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Did Dallas Miss Out On The World’s Biggest Real Estate Boom?

Wick poses the question over on Frontburner, with this colorful chart. I think we need to keep in mind that the purple line that represents Dallas real estate values is an overall average of everything from Preston Trails to Oak Cliff. There are parts of town –Park Cities, Preston Hollow, Lakewood — that, if graphed, I think would look more like Seattle. Real estate is about as local a story as you can get. And I wish I had bought more real estate in 1999.

Dallas Home Sales

Here’s a real shocker: Dallas home sales are down from last year — but prices down just an itty bit. But wait. Didn’t Trulia just say that Dallas has one of the highest price reduction rates in the country? When I saw that story, first thing came to mind: how in the Beejesus does Trulia know anything about anything in an undisclosed price state? Beats me. As we told you in last week’s Real Estate Round Table, that $8000 first-time home-buyer’s credit – you have to have not owned a home for at least three years and must earn less than $120,000, although higher salaries can be pro-rated — is really getting first time home buyers off the fence, into the homeowner’s pool. I’ve been interviewing a few first time home buyers to gather thoughts — stay tuned.

Steve Brown’s Pain Comes In The Nick Of Time

My husband just called and told me to copy and laminate Steve Brown’s Real Estate Report in today’s DMN. (Our neighborhood values, he says, have declined almost 30%.) Why laminate? Because next Friday, the Dallas County Appraisal District will be mailing out thousands of notices of valuation on all our properties.  My sources tell me they are going to have to enlarge the parking down at DCAD offices: it’s going to be a bloodbath. As for Browns’ reporting, he’s right on: what’s moving, if anything, are first time home buyers in starter homes — less than $100,000 to $300,000, spurred by the $8000 first time home buyer credit. (Stay tuned.) Homes above $500,000 to $2.5 million are sitting. Cannot move. Cannot get loans unless you have near perfect credit (”Nothing less than 620,” says Barbara Meager at Granite Mortgage) and big time equity. (Credit scores are the new SAT.) But what Steve didn’t tell you is that over the $2.5 to $3 million dollar mark, the mega homes are moving under the radar, off MLS, as I’ve told you on this blog and elsewhere.

D Sale of the Week: Two Green Acres in Lakewood

Not only is 7130 Alexander Dr. a deal, but it’s now a steal–just reduced to $1,250,000 from $1,395,000, with an original listing price of $1.7 million. The owner, Coldwell Banker agent Lou Alpert, is also an author and Renaissance woman who no longer needs 6,135 square feet on almost two acres of prime property plus creek bridge, pool, and cabana. A true family home, the main structure is comfortable and sprawling, with three living areas, six bedrooms, five and a half baths, formals, and state-of-the-art kitchen with stainless appliances and granite counters. Truth be told, the bathrooms do scream 1977, when the home was built, but that’s nothing a little Ann Sacks tile couldn’t fix. This is a home that housed a large blended family and those who just crashed–teenage friends, rescue dogs, even a pet chinchilla. “We found some very interesting stashes in the crawl space whenever the workmen started tearing up floors,” says Alpert.

There’s great low-key drive up appeal on Alexander Drive, while the back of the house affords views 0f the lush treed acreage and vine-covered bridge to the swimming pool and cabana, which are separate from house and extremely private, if you get my drift. The third living area can be re-converted back to a three-car garage. It’s a perfect entertainment home, and given the value of the rare lot size plus reduced price, you are practically getting the home for free.  

$1,250,000

Lou Alpert for Coldwell Banker Residential Whiteside Group

214.738.0062

Open Sunday 1-3 pm

State Of The Dallas Market: We May Not See Mega Leverage For 50 Years

W. Michael Cox is the Director of the O’Neil Center for Global Markets and Freedom at the Cox School of Business at SMU, and a Chief Economist for the Federal Reserve Bank of Dallas for the past 25 years. Cox, appraiser Brad Edgar, and economist Britt Fair (Hexter-Fair Title Company) spoke to a group of Realtors today about the Dallas market. Couple highlights:

No inflation is going on right now, the government is trying to stop de-flation. Almost all the experts agree that we may see eventual inflation because of the economic stimulus — that money pumping into our systems. We may have a window of about 12 to 16 months before interest rates will have to rise to control it.  The Fed can and will monitor inflation tightly 24/7 and may in fact want to see a bit of inflation, say 2 to 4%, anything but hyperflation or deflation.

The banks still aren’t lending, what will it take to move them? Maybe higher interest rates. Cox doesn’t think you can pass laws forcing banks to lend money.

“When the risks and rewards are in balance, they will lend,” he says.

Our day of reckoning for the stimulus package will be when we convince China and Japan that treasuries are worth buying.

