The real estate market in Texas is not immune to the drops in home values. True, we haven’t been affected in Texas like California, Florida or Las Vegas — but all over Texas, people know that their home isn’t worth as much now as it was 2 or 3 years ago.
However, there is a bright side to the down market — home values are affordable and first time home buyers who previously couldn’t buy a home because they couldn’t afford it, now can buy a home.
In Dallas, for example – home values are back at 1990′s levels.
According to the Dallas News:
Dallas-Fort Worth is among many markets where home prices are back to 1990s levels in real terms.
Looking at local sales numbers, median prices in North Texas peaked in June 2007 at $158,000. But by January of this year, the median price was only $129,000, a decline of 18 percent based on houses sold by real estate agents through the Multiple Listing Service.
Without adjusting for inflation, median home sales prices in the first quarter here were at their lowest levels since early 2002, according to reports from the National Association of Realtors.
“Almost all of the value increases of the last four or five years have basically been lost,” Jim Gaines, an economist for the Real Estate Center at Texas A&M University.
Since the D-FW area didn’t participate early in the nationwide home prices boom, recent declines have wiped out a big chunk of the value gains the area saw in the early and mid-2000s.
“This year is still probably going to be double-digit declines in the national home price,” Gaines said. “Housing will become very, very affordable for those who can qualify for a mortgage.”
Since 2005, nationwide median home prices have dropped almost 30 percent when adjusted for inflation.
The nationwide drop in prices has had a chilling effect in many markets.
“Homeowners who are not under pressure to sell are usually unwilling to cut their prices drastically,” the Harvard report says. “Many would-be sellers therefore prefer to stay put unless compelled to move.
“Still, the longer that foreclosures remain a problem, the greater the pressure on sellers to drop their prices.”
Researchers also found that lower-income neighborhoods have been hardest hit by price declines around the country. Many of these homeowners relied on risky subprime loans, which have resulted in higher-than-average home foreclosures.
