had the pleasure of hearing my favorite real estate guru, Dr. James Gaines, speak to the Home Builder’s Association of Greater Dallas. It is so fun to be around a (dwindling) bunch of home builders —

“Hey Joe, how much are you paying for metal roofs now?”

“Oh about $350 a foot.”

“Wow, who do you use?”

I always feel like I am getting inside info and I am addicted to the smell of fresh lumber! Anyhoo, Dr. Gaines made his usual stab at spreading common sense: our economy is trying to recover, but cannot because of all the uncertainty. Texas is the only state in the union with job growth. Everyone has quit spending. It’s like we are at a giant standstill. Corporate America is siting on $3 trillion in cash but no one wants to move because no one knows what crazy thing the government might do next.

Like Dodd-Frank. 240 regulations yet to be written by an entity that doesn’t even have a leader because the Senate won’t appoint anybody, says Dr. Gaines. Will the government change the mortage deduction? There has been speculation they may wipe it out completely for second homes — there goes that market.

So Kerry Curry hit it on the nose: they are all pretty much clueless, expect, I think, Cain. I thought I would barf last debate when Michele Bachman got all touchy-feely and went “Super Mom” on us, sympathizing with the Las Vegas foreclosure folks. Last night she said that Fannie Mae and Freddie Mac are destroying housing and “we need to put them back into bankruptcy and get them out of business.” Michele, they are already sort of bankrupt but they are also the only entity loaning money right now for many Americans. Do you want everyone to pay cash for homes like they did in 1915?

Then Newt Gingrich claimed that banks profit more from foreclosures than they do from short sales. This is something I have actually heard, and would love to know more about, the idea being banks repossess the home or property, then they re-sell it. But it’s still hard for me to understand how banks “profit” from millions of foreclosures or short sales.

Ron Paul is a physician and has his home on the market so should not be so clueless: “prices on mortgages are too high, and that’s being done to prop up the banks.” GMAB: interest rates are at their lowest in years, as Dr. Gaines pointed out Tuesday at HBA. He expects them to continue to be low at least through 2013.

Kerry liked  former U.S. Ambassador to China Jon Huntsman, who felt the pain in better words than the other candidates:

“Let me just say, on the housing discussion here, lost in all of this debate is the fact that there are people tuning in tonight who are upside down in terms of the financing of their homes. They are feeling real pain. People who probably heard today that they lost a job. These issues are very real. They are complicated. For us to say that there is an easy solution to housing, that’s just not right, and that’s not fair.”

Yes, sounds sympathetic, but a solution? One? Two? The Obama administration has none, and neither do any of these candidates. Except, of course, for Cain, once he stops blabbing about his “9-9-9”. He points out that government policy, which got us into to this mess in the first place, sure isn’t getting us out.

P.S: How deft is Rick Perry? While he had that brain fart about which government agency he would eliminate, why didn’t he jump in to talk about what Texas has done to remain one of the few housing bright spots in the nation? Surely it’s our economy, employment stats, lack of regulations, but for one: the Texas legislature passed the RIGHT sort of regulastion when it limited home owners to borrowing 80% loan to value on their homes with HELOCs.

Please note: I am curbing my use of the phrase “on fire” these days, when it pertains to homes. Should I slip, please catch me.

August home sales in North Texas surged by 27 percent last month, the biggest gain in more than a year. According to NTREIS,  more than 6,800 pre-owned single-family homes sold last month. That’s just awesome. It was one of the highest totals recorded since those (cough cough) federal homebuying incentives ended in early 2010.

And August was the second month in a row that North Texas has seen double-digit home sales increases from a year earlier. Even condominium and townhouse sales were up in August, by 34 percent from a year earlier. I know Bobby Dhillon sold three units at The House, and Kyle Crews is on fire (no reference to a house) over at The Ritz.

What gripes me is housing analysts saying “oh yes, we knew this was coming.” Quit lying — you did not. Home sales fell for a full year after the buying crush created by the first time homebuyer’s credit. Thing was a disaster except that it was probably the only way I got my kids to move out of my house. At least James Gaines, an economist with the Real Estate Center at Texas A&M, is honest. He says he was surprised. Dallas is doing better than the rest of the country in terms of employment and job creation, but people moving here still have to sell their homes. And we are seeing a whole lot more rentals.

“If the pattern continues, we could be up 10 percent or more for the year,” Gaines told Steve Brown at the Dallas Morning News. Overall, however, inventory is down.

Here’s where the biggest sales increases were: Carrollton-Farmers Branch (60 percent), northeast Dallas (59 percent) and the Park Cities (49 percent).

August median sales prices were up 54 percent from a year earlier in Oak Cliff , 26 percent in Cedar Hill and 25 percent in Fairview.

I’ve told you about Cedar Hill. Next I’ll tell you about southwest Fort Worth. It’s on fire — hopping!