Why are the banks doling out TARP funds to the “troubled” banks rather than the solid banks, so the solid banks could lend the funds?

Good question, said Cox.

Unemployment is starting to affect everyone, even in the higher net worth classes. Though Texas thankfully lags the nation in unemployment, layoffs may not be over yet. Two solid businesses now: healthcare and education.

And these men think Americans’ spending habits have changed dramatically, maybe forever for a generation. Just as they did after the Great Depression, people are tightening their belts. Whether they keep them tight and how many years they live lean depends on how affected they are by this economic downturn, how long it lasts. We may not see mega leverage for another twenty years.

Higher taxes may force people out of states like New York and California, and we could see another wave of  sunbirds heading here for our sensibly valued homes. Watch: commercial real estate failings. Be glad we live in a city that continues to attract business and generate jobs as well as technology (intelligent medical systems being developed at Texas Instruments) and varied corporate headquarters. Buffalo, New York was home to the largest number of wealthy individuals in the U.S…  once upon a time.

Mortgages Below 4%: Would Someone Please Do This In Dallas?

From Inman News, reports of a bank in the Great Northwest offering, for a limited time, mortgages below 4% in an effort to help struggling builders. What a great idea — why doesn’t somebody try this in Dallas? I spoke with a Dallas builder yesterday who tells me how hard it is to move million dollar properties outside the Bubbles (Preston Hollow, Park Cities). Problem is that builders have discounted their wares so much in the Bubbles, folks will snap those up no matter how shabby, no matter if they are on the busiest of streets, just to “get in”. That leaves the million dollar plus props in places like Bluffview, Lake Highlands, Lakewood, still very much available. So, he says, it’s not foreclosures hurting them, it’s over-supply. Jumbo loans — that is, loans for more than $417,000, require at least 20% down plus superior credit. And yet we hear reports that builders added 583,000 new homes in February.

Update: my wish may come true: the Fed  is buying $300 billion  of long-term treasury securities.

What Price Home Does An Annual Salary Of $250,000 Buy?

I’m just saying here — looking ahead to how much house someone who earns $250,000 a year will be able to buy as we re-distribute the wealth. Not saying it shouldn’t be re-distributed, not saying it should. (Thain’s should.) OK, $250,000 in the 28% income tax bracket. That leaves $180,000. Or a monthly income of $15,000. Lots of money. We had a car lease of $1,000 on that Beamer, and maybe a little college loan out there. We are down to $13,000. We charge about $4500 a month — we pay that off. We donate and/or fritter another $1000. Did I forget anything? That leaves us $7500 for PITI — house payment, taxes and insurance.

I ask you: what price range home can you afford with $7500 a month?�

House Porn: The Meadows

Nice master with fireplace, doesn’t look like 1963 to me. But then, change out that mantel, make it sleek, and next thing you know you’ll be wearing a beehive!

Deal Of The Week/House Porn: Musing In The Meadows

Dealbook Deluxe: 2008 list price: $515,000, now $379,000. Located in the Meadows, a couple streets south of the home where the Geis tragedy took place, the neighborhood is getting very hot and the home has true sixties sensibilities. Not that I’m trippin’ or anything, but I can see Twiggy in her micro-mini, hear the psychedelic music on the intercom. Memories of avocado and orange-shagadelic carpet whisper from the walls. This street was the 1963 Parade of Homes. What may be keeping her from being a bride: four levels, backs to Walnut Hill Lane, outdated kitchen, grandmotherly knick knacks. Let’s think outside the box here: the knick knacks can go to the Salvation Army and net you a nice deduction, plant some junipers across the rear yard fence, and go get some granite asap. There — any other questions?

RE: Just So We Don’t Blame Bush

Vital point from a commenter:

“Regardless of political mudslinging, the crux of the discussion is this section
“Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a
conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes
his or her monthly payments on time for two years, the one percentage point premium is dropped.”

So Candy, how many of the current defaulters used that program? I am sincerely asking the question. Is it 1% of the current defaulters, 10%, 50%, 0%? What is it?

Don’t go pointing fingers without having some answers.”

Anyone have the answers?

Real Estate Downturn: The End (Of The Bottom) Is In Sight

Using old-fashioned supply and demand, not algorithms, some experts are peeping up from the ground with word that the end of the real estate bottom may be in sight. As I noted earlier today, we have reports that home construction nationally is way down. We know it is down in Dallas. Finally we have breathing room to absorb the inventory… if anyone is lending money…

Steve Brown: DFW Average Home Prices Near 2001 Levels

News that housing prices have dipped is making the financial world all jittery today. I don’t know why this should be such a eureka — we have been saying for months now — homes that are moving are reasonably priced and buyers with cash in hand or financing are asking for deals. Everyone wants a deal. Even former presidents.

