The year 2007 will go down as the fifth best year for home sales in U.S. history. Not bad. Pretty amazing when you think about all the bad press the real estate industry has endured this year. Early in 2007, the news centered on falling home starts, which of course is new construction, not home sales. Builders had overbuilt, and when they put their new subdivisions on hold, the percentage drop in new home starts was huge and made for great headlines. Yes, home sales were flat or declining in many markets, but not at the dramatic pace of home starts. Recession talk started, as no home starts meant no refrigerator and floor tile sales at Home Depot. Home building has a major trickle-down affect on our economy. Then came August and the meltdown of the sub-prime lending era. Increases in interest rates were impacting adjustable rate loans, and with a lot of these loans “re-setting” in 2007 (i.e., those 3-year adjustable loans at amazingly low rates which buyers in 2004 used to purchase their homes), a bunch of homeowners began defaulting on their loans. More good TV news material. Do you know that 94% of all mortgages today are paid on time? And, 30% of all homes owned in the U.S. are owned free and clear? Needless to say, real estate is a cyclical industry just like everything else, and 2007 was a down year…but still the FIFTH best year in history for home sales.
Dallas was not immune from the slowdown in home sales. We saw an 8% decline in sales from 2006. Much of our slowdown came in the last six months, with single digit declines turning into double digit declines vs the same months of a year ago. Will this trend continue into 2008? No one knows, although it takes a little time to turn a battleship, as they say. However, when the stock market slumps, as it did in December and early January, money moves to the bond market. Higher bond prices means lower yields, which is great news for mortgage interest rates. Right now, there is plenty of mortgage money at the best rates since 2004 available to people who can pay the loan back.
Yet in today’s market, for most people (renters excepted) to buy a home, they must first sell a home. If you are not selling, you are not buying, and around and around we go. This usually results in lower sales prices, as sellers become aggressive with their need to move. Another funny thing then happens. Sellers, sensing a softness in home prices, decide NOT to sell, IF they don’t have to, waiting instead for better times. These discretionary buyers are almost always local, and when they pull in their horns, we get numbers like the ones we are now seeing.
Fortunately for Texas and Dallas in particular, we have a lot of relocating buyers, as our economy continues to grow. There are a lot of reasons for this, but our pro-business climate is the primary factor. See the Dallas Fed’s latest statistics on our local economy at http://dallasfed.org/data/hotstats/econ.html. As a result, our housing business is not in desperate straights, as can be seen by our relatively decent average sales price changes. Dallas overall had a 4% increase in average sales price in 2007. Several other major metros around the country were not so lucky. So, be nice to those new neighbors with out-of-state plates, because they are helping to support our housing industry.
Looking at the submarket analysis below, the Uptown-Downtown-Oak Lawn market was the only market of those I track in this report that showed an annual increase in sales over 2006. One percent, but in the plus column! Looking a little deeper, note that the average sales price was up smartly in all but two markets. Many of these increases are due to the sale of high-end properties in these slower selling environments. And, as I have stated previously, much of this is new construction, from North Dallas to Downtown. In fact, Uptown’s average sales price increase in December of 76% is most certainly attributed to the sale of new condos in the W, the Ritz, One Arts Plaza, the Azure and the Terraces. Soon, we will have the Stoneleigh Hotel condos, another Ritz tower, the House, the Museum Tower and another One Arts Plaza (Two Arts?) adding more fancy condo inventory to this busy submarket. Also good news is that the sale of $1 million plus condos has begun to take off, reducing what was a 5-year supply only three months ago to a 3-year supply today.
Here are the details for single family homes and condo/townhome sales in selected areas. For a more comprehensive look at any one market, give me a call. Scroll down for the “Sales by Price Category” info. DOM is short for Days on Market. Avg Price pertains to sales occurring in the period(s).
Overall Market (North Texas):
Dec 07 vs 06: Sales down 25%, avg price up 1%, DOM 84, up 9%.
YTD 07 vs 06: Sales down 8%, avg price up 4%, DOM 74, up 6%.
Uptown, Downtown and Turtle Creek (Condos and Townhomes):
Dec 07 vs 06: Sales down 10%, avg price up 76%, DOM 106, up 9%.