Your home value could be 4.3 % lower today than it was last year if you follow the guys over at Standard & Poor’s/Case-Shiller, which released their Home Price Index this week. That means home prices have been falling for an entire year in the 20 major U.S. cities that create this way over-quoted housing market indicator. Case-Shiller tracks only previously owned home sales, not new construction. Of course, new construction across the U.S. is the lowest it’s been in 50 years.

No one metropolis was spared: all the 20 major U.S. markets in Case-Shiller’s survey for June saw home-price declines from mid-2010, even Washington D.C.

Nationwide, home prices shot down 4.5 percent from June 2010.

But Dallas was singled out, along with Denver, the major Cali cities, and D.C. as having bottomed in 2009 and kept their (our) heads above the water.

“Relatively strong markets,” Standard & Poor’s David Blitzer said in the report.

Prices in most markets — including Dallas’ 1.4 percent blip — were up in June from May, to expected in the buying season.

Steve Brown says that if you count 2007 as the peak year of pricing, Dallas-area home prices are down about 9% from that Rocky Mountain High.

My favorite economist at the Real Estate Center at Texas A&M University, Dr. James Gaines, says what we all know: the short sales and foreclosures dragged pricing down and will continue to do so until we clear them out in 12 to 18 months.

The good news there: Dallas foreclosure rates are diminishing.

The cities that took the biggest hits were (ouch) Minneapolis (10.8 percent), Portland, Ore. (9.6 percent) and Phoenix (9.3 percent).

The smallest price drops happeend in, no surprise, government-employee rich Washington, D.C. (1.2 percent) and Boston (2.1 percent). Watch for those market to go up first.

But it’s all local. Ted Wilson of Residential Strategies says the foreclosures depend on what part of town you live in. In affluent neighborhoods with few distressed sales, such as the Park Cities or Preston Hollow, prices recently have been flat or are actually higher. Many gargantuan homes that have languished for years have sold.

But good news: the number of foreclosures has dropped in the northern burbs, and price declines are softening. For the first time in eleven years, year-to-date residential postings declined. Here are the facts from Roddy’s Foreclosure Listing Service Inc:

  • “D/FW quarterly residential foreclosure posting activity has dropped to its lowest level in eleven quarters.”
  • “With just 12,876 foreclosure postings on D/FW homes in the third quarter of this year, quarterly postings fell below 13,500 for the second quarter consecutive quarter.”
  • “Over the last year, third quarter home postings plunged downward 21%.  
  •  “On a quarter-to-quarter comparison, third quarter’s posting level was down 3% from the 13,310 notices filed for the second quarter of this year.”
  • “All four counties within the D/FW Metroplex had a decline in third quarter’s posting activity compared to one year earlier; and, in all four counties, quarterly postings dropped to their lowest level in two years or more.”
  • “Among the four counties, the deepest decline was a 25% fall in homes posted for foreclosure in Dallas County, which most often ranks with the highest volume of home postings among the four counties in the Metro.”




I am almost afraid to write this for fear of a jinx: the North Texas housing market is doing well. Like, really well. Prices are down a smidge, but July volume was way up.

And maybe, just maybe, I know when we found the bottom.

Steve Brown reports today that pre-owned home sales were up 18 percent — that’s a lot! — in North Texas in July, which is the first year-over-year increase in more than 12 months.

And this is what I have been hearing, and telling you, too: condo and townhomes are moving, prices coming down but volume up 36 percent. My sources at The Ritz and Palomar and even The House tell me they are selling units. Friends just sold a home in Lake Forest that had been languishing for three years, about half a million. The high end is moving, too, because the rich are getting richer and the middle class is dissappearing. Dave Perry Miller sold off 9338 Meadowbrook to his own buyers, Shelly & Barbara Stein of Glazer’s Liquor fame. This is a kind of notorious, 14,000 square foot plus plus plus Preston Hollow home that had been on the market since at least 2008, originally listed for $9 million. It is now the most expensive home to close in the honeypot of Preston Hollow at $6.795 million. The new owners, by the way, are adding on a killer wine cellar which will make a party at that home the most coveted invitation in town.

So why are we doing so well? Wasn’t I on Channel 5 just last week talking about the steepest market decline in prices since gloomy doomy 2009? Prices are down, yes. But what happens when you drop prices? Buyers buy. And that, my dear readers, is very good news and basically means we still have a pulse!

Of course, analysts are cautious. What did Dr. James Gaines (my hero) say?

“All positive news, like compliments, is always welcome. It’s great the sales volume was up. But we need to look inside the numbers.”

Here’s what I think: Distressed sales are driving the sales, as are record low interest rates — please stay tuned to a forthcoming post on how long those will be low: the Fed says till 2013. Investor purchases, said Gaines, could also be influencing the numbers. Less inventory — the number of houses on the market in North Texas is down 14 percent from a year ago, and I am getting daily emails from agents saying they have scoured MLS but cannot find a home to suit their buyers.

