Es kommt, wie es kommen muss!

verfasst von XERXES, 16.07.2002, 10:33

By STEVE BROWN / The Dallas Morning News
Beyond their worries about sagging stock prices and corporate skullduggery, Dallas-Fort Worth homeowners have a new concern: Will the value of their houses decline?
Industry surveys warn of a"bubble" in home values over the last few months. And one of the country's largest mortgage insurers forecast that area home prices may decline.
Local experts say there are reasons to worry. Prices aren't as strong as a year ago, for one. But there is no reason yet to panic, they say.
"People are talking about it, and I've sensed more nervousness," said Dallas real estate appraiser Chuck Dannis."There is a lot of chatter, but it appears to all be media hype."


Many housing analysts scoff at the notion of a bursting home price bubble. They point out that the housing market has outshone the rest of the nation's economy - the first time that has happened in a recession.
"The housing market has never looked better," said David Lereah, chief economist for the National Association of Realtors."We don't have the excesses in the market nationwide that would cause home price appreciation to turn negative."
Mr. Dannis says Dallas-Fort Worth's housing market is a safe bet."We haven't had the kind of price increases [that would cause] the bubble to pop," he said.
But North Texas home prices have just gone through one of the biggest run-ups in history. Average preowned home prices have jumped by almost 70 percent since the early 1990s.
In 1993, The Dallas Morning News published sale prices for 18 area houses researched by the University of Texas at Dallas Bruton Real Estate Center.
The News compared how much each house sold for in 1985 and how much it sold for again during the down cycle in 1992.
This year, The News was able to track 14 of those houses, confirm that they are still there, and compare those prices with 2002 tax appraisals from the Dallas Central Appraisal District.
The News' analysis found that the average house value increased 46 percent since 1992. For one home in Cedar Hill, the price increase was almost 80 percent.
The average home price in the Dallas area is $194,800, according to the Texas A&M University Real Estate Center. This figure includes new and preowned homes.
But real estate agents and appraisers say that home price increases appear to be stalling. In June, median home resale prices in the area dropped by 1 percent, the first such decline since 1999.
"There is no question that the market is off," said Dallas appraiser D.W. Skelton, who has tracked residential values in the area for more than 20 years."Inside LBJ Freeway, the market is off about 10 to 12 percent. It may be a little higher, and it's easy to document."
Tough negotiators
Real estate agents say homeowners are often shocked to hear that their houses won't sell for what they would a year or two ago.
"I keep telling them we are not in last summer's market, and it's not like it was," said North Dallas sales agent Jennie Ling."There have already been quite a few price reductions."
"New Price" and"Reduced Price" signs are popping up in front yards all over town.
Buyers are more cautious about overpaying and have become tougher negotiators, agents say.
"Two years ago, people bought no matter what," said Scott Carlson, who sells houses in Lakewood and northeast Dallas."Now there is just not that frenzy that we saw."
The threat of a housing price bubble in cities nationwide has drawn broad media attention.
First red flag
But beyond anecdotal reports from agents and appraisers, the first red flag that local housing prices might be vulnerable came in April, when one of the country's largest mortgage insurance companies ranked Dallas-Fort Worth among the cities with the highest risk of house price declines.
San Francisco-based PMI Group included the D-FW area with Austin; San Jose, Calif.; Portland, Ore.; and Denver.
In a June update, PMI Group estimated Dallas' risk of a home price decline at about 60 percent higher than the national average.
The company, which insures thousands of home loans against default, uses the numbers to predict losses. But PMI Group also added that the chances that even high-risk cities will have a significant drop in residential values are only"moderate."
Continued low mortgage rates have helped keep prices stable, said Matt Nichols, director of investor and public relations for PMI Group. But homeowners may still be edgy.
"With falling stock markets, people look at their homes and question, what's next?" Mr. Nichols said.
North Texans are no strangers to home price declines. During the late 1980s and early 1990s, residential values in Dallas-Fort Worth plunged by a staggering 30 percent.
That drop was caused by a combination of overbuilding, speculation and a regional and national recession.
