Read Steve Brown and you might say what someone from last month’s ULI Conference told me they felt like doing after the opening session: committing suicide. Steve says north Texas pre-owned home purchases were down 15 percent in May — the 12th consecutive month of declines, a solid year of flushing.
Real estate agents last month sold 6,224 single-family homes through the MLS, which is 145 percent less than they sold during the first five months of 2010. Because of, let’s all chant now, the “First Time Homebuyer’s Credit.”
Sales volume is down, which was expected once the crack cocaine was taken away. But experts are glancing at the U.S. economy and scratching heads, because it ain’t looking so rosy, and everyone’s re-thinking recovery ETAs.
“I don’t have a concern about things getting a whole lot worse,” (usually chipper) Jim Gaines, an economist with the Real Estate Center at Texas A&M told the Dallas Morning News — RECON is like the Bible of real estate statistics in Texas. “But where is the demand going to come from?”
Good question, when banks are not lending and employers are not hiring. Maybe Mexico? Capital flight? That only leaves the rich buying homes, which we know they are.
“I can’t see any kind of substantial increase” in home sales for the rest of 2011, Gaines told the DMN.
Sales. Last week, the Standard & Poors/Case-Schiller report showed a 2.5 percent drop in Dallas area home prices in March – the 9th straight monthly decline. Every metropolitan area in the country except for Washington, D.C. showed declines. That 2.5 was not so bad compared to other areas. Patricia Szot, president of the MetroTex Association of Realtors, told KERA our local housing market is stable overall and showing some improvement. In fact, Szot says the average home price in north Texas is $195,000, six percent higher for the first four months of the year than we were last year. Our median price is $143,000, up 1% from last year. I’m not going to go into other details of the interview because we all know that Dallas has a growing population, 350 to 398 new families arrive in North Texas daily looking for jobs, our unemployment levels are not as bad as the rest of the country’s. Szot, like me, is more concerned over how federal banking regulators are making it hard to get loans. No loans, no sales. But the biggest challenge remains employment. One more positive note: Dallas is the only federal district where the economy is expanding, says the Federal Reserve. New York, Philadelphia, Atlanta, and Chicago are slowing, says the Fed, according the Beige Book report, while the other districts are expanding. Some experts say that’s because of the increase in oil prices which tends to benefit the Texas economy while it drains consumer’s pocketbooks. The report also says real estate prices continue to decline in most areas, while it noted that:
Dallas indicated that improved traffic has raised prospects of improved sales in the second half of 2011, and Boston observed signs that the market is stabilizing. Sales activity was characterized as mostly steady in the New York, Cleveland, Dallas and San Francisco Districts, but declining in the St. Louis and Minneapolis Districts.