I checked in with Kristin Evans over at Altos Research (no relation) to see what she thought from her numbers. Altos analyzes listing prices and reductions, time of sales after those reductions, scrutinizing them like the most anal surgeon along with anything else that affects LOCAL market conditions. In a word, she says Dallas is in pretty good shape. Our listing prices may have bumped down, after bumping up. In January, Altos reports the Dallas average at $225,000 which ticked up to $270,000 about the third week in May — usually a robust month for sales. The last three weeks prices have ticked downward again to $260,000.

That low in January? Kristin says that was the bottom of the market and about the time investors jumped back in. Hence, the bottom.

Steve says agents sold 6,079 pre-owned single-family homes in North Texas last month,  down from June’s 6,929, but light years ahead of the 5,153 homes that sold last year in July 2010, right after the first-time home buyer fiasco event. And we are at slightly more than a seven-month supply of pre-owned, single-family homes in North Texas’s 29 county area. That’s one month more than six-months, which is considered normal. I’m not grabbing the Prozac just yet.

Where did people drop money?

Like I said last week, anywhere close-in did well. Northwest Dallas sales were up 71%, northeast Dallas up 68%, even up 59% in Coppell. The far out suburban areas continue to lose sales volume of about 16 percent.

Experts say we won’t expect any rebound news in housing as long as consumer confidence remains depressed and until the job situation improves, even here in job-rich (In -N-Out Burgers) Texas. What concerns me is that the crappy economic news dominating the headlines may take this uptick and slap it right down. Thank you, D.C. for creating the dreaded double dip.

July home sales and prices in North Texas from NTREIS:
Category Single-family Homes Change Condo-townhouses Change
Sales 6,079 +18% 363 +36%
Median price $153,000 -1% $126,000 -7%
Avg. days on market 84 +9% 97 -8%
Pending sales 5,521 +13% 342 +29%
Listed for sale 36,733 -14% 2,931 -25%

I’m not going to say Dallas Real Estate is a hoppin’, but we are really hanging in there. Really. As I mentioned yesterday, I was in Southlake on Saturday, and I went to that adorable Southlake Town Center. Met a cute couple who were building a home in Colleyville because they had just sold their home in Keller in 6 days. Wow!¬† I got nosy and said, so how much did you reduce it by? Was it a fire sale? Only $2000 under asking, they said. You live out here, I asked? Nope, both work in downtown Dallas. They are in Colleyville for a new home, schools and safety.

Welcome to the suburbs, which are not as dead as the media might have you believe. Over on YouPlusMedia, my good friend and super respected home builder Brad Holden says the Frisco new home market is “experiencing a growth that has builders scrambling to get permits for new lots in their communities. This increase in new contracts over the past couple months shows me signs of buyer confidence and the fact of low interest rates slowly rising.” Case in point: Meritage Homes, he said, had 649 closings last year, so Brad wonders where Steve Brown gets his info on home starts plummeting.

Case-Shiller spoke this week, and we all grabbed our Depends. CS says Dallas-area pre-owned home prices dropped just 1.2 percent in February 2011 from a year earlier. That’s really not bad. Not trying to be Susie Sunshine, but I’d almost say they just held steady.

In fact, the decline in the LOCAL Standard & Poor‚Äôs/Case-Shiller Home Price Index was a lot better than what we’ve been hearing, especially when prices were about 3 percent or 4 percent lower than last year.

There are two ways to look at this. One, is to be Steve Brown and note that Dallas-area home prices have been down for eight consecutive months. Well, he has a point.

Or we could note, as Dr. James Gaines over at the Real Estate Center at Texas A&M University, that the diminishing is getting better.

“It could indicate a trend toward being back to even or perhaps even start a trend toward positive increases,” Gaines said Tuesday.

Did he say positive increases?

Case-Shiller said our price decline was less than half of what the rest of the nation suffered, which was about 3.3 percent. Prices were down in all of the 20 major Case Shiller markets with the exception of Washington, D.C.

Nice to know our tax dollars are helping lift that market.

‚ÄúThere is very little, if any, good news about housing,‚Äù Standard & Poor‚Äôs David Blitzer said. ‚ÄúPrices continue to weaken, while trends in sales and construction are disappointing.”

You talk to these guys, it seems that the economic recovery is moving about as fast as a slug.

Steve says Dallas-area home prices are now about 10 percent below the Case-Shiller mid-2007 peak in the Case-Shiller index. Could we be coming out of the tunnel? David Brown at Metrostudy says maybe. Brown  also thinks that the dearth of housing inventory could bring on inflation in home prices.

“For-sale housing inventory is not growing, even with sales at a low for this housing cycle,” Brown said. “Demand is likely to grow.”