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I have been a long time "lurker" on these boards. My husband and I moved from California 6 months ago, he is a native Texan born in Fort Worth while I have never lived anywhere but Southern California until now. We were not in a position to buy a home here until recently (as finding an apartment was our first order of business) and this concerns me: D-FW home prices are 10 to 14 percent overvalued, says Wall Street firm | Real Estate | Dallas News
Any thoughts from those also home searching right now? Thoughts from those who went through the last housing downturn here? It wouldn't seem like prices were so crazy if I hadn't been looking at homes here every November for the last 6 years when we visited my DH's family in Fort Worth for Thanksgiving. I truly don't know if we should "pull the trigger" and buy or rent for a couple years and see what happens. It seems like the cost of home ownership is cheaper than California but when you figure in the highest homeowner insurance rates in the nation and high property taxes the picture doesn't look as rosy. Yes, houses are cheaper but those are sunk costs that do not pay down principal. I'm also seeing $1000 and $2000 dollar deductibles for hail and tornado damage which seems to happen a lot here...Would love some opinions. Feeling like an indecisive fence sitter!
I have been a long time "lurker" on these boards. My husband and I moved from California 6 months ago, he is a native Texan born in Fort Worth while I have never lived anywhere but Southern California until now. We were not in a position to buy a home here until recently (as finding an apartment was our first order of business) and this concerns me: D-FW home prices are 10 to 14 percent overvalued, says Wall Street firm | Real Estate | Dallas News
Any thoughts from those also home searching right now? Thoughts from those who went through the last housing downturn here? It wouldn't seem like prices were so crazy if I hadn't been looking at homes here every November for the last 6 years when we visited my DH's family in Fort Worth for Thanksgiving. I truly don't know if we should "pull the trigger" and buy or rent for a couple years and see what happens. It seems like the cost of home ownership is cheaper than California but when you figure in the highest homeowner insurance rates in the nation and high property taxes the picture doesn't look as rosy. Yes, houses are cheaper but those are sunk costs that do not pay down principal. I'm also seeing $1000 and $2000 dollar deductibles for hail and tornado damage which seems to happen a lot here...Would love some opinions. Feeling like an indecisive fence sitter!
Two years ago, people on this board were telling me that prices were overvalued and that we were in a bubble. My realtor convinced me to buy anyways. In those two years since I closed, the values have gone up 11% per year, and at the prices my neighbors are selling their houses for, I could actually probably sell for 25-30% more than what I paid two years ago.
Home prices still have a ways they could go up. The market could definitely bear higher home prices, given all the companies and people moving here. Another poster made a good point a couple weeks back about how the percentage of income spent on housing in DFW is actually quite a bit lower than that of many other major metro areas.
In any case, if you need a place to live, buying now is definitely not foolish. I know the house I bought is a hell of a lot nicer than the house I was renting, and I actually save money each month while having a nicer place (it helps that it's new construction so my maintenance and repair costs are almost nothing - I have yet to pay for a single repair that wasn't covered under warranty). It would have been better to buy five years ago obviously, but DFW real estate is by no means a bubble - solid economic forces are raising prices.
At the end of the day, nobody really knows the future, and if you want to buy and it's a good financial decision for you, don't let the fear of a collapse in DFW home prices hold you back, because that's unlikely to happen. Best of luck!
Two years ago, people on this board were telling me that prices were overvalued and that we were in a bubble. My realtor convinced me to buy anyways. In those two years since I closed, the values have gone up 11% per year, and at the prices my neighbors are selling their houses for, I could actually probably sell for 25-30% more than what I paid two years ago.
This is all well and good, but it doesn't say anything about the current market. The fact that people were wrong about a housing bubble two years ago doesn't mean people are wrong about a housing bubble (or overvaluation, which is what the OP is referencing) today.
Quote:
Originally Posted by BongoBungo
Home prices still have a ways they could go up. The market could definitely bear higher home prices, given all the companies and people moving here. Another poster made a good point a couple weeks back about how the percentage of income spent on housing in DFW is actually quite a bit lower than that of many other major metro areas.
