Friday, July 18, 2014
Dallas-area buyers will have to shell out even more this year for homes
With Dallas-area housing still in tight supply this year, buyers have to dig a lot deeper to get the home of their dreams.
Median home sales prices in the area are up 12 percent through the first half of 2014 from the same period last year.
In some neighborhoods, the price hikes have been even larger.
Affordable neighborhoods in southern Dallas County have seen median sales prices jump 20 percent to more than 30 percent this year, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.
Pre-owned house sales prices are 19 percent higher in Southlake, 17 percent in Mesquite and 16 percent in the Park Cities.
Overall home prices in North Texas are now at a record high of just under $200,000.
Local home prices are more than 45 percent above where they were at the worst of the recession in early 2010.
Dallas-area median home list prices in May were about 7 percent higher than those nationwide, according to Realtor .com.
Economists and housing analysts continue to be surprised by the rate of residential appreciation and wonder how long it can last.
“Can you have 10 percent to 15 percent increases in median home prices year after year? The answer is no,” said economist Bernard Weinstein of Southern Methodist University. “This appreciation in home prices is going to slow, if it isn’t already.”
Influx of professionals
Along with the lean inventory of houses for sale in the area, the factor that’s most fueling home prices in North Texas is the large migration of professional workers to the area.
“All these companies relocating to the Dallas-Fort Worth area — that will continue to put pressure on housing prices,” Weinstein said. “As long as we have people moving here who have built up a lot of equity in another state, we will continue to see price inflation.”
Thousands of jobs coming to the Dallas area from the West Coast and Midwest are a significant contributor to the recent home price gains, agents and analysts say. For those buyers, Texas prices are still on the cheap side.
“Look at Toyota — their people are coming here and getting a bargain,” said Randall S. Guttery, director of the University of Texas at Dallas’ real estate programs.
Guttery said affordable interest rates are also allowing homebuyers to dig deeper for a house.
But he agrees the residential market isn’t going to be the new norm.
“It’s crazy to have three to 10 offers on a house,” he said.
Real estate agents say that both buyers and sellers sometimes fret about the pace of price increases.
Buyers, with the recession still in their minds, are concerned about overpaying.
“The consumer today is saying I understand we are in a seller’s market and I’m even willing to pay a premium price for a quality product, but I’m not willing to be taken advantage of,” said agent Steve Habgood of Hewitt & Habgood Realty Group.
“The homes that are selling the best and fastest are those that are completely done and move-in ready, or those that need extensive remodeling and someone can make it their own,” he said.
“And we are still seeing selective bidding wars, with multiple offers going a good bit above list price for the right homes.”
Sellers who are getting what they want for their properties sometimes are nervous that the buyers won’t be able to get financing.
“I am finding that it’s not the buyers who are so concerned about rising home prices, but it’s the sellers,” said agent Barry Hoffer of Ebby Halliday Realtors.
Can they qualify?
Hoffer said some sellers are requiring potential buyers to guarantee that they will still purchase the house even if it doesn’t appraise for a loan.
“Some of these buyers were willing to give that assurance, but most were not,” Hoffer said. “Obviously, if the sellers do not even feel confident about the market value of their own home, then why should the buyers?”
James Gaines, an economist with the Real Estate Center, said recent consumer surveys show that higher home prices are starting to put a pinch on some markets.
“There has been some push-back,” Gaines said. “It’s still a seller’s market, and buyers don’t have as much choice as they would like.
“Yes, prices are higher than before, but they’re still cheaper than many other areas of the country.”
Rich Thomas, CEO of the MetroTex Association of Realtors, said the current home market isn’t too overheated.
“We are certainly not at real estate bubble stage yet, and I hope we don’t get there over the next year or so,” Thomas said.
“My sense is that we will very gradually return to slower price appreciation and better balance of number of buyers and sellers by the end of this year or early 2015.
Steve Brown- Dallas News