We Have Liftoff. DFW Home Sales Up 27% in August.

By Troy Corman, www.t2realestate.com

Has the DFW residential real estate market turned the corner? According to The Dallas Morning News and data from the Texas ATM Real Estate Center, north Texas home sales exploded in August, up 27% over August 2010.

July also recorded double-digit Dallas home sales increases as sales of townhomes and condominium homes soared upward 34% from a year earlier.

Low mortgage rates and good home deals seem to be finally motivating qualified home buyers off the fence. Also, a tight rental market and rapidly rising rents are making home ownership more attractive from a financial perspective.

Texas ATM Real Estate Center's Jim Gaines said, "This home rebound is a lot better than we thought it would be. If this pattern continues, we could be up 10% or more for the year."

Carrollton-Farmers Branch homes sold were up 60%. Northeast Dallas homes were up 59%, and Park Cities home sales were up 49%.

DFW area home prices are flat for the year but were up 2% in August.

Also, the inventory of homes for sale was 17% below last year, with just over a 7 month supply. Six months of inventory is considered a balanced, healthy market.
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Texas ATM Economist Mark Dotzour on his Texas Real Estate Forecast.

Texas population expected to double by year 2030 (another 30,000,000 people)

By Troy Corman, www.t2realestate.com

I had the pleasure of hearing Texas ATM Real Estate Center economist Dr. Mark Dotzour speak about the Texas real estate market at a live event last night sponsored by the Texas real estate investor group, Lifestyles Unlimited. I'll generally paraphrase and try to hit the highlights of what Dr. Dotzour sees for the Texas economy, and in particular, the Texas real estate markets going forward.

In all, Dr. Dotzour was very bullish on Texas and our real estate market. One of the most vivid examples is this - imagine Texas having another Dallas-Fort Worth metro-plex, another Houston, another Austin, another San Antonio and another Corpus Christi by the year 2030 - about 18 years from right now! If the demographic experts are correct, expect the Texas population to increase by 30,000,000 by 2030. That's a lot of folks that are going to need roofs over their heads.

That's one of the reasons Dr. Dotzour thinks we're going to have a lot of pent-up demand for home ownership as soon as Washington gets their act together. In fact, he thinks the economy is "spring-loaded", and as soon as Washington takes the right steps, our economic recovery could really rocket to the upside.

Dr. Dotzour also touched on inflation quite a bit. He thinks the gold bugs are continuing to buy gold because they believe Washington and Ben Bernanke will continue to print money. That's why he likes rental real estate as a hedge, because regardless of the value of the dollar, folks will always need a place to live. If the dollar is greatly devalued, it takes more dollars to buy or rent real estate, yet landlords who already own real estate have locked-in mortgages at lower values.

Gold is much more volatile than real estate because it's a speculative commodity. As soon as correct policies begin coming out of Washington, gold prices could drop like a rock - just like they did in the 1980s when Paul Volker raised interest rates.

The commercial real estate, and to some extent, the residential real estate market is still clogged up with bad loans. The problem is the FDIC doesn't have the money to rescue banks on a wholesale level, so banks are slow to foreclose, because once they foreclose, they're required to have more capital to offset the bad loan. Many are still in the extend-and-pretend phase, and this is choking off commercial real estate lending.

There's been talk of Fannie Mae and Freddie Mac buying up bad mortgages from banks and taking over homes. It's not clear whether the government wants to be America's landlord or what their thinking is on that idea. It's also quite clear that the government has done little to accommodate real estate investors. A couple of simple solutions offered by Dr. Dotzour to clean up the real estate mess: 1) Allow investors to double the velocity of appreciation to 15 years instead of 27.5 years and; 2) Allow investors who buy and hold real estate for 5 years to pay no capital gains taxes on profits. This drew quite a bit of applause from the crowd.

Finally, Dr. Dotzour is bullish on Texas and thinks there's a window of opportunity to buy now and be ahead of the curve when the real estate markets get moving again. In fact, he said the state bird of Texas, is the construction crane!
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Dallas Real Estate Up 33% In Last 10 Years.

10-year chart of Dow Jones Industrial Average - click chart to enlarge.

By Troy Corman, www.t2realestate.com

Despite the latest housing slump, Dallas real estate returns over the last 10 years have crushed the Dow Jones stock market returns during the same time frame.

According to the Texas ATM Real Estate Center, the average Dallas home price in July 2010 was $237,000. The $237,000 number is $59,000 more than the average Dallas home price 10 years ago which was recorded at $178,000. This represents a 33% return over 10 years, or a 3.3% annualized return.

In contrast, the Dow Jones Industrial Average has actually lost ground in the same 10-year period. According to Yahoo Finance, on July 3, 2010, the Dow sat at 10,635. More than 10 years later, the Dow has slumped to 10,303.

As Dallas and all of the major Texas cities, including Houston, Austin and San Antonio, undergo dramatic population growth in the next 20 years, the long-term prospects of Dallas real estate are quite promising - particularly areas close to downtown Dallas. Real estate close to the heart of the city will become much more valuable as our population and traffic growth double in size.

With mortgage rates at all-time lows, and home prices at reasonable levels, renting and stuffing money into a 401K that you can't access for decades may be an inefficient strategy. In addition, home ownership allows you to deduct your mortgage interest and property taxes from your taxable income, while rental real estate adds additional deductions including insurance and depreciation. The stock market? Not so much.

To view more Dallas real estate statistics or Texas real estate statistics, visit the Texas ATM Real Estate Center.

Texas Home Sales Volume And Prices Up in 2009-Q4

February 1, 2010 - Austin.
Release From Texas Association of Realtors Summarized by Troy Corman, t2realestate.com

The Texas A&M University Real Estate Center has released data that show that Texas' sales volume increased 16% from the fourth quarter of 2008. The average home price also jumped 2.35% to $143,400 from $140,100 in the previous year.

Jim Gaines, Ph.D., and economist with the Texas A&M Real Estate Center said, "while figures throughout the first quarter of 2009 were positive compared to 2008, they were particularly positive in October and November, which makes it clear that the first-time homebuyer tax credit is having an impact in Texas. The increase in median price also stands out, particularly compared to national figures, which are down substantially."

Texas also enjoyed a decrease in the number of homes of inventory on the market. It dropped from a 6.6 months' supply to 6.5 months. The Texas A&M Real Estate Center typically uses 6.5 months' supply as a target point for a healthy, balanced market.

To view the Texas Quarterly Housing Report for 2009, visit texasrealestate.com.