Friday, August 21, 2009

It's a risk to say it, but it looks like the worst is over for real estate market

I've mentioned before that my great-grandfather was a survivor of the Galveston hurricane of 1900.After hours and hours of lashing wind and rain, he no doubt wondered whether the storm would ever end. More than 6,000 people were left dead in its wake.

Even when the worst was over, Grandpa was so rattled that he packed up and left for good. He wasn't convinced it was safe to stay on the storm-prone island.
We've had our own storm of sorts in the Dallas-Fort Worth housing market. For the last couple of years, home sales and prices have been falling here.

Now, finally, there are signs that the tempest is ending.But is it really over, or are we just in the eye of the storm?

Calling the bottom of any market is a dangerous prognostication. What you think is the deepest part of the pond might turn out to be just a ledge.It's safe to assume that you won't know the worst in any economy is over until about six months after the fact.

All that being said, I'll go out on a limb and say that the North Texas home market has bottomed out.After some significant declines in sales and prices early this year, the numbers are showing a definite leveling. This week, North Texas pre-owned home sales data showed that July had the lowest percentage decline in almost two years. And median prices last month were up 3 percent from a year ago, according to statistics prepared by Texas A&M University's Real Estate Center.

The National Association of Realtors reports that median home sales prices for the entire second quarter were basically flat in D-FW when compared with prices a year ago. That follows five consecutive quarters of falling prices in the Realtors' benchmark report.

Yet another home price measure, by Standard & Poor's Case-Shiller, recently found that the Dallas region was one of only two metropolitan areas in the country with three consecutive months of home price increases.

So what does it all mean?

Well, if you've been waiting to unload your house and make a killing with the price, you'd best go on waiting.Just because the home market here is pulling up from its dive doesn't mean things will go zoom zoom again.

Most economists foresee a long, drawn-out housing recovery that will depend on a rebound in the employment market. Good luck with that.And the thousands of home foreclosures – which are expected to continue – will still put downward pressure on North Texas residential values.Still, the fact that the home market appears to be stabilizing is positive news for our local economy.

Home inventories – new and pre-owned – are now at the lowest levels in several years. Tight lending restraints will make it hard for builders to put up a bunch of spec houses.The only real wild card left is the foreclosure situation.Home sellers who decide to brave the market with a "for sale" sign will find buyers are still looking for deals.

A lasting benefit of the housing downturn will be a more restrained view of the often-hyped residential market by consumers.That's the real rainbow that will follow this storm.