Prices in DFW are pushing UP

Just the Facts

Why Home Sellers Are Seriously Scarce

The lack of home sellers as the spring selling season nears is of little surprise.  Nationwide, the supply of existing homes for sale has fallen for seven straight months.  Competing multiple offers abound with most of the country now a seller’s market, just one year into a housing recovery following the worst downturn since the Great Depression.   The shortage of sellers is expected to ease as home prices rise.  Many homeowners cannot afford to sell because they do not have enough equity to put into another home.  Some potential sellers are waiting for the prices to rise a bit more.   Many have learned to be content during these past few years of the national recession.  They have simply rearranged their priorities and decided their current home is fine.    Major companies have nixed potential employee relocations.  And some are simply concerned with our national politic malaise.   But with all of this – economists predict sellers will sell again, and soon!

-          USA Today, February 27, 2013 and Wall Street Journal, February 27, 2013

Builders Fuel Home Sale Rise

Sales of new homes are surging in the U.S., far outpacing sales of existing homes and creating an unusual disparity in the housing recovery.   The trend partly reflects the small inventory of previously owned homes, now at a 13 year low.  But the strong sales of new homes also show how the nation’s home builders have mastered the art of selling.  New home sales jumped 28.9% in January from a year earlier, as sales of previously owned homes rose 9.1%.  This desperate selling pace exists even though a typical new home costs 37% more than one already built, the widest gap since figures started being tracked in 1968, according to Barclay’s Capital.   In the past two years, more builders have offered to pay closing costs and arrange home loans through their in-house lender, and made heavy use of government backed loans with little or no down payment.   Over three times more new homes today are sold with an FHA mortgage than just two years ago.  The result – it is easier to buy a new home, although the better value may be an existing previously owned home.

-          Wall Street Journal, February 27, 2013

Investors Driving Up Home Prices

During the housing bubble, investors played a significant part in overheating home values.  And when all the air went out of the home market, the mortgage companies and ultimately the economy were left holding the bag when the investors bailed out.  Now that housing is picking up steam again, investors are back buying up thousands of homes in North Texas and across the country.  Indeed, a flood of dollars (by investors) is driving up home prices and dramatically reducing the number of homes for sale.  And while most of the purchases are for cash, what happens five years from now if many of these investors cash out of their deals?  The numbers are just huge.  In some markets, investors are 20% of home sales.  In other markets, it is much more.

-          Dallas Morning News, March 1, 2013