D-FW home price growth trailed the nation in the fourth quarter

D-FW home price growth trailed the nation in the fourth quarter

Dallas-Fort Worth home price gains were slightly below the nationwide average in the latest comparison.

D-FW home prices rose 3.6 percent in the fourth quarter of 2018 from a year earlier compared with a nationwide 4 percent increase, according to the National Association of Realtors.

While home appreciation across the country has cooled, more than a dozen U.S. metro areas the Realtors group tracked had double-digit gains in the final three months of 2018.

“Home prices continued to rise in the vast majority of markets but with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace,” Realtors’ chief economist Lawrence Yun said in the closely-watched report. “Housing affordability will be the key to sustained healthy growth in the housing market in the upcoming years.”

The largest fourth quarter home price gains were in Cumberland, MD (up 29 percent) and Boise, Idaho (up 14.3 percent.)

Home prices fell year-over-year in 14 metro areas, with the worst declines in Decatur, Ill. (-10.7 percent) and Elmira, N.Y. (-8.3 percent.)

Among Texas’ big cities, the largest price growth was in Austin where median single-family home prices were 5.9 percent higher than fourth quarter 2017. Austin also had the highest prices with a median of $310,400 at the end of 2018.

D-FW’s median home price of $254,900 is still just a bit below the nationwide $257,600 price, according to the Realtors.

Nationwide home sales by real estate agents fell 7.4 percent in the fourth quarter compared with a year earlier. The biggest drop was in the West where home sales were 13.9 percent below a year ago.

The slowdown in home sales and price increases in the second half of 2018 is continuing into early 2019.

The moderation in the U.S. home market comes after several years of booming sales and huge price gains.

Article by Steve Brown for the Dallas Morning News.

Related article: Buying a Home This Year? Here’s What to Watch.

 

 

 

Homeowners and Appraisers See Price Increases

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5% (or more) over the next twelve months. One major challenge in such a market is the bank appraisal.

Homeowners are seeing prices increase

When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the same neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

March 2015 marked the first month of a three-year gap between what an appraiser and a homeowner believed a home was worth. That gap widened to 2.65% in September 2015 and had consistently hovered between 1.0% and 2.0% through November 2017.

The chart below illustrates the changes in home price estimates over the last three years:

In the latest release, the disparity was the narrowest it has been since March 2015. The gap between appraisers and homeowners was only -0.33%. This is important for homeowners to note as even a .33% difference in appraisal could equate to thousands of dollars that a buyer or seller has to come up with at closing (depending on the price of the home).

Bill Banfield, Executive VP of Capital Markets at Quicken Loans urges homeowners to find out how their local markets have been impacted by supply and demand: 

“The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process. The Home Price Perception Index is a way to illustrate the differences of opinion. These differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home.”

Bottom Line

Every house on the market must be sold twice; once to a prospective buyer and then again to the bank (through the bank’s appraisal). With escalating prices, the second sale may be even more difficult than the first. If you are planning on entering the housing market this year, contact the Indigo Skye Group to discuss this and any other obstacles that may arise.

If you are thinking about selling your home, contact The Indigo Skye Group. Understand your options and to find out the true value of your home. To help prepare you, download our FREE printable guide  “2o Tips for Preparing Your House for Sale.”

See more Real Estate market news here.

Home Prices Up 6.54% Across the Country! [INFOGRAPHIC]

 

Some Highlights:

  • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
  • In the report, home prices are compared both regionally and by state.
  • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!

Home Prices Up 7% from Last Year

According to CoreLogic’s latest Home Price Indexnational home prices have appreciated by 7.0% from October 2016 to October 2017. This marks the second month in a row with a 7.0% year-over-year increase.

A lack of supply of homes for sale has led to upward pressure on home prices across the country, especially in areas where both existing and new home inventory have not kept up with buyer demand.

CoreLogic’s Chief Economist Frank Nothaft elaborated on the significance of such a large year-over-year gain, 

“Single-family residential sales and prices continued to heat up in October. On a year-over-year basis, home prices grew in excess of 6 percent for four consecutive months ending in October, the longest such streak since June 2014.

This escalation in home prices reflects both the acute lack of supply and the strengthening economy.”

This is great news for homeowners who have gained over $13,000 in equity in their home over the last year! Those homeowners who had been on the fence as to whether or not to sell will be pleasantly surprised to find out that they now have an even larger profit to help cover a down payment on their dream home.

CoreLogic’s President & CEO Frank Martell had this to say,

“The acceleration in home prices is good news for both homeowners and the economy because it leads to higher home equity balances that support consumer spending and is a cushion against mortgage risk. However, for entry-level renters and first-time homebuyers, it leads to tougher affordability challenges.”

Any time the price of a home goes up there will likely be concern about the affordability of that home, but there is good news. Mortgage interest rates remain at historic lows, allowing buyers to enter the housing market and lock in a low monthly housing cost.

Rents Are Also Rising

The report went on to mention that over the same 12-month period, median rental prices for a single-family home have also risen by 4.2%.

With rents and home prices rising at the same time, first-time buyers may find the task of saving for a down payment a little daunting. Low down payment programs are available and have been a very popular option for first-time buyers. The median down payment for first-time buyers in 2017 was only 5%! 

Bottom Line

If you are looking to enter the housing market, as either a buyer or a seller, let’s get together to go over exactly what’s going on in our neighborhood and discuss your options!