Published Oct. 6, 2014
Dallas-Fort Worth homebuilders sold more houses in the just completed quarter than at any period since 2008.
Dallas-area home foreclosure sales fall more than a quarter. You have to go back to before the recession hit to find such robust new home sales, according to data released Monday by Residential Strategies Inc. Home sales in North Texas were up almost 17 percent from third quarter 2013.
New home construction in the area rose 11.4 percent from a year ago to 6,511 starts – the highest third quarter start level since 2007, Residential Strategies reports. “Start activity remains strong as builders maintain healthy sales backlogs and are working to reestablish depleted speculative inventory,”
Residential Strategies’ Ted Wilson said in the report. “Robust job formation, in combination with tight housing inventories, has kept builders optimistic about sustained new housing demand.” Rising new home prices have caused a slowdown in sales for some buyers. Since 2007 the median price of a new home in North Texas has increased $69,000 – 33 percent – to $275,000. “Affordability continues to be a primary concern for new home builders,” Wilson said. “ “Many are anticipating that at some point down the road, interest rates will increase, and they want to ensure that their housing prices are still within reach of the consumer.”
New homebuyers won’t find a lot of ready product to choose from. At the end of September, only 3,169 finished, vacant houses were available in the D-FW area. That’s less than a 2-monthy supply
Prices of preowned homes in the Dallas area hit a post-recession high in the latest housing market report. Local home prices were up 10 percent in March from a year earlier in the closely watched Standard & Poor’s/Case-Shiller Home Price Index. And prices were up 1.2 percent from February.
March was the fourth month in a row that Dallas home prices increased at a double-digit rate from the previous year. Nationwide, prices were up 10.3 percent from 2013.
“All cities were higher than a year ago, and all but New York were higher in March than in February,” S&P’s David Blitzer said in the report released Tuesday. “However, only Denver and Dallas have set new post-crisis highs, and they experienced relatively lower peak levels than other cities.” Home prices in North Texas have recently been rising at about twice the long-term average rate because of a shortage of homes on the market and a booming local economy, which has heated up demand.
Dallas housing analyst Ted Wilson said buyers are starting to push back at the higher home prices. “Nonetheless, with the short supply of both existing home listings and new home specs, prospective buyers have limited housing alternatives these days,” said Wilson, principal with Residential Strategies Inc. “It appears to us that with the inventory shortages, house prices may be up another 10 percent this year.
“If price appreciation doesn’t start to settle down at that point, it may begin to curb some demand.” Dallas-area home prices are now 6 percent higher than they were at the previous peak of the market in 2007, according to Case-Shiller.
Nationwide, prices are still almost 20 percent below where they were before the recession. Las Vegas, up 21.2 percent, and San Francisco, up 20.9 percent, had the largest price gains in March from a year earlier. Among the 20 major cities Case-Shiller tracks, overall prices rose 12.4 percent. Case-Shiller’s index tracks over time the prices of specific single-family homes in each metropolitan area. The index survey does not include condominiums, townhouses or new construction.
A dwindling supply of homes for sale is helping prices.
The Standard & Poor's/Case-Shiller home price index for December shows home prices posted the biggest year-over-year increase last year in six years.
Boosted by decreasing inventory and increasing demand, the 20-city index shows prices rose 6.8% in 2012 compared to the year before with price hikes in 19 of 20 major cities tracked, according to the report released Tuesday. Only New York fell, down 0.5%.
On a monthly basis, the 20-city index gained 0.2% in December. Nine cities posted positive monthly gains in December.
The Case-Shiller national composite index, which covers all nine U.S. census divisions, posted a 7.3% gain in the fourth quarter over a year earlier.
Home prices ended 2012 with "solid gains," said David Blitzer, chairman of the home price index committee. Housing and residential construction led the economy in the 2012 fourth quarter, he added.
The strong movements, combined with other housing data, suggest that while housing is on the upswing, some of the strongest numbers may have already been seen, Blitzer says.
In a separate report Tuesday, the government said new home sales rose almost 16% in January.
Phoenix continues to lead the recovery with prices up 23% year-over-year. It's followed by San Francisco, up 14.4%, and Detroit, up 13.6%, S&P says.
Atlanta posted its biggest year-over-year increase since 1991 — 9.9%.
The housing market helped pulled the economy into recession in 2007 but it has finally emerged as a bright spot in the economy.
The strong final few months of the year helped to "cement the housing recovery," says Stan Humphries, Zillow's chief economist.
He expects some moderation in home value appreciation this year but says the housing recovery is on a stable footing, fueled by strong fundamentals of high affordability and increasing household formation.
A dwindling supply of homes for sale is also helping prices.
In January, the supply of homes for sale fell to 4.2 months, nearly an 8-year low, the National Association of Realtors says. That means if no more homes came on the market, they would all be sold within 4.2 months.
The tight inventories are spurring bidding wars and multiple offers in some markets, particularly out West where supplies are most tight. Much of the country is now a seller's market, NAR says.
The winter months are typically slower in the housing market. But high demand and tight inventories in many markets helped "keep things at a boil" into January, Humphries says.
Zillow's home value data shows values continued to rise in January, leaving them up 6.2% year-over-year.
Investors continue to purchase many homes. In January, they accounted for 19% of home sales, down from 23% a year ago, NAR says.
Low interest rates are also fueling demand from first-time buyers and those who lost homes to foreclosure or short sales several years ago, says John Burns, CEO of John Burns Real Estate Consulting. Rates edged up slightly to an average of 3.56% for the week ended Feb. 21 for the 30-year-fixed rate loan.
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