The new year started with a bang in some markets and slumped badly in some markets. While sales were down 4% for the entire North Texas market, the average sales price was up 4%, clearly due to sales of higher priced homes ($600K and up). Without the continued support of buyers for expensive homes, the average sales price change may well have been negative. Indeed, the median price of homes sold in January versus January a year ago was down 1% overall. Much of the slow sales activity was concentrated in the $100,000-$199,000 price range, which makes up 46% of total sales volume in North Texas. When this huge chunk of the market is not selling well, it impacts the overall picture significantly. This is why it is difficult to broad-brush the Dallas market and claim times are bad (or good!).
Upon analyzing the few submarkets I track, it is also apparent that, for the first month of the year anyway, home sales priced in the $300’s, $400’s and $500’s were also very soft. This may account for sales being off significantly in the Lake Highlands area, Plano, and Frisco markets. On the other hand, it was good to see Southlake bouncing back with positive sales and increase in average sales price after several months of slower activity in 2006. And, what happened in Northwest Dallas, where sales were up 24% in January vs January 06? Well, as I mention this time of year every year, one month does not make a trend, and there could have been some spillover from year end closing activity. We will have a better handle on trends later this spring. My office saw a 15% increase in closings in January over year ago, 68 sales totaling $33 million in volume, an encouraging pace going into the spring market.
However, we continue to read of the heavy foreclosure volume in Dallas. Some reports have Texas leading the country in foreclosures. From what we hear, much of this is due to sub-prime loans going bad, as homeowners who may have had questionable borrowing ability in the first place bought more than they could afford, especially in the environment of rising interest rates for adjustable rate loans. It doesn’t take a large move in interest rates on an adjustable loan to slam homeowners on very tight budgets. And, much of this business was concentrated in the lower-priced home bracket, again an indicator that our market is very stratified between the the large number of middle income families in $100K-$199K homes, and the more affluent owners in pricier homes with more financing options open to them.
The outlook for 2007 home sales is generally favorable, especially in the closer-in (I include Plano and some of Frisco) resale market. The tract-home builders of new construction in the perimeter suburb subdivisions are working hard to sell existing inventory, and this is where price weakness, if any, would likely surface. The economy is doing well, the job market is healthy, and the fixed long term mortgage rates are steady, around 6%, where they were a year ago. The Dallas Fed has a nice site for viewing Dallas economic activity: http://dallasfed.org/data/hotstats/index.html.
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):
Jan 07 vs 06: Sales down 4%, avg price up 4%, DOM 81, up 4%.
YTD 07 vs 06: Sales down 4%, avg price up 4%, DOM 81, up 4%.
Uptown, Downtown and Turtle Creek (Condos and Townhomes):
Jan 07 vs 06: Sales up 1%, avg price up 10%, DOM 81, down 13%.
YTD 07 vs 06: Sales up 1%, avg price up 10%, DOM 81, down 13%.
Highland Park and University Park, Devonshire and Greenway Parks:
Jan 07 vs 06: Sales unchanged, avg price up 30%, DOM 69, up 13%.
YTD 07 vs 06: Sales unchanged, avg price up 30%, DOM 69, up 13%.
East Dallas (incl M’s and Lakewood):
Jan 07 vs 06: Sales down 7%, avg price up 3%, DOM 78, down 1%.
YTD 07 vs 06: Sales down 7%, avg price up 3%, DOM 78, down 1%.
North Dallas (South of LBJ):
Jan 07 vs 06: Sales up 3%, avg price up 19%, DOM 75, down 1%.
YTD 07 vs 06: Sales up 3%, avg price up 19%, DOM 75, down 1%.
Far North Dallas (incl Addison and to Park Blvd in Plano):
Jan 07 vs 06: Sales up 6%, avg price down 1%, DOM 61, down 37%.
YTD 07 vs 06: Sales up 6%, avg price down 1%, DOM 61, down 37%.
Northwest Dallas:
Jan 07 vs 06: Sales up 24%, avg price unchanged, DOM 79, down 5%.
YTD 07 vs 06: Sales up 24%, avg price unchanged, DOM 79, down 5%.
Northeast Dallas (incl Lake Highlands):
Jan 07 vs 06: Sales down 26%, avg price down 3%, DOM 57, down 16%.
YTD 07 vs 06: Sales down 26%, avg price down 3%, DOM 57, down 16%.
Plano:
Jan 07 vs 06: Sales down 17%, avg price up 1%, DOM 57, down 16%.
YTD 07 vs 06: Sales down 17%, avg price up 1%, DOM 57, down 16%.
Frisco:
Jan 07 vs 06: Sales down 26%, avg price up 8%, DOM 81, up 19%.
YTD 07 vs 06: Sales down 26%, avg price up 8%, DOM 81, up 19%.
Richardson:
Jan 07 vs 06: Sales down 4%, avg price up 5%, DOM 72, up 9%.
YTD 07 vs 06: Sales down 4%, avg price up 5%, DOM 72, up 9%.
Southlake:
Jan 07 vs 06: Sales up 3%, avg price up 2%, DOM 91, up 11%.
YTD 07 vs 06: Sales up 3%, avg price up 2%, DOM 91, up 11%.
Here is a look at Single Family home sales by price category for YTD 2007 vs 2006:
$200-299K (14.3% of sales): up 9%, 10 months inventory
$300-399K (5.7% of sales): down 7%, 12 months inventory
$400-499K (2.4% of sales): down 15%, 15 months inventory
$500-599K (1.3% of sales): down 3%, 16 months inventory
$600-699K (1.0% of sales): up 60%, 14 months inventory
$700-799K (0.5% of sales): up 50%, 21 months inventory
$800-899K (0.3% of sales): up 63%, 26 months inventory
$900-999K (0.4% of sales): up 73%, 10 months inventory
$1MM and up (1.0% of sales): up 11%, 21 months inventory
Here is a look at Condos and Townhomes sales by price category for YTD 2007 vs 2006. Some builders do not report their sales in MLS–this list represents MLS reported sales only (as does this entire report).
$200-299K (15.0% of sales): 46 units vs 31 units year ago, 13 months inventory
$300-399K (5.5% of sales): 17 units vs 22 units year ago, 22 months
$400-499K (3.6% of sales): 11 units vs 8 units year ago, 8 months
$500-599K (0.7% of sales): 2 units vs 1 year ago, 54 months
$600-699K (0.7% of sales): 2 units vs 2 year ago, 35 months
$700-799K (0.7% of sales): 2 units vs 2 year ago, 23 months
$800-899K (0.0% of sales): 0 units vs 0 year ago, 21 on the market
$900-999K (0.3% of sales): 1 unit vs 0 year ago, 10 months
$1MM + (0.3% of sales): 1 unit vs 0 year ago, 91 months
Bob and Knoxie Edmonson
Allie Beth Allman & Associates
214-563-8540
Oh, by the way, if you know someone who is planning to buy or sell a home and would appreciate the service I provide, please send me their name and number, and I will gladly follow up with them!