After slogging through two years of decline, the North Texas housing market is headed for a rebound in 2010. The only question, analysts say, is how strong the bounce-back will be. And that depends on the economy, of course."Any sustained turnaround in sales and construction activity will definitely depend on the economy and job growth," said D'Ann Petersen, a business economist at the Federal Reserve Bank of Dallas. "We do see increasing signs that the local economy has bottomed out, and business contacts say they are through cutting staff."
Petersen said there are signals that the worst is over for the Dallas-Fort Worth housing market. Next year will look better for builders and buyers.
"It will be slow going in 2010, but I do think that Dallas' housing market is in a better position than many other areas of the country to respond to positive economic growth," she said.
During the last two months, sales of pre-owned homes have increased significantly from year-ago numbers, and price declines have slowed. At the same time, the number of homes for sale in North Texas has fallen to the lowest level in more than two years.
Given the demand from homebuyers, builders will have to start more houses in 2010, said David Brown, an analyst with Metrostudy Inc.
"There now is currently less than a six-month supply of homes priced under $250,000 and just over a six-month supply of homes priced between $250,000 and $500,000," Brown said.
Full Story: Dallas News
Wednesday, December 23, 2009
Tax credit drives surge in home sales
WASHINGTON (AP) -- Extraordinary government efforts to stabilize the housing market are paying off. What happens when the help runs out is anyone's guess.
Sales of previously occupied homes surged in November to the highest level in nearly three years, spurred by federal subsidies for starter homes and a massive Federal Reserve push to drive down mortgage rates.
The strong figures were driven by a race to take advantage of a tax credit of up to $8,000 for first-time homebuyers. The credit has since been extended to next spring, but the government initially planned to end it Nov. 30.
"It was like the end of the world," said real estate agent Stephanie Somers of Re/Max Access in Philadelphia. "All the first-time buyers converged onto that one month."
The pace of home sales is now up 46 percent from its bottom in January and still 10 percent shy of its peak from four years ago, according to data released Tuesday by the National Association of Realtors.
The real estate recovery depends not only on taxpayer dollars but also on the health of the economy at large, which grew at a less robust pace in the third quarter than previously thought.
The economy grew at a 2.2 percent annual pace from July to September, down from an initial reading of 2.8 percent, the government said Tuesday.
Experts think the economy is even stronger now than it was last quarter, but they expect it to ebb again early next year. And that's when the tax credit will wind down and the Fed plans to stop buying mortgage-backed securities, which could raise mortgage rates.
Whether the real estate rebound can continue without the help remains to be seen.
Full Story: Dallas News
North Dallas Luxury Real Estate
Incomes, spending post gains; new-home sales sink
WASHINGTON (AP) -- Personal incomes rose in November at the fastest pace in six months, while spending posted a second straight increase. But economists cautioned that the gains remain too weak to sustain a strong economic recovery.
The Commerce Department said Wednesday that personal incomes rose 0.4 percent in November, helped by a $16.1 billion increase in wages and salaries. It reflected the drop in unemployment that occurred last month.
The rise in incomes helped bolster spending, which rose 0.5 percent in November. Still, both the income and spending gains were slightly less than economists had expected.
After taking inflation into account, after-tax incomes are rising at an annual rate of just 1.2 percent. Economists say the recovery will require higher levels of income and spending. This is especially true at a time when households are using some income to shrink debt loads and rebuild savings, rather than spend.
"Annualized income growth of a little over 1 percent will not be enough to drive a significant recovery in consumption at the same time that debt needs to be paid down," said Paul Dales, U.S. economist at Capital Economics.
Contributing to the cautionary picture was a separate report Wednesday that sales of new homes plunged unexpectedly last month to the lowest level since April. November's sales fell 11.3 percent. And sales were down 9 percent from a year ago.
The median sales price of $217,400 was down nearly 2 percent from $221,600 a year earlier, though up about 4 percent from October's level of $209,400.
The report signaled that the housing market's recovery remains rocky.
Economists viewed the two reports as evidence that the recovery from a deep recession is proceeding in fits and starts, with households struggling with a bleak job market. At the same time, analysts said the economy is much improved from this time last year, when the nation was gripped by the financial crisis.
"People are continuing to pay down their debts, and they remain concerned about their financial futures and whether they will have jobs," said Sal Guatieri, an economist at BMO Capital Markets. "Santa's toy bag won't exactly be brimming with goodies this year, but at least he will show up, unlike last year."
Full Story: Dallas News
The Commerce Department said Wednesday that personal incomes rose 0.4 percent in November, helped by a $16.1 billion increase in wages and salaries. It reflected the drop in unemployment that occurred last month.
The rise in incomes helped bolster spending, which rose 0.5 percent in November. Still, both the income and spending gains were slightly less than economists had expected.
After taking inflation into account, after-tax incomes are rising at an annual rate of just 1.2 percent. Economists say the recovery will require higher levels of income and spending. This is especially true at a time when households are using some income to shrink debt loads and rebuild savings, rather than spend.
"Annualized income growth of a little over 1 percent will not be enough to drive a significant recovery in consumption at the same time that debt needs to be paid down," said Paul Dales, U.S. economist at Capital Economics.
Contributing to the cautionary picture was a separate report Wednesday that sales of new homes plunged unexpectedly last month to the lowest level since April. November's sales fell 11.3 percent. And sales were down 9 percent from a year ago.
The median sales price of $217,400 was down nearly 2 percent from $221,600 a year earlier, though up about 4 percent from October's level of $209,400.
The report signaled that the housing market's recovery remains rocky.
Economists viewed the two reports as evidence that the recovery from a deep recession is proceeding in fits and starts, with households struggling with a bleak job market. At the same time, analysts said the economy is much improved from this time last year, when the nation was gripped by the financial crisis.
"People are continuing to pay down their debts, and they remain concerned about their financial futures and whether they will have jobs," said Sal Guatieri, an economist at BMO Capital Markets. "Santa's toy bag won't exactly be brimming with goodies this year, but at least he will show up, unlike last year."
Full Story: Dallas News
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