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Zillow Says Dallas Home Prices Declined 7.5% Second Quarter 2009

The silver cloud is that home prices elsewhere declined 12.1% nationally in the same period.

Is Tough Love With Appraisers Hurting Dallas Real Estate Sales?

Bigtime, my sources tell me, and I’ll try to get all the horror stories posted. Feel free to comment below. Meantime, the WSJ reports.

Sensationalizing Math: Could Underwater Mortgage Reports Be Flawed?

This is going to be a long one, and I’ll be late for lunch, as usual. I just got off the phone with Gwen Moritz, Editor of Arkansas Business in Little Rock. Gwen took a look at a scintillating report in Saturday’s Arkansas Democrat-Gazette that said 25% of Arkansas mortgages are “under water”. Steve Brown ran the same report Friday and I parroted, our number in Dallas being 30% underwater. Every media outlet in America ran the piece since it was wisely sent out localized and sensational. The study was made by a California company called First American CoreLogic. Gwen read the story and it nagged her — 25% of Arkansas mortgages under water? How can that be, she asked.

Now when I read the story, I too had my doubts, for this reason: if the reports CoreLogic used included HELOCS — home equity lines of credit — why would 30% of Dallas mortgages be underwater? In Texas we are limited to 80% loan to value home equity ratios. That would mean that if someone maxed out their HELOC in Texas, they’d have to have lost 20% of the value of their BRAND NEW 100% FINANCED home and then some to be underwater. Or maybe they’d be flat. Whatever, I thought, as I usually do, who am I to question the brainpower and computers of these geniuses in California? God, we are all so bad!

Well, Gwen questioned them. She did what I should have done and picked up the phone and said, you know, this just doesn’t look right. Artkansas never had a housing bubble. Neither did Texas. She did some research on CoreLogic’s methodology and found out — hold the presses!!! — the company’s numbers may be biased on the HIGH SIDE . In other words, giving us facts that are worse than they really are.

Most of the mortgages used in the study are less than six years old — really? Did the whole world re-finance in the last six years? When she called CoreLogic, Gwen got them to admit actually 85% are less than six years old.

The study assumes that the borrower owes the balance of the mortgage when they took out the loan — in other words, it does not take into account monthly mortgage payments made against that balance. Why? Because of the way CoreLogic gets it’s information — it aggregates information from lenders, matching total mortgaged amounts in geographic chunks, like how much was loaned in a specific area or zip code. Then the computers whiz out numbers against property values. (Obviously I over-simplify.) They get this proprietary info from the lenders and use original loan amounts from public data records. But they base it on the original loan amount — they never get to come into our file cabinets and see how much money we’ve actually paid down on that mortgage or home equity LOC.

See where I’m going with this?

Gwen also found out the study includes the HELOCs but again, uses only the maximum credit figures since that is all the information that is available. So it looks like every one’s HELOC is at the max. Don’t know about you, but I have to pay down on mine every month and in fact, ours is almost paid off.

So if you are using figures that assume homeowners still owe every penny in debt they ever took out on a loan, figures that give no credit to what homeowners have in fact paid, then Gwen asks, maybe that study could over-estimate the number of folks whose mortgages are underwater.

“It’s biased to the high side,” says Gwen. “We need to be a little more skeptical of these studies.”

No kidding.

(Note: Thanks to Gwen Moritz for not only questioning the CoreLogic report but notifying the Alliance of Area Business Publishers of her query via email, which Glenn Hunter, editor of award-winning DCEO, then forwarded to me.)

Dallas Real Estate: Watter’s Creek Is My New Fave Shopping Center

That’s why. Plus some really nice ‘hoods up there. Lookie what I found yesterday at Montgomery Farm: 5747 square feet built in 2006 with all the new bells and whistles — granite, gourmet, Sub-Zero, gameroom, media, five bedrooms, five and a half baths, four living areas plus it backs to the Connemara Conservancy so no houses, no utility lines in the back yard. And get this: 1226 Monica, Allen, slides in under one million at $965,000.

Paul McCartney Talked To Me Last Night About Dallas Real Estate

Well, in my head he did. Through his music. (Full disclosure: I emailed Live Nation last week to get an interview with Paul, never heard back. Told them we could talk “flats”.) But I think he liked Dallas, our energy, and our insistence at last night’s concert that he give three encores, which he ever so graciously did. But if Paul McCartney ever decided to move to Dallas, I think  Braden Power’s sexy home at 3816 Turtle Creek Drive would be the one. The two kitchens would be quite helpful for partying and late night, post-concert snacks, he’d think about Linda in the spa off the sweet master suite, write songs on the piano in the library, lyrics inspired by the black swans on Turtle Creek, and that gigunda master closet would hold all the guitars and the ukulele George Harrison gave him. But best of all, that pool in the foyer would sure keep Heather Mills out of his house and might even deter requests for increased alimony. Oh by the way, 3816 Turtle Creek is listed this week with Dave Perry-Miller at $7,900,000.

D Sale of the Week: Stealing Mid-Century Modern in University Park

Mid-century modern enthusiasts, get out your hankies. You are going to drool over 7010 Airline Dr., a three-bedroom, two-bath University Park home just a hop from SMU listed at $898,000. (Yes, Virginia, there are homes under $1 million in Park Cities.) The personal home of the late architect Glen Galloway was built in 1962, and this well-preserved mid-century modern was the recipient of AIA’s 25 Year Award. The home has been written up in several local publications, and the interior features glass and museum finish walls and original materials, such as Carrara marble floors and a gas fireplace embedded in a wall of paneling that conceals ample storage. The home office even has the architect’s original drafting desk and drawers. The master suite overlooks a private Japanese garden, treed yard with covered terrace, and outdoor shower. Opposite this, two bedrooms (one has original cork flooring) are connected by a Jack and Jill bathroom. This is an excellent opportunity for a mid-century modern enthusiast to live within a work of art. Plus, the home has been on the market for a wee bit and sellers might be ready to say, Let’s Make A Deal. For additional information on the period furnishings pictured, visit www.collageclassics.com.