A strong spring selling market has finally pushed Dallas-area home prices ahead of where they were before the recession.
The gain in the monthly Standard & Poor’s/Case-Shiller Home Price Index isn’t much — up 1 percent from where Dallas-area prices were in June 2007. That was just before the housing crash and economic meltdown hammered residential values across the country.
The latest Case-Shiller report is another strong sign for the Dallas area’s economy and real estate market, said D’Ann Petersen, an economist at the Federal Reserve Bank of Dallas.
“Other measures of North Texas prices indicate the same improvement,” Petersen said. “While the North Texas market suffered during the downturn, the depth of the decline was not as bad as many other areas of the country.”
Prices of pre-owned homes in the Dallas area were up 7.6 percent in May from the same month in 2012, Case-Shiller reported Tuesday.
It’s the largest year-over-year percentage gain since Case-Shiller started tracking Dallas home prices in 2000.
At the worst of the housing market downturn in early 2009, Dallas-area prices were off by about 11 percent in the Case-Shiller index.
Both Dallas and Denver in May were about 1 percent above pre-recession price levels.
“This is the first time any city has made a new all-time high,” the Case-Shiller report said.
Fueled by energy
Jed Kolko, the chief economist with online real estate firm Trulia Inc., said both Dallas and Denver have strong economies fueled in part by the robust energy sector.
“And they both had a milder housing crash to bounce back from,” Kolko said. “The places now with the biggest home price increases are those having the rebound off the lowest bottoms.”
The rate of home price growth in the Dallas area in May trailed the 12.2 percent nationwide rise in the index.
The biggest year-over-year price increases were in San Francisco, 24.5 percent, and Las Vegas, 23.3 percent.
While Dallas and Denver are ahead, nationwide home values are still about 24 percent lower in the Case-Shiller report than they were before the recession. The biggest deficits are in Las Vegas, still down 51 percent from the peak, and Phoenix, down 41 percent.
“On a relative basis, I guess it is a big deal as one compares Dallas to all the other major metropolitan areas around the country,” said James Gaines, an economist with the Real Estate Center at Texas A&M University. “It sure beats still being down by 25 percent or more as some of the cities are.”
The prices in Dallas and Denver really haven’t caught up, Kolko points out.
“Remember, since the peak of the bubble, there has been modest inflation,” he said. “In real terms, prices are still a little lower than they were then.”
Case-Shiller’s index tracks the prices of specific single-family homes in each metropolitan area. The index survey does not include condominiums and townhouses.
Record levels
North Texas home prices have been at record high levels for several months based on sales of houses by real estate agents.
In June, the median price of homes sold through Realtors’ multiple listing services was up 13 percent from a year earlier to $185,820.
Total pre-owned home sales through the first half of 2013 were up 19 percent from the same period a year ago, a new high for the six-month period.
MLS sales prices for pre-owned single-family homes in North Texas last month were about 45 percent greater than they were in January 2009, according to numbers from the Real Estate Center at Texas A&M.
But the types of properties that sell each month, not just overall changes in values, can heavily influence those numbers.
A decline in the number of distressed and previously foreclosed homes on the market has no doubt had a big impact on overall median home sales prices and values. Foreclosure filings this year are running almost 40 percent below 2012.
But not every neighborhood is experiencing a boom in home prices.
“We have seen very little, if any, change in the average sale price of properties,” said Charles Wilmut, who lives in Irving’s Hackberry Creek neighborhood. “It appears the brass ring is out there, but we are not getting it.”
Tim Slavin, who lives in Frisco, fretted for months reading about increasing North Texas home prices while his home’s value continued to lag. He was pleased by a recent appraisal one of his neighbors got.
“The appraisal came back closer to what I bought my house for in 2007,” Slavin said. “I hope the home values continue to improve.”
Improving prices should bring more homes to the market, which will relieve the lack of inventory. The number of homes for sale in North Texas has been at a 20-year low this year.
“There are many homeowners who might have wanted to move up but could not sell their homes without taking a loss,” said David Brown, a housing analyst with Metrostudy Inc. “They are now capable of selling their existing home and purchasing a move-up home.”
