That’s right, we are getting delirious over one-half percent.

Like the caboose of a train, a little behind everyone else, I think our Dallas market peaked in 2007/early 2008.  I was in California last January when evidence of the bust was already showing.  Of course, our prices never ballooned the way the hot markets like California, Nevada, Phoenix and New York poofed up, one reason why our contraction has been much less painful.

But I am not drinking Moet just yet. Homes are selling because sellers are slashing prices — DFW home prices today more closely resemble those in the years 2003/2004. Except for buyers with large cash reserves (flush from pre-bust sales) and near perfect credit scores, loans are not flowing. Credit is still constipated. Stringent new appraisal laws are blowing many real estate deals at a time when we need them most The first time home buyers are leading most of this upturn, but the $8,000 stimulus ends January 1 — Congress would be smart to extend it one more year. Not to be Debbie Downer, but spring is like Christmas for the real estate industry. Most people who need to buy or move do so in spring and early summer, usually families who want to get settled as soon as the kids are out of school.

I think the real test will be in the fall. Autumn is when the bottom feeders come out and swoop up the bargains, especially towards the end of the year when third-quarter reports yield more depressing news and property taxes are coming due. Commercial real estate is like a Jenga tower, and my sources tell me we are in for a tsunami of commercial foreclosures. Oh and get this: commercial loans were also securitized by the Ivy League geniuses on Wall Street. (Question while I’m on the rampage: where was McKinsey & Co., that powerhouse of knowledge, when subprime etc. hit the fan?) Unemployment still haunts, despite what Al Coker told Steve Brown.  Sweeping health care legislation could sweep out even more jobs, which is the number one reason now for home foreclosures: people losing jobs cannot pay mortgages. And foreclosures — if not in Park Cities or Preston Hollow — will further erode home prices even more in areas like Duncanville, Frisco, and Little Elm.

Which could, of course, bring out even more fire-sale buyers. IF they can get mortgages. Some experts out there are saying that the Fed is keeping us from knowing the awful, ugly truth – that a whole lot of the big banks are as wobbly as the soils in Farmers Branch. I would still like to know why more TARP funds have not trickled down to the consumers for home loans.  And consumers, well, they are not really letting loose. I was at Neimans Last Call this weekend and when the 65% markdowns came on, a few bought. One clerk told me the mall was crowded with more lookers than buyers.

My most trusted financial advisors are calling it bottom. Mortgage companies are starting to work with delinquent borrowers, finding it economically more advantageous to make a deal and keep them in the house rather than add to their burgeoning inventory. (Besides, it is so hot on the courthouse steps.) Builders are slashing as much as half a million off prices and every new home start I see has an owner — the spec home is dead. We might as well carry a casket like the Hippies did at Haight-Ashbury at the end of the 60′s. I remember Della Lively telling me in 2007 that Dallas builders were living on Moet, it was really running in the streets of Park Cities and Preston Hollow. Even the teenagers were drinking it.

Now, she says, they’re all drinking beer. 

This week I’m going to ask several Dallas real estate experts if they think we have seen the bottom and when they think the upward climb will begin. Comments are open, what do you think: has the Dallas housing market hit bottom from the Great Recession of 2008?

Or will we — gasp — get even lower? Bottoms up!

Uneeta Mosby-Palmer, a spokeswoman for NTREIS, said the data for the report was obtained from MLS and then sent to the National Association of Realtors to be calculated for average price change and percent change in the number of homes sold. She declined to comment further.

Officials at NAR will now review all the data in the report for errors including: average price, total number of homes sold, average days on market, and percent of asking price.

The discovery was made during an investigation conducted by People Newspapers into the NTREIS quarterly reports.

“It looks like it’s going to take us quite a while to dig into it,” said Ken Fears, manager of regional economics at NAR. “Something clearly happened when we were loading the data for the first quarter 2008 so we need to go through our notes, go through our algorithms and equations to check out what is going on. And then we are just going to completely re-publish this report because it’s obviously just too messed up.”

ZIP codes such as 75208, in North Oak Cliff, were reported as experiencing a 1,950 percent increase in the number of homes sold for the first quarter of 2009 when compared to the first quarter of 2008, according to the report. The 75225 ZIP code, which covers parts of the Park Cities and Preston Hollow, was listed as having an 84.82 percent increase in price and 330 percent increase in the number of homes sold when the two quarters were compared.

Fears said the report was “so out of the ballpark it doesn’t even make sense.” He said he and his staff were hopeful they would be able to present a new, more accurate report within two days.

One Preston Hollow and Park Cities brokerage had already published the error-riddled report in an e-mail newsletter sent to their entire staff.

“My word,” said Pierce Allman, of Allie Beth Allman and Associates, when he was told of the mistake. “They’ve always been reliable. I don’t know what the glitch was and they may not know either. We will obviously try to find out any of their faulty data that we’ve already used.”

Jeff Duffey, an agent with Coldwell Banker Residential Brokerage, said such abnormally high results shouldn’t be trusted despite the reliability of the source.

“Those numbers are so bizarre I wouldn’t even pay attention to them,” Duffey said. “If I had seen those digits … I would probably have done some more fact checking before I passed it on. I would never put that in a publication to my clients.”

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.

Another client paid a local “law firm” that advertises on a local Dallas radio station $3,000 to get his mortgage modified; the firms first piece of advice was to intentionally get behind on his mortgage. The mortgage company posted him for foreclosure, the modification people told him that they couldn’t help him. Now he now faces the prospect of losing his home if he does not pay three months of payments all at once, plus all of the bank’s legal fees related to the foreclosure, and he’s out the $3,000. What a scam.

Then there’s the “foreclosure rescue specialist” called North American Foreclosure, LLP.  Folks need to be careful, says Polk, a bankruptcy attorney and home foreclosure expert for 15 years.

“Sadly, a person will try whatever they have to in order to keep their home and a roof over their kid’s head.  And who can blame them?,” says Polk. “But a con artist can sense that kind of desperation.   The number of so-called “loan modification counselors” has quadrupled in the last 18 months as the hucksters have opened up shop.  These fly-by-night operators target desperate homeowners– the easiest mark, but also the least able to afford such a scam.”

Avg. Days on Market:

PC 106.7 days

PH 112.1 days

Months of inventory for Dallas and other cities in U.S.:

Dallas 5.9 months

Atlanta 12.5 months

Chicago 14

Miami/Fort Lauderdale 29.5