"This is nothing like the '80s because we don't have the inventory on the ground," said Ted Jones, an economist for Houston-based Stewart Title Co."You can't compare today's residential market with then."
Different times
Indeed, statistics from the late 1980s paint a dramatically different picture.
In 1989, Dallas had almost a 15-month supply of preowned homes on the market, compared with less than six months currently.
Thousands more unsold new homes and foreclosed properties added to the housing glut during the last recession. Lenders foreclosed on almost 10,000 Dallas County homes in 1989 alone. Many of those houses were then resold at slashed prices.
While home foreclosure postings are up by about 20 percent in the D-FW area this year, they are still a fraction of those late-1980s numbers. But in some Collin County neighborhoods hard hit by tech layoffs, foreclosure postings spiked by almost 80 percent in the first seven months of this year.
"All bets are off if we keep laying off people," said Mr. Dannis, the appraiser.
Employment in the Dallas-Fort Worth area has dropped by almost 30,000 jobs during the last year, with most of the cuts coming in the high-tech and telecommunications sectors.
Low interest rates
At the same time, low- and moderate-income home buyers have benefited in recent months as low interest rates made homeownership affordable to thousands of former renters. And home builders say their moderate-priced houses have the strongest sales rates.
"Our market on the lower end is absolutely incredible," said Rick Horton, a board member of Arlington-based D.R. Horton homes. He sees it as a case of divergent consumer confidence."A lot of people that make over $100,000 are more worried about their jobs than the people who make $50,000.
"Sales of our houses priced at $180,000 and under are up 35 or 40 percent," Mr. Horton said."Sales of our homes over $300,000 are down about 30 percent."
'No bargains out there'
The Dallas housing market isn't expensive compared with other U.S. cities. The median prices of homes sold in the area this year are about 15 percent below the national median. And housing costs here are almost half the level in some West and East Coast markets.
Even with the current downturn in Dallas-area home prices, real estate agents and appraisers predict that wholesale price-cutting is unlikely.
"There are no bargains out there," said Mr. Skelton, the Dallas appraiser."There are some good buys, but you won't steal any properties."
One change he has noticed is that buyers are increasingly unwilling to overlook any warts.
"They are walking away from stuff today that used to not be a big deal," Mr. Skelton said."If they are going to pay top dollar, they want the house to be perfect."
Housing - even with increased fears about a price bubble - is still perceived along with the rest of the real estate market as a better buy than most investments, analysts and agents say.
"Real estate has become a superior investment to stocks," said Mr. Lereah of the Realtors' association."Wall Street is losing a lot of money, and funds are flowing into real estate."
Nationwide, home prices have gone up by almost 8 percent this year, while securities prices have fallen to five-year-ago levels.
But the increase in housing costs during the last year has been partly offset by drops in mortgage rates.
More time at home
There is little likelihood that interest rates will go up significantly this year, but economists who track housing still worry about the possibility.
"Probably what has helped the market most in the last few months is the relatively low interest rates," Mr. Nichols said."Housing affordability is largely a function of interest rates."
Mr. Carlson said some buyers are pulling dollars out of the stock market to spend on housing."You can't leave your money in the stock market, so why not buy a big house?" he said.
That jibes with many people's thinking, housing experts say.
"Since Sept. 11, the home has become much more important to Americans," said Stewart Title's Mr. Jones."We are spending much more time there. We aren't traveling as much.
"Housing is much more important to us," he said.
With homeownership rates in America at record highs, more of the nation's wealth is in the housing market.
"Everyone's fortune isn't tied to their 401(k) but their house," Mr. Dannis said.
In fact, Americans have more than $12 trillion invested in their homes, compared with only about $3 trillion in mutual fund shares.
The slight dip in Dallas home prices may be a godsend, some market observers say.
"If it keeps going up, the bubble would pop," Mr. Skelton said."I'd rather prices decline a little bit before we get to that point."
E-mail stevebrown@dallasnews.com


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• Es kommt, wie es kommen muss! - XERXES, 16.07.2002, 10:33