DALTX Real EstateDALTX Real EstateDALTX Real Estate
  • Home
  • Guest Post
  • Agents
  • Contact Us
  • About
  • Advertise With Us
Reading: Dallas Home Prices Are up 10.4 percent YOY, But Are We Getting Bubbly Again?
Share
Font ResizerAa
DALTX Real EstateDALTX Real Estate
Font ResizerAa
  • Home
  • Guest Post
  • Agents
  • Contact Us
  • About
  • Advertise With Us
  • Home
  • Guest Post
  • Agents
  • Contact Us
  • About
  • Advertise With Us
Follow US
© DALTX. All Rights Reserved.
DALTX Real Estate > Dallas real Estate Economy > Dallas Home Prices Are up 10.4 percent YOY, But Are We Getting Bubbly Again?
Dallas real Estate Economy

Dallas Home Prices Are up 10.4 percent YOY, But Are We Getting Bubbly Again?

5 Min Read
SHARE
report_highlights_hpi_2014_04_apr
(Graphic: Courtesy of CoreLogic)

Lots of conflicting reports are circulating lately, some of them say our region’s real estate market, along with the U.S. at large, is poised for unprecedented growth in prices. Others claim that relying on the real estate market to support our nation’s financial comeback is a huge mistake.

CoreLogic’s most recent HPI shows a 10.4 percent year-over-year increase in Dallas-area home prices, with national figures coming in at 10.5 percent year-over-year. The April 2014 HPI report shows Dallas among eight other U.S. metros that posted double-digit growth over the previous year ending in April, with Riverside, Calif., posting a gargantuan 19.7 percent increase in first, Houston coming in third at 14.7 percent YOY, and Dallas coming in seventh.

“Home prices are continuing to rise as we head into the summer months,” said Anand Nallathambi, president and CEO of CoreLogic, in a June 3 press release. “The purchase market continues to suffer from a dearth of inventory which we expect will continue to drive prices up over the year.”

But is that necessarily a good thing? Is our new normal a shortage of available housing in key sectors? And how do we stave off another recession?

If this concerns you, then perhaps this article from Keith Jurow, a real estate analyst and publisher of Capital Preservation Real Estate Report, will resonate with you. Here’s the basic point that Jurow makes, namely that home buyers aren’t trading up from starter homes as they used to, cutting the inventory down sizably:

During the roughly 50 years of rising home prices, the first-time buyer was the foundation of the housing market boom. This younger buyer would purchase a home which was smaller and less expensive than most houses. That would enable the seller to “trade up” to a larger, nicer home. These trade-up sellers would then buy and enable another trade-up buyer to do the same.

This trading up was possible because the seller almost always posted a profit on the sale of the house and could plow that into a more expensive home. When the bubble finally burst in late 2006, speculators dumped their properties on the market in metro after metro and prices no longer rose.

Listings soared and sales slowed down even in the hottest markets. Then prices began to decline. That posed a serious problem for the trade-up buyer. Many of them found that they had little or no profit with which to buy another home. A growing number found themselves “underwater.” Because they had put little or nothing down, the value of their home was less than the mortgage on the property.

Making matters worse was that after the sub-prime collapse in the spring of 2007, lenders finally tightened up their underwriting standards. They began to demand down payments as in the pre-boom days – 20% or even more. With little or no profit garnered from selling, would-be buyers could not come up with such a steep down payment. Nor could the first time buyer.

And so the trade-up game came to a screeching halt. It has never returned. You need to understand that it will not be coming back. Do I mean never? Not quite. My answer — not for a long, long time.

It’s under this assumption that Jurow advises that investors divest themselves of their properties before the market weakens. This advice, of course, could result in a flood of inventory on the market, which could drive prices down. It’s a balancing act, for sure, but considering the Dallas area and our inventory woes, it would be better for many buyers to have access to more potential properties at more affordable prices, rather than accept inflated prices as the new normal.

What do you think?

Oh Hey This Abandoned Villa On a Bridgeless Island Isn’t Creepy At All
Transwestern Scales Back Plans For Apartments at Preston and Northwest Highway, But Neighbors Still Feel It's Too Large
Ranch of The Week is a Tiny House on a Big Piece of Land
Foundation Issues Are a Given, But Here’s What You Need to Look Out For
This Lower Greenville Condo Is The Stuff Daydreams Are Made Of
TAGGED:Dallas EconomyDallas FundamentalsDallas home pricesDallas Home SalesDallas Real Estate MarketDallas real estate newsDallas Realtor
Share This Article
Facebook Email Copy Link Print
Previous Article Clay Stapp Realtors Adds Second Office: Hello East Dallas!
Next Article Newest Design Obsession: Rustic Chic Lighting With Barn Style Lamps
Popular News
Mill Creek Residential

Need to Rent? More Development in Works for Already-Hot Home Rental Surge in D-FW

The Williamsburg (and Bushwick) of Dallas? Oak Cliff and Deep Ellum?
New House Lighting Inspection Checklist: A Must-Read for Home Buyers
NAEP Scores Are In. What Does That Mean?
Indigo River Shows Not All Tiny Homes Are Created Equal
about us

DaltxRealEstate.com is the largest real estate blog and the only one in North Texas.

Links

  • Privacy Policy
  • Terms of Service
  • Contact Us
  • Paid Guest Post Submission

Categories

  • Wednesday WTF
  • East Dallas
  • Monday Morning Millionaire
  • Upon Closer Inspection

Get Involved

  • Advertise With Us
  • Write for Us: Submit Guest Post

Find Us on Socials

© DALTX. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?