DMN article on Dallas housing market (Plano, Portland: transplants, for sale, foreclosures)

[jobezee1]

The Dallas Morning News reports today that Dallas was one of only five cities in the top 20 markets where home prices continue to climb. Standard & Poor reports a 3.2% drop nationwide in the second quarter, but a 1.6% rise in Dallas. Guess what the other four markets were: yep, everywhere the transplants are moving: Atlanta, Charlotte, Portland,OR and Seattle. Guess where the declines were higher than the national average? Yep, everywhere where the transplants are fleeing: L.A., San Francisco, Boston, Detroit, and D.C.

Medium home prices nationally was 230K, but in DFW, 150K. Lenders are starting to get in a credit crunch because of the subprime meltdown and foreclosures and their tightening up. So natives, if you want to buy a home, you'd better do it now.

[lh_newbie]

Mortgage rates, for those that can get one, are dropping quickly over the last week! If they continue on that path, I suspect the refinancing market will heat up again - possibly saving a lot of people from ARM troubles.

Heck, if the rates drop much more, my wife and I will refinance our home! Maybe even into a 15 year. Screw paying interest!

Brian

[KantLockeMeIn]

Hmm... so my prediction was correct? I knew I was always right

It's an amazing thing, but look at that average household income in Plano compared to San Jose. They're very close, but on average people in Plano pay 2-4 times their household income on a home versus 6-10 times in San Jose.

[Debsi]

Originally Posted by lh_newbie

Mortgage rates, for those that can get one, are dropping quickly over the last week! If they continue on that path, I suspect the refinancing market will heat up again - possibly saving a lot of people from ARM troubles.

Heck, if the rates drop much more, my wife and I will refinance our home! Maybe even into a 15 year. Screw paying interest!

Brian

0+0 15 yr quote where I work is 5.875 today.

[intence]

Home prices alone don't mean a whole lot. It could mean that smaller cheaper homes aren't being offered. The only firm numbers in the article mentioned the median home prices in the DFW area vs. the rest of the country.

I personally haven't seen many homes in the DFW area below the median price stated in the article of $150,000. I would assume that the if they're measuring by median price, we're not seeing existing sales increase in price, but rather fewer low-priced homes being offered. Instead of a builder offering a 1600 sq ft. house, their entry-level is now 1800 sq. ft or something along those lines.

Looking at the MLS, and new home listings, it appears that inventory is moving extremely slowly. Just my own observations over the last few weeks. I don't think we'll see a drastic loss in home values here, but I also wouldn't anticipate rising prices anytime soon. Stricter laws in the lending market also mean fewer qualified buyers.

[galore]

Originally Posted by lh_newbie

possibly saving a lot of people from ARM troubles.

I thought the problem with a lot of ARMs is that because of lack of appreciation (esp. in a buyer's market nowadays), homes won't appraise enough to refinance.

[galore]

Originally Posted by intence

I personally haven't seen many homes in the DFW area below the median price stated in the article of $150,000.

Ebby's mapsearch with it's default setting shows about 40000 homes for sale in DFW. If you select a max price of $150k, it shows 17000 homes for sale.

[lh_newbie]

Originally Posted by galore

I thought the problem with a lot of ARMs is that because of lack of appreciation (esp. in a buyer's market nowadays), homes won't appraise enough to refinance.

The folks that will have a hard time refinancing will be people that have low credit scores or high debt-to-income ratios (folks that used sub prime mortgages). It's a bummer, cause as they are stuck in a catch-22. Their ARMs are adjusting upwards, putting more stress on their monthly budgets (may even be behind in their payments already - lowering their credit score). Since their score is lower, they can't get the refi, so their ARM will adjust up more, causing them to fall further behind, further hurting their score, ensuring they can't refi. It's a real bummer. Sure wish people didn't get in over their heads... and sure wish banks had more freaking common sense when giving out these sub prime loans previously.

As long as the home's value hasn't dropped and people that have good scores, the folks that got ARMs and have had them adjusting upwards to where they are stressing their monthly budgets might just be saved with the lowering of fixed rates.

Originally Posted by debsi

0+0 15 yr quote where I work is 5.875 today.

Yup, it's looking pretty good. I did some math. I think if we can get a 0 point 15-year refi at 5.625 or lower, we can save enough over the term to make it worth our while.

[loves2read]

the assumption was made that buying a home w/o any real downpayment and using two mortgages to finance---one for 80 at relatively market rate and then a 20% mortgage at HIGH interest rate would work because the house would appreciate in the two years before the ARM adjust and you could refinance to manageble rate on one loan--that did not happen in DFW--and it did not happen in most of US because market softened...
more crashing to be heard in next 18 mo--is my prediction---
I think some of the uppies who bought a first or second home based on expectations of what was to come will be burned....some people are going to be laid off--don't know if banks will fail like they did in 80s because of oil n gas meltdown...but lots of banks are holding credit card debt--if people want to pay their mortgage--what is the likely loser in the money whip round--their credit cards....think there will be plenty of those going down...problem is you cant get blood from a stone--the bankruptcy law was rewritten to favor not dumping credit card debt--but if people don't have money, they cant pay ANY debt...

[socketz]

1.6% per year.

Maybe in 5 years if you sell you can afford to pay your selling costs.

If you follow the credit market, note that things are tightening up to almost a scary level. This is mainly because it's hard for mortgage companies to carry the paper and service it themselves. There is no longer a secondary market on Wall Street for even good paper. That may change one day, but for now, there is still alot of red flags surrounding the housing market.