REAL ESTATE REPORT

D-FW home market gets groove back

STEVE BROWN

stevebrown@dallasnews.com  

This spring will no doubt be remembered for its pounding Dallas hailstorms.

And who could forget the devastating wildfires in Colorado that scorched thousands of acres.

But will anyone recall that this was the season when the housing market finally got its mojo back?

For the last few years, prognosticators have promised that the home market in North Texas and across the country would soon turn the corner. But “soon” always turned out to mean next year.

Well, next year is finally here. And the home market, the hardest-hit sector of our local economy during the recession, has indeed begun to rebound.

Thursday’s news was the latest and best in a long string of positive home sector reports.

Home starts jumped almost 25 percent in the last year.

And demand for apartments is outpacing construction by a rate of 5-to-1.

May’s pre-owned home report for North Texas saw a 22 percent hike in sales from a year ago.

And median home sales prices were up 9 percent.

Outstripping supply

Real estate agents say that demand for homes is outstripping the supply of houses on the market in many neighborhoods.

And if you’re hunting for a new house that’s ready to move into — well, good luck with that.

There are fewer than 2,700 new homes available in a metro area with more than 6.5 million people. If you want a new house, chances are you’ll have to wait for it to be built.

So why is this happening now?

For one thing, consumers — at least in the Dallas-Fort Worth area — are feeling a lot better about the economy.

“The U.S. economic recovery remains fragile, but locally, buyers and renters appear to be a little more confident,” said D’Ann Petersen, an economist with the Federal Reserve Bank of Dallas. “Housing indicators suggest that demand, both for apartments and single-family homes, continues to rise consistently.

“So far, the data show that overall, the housing sector is finally in a solid upswing,” she said. “Population growth and job growth are spurring demand.”

Employment growth in the last year has added about 53,000 jobs in D-FW, one of the best gains in the country.

And just the promise of employment is bringing thousands of transplants to the area, including folks hunting work from California and the Midwest.

On the rebound

North Texas tops the country in population growth, and that’s expected to continue for years. By 2025 — just 13 years from now — D-FW population will surpass 9 million, some forecasts say.

And every one of those additional people is going to need someplace to live.

That’s why the expected population gains are as important as the job market to explain the sharp rebound in housing demand here.

“I believe it’s the combination of the two,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “You can’t really have true growth — the kind you want to have — without both parts.”

For the near term, this means demand for homes and apartments in North Texas could rise much faster than supply.

Consumers have already gotten the message, sometimes finding themselves in bidding wars for homes.

“Tight inventories and low interest rates are also likely spurring potential single-family homebuyers to act now,” Petersen said.