“Last month’s median house sales price, $129,000, was the lowest since early 2001.”

PRE 911. OK, but look at this:

“There are 37,224 homes offered in the Realtors’ Multiple Listing Service, meaning the area has about a six-month supply, which is considered a healthy inventory.”

Knock knock, Appraisal District, who’s there? 2001 home values…

Attention All Real Estate Shoppers Who Bought In 2006

Zillow tells us that nationally, home values have slid 17.5 % from their values in 2006, which most experts agree was pretty much the peak year of the market. According to Zillow’s tabulations for the Dallas/Fort Worth area, our prices are — up 1.5 % ? Is that what this is saying?

Need A Painting Contractor?

Times are tough. The stock market is going deeper than the toilet. So maybe we need a painter without the frills? My favorite part about this contractor is the hand-painted line: “If You’re Piky Please Dont Call”

(Thanks to Ebby Southlake Realtor Patti Moore for sending me the photo).

Debbie Downer Is Alive And Depressed In New York City

You haven’t heard from me because I spent half the day with travel delays –it’s cold and rainy in NYC, which matches the mood perfectly at this year’s Inman News Real Estate Connect. I tootled in just in time to hear Bob Shiller, the famed Yale economist who creates the benchmark SP/Case Shiller Housing Report. The heads — Bob Shiller wants to see us trade real estate securities like stocks, thinks the government should subsidize financial advisers for every family, and made liberal use of the D word — depression:

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November Home Sales: The Picture Isn’t Pretty

Today’s report on home sales may have us all pining for the New Year’s hangover headache, or bring on a new one: November national home sales plunged to their lowest rate since the National Association of Realtors have been keeping records. Lawrence Yun, NAR’s chief economist, says a home sales stimulus plan is sorely needed. I am off tomorrow morning bright and early to Inman Real Estate Connect in NYC where Robert Shiller will be speaking — as well as Mr. Yun. Coming on the heels of this downer report, it ought to be a very interesting meeting and I will keep you posted. Also at Inman: unveiling of new company launches such as Dwellicious, a social bookmarking site to help buyers search for their next home.

Second Home Market Sucking (Super Cold Yellowstone Club Type) Bad Air?

This story says there are bargains to be found in the Hampton’s — that is, if you think a $1.537 million second home is a bargain. (Here’s former Lehman Brothers president Joseph Gregory’s $32.5 million Bridgehamton vacation pad.) I have an idea: turn this place into a fractional ownership for those of us who lost money with Lehman. Any legal minds out there want to litigate this?  

Meantime, Tamarack in Idaho is under, while Credit Suisse is fighting to hang onto first lien status with uber-exclusive Yellowstone Club, which is just a mess , bankrupt and smarting from bad press due to the nasty divorce of it’s great-looking founders, Tim Blixeth and his ex (?), Edra. Also pulled in: luxury second home big boys Discovery Land Co. Interim lender CrossHarbor Capital Partners is trumping and may end up owning the joint because Credit Suisse apparently could not cough up enough cash for a debtor-in-possession loan:

“While it is highly unusual for a major lender to be pushed out of the first lien position in a bankruptcy, Credit Suisse may turn out to be too late with its latest plan.”

About this time last year I tried phoning YC to write up  properties as Hot Props in D Home — they acted as if I needed a security clearance and was trying to find the president’s war-time bunker. We ended up in Big Sky.

But Dallas Addison, who develops second home properties in east and south central Texas, as well as Hawaii, tells me the second home market is still pretty strong. (Posting his story soon: Dallas tells me that Hawaii’s Big Island gets so crowded with residents’ private jets they have to haul them off to other islands for parking.) Glad to hear it: I haven’t been on a Lear in forever.

Swapping Spouses, Houses?

A friend in Massachusetts told me about a couple-swapping ring going on at their country club — how risque! This I can handle: the DMN ran a cool story on house swapping. I understand house-swapping is a trade, an  ”I agree to buy your house, you agree to buy mine” transaction. Like consensual swingers, potential home swappers post pictures (”House Porn”) and descriptions of their homes online, hoping to attract other homeowners looking to trade. (Do they fudge on details, like 6500 square feet and oceans of granite when really those are 12 by 12 granite tiles?) Ideally, they buy each other’s property and even better, no STDs!

The National Association of Realtors does not track swap sales, but a number of house-swapping websites have popped up in the last couple of years, most reporting steady increases in online swap postings, like Craigslist, which reported a 30 percent increase in house-swap listings in 2008 over last year.

So I wish I had asked our teacher about this in school. Vitally,  what is the role of the Realtor? I would imagine it would be business as usual for Texas agents, but since out-of-state agents are considered “foreigners” here until they obtain a Texas license, wonder if you have to use an agent or an attorney if the swapper is in another state? And I imagine there are some horror stories out there — about the houses, not spouses — anyone?

