What goes up has to come down, at some point, right?
It’s like that with home values. Except home values in Dallas have never shot skyward as much as they have in coastal cities and international hubs like Miami and New York City. Our home prices creep up by 5 to 7 percent a year. Then they stay there for a few years until the upward trend starts again. The only time I remember Dallas home prices actually declining as in the late 1980s, agree?
Comes news this week from Standard & Poor’s/Case-Shiller Home Price Index that Dallas home prices were up only 5.2 percent from where they were a year ago. Which is less than the 6.2 percent nationwide home price gain from June of 2017. So for the first time in a long time, we are dragging behind the national average, not leading it.
In fact, Dallas-area home prices expanded by the smallest percentage in almost six years.
The silver lining: (copy and paste this story for DCAD) if prices start to stabilize, our property taxes will, too. Oh and don’t let the Dallas City Council fool you into thinking they are lowering taxes, either. They are trying to lower the rate, because property taxes in this state are set by values. So all these nice Case-Shiller reports have brought in increased revenues from property taxes.
So, should we be concerned? No.
First of all, home prices have risen pretty darn dramatically since 2007, when the real-estate, crazy lending-induced recession chilled markets. We are still almost 50 percent (45 percent actually) ahead of where we were before the market tanked. Except it never really tanked in Dallas, it remained flat.
Our rate of growth is above the national average of 4.2 percent for the last decade. North Texas home price increases have been cooling down for two basic reasons: more supply on the market, and a slow down in the buying frenzy, which could be related to the recent changes in the tax laws.
In other words, home appreciation rates in North Texas are about half of what they were 18 months ago, 2016, when the market was piping hot.
“Home prices continue to rise across the U.S.” S&P’s David M. Blitzer said in the report. “However, even as home prices keep climbing, we are seeing signs that growth is easing in the housing market.
“Sales of both new and existing homes are roughly flat over the last six months amidst news stories of an increase in the number of homes for sale in some markets.”
Let me remind you that Case-Shiller only tracks single-family, pre-owned homes, not new construction such as new developer communities, and not condos or townhomes. In a market like ours, where new construction is so prevalent, adding in condo and new homes sales would definitely give us a boost. It also doesn’t track off-market listings, which agents tell me amount to almost 20 percent of sales in the high end market.
Biggest year-over-year home price gains were in Seattle (12.8 percent, why always Seattle?), where Redfin founder Glenn Kelman says the market has hit “a slow and definite downfall”:
“We aren’t entirely sure how much of it is the market and how much of it is us because our guidance is based on a slowdown that only occurred in the last few weeks. It was a significant slowdown,” Kelman said. “It may be that we have a good week this week and a good week next week and we can outperform it. But we are seeing a significant change.”
Las Vegas is getting way pricier (13 percent gains). Which is very interesting: Las Vegas also saw high percentage value increases right before the market crashed.
“The west still leads the rise in home prices with Las Vegas displacing Seattle as the market with the fastest price increase,” said Blitzer.
Real estate economists say we are shifting from “extremely competitive for buyers to only somewhat competitive.” But sellers are still in control. A lot depends on price point, as properties priced under $500,000 remain a hot commodity. The bigger, pricier homes are staying on the market longer because there are fewer buyers and more inventory.
But let’s take a look at some properties here that went under contract lickety split, despite more inventory. In fact, on Ricks Circle, which happens to be my street, there are four homes for sale :
Becky Frey’s 11422 East Ricks Circle: listed on July 25 for $4.095 million, under contract. Why did this house go so fast? Because it is a transitional, contemporary style, was built in 2013, and is loaded with stunning contemporary bells and whistles (not to mention a zip line in the backyard).
Paula Scofield’s 6111 Northaven: went on the market July 19, under contract with an asking price of $995,000. While a traditional 1950s ranch on the exterior, the interiors are stunningly streamlined contemporary.
This summer, over in the Walnut Hill/Midway area, I tried to write about 3738 Martha. A darling, dynamically remodeled ranch of 2,222 square feet with three bedrooms, two bathrooms, killer beamed great room, kitchen, dining and butlery.
But the real grab for this home, besides the location, is the yard. To-die-for, and I mean it. Listed with Blake Phillips of Classic Living Realty for $725,000. Listed early July, sold in August near or at full price.
And now even Lisa Blue’s estate is sold. Not for $36 million, but it sold. The Crespi Estate is going into parcels.
So tell me, how bad is it really out there? Will the floodgates open after Labor Day with the threat of higher interest rates? Lines are wide open.
