Scorching Dallas-area home prices mean tough summer market for buyers
Posted by Brandon Stewart on Tuesday, July 28th, 2015 at 6:46pm.
from Dallas Morning News
Homebuyers venturing into this summer’s hot housing market better hang on to their wallets.
The Dallas area leads the country in home price gains. Median home sales prices are more than 10 percent higher this summer than a year ago.
In some neighborhoods the price hikes this year are two to three times that rate.
Prices for preowned homes are up 30 percent in Oak Cliff, 29 percent in Fairview and 22 percent in North Dallas in the first six months of 2015.
And prices were up 15 percent or more in a dozen other Dallas-area neighborhoods, according to a midyear analysis of the North Texas home market based on data from the Real Estate Center at Texas A&M University.
“If I was in those neighborhoods, I’d be nervous,” said James Gaines, an economist with the real estate center. “You would have to be skeptical of anything that goes up that fast.
“These kinds of home price increases can’t continue indefinitely.”
With North Texas median home prices at an all-time high of $220,000, preowned homes are selling for about 60 percent more than they were at the worst of the recession in early 2010.
And median prices are almost 40 percent ahead of where they were at the peak of the last housing boom in mid-2007.
Gaines predicts that the rate of home appreciation and sales will drop in the Dallas area when mortgage costs rise and economic activity slows. He’s not forecasting another housing crash in this area.
“This is not really a bubble; therefore I don’t think there will be a bust,” he said.
Real estate agents say that relocations resulting from job growth are fueling demand and prices.
Demand is especially high for more affordably priced homes, which are in short supply in the Dallas area.
“The lower price points — less than $350,000 — are moving really quickly in the suburbs,” said agent Scott Schueler of Keller Williams Realty. “It doesn’t matter where it’s located; it’s still getting multiple offers.”
Schueler said both investors and owner occupants are scrambling to find modestly priced houses.
Despite concerns about higher prices, he doesn’t see buyers backing away from the market this summer as properties get bid up.
“Last year at this time some people overpaid, and now they feel like they got a good deal,” Schueler said. “You really have to make an aggressive offer to get a house.”
The fast pace of homebuying in North Texas brings its share of problems. Some buyers who are in a hurry to get a house under contract then determine they’ve made the wrong deal.
“We’re seeing so many contracts terminate in the option period right now,” said Lydia Player, an agent with Ebby Halliday Realtors. “With the buyer frenzy going on right now, a lot of folks are realizing they need to make a quick, strong offer when they find something they like.
“A lot of properties are generating multiple offers as soon as they hit the market,” Player said. “This might be what’s causing so many buyers to put a property under contract and then take a couple of days to think about it.”
She said buyers at two of her listings have opted out of the deal in the last few weeks.
“As frustrating as this market is for buyers, it’s a challenge for sellers and agents to determine how likely an offer is to stick,” Player said.
North Texas home sales were up 12 percent in June from last year.
And so far in 2015, there have been even larger sales increase in markets including Grapevine and Southeast Dallas.
“Dallas-Fort Worth led the state in home sales increases at mid-year,” Gaines said. “It’s incredible that demand has not slacked off.”
Sales would be higher if there were more properties to sell.
Thirty of the 45 Dallas-area residential districts The Dallas Morning News tracks each quarter have less than a two-month supply of houses listed for sale with real estate agents. That’s less than a third of what is considered a normal inventory.
There’s less than a month’s supply in The Colony, Richardson, Bedford and Hurst, according to mid-year numbers.
“Absolutely, I could sell more houses if we had the listings,” said Alicia Schroeder of Dave Perry-Miller Real Estate. “The market this summer is a whirlwind.
“Buyers have a heightened sense of anxiety about interest rates creeping up given there is still such a lack of inventory.”
Follow Steve Brown on Twitter at @SteveBrownDMN.