I asked this yesterday: why is our market so darn tootin’ healthy when others are not? David Brown over at MetroStudy gave me some good answers.
First of all, Case-Shiller is so like yesterday’s news. This is one reason why I don’t like this index and warn y’all not to get your panties in a wad when it comes out. The release we get at the end of May is for Jan. Feb. March closings. Those were negotiated back in the fall of 2011. So that news, though good, is old news. The index is not really indicative of what we see happening in the spring/early summer or NOW! What we see happening is what we tell you on these here web pages: inventory is very low and homes are selling.
Atlanta? That’s an anomaly. David says builders who work in both Dallas and Atlanta say the place where Al Hill III moved continues to be very soft.
David says our market is a reflection of our economy, as most of us suspected. The Dallas economy has been right at the top in terms of job growth in the nation. New York slipped ahead of us, but Dallas and Houston have doubled our growth rate. We were late going into the downturn, early coming out. We never let our inventory out of line in a huge way. In isolated pockets, appreciation is popping up.
“The strength of our economy is what is helping us in this market,” says David, Director of the Dallas/Fort Worth Region at MetroStudy. “The key to demand is people have to have jobs to afford mortgage payments.”
I also found out why Houston and Austin/San Antonio were not on the list: Case-Shiller does not track Houston. But Huston, Austin and San Antonio are also healthy markets, David told me. For the first year since 2007 and 2008 builders are telling him they are ahead of their business plans.
Now every time we hear that rents are going up, we should probably do a little high school cheer. With rates still low and FHA loans available for as little as 3% down, those higher rents are pushing buyers to buy. In fact, David says a lot of tenants seeing their second year in a row of rent increases are saying, maybe we ought to get a 4% mortgage and buy a house. In some Class A units, those increases are exceeding 10%.
— Daily Local Real Estate Dish By Dallas Real Estate Insider — Candy Evans at CandysDirt.com