By Steve Brown
Where have all the “price reduced” signs gone?
You know what I’m talking about, those little hanging signs that real estate agents have been using the last few years to let buyers know the seller was eager to make a deal.
An even worst sign was the dreaded “make offer” banner, which meant that the seller was desperate enough to look at any contract that came through the front door.
All of that is soooooo 2009.
These days the most common signs in the Dallas-area home buying market say “sold” or “pending.”
With preowned home sales up about 20 percent year-over-year, prices are jumping in many neighborhoods and buyers are fighting over choice listings.
The hike in local home prices – perhaps as much as a double-digit increases this year – has caught even the experts by surprise.
“North Texas home prices have really taken off,” said D’Ann Petersen, a business economist with the Federal Reserve Bank of Dallas. “The strong increase in prices in recent months feels like somewhat of a shock given that the local housing market was in the doldrums for so long.
“The housing recovery was just getting started in early 2012 and most forecasts were optimistic but cautious,” Petersen said. “However, sales in 2012 proved to be stronger than expected, and at the same time total listings declined.”
Unless the number of homes on the market in North Texas grows this year, it will be tough to get another 20 percent home sales increase. But you can count on higher prices if the preowned home market remains tight.
“North Texas housing prices may continue to increase in 2013. How fast depends on whether inventories rise: from both new construction and existing-home listings,” Petersen said.
She’s anticipating a rise in homes on the market this spring, which would let some of the steam out of price increases.
But I’m not so sure that will happen. Folks who have refinanced at record low rates aren’t going to be eager to move.
And even motivated sellers will be shocked when they see how few options there are in many neighborhoods for them to purchase after their existing home sells.
If the inventory doesn’t grow, analysts agree that local home costs will rise significantly.