YTD 07 vs 06: Sales up 1%, avg price up 18%, DOM 98, up 18%.
Highland Park and University Park, Bluffview, Devonshire and Greenway Parks:
Dec 07 vs 06: Sales down 43%, avg price up 37%, DOM 86, up 28%.
YTD 07 vs 06: Sales down 8%, avg price up 13%, DOM 68, up 11%.
East Dallas (incl M’s and Lakewood):
Dec 07 vs 06: Sales down 14%, avg price up 10%, DOM 77, up 20%.
YTD 07 vs 06: Sales down 6%, avg price up 9%, DOM 64, unchanged.
North Dallas (South of LBJ):
Dec 07 vs 06: Sales down 20%, avg price up 11%, DOM 81, up 56%.
YTD 07 vs 06: Sales down 7%, avg price up 20%, DOM 71, up 11%.
Far North Dallas (incl Addison and to Park Blvd in Plano):
Dec 07 vs 06: Sales down 23%, avg price up 6%, DOM 73, up 20%.
YTD 07 vs 06: Sales down 7%, avg price down 1%, DOM 56, down 7%.
Dec 07 vs 06: Sales down 27%, avg price unchanged, DOM 76, up 17%.
YTD 07 vs 06: Sales down 1%, avg price up 5%, DOM 61, down 5%.
Northeast Dallas (Lake Highlands):
Dec 07 vs 06: Sales down 41%, avg price up 6%, DOM 52, down 24%.
YTD 07 vs 06: Sales unchanged, avg price up 9%, DOM 50, down 2%.
Dec 07 vs 06: Sales down 20%, avg price down 2%, DOM 81, up 21%.
YTD 07 vs 06: Sales down 11%, avg price up 4%, DOM 55, up 8%.
Dec 07 vs 06: Sales down 16%, avg price up 10%, DOM 99, up 14%.
YTD 07 vs 06: Sales down 1%, avg price up 4%, DOM 77, up 18%.
Dec 07 vs 06: Sales down 24%, avg price up 7%, DOM 71, up 18%.
YTD 07 vs 06: Sales down 7%, avg price up 2%, DOM 56, up 4%.
Dec 07 vs 06: Sales down 49%, avg price up 2%, DOM 76, down 3%.
YTD 07 vs 06: Sales down 4%, avg price up 7%, DOM 71, up 15%.
Here is a look at Single Family home sales by price category for YTD 2007 vs 2006:
$200-299K (16.6% of sales): down 7%, 6 months inventory
$300-399K (7.1% of sales): up 2%, 7 months inventory
$400-499K (3.1% of sales): up 3%, 9 months inventory
$500-599K (1.5% of sales): up 6%, 10 months inventory
$600-699K (1.0% of sales): up 5%, 11 months inventory
$700-799K (0.7% of sales): up 14%, 12 months inventory
$800-899K (0.4% of sales): up 2%, 13 months inventory
$900-999K (0.3% of sales): up 8%, 13 months inventory
$1MM and up (1.1% of sales): up 16%, 16 months inventory
Here is a look at Condos and Townhomes sales by price category for YTD 2007 vs 2006.
$200-299K (14.8% of sales): 829 units vs 659 units year ago, 10 months inventory
$300-399K (7.8% of sales): 436 units vs 357 units year ago, 12 months
$400-499K (2.6% of sales): 145 units vs 163 units year ago, 16 months
$500-599K (1.4% of sales): 81 units vs 77 units year ago, 24 months
$600-699K (0.7% of sales): 37 units vs 33 units year ago, 23 months
$700-799K (0.4% of sales): 20 units vs 22 units year ago, 29 months
$800-899K (0.2% of sales): 9 units vs 6 units year ago, 56 months
$900-999K (0.2% of sales): 13 units vs 7 year ago, 25 months
$1MM + (0.7% of sales): 39 units vs 18 year ago, 34 months
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Bob & Knoxie Edmonson
Allie Beth Allman & Assoc.
Dallas TX Homes for Sale, Condos and Real Estate
Highland Park Real Estate, University Park Real Estate,
Uptown Dallas Real Estate, M-Streets Real Estate