The Current Pulse of the North Texas Real Estate Market
The Real Estate market is forecast to be very strong in 2013. That may be true however what are the current conditions? If you are looking to sell your current home or buy a new home, why should you do it now? It is important to keep a pulse on what is occurring right now. In doing so you can extrapolate what might happen in the future barring major economic changes. However in this day and age anything is possible. Let’s take a peek at some of the current market indicators to determine what is happening in the North Texas Real Estate market.
Median home prices:
In the North Texas area we are fortunate to see a slow yet steady increase in home prices. From last year at this time prices rose 8.8%. The United States average is 8.5%. However if you look at where we stand from three years ago 2009 our home prices rose 10% compared to the U.S. average of 3%. Rising prices are the start of a strong market. Inventory (listings) is drying up in Tarrant, Dallas and the surrounding counties helping to drive up value. However the rise has been tempered by the growth of new construction, I will get to that later, however even so home prices are rising.
Local economic factors:
The current unemployment rate has decreased from 7.8% in 2011 to 6.3% in 2012. That is a 1.6% increase in jobs. What are not factored in are those who do not have a job and are off unemployment benefits. Those folks are not counted and unfortunately in today’s economy it is a reality. Nevertheless 1.6% growth is nothing to sneeze at. 20.6% of the new jobs are in the trade/transportation/utilities industries, 15.7% from the business community and 12.6% from the health industry. These are the major growth areas. This would indicate a high demand for lower and mid-priced homes and a slightly less demand for higher priced homes.
New home construction:
In North Texas 16,307 building permits for new home construction were issued. This is an 18% increase from last year. Builders are confident Buyers are out and about and that is true. Not all will desire brand new homes however. Like every choice there are positives and negatives to buying new as compared to buying existing homes. For instance new homes with all the latest amenities however with an older home you can determine how the foundation has performed to the different climate conditions in north Texas.
Sub-prime loans are defined as a type of loan offered at a rate above prime to individuals who do not qualify for prime rate loans. Quite often, sub-prime borrowers are often turned away from traditional lenders because of their low credit ratings or other factors suggest they may be a reasonable chance of defaulting on the debt repayment. Foreclosures on those types of loans dropped from 7.24% in 2011 to 6.88%. The 90 day delinquency is at 10.4%. This means the foreclosure rate for sub-prime loans should stay around 6.88%. Foreclosures on prime loans increased from 1.5% to 1.11% however the 90 day delinquency is only at 3.55%. This means the prime lending foreclosures should decrease this year. This is important because fewer foreclosures mean a better sales price for Sellers and this is a good thing.
This factor shows what the mortgage rate is compared to actual income. Basically are the people purchasing these homes able to afford them? This is an important factor because it can forecast the number of future foreclosures as well as future short sells. North Texas is at a rate of 8.1%. This is very good. This number has stayed consistent from last year.
North Texas has been fortunate, we were not hit nearly as hard with this economic down turn as compared with the rest of the country. Why is this? Partially from our vast reserves of oil and natural gas and partially from the pro-business laws in place, this is the reason so many are moving to our area from out of state. It is particularly interesting a majority of these relocations are coming from states like California which is not known for their business friendly attitudes. North Texas is the place to be for Real Estate. See ya down the road.