It’s no secret that the national housing market has seen its share of troubles over the last few years. With plummeting home sales, historically low mortgage rates and a steep decrease in the number of new homes being built, Texas was no exception.
Going into 2012, however, there are some indicators that things could be turning around – especially for the local area.
“The North Texas market has experienced six straight months of increased sales,” says Bill Head, director of communication for MetroTex Association of Realtors. “Projections indicate that DFW will be one of the ten top markets for home price gains in 2012.”
In fact, according to North Texas Real Estate Information Systems MLS Area Housing Activity Report, in December 2011, the Addison/North Dallas Corridor area saw 825 home sales, up 4 percent from December 2010. The average price, $330,200, was up 1 percent.
“The market was off just a little in 2011 compared to 2010,” says local real estate agent Lorrie Semler, “but the strong fourth quarter last year portends well for 2012. The momentum seems to be carrying us into a modest rebound, at least here in the Addison and North Dallas Corridor area.”
Brett Caldwell, team leader at Keller Williams in North Dallas, says that the D/FW Metroplex has been outperforming most of the major markets in the country for the last couple of years, and that the North Dallas Corridor has even fared the best out of the Metroplex.
“We have seen very little price depreciation with continual increase in units sold of the past few years,” he says. “While our market did follow trend nationally into a buyer’s market we clearly see the pendulum has swung towards a seller’s market in the North Dallas areas.”
In 2011, the zip codes in the Addison/North Dallas Corridor area (75001, 75006, 75240, 75243, 75244, 75248 and 75254), saw total number of home sales rise from 1,388 to 1,505, a 7 percent increase. Seeing the biggest increases were 75243, which jumped from 280 sales to 358 – an increase of 26 percent, and 75006, which jumped from 317 to 374 sales, an 18 percent jump.
All zip codes combined, Addison/North Dallas comes in with a 2010-2011 price per square foot average of $105, just two dollars shy of the county average.
Even more of a positive indicator of an improved market is the local average home sales prices. Over the last two years, all but two zip codes in the Addison/North Dallas Corridor boasted an average home sale price higher than the averages for all of Dallas County and the state of Texas.
In fact, the Texas average home sale price over the last two years – $193,900 – is hugely lower than many of those in the Addison area. Zip code 75254 boasts an average 2010-2011 average sale price of $501,137, and 75248’s average was $324,388.
The only local zip code that came in lower than the state’s average was 75006, with an average home sale price of $145,898. As a whole, the Addison area averaged a home sale price of $256,137 for 2010-2011, more than $62,000 higher than the state average.
According to BankRate.com, as of January 22, the national average 30-year mortgage rate was 3.95 percent. “To be able to lock in that type of rate over 30 years is unprecedented,” says Jason O’Quinn, president of Petra Lending Group, located in Addison.
O’Quinn says that could be a great indicator of increased home sales, especially from those who are currently renting.
“The ability to borrow money this ‘cheap’ is pushing some renters off the fence,” O’Quinn says, “and has forced them to consider purchasing, especially as rental rates increase.”
Bill Head, director of communication for MetroTexas Association of Realtors, says these low rates, coupled with the Addison/North Dallas Corridor market numbers, might indicate good things to come. “Historically low mortgage rates and a stronger local economy combine to form an attractive purchase environment,” Head says.
O’Quinn shared similar sentiments, noting that Addison/North Dallas Corridor’s proximity to the Dallas North Tollway may work in its favor in regards to the real estate market.
“This area continues to be desirable because of its close proximity to the North Dallas business centers,” O’Quinn says. “Decision makers for companies generally like to live close to their office.”
But we can’t jump to conclusions too soon; O’Quinn says there might be changes in store for mortgage rates next year, with the upcoming election looming.
“It is important to note that the federal government has continued to enact monetary policies that kept mortgage rates low in an effort to spur borrowing,” O’Quinn says. “If we have a new president in 2012, I will be curious to see if tactics change.”
As of now, however, numbers are working in the area’s favor.
“We have seen some real positive signs occurring over the last 12 months, and expect a continuation of this over the coming year,” O’Quinn says. “Long-term mortgage interest rates are still hovering around historical lows.
Low mortgage rates, dropping average prices per square foot and improved numbers in total home sales seem to be signs of good things to come. “The market is definitely picking up,” says Lorrie Semler, local real estate agent for Keller Williams. “The fourth quarter was busy, and that’s continuing into 2012.”
Caldwell predicts that, if the market stays constant, there will be a gradual, continual improvement in units sold with modest price appreciation.
“The perfect conditions exist to buy a house with all-time low interest rates and the most affordability to the American Dream,” he says. “We have more buyers and investors currently than there are good properties to purchase. If this condition stays at a seller’s market we will see home values continue to rise over the next few years.”
Head also noted that supply and demand for local housing seems to be shaking out. “Sellers are seeing multiple-offer situations,” Head says, “and supply-demand trends are becoming more balanced.”
But all positive indicators aside, Head says we’ll just have to wait and see. “There’s no way to be certain what 2012 will bring. Ultimately, the upcoming spring market should be a major tell about the future direction of housing.”
–By Aly J. Yale