Dallas-Fort Worth Fails to Escape Housing Crisis
Sales of distressed homes -- that is, short sales, or homes sold due to foreclosure-- have grown steadily in north Texas, according to the gurus at Texas A&M University's Real Estate Center. In 2003, only 5.7 percent of homes sold through real estate agents in the north Texas multiple listing service were "distressed transactions." Now, Dallas Realtors say the real number is actually much higher.
Not all distress or short home sales are identified in the MLS, and if a real estate agent was not involved in the transaction, it will not be included in statistics. The median price of distressed homes sold in the Dallas-Fort Worth area last year was $57.20 per square foot, compared to $81.52 for non distressed houses.
Dallas broker Alicia Trevino says she thinks the numbers are much higher. The Dallas area has seen a dramatic increase in the last few months of distressed properties for sale or properties that are about to be distressed.
"We still have thousands of homes that are going to come up on the market, homes that were held in moratorium last fall because of the Robo-signing crisis," says Trevino, who retooled short sales in the venerable Park Cities area. "The existing home market is going to be hurt by the continued saturation of those distressed properties."
National figures indicate that between 36 and 47 percent of all homes sold across the U.S. were distressed properties, and some experts go as high as 50 percent, making 2010 a banner year for distressed home sales. Consumers are seeing more real estate auctions than ever before. Banks often polish up then hand over their distressed properties to auction houses for quick liquidation sales. Investors are getting great deals out there at these auctions -- some as low as 50 percent off the homes' last listing price. Still, says Trevino, she doesn't understand why sellers don't just lower home prices and sell the properties before they get to the bank.
If Dallas/Fort Worth distressed sales are at 16 percent -- or even 20 percent -- of all local real estate transactions, that is still far below the national norm. While the Dallas market is not robust, it has not suffered as much as other bubble markets, nor has it lost as much in values. In fact, one recent report by the Real Estate Center indicated home values have actually risen in Dallas 1.2 percent, even when shadowed by all the distress. Texas law limits homeowners to how much they can borrow against their home, so far fewer owners are under water with huge home equity loans. And the market is extremely segmented. Certain higher income neighborhoods saw a flurry of real estate activity in December, and local experts think the spring market will be hopping.
Trevino thinks the existing home market is still going to be hurt by the continued saturation of distressed properties, but says that shouldn't keep buyers away from the beach, so to speak. I think, she says, the next 12 months are going to be the final push. Even if you take a $100,000 bath on your home, think of it as moving equity if you can move up into a bigger home or blue chip real estate. And if interest rates start to creep higher, she thinks buyers will come out of the woodwork.
"I think we will have a great spring market," says Dallas appraiser D.W. Skelton. "The sellers have gotten more realistic and dropped prices, and I think buyers are finally ready."
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