Dallas Realtors, for the most part, call Steve Brown negative Nellie. He knows this, and almost delights in it. But I’m a little concerned he went too far in his latest story that shouts out “For Home Sellers, It’s Getting Tougher in Dallas.” First of all, this story will get on a Google feed and come across the screens of editors all over the US. It will get jumbled with Sunday’s piece in the New York Times on how dismal the Seattle market is doing – PMI Mortgage Insurance thinks Seattle real estate may drop another 11 percent. Zillow, which is based in Seattle, says home prices there are down about 31% from the 2007 peak. Real Estate there is as depressing as the weather.
Let’s get something straight: no doubt this is a tough market. We have been flooded with foreclosures, more than at any other time in Dallas history. Texas had a 9.65 % mortgage delinquency rate in third quarter 2010, which is almost as high as California’s, and far worse than Montana’s 4.94%. Sellers are cutting prices to the point that I almost thing “reduced” should be part of a normal sign. But homes are selling, if buyers can get loans. The financing of mortgages is really the biggest problem with the market. It deserves much more attention. In fact, the NAR should be staging sit-ins at this moment. Self-employed people even with thousands in the bank are finding it near impossible to get loans. Talked to a Realtor over the weekend: he has a client with a 692 credit score and 10% for a down payment and no bank in Texas will consider loaning him money for a $105,000 home. The agent found one guy in Texas who will do it for 8.35%.
What’s that you say? Interest rates are low? Only if you qualify. I’m beginning to think the low-interest rate BS “come on” advertising we see is bordering on violating truth in advertising.
Foreclosures and short sales are driving down values. Like I’ve always told you, if you make an offer and you’re not embarrassed by it, then it’s not low enough. (Sidenote: this came back to bite me in the butt when a certain renown editor of late turned the tables on me with this phrase in negotiating salary!) But Dallas is so different than other areas and Steve, six months is considered a normal number of days on market! Why are you fretting about that? Looking at the Seattle article, folks there say it is taking 17 months to sell their home.
“More than 9,500 North Texas homes in the Realtors’ Multiple Listing Service have been for sale for six months or more, according to the MetroTex Association of Realtors. And that number can be misleading because houses are sometimes taken off the market for a while and then relisted. “
When I search MLS for a property, I always look to see the listing history. You are correct in that this is no market to make a killing on your home, or make anything above what the other homes in the area are comping at. You show me someone putting their house on the market for a fantasy price, I’ll show you someone who’s not going to be selling any time soon.
This spring market will tell us a lot, and here’s what I think we’ll learn:
-It’s a buyer’s market but sellers are willing to let go finally.
-Cash buyers are being greeted with open arms and discounts
-Don’t expect home appreciation in D/FW for another five years (sorry)
-Be grateful our prices are flat, up/down 1%. Could be much worse.
-This administration is clueless on what to do to invigorate the market. It seems to be on a mission to de-stabilize real estate.
-Where’s the money, honey? Now the administration wants to put out of business the two mortgage units responsible for 92% of the mortgages in this country?