PS: Another trend agents tell me we are going to be seeing more of: owner financing. Stay tuned.

Mortgage Rates: What’s The Story, Glory Or Gory?

My prediction: glorious low rates in 6 months. Today was my last full day of class at Champion School of Real Estate before my elective and then — I take the state exam! I am getting my real estate license to be a better real estate reporter for the D Empire and our forthcoming new website. Learned a ton – have TOTAL new respect for agents and brokers. From remembering intermediary to sub agent to IABS forms always need to be in size 10 type to HB 489 to independent contractor status to TRELA and TREC, ostensible authority and agency by estoppel, MLS to agent with appointment, without appointment, all I know is HOW DO YOU AGENTS DO IT? And I need an appointment with a glass of wine!

But, while I was ensconced in academia, history was made in the interest-rate realm. Here a couple of takes on that, jump for one from Philip Walker, one of my favorite agents at Keller Williams Turtle Creek, who brought lunch to recruit the A-plus students. Mortgage rate comments are on and the meter is running:

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RECON Versus Altos Research

Can someone tell me why today’s story in the Dallas Morning News, which quoted the Real Estate Center at Texas A&M, is all doom and gloom while a report from Altos Research says Dallas home prices actually increased — this from the firm’s latest housing market updates ? Altos says its ten-city composite index was down .8% during November, down 2.4% for the last three months. ASKING PRICES DECLINED IN 19 MARKETS. Viva Las Vegas NOT: November marks the eighth consecutive month that LV has posted the fastest rate of declining home prices among major markets. Cripes, you may have done better at the Black Jack table than in the LV housing market. But here’s the real shocker: prices increased in six of 26 markets with Houston up a strong 2.4% — love me that oil industry — and Dallas up .5% or one-half percent in November. (Rocky Mountain High Denver was up .9%. Must be the altitude.) Dallas, Denver and Houston are now the only markets in the nation showing three months of sequential price increases.

I’m confused.

Dallas Fort Worth “Moderate” Risk of Mortgage Default And Pop Quiz

As usual, those bad boys of California, Arizona and Florida have major cities all ripe for more mortgage defaults. We are moderate, but look at McAllen-Edinburg-Mission, TX. Did an interview last week with someone who is developing in that area and in a word — HOT!

Pop-quiz: what is the one home market in the world where there is an under-supply of housing and the middle class is buying homes faster than the builders can build ‘em?

Let’s Not Discuss Dallas Real Estate Values Today

This is not as bad as when you get those monthly stock reports showing that all the money you’ve stashed away for retirement is down by 36%. No sir, not that bad at all. Steve Brown reports a decline in Dallas home prices of just over 2% while some Texas cities have actually seen modest increases. Don’t even ask me about the national outlook: it’s Miller Time for builders — those Dom Perignon days a recent memory. As one local home builder told me: no one is picking up a hammer. Even the Russians are having problems. I am starting my appraisal battle file right now — will keep copies of all these stories so just holler if you need. Listen up DCAD: my property taxes should be LOWERED next year, retroactive to November 19, 2008. Got that?

Dallas Home Prices Nosedive, But But But…

Remember, we are comparing to last year, one of the hottest sales years in the history of Dallas Real Estate, and maybe the world. The good news is that inventory is dwindling. Realtors have told me that folks who are not serious about selling are yanking up the for sale signs, putting them on ice. Builders are telling me that if they can hold out for about a year, 2010 will be the Comeback Kid and because there are so few housing starts now, there will be very few new homes for sale come 2010. Less inventory, stronger market, better prices. Everyone’s just taking a chill pill. P.S. Clip and save (or bookmark) this article to help fight your tax appraisal next spring.

NAR Week, 2008 Sales Downgraded

The National Association of Realtors is meeting in Orlando — believe Catherine is there — and the trade group reports altered sales expectations for the rest of this year. Of note is how powerful housing is to our entire nation’s economy — at least according to NAR economist Lawrence Yun:

“The depth of the recession depends entirely on housing — with sufficient housing stimulus, the recession will be shallow. If government actions stay focused on housing, the cost to the Treasury would be much less that the potential losses in the nation’s output and income in a severe recession.”

Dallas, Houston, San Antonio Home Equity A-OK

So says Steve Brown today, citing the Center for Economic and Policy Research and the National Low Income Housing Coalition. I guess folks are concerned that if they buy homes, even cheaper homes, prices may fall after they sign on the dotted. Reminder: Real Estate is for the long term, not a three-month flip. The study says basically that Texans will have more home equity long term, and the worst is yet to come in areas that had huge bubbles, such as the so-called “sand belt”. See, Real Estate is such a local story… what do you think?