Recent Big D article on appreciation in the Metroplex (Dallas: low income, fit in)

[socketz]

They finally put the chart online:

http://www.dmagazine.com/Media/Media...HomePrices.pdf

This is an excellent chart.

As you can see, appreciation in the popular northern suburbs is not as dismal of a situation as some people here portray.

10% in Mckinney
6-8% in Frisco/Allen
14-17% in Prosper

Then, look at Plano - 2%. However, homes sell quickly there and if you read the actual article, Plano is picked as a hot spot because homes do sell quickly. Just at the top of the appreciation curve.

Here's the article:

http://www.dmagazine.com/ME2/Audienc...7283472C772CBB

Also, Big D is very pro-dallas anti Collin County, so if there is skew due to favoritism, it would not be in favor of the suburbs.

[shannon94]

That's 2006 though............I find most of the numbers not to be the case anymore. Not picking on your area either...alot of the areas have changed since then.

[socketz]

Agree. Just look how much things changed from 05 to 06.

This is just a benchmark anyway. Once you visit a bunch of areas, you'll know which one is best for you personally.

Also, this report tends to group an entire area together. Massive towns like Plano/Mckinney/Garland, etc tend to suffer from these types of lump statistics. In reality, if you live in say West Plano, the low income areas of East Plano have almost 0 affect on your schools, nieghborhood, etc.

Also, in say Mckinney, the median family income in Stonebridge is about 40k more that the rest of Mckinney. You wont see those differences studying stats such as this...again, these present nothing more than a benchmark on which you begin the rest of your eval.

[shaxs]

Keller looks like it is doing well in both those articles you posted. Less than 2 months before I come out there- yay!

[lh_newbie]

One other thing to keep in mind that does skew statistics taken in this fashion:

These statistics are for median home price. This does NOT compare existing homes - but also includes new homes. McKinney is an area with lots of new homes. The new homes being put in that area are larger and more expensive, so the statistic is of course going to be skewed on the high side.

That being said, "East Dallas" is an area going through a rash of teardowns. People tear down inexpensive (relatively speaking) and put up expensive homes, so this does skew statistics a bit also - although not nearly to the extent that turning a lot into a luxury home would.

Plano has a more stable home base - it's basically built out and is new enough to not have the teardowns - so it is probably the most accurate numbers on the whole chart. Frisco, Allen, Murphy, Wylie, McKinney and Prosper all benefit from the influx of new homes; East Dallas, NE Dallas and N Dallas skew a lesser amount due to teardowns.

As is the case with most statistics, don't take them as a fact - stats can be twisted to fit into any viewpoint. To make an apples-to-apples comparison, one would need to normalize values and compare same-home value fluctuations - obviously a more difficult task. I feel this article tries to paint Dallas, in general, in a better light than the actual market would say. The Dallas market is good - but not THIS good.

[socketz]

Good post lh_newbie.

Areas that are building and/or tearing down then rebuilding do reflect a different dynamic than a pure buy/sell of resales.

With new homes, you can expect price increases (to some point) as new phases/communities are released. Then, once there is no new construction, the appreciation curve would then tend to flatten out (like Plano).

This also explains the cycles that each community goes through:

1. Start cheap building small low cost family housing around local ammenities. This will attract first time buyers and people that expect a commute in order to afford a home.

2. This then migrates to mid range housing as the infrastructure builds in the new community. The homes are now bigger, but typically reflect mid-range pricing/builders because the area has not gained enough traction yet for the tier 1 luxury production builders.

3. Now the word is out and the area is developing nicely, property is more expensive so the yield of return needs to be higher to sustain profit margins. More expensive homes are built and community ammenties are increased to attract higher family incomes. At this point, the better retailers start moving in, new higher end places to eat, etc.

4. After this point, backfill into a smaller remaining areas begins, zero lot lines, condos, etc.

5. Now you are where Plano is today. Mckinney, Frisco and Allen are in the group above still heading north on the appreciation line because new building brings higher prices.

But....what keeps the prices in check is that they can't rise much higher than say a Plano, because at some point it makes more sense to buy older and live south to remove the commute and be closer to existing infrastructure.

The risk the areas that are older have to contend with is the maintenance of their reputation. If say crime creeps in, employers move, schools deteriorate and upscale retailers flock to the new areas, then the desirable factor will decrease, which will create a new wave of movement north. This will then send the appreciation curve downward until some sort of gentrification effort begins. Once this begins, prices will increase greater than average, but the effort typically attracts more of a niche buyer.

Kind of interesting how this all works because of the mere fact there is land to develop. In CA, this is simply not the case. Nice areas get nicer and remain desirable. Undesireable areas remain so until the price of the nicer areas drive the backfill process and people begin taking a chance because they are left with no other options. Since the prices are now so high in these fringe areas, the people that were there originally cannot afford to move, so you create an area with vast socio-economic differences. Which is dealt with until a downward trend in the market is experienced (such as now for Socal). This then drives the people from these areas back into the more desirable areas they would have preferred to live in originally. These fringe areas then suffer greater RE appreciation losses while the desirable areas maintain.

Vastly different from TX.

What I can't understand here in Dallas is why the area South of Dallas is not growing anywhere near as quickly as the area north. Is it employment related ? Colleges ? Proximity to SE Dallas Crime ? Seems that if Dallas proper could get a couple of big name employers to believe in southern Dallas and move there, then that area could be the next boom area. We all know that after this next wave of north development into places like Celina/Van Austyene, there isn't much left...

[kaykay]

Well, Socketz, I imagine you know what I think the answer to your question is-Crime and proximity to areas which have serious crime.

[shannon94]

Originally Posted by shaxs

Keller looks like it is doing well in both those articles you posted. Less than 2 months before I come out there- yay!

It's old data. Keller has alot of foreclosures now and traffic is getting unbearable just to get out of the neighborhoods. A friend of mine just moved from there ....she was spending an hour an a half in traffic just to get to work in Bedford. Made alot of money on the sell of her house though and would you believe it wasn't in the northern burbs??!! (giving you a hard time sockets)

[socketz]

Originally Posted by shannon94

It's old data. Keller has alot of foreclosures now and traffic is getting unbearable just to get out of the neighborhoods. A friend of mine just moved from there ....she was spending an hour an a half in traffic just to get to work in Bedford. Made alot of money on the sell of her house though and would you believe it wasn't in the northern burbs??!! (giving you a hard time sockets)

I never said they were the only places with appreciation :-0

There is another burb dynamic over near the airport as well. Keller, Flower Mound, Colleyville, Southlake, Grapevine, etc.

Again, I don't think anyone has the Dallas market figured out.

[lh_newbie]

I have the dallas market figured out - everyone should buy and drive the price up in my neighborhood - make the house values 10-15x what they are today, I will sell and then retire. How do we get that implemented?