In any case, if you need a place to live, buying now is definitely not foolish. I know the house I bought is a hell of a lot nicer than the house I was renting, and I actually save money each month while having a nicer place (it helps that it's new construction so my maintenance and repair costs are almost nothing - I have yet to pay for a single repair that wasn't covered under warranty). It would have been better to buy five years ago obviously, but DFW real estate is by no means a bubble - solid economic forces are raising prices.
At the end of the day, nobody really knows the future, and if you want to buy and it's a good financial decision for you, don't let the fear of a collapse in DFW home prices hold you back, because that's unlikely to happen. Best of luck!
I'm always interested to know how it is that so many average Joes feel so confident in their analysis of the housing market, even if veritable experts disagree. As an average Joe myself, I really have no opinion on the matter, but I do know that both of the following can be true:
1. Significant economic and population growth is occurring in north Texas.
2. Real estate in north Texas is overvalued.
It isn't as though the first point eliminates the possibility of the second point. Personally, I don't think "bubble" is the right term, but I do think housing is reaching a high point. There are many areas of the country where buyers are falling over themselves to buy in extremely competitive markets. That scenario is usually unsustainable in the long run.
Last thought: Predicting the timing of things is almost impossible. It's famously been equated to trying to catch a falling knife. I remember the housing market of the early and mid-2000s. Lots of people were already talking about a bubble as early as 2002 and 2003, but the turnaround didn't happen nationally until mid-2006. Larger economic forces were at play, and the effects of those are often difficult to predict. A lot of people want to point out that the larger economic forces that caused the last housing bubble don't exist today. That's certainly true, but that doesn't mean housing can't be overvalued for different reasons today.
Edit to add: People also love to point out that Dallas fared pretty well in the last housing crash. That is true, but it is also true that Dallas real estate was MUCH cheaper going into that crash. The peak Case-Shiller for Dallas back then was 126 and change. Today, it's around 170. I'm not sure if there is another city in the United States that has seen that much of a rise (from 2007 pre-crash numbers to today's numbers). That raises the million dollar question of whether Dallas has seen that much genuine growth and can fundamentally support prices that much higher. Who knows -- I certainly don't claim to, and I'm suspicious of most people who claim they do.
Last edited by Wittgenstein's Ghost; 04-04-2017 at 01:58 AM..
I saw that story too, and understand where you're coming from. We lived through the collapse of the bubble in SoCal back in 2004. I don't want to do that again.
I've actually asked on here before about whether or not there's a bubble in this area, and was assured that the market is just adjusting to what it SHOULD be, and that it's been undervalued for a long time. Frankly, I think that's crap. I do think there's a bit of a bubble, and I do think that at some point in the not-too-distant future we're going to see a downward trend in the pricing.
But, we're seriously considering selling our little house and buying something closer to my husband's work soon, because interest rates seem to be climbing.
At least if we have something closer to his work, and the bubble does burst, our property taxes might make a drop too. I would hope so, anyway.
There are a lot of expenses that don't go toward paying down the principle on a home here. The taxes, HOA fees, home insurance rates, utilities. They're all so high!! I feel so nickel-and-dimed living here.
Two years ago, people on this board were telling me that prices were overvalued and that we were in a bubble. My realtor convinced me to buy anyways. In those two years since I closed, the values have gone up 11% per year, and at the prices my neighbors are selling their houses for, I could actually probably sell for 25-30% more than what I paid two years ago.
Home prices still have a ways they could go up. The market could definitely bear higher home prices, given all the companies and people moving here. Another poster made a good point a couple weeks back about how the percentage of income spent on housing in DFW is actually quite a bit lower than that of many other major metro areas.
In any case, if you need a place to live, buying now is definitely not foolish. I know the house I bought is a hell of a lot nicer than the house I was renting, and I actually save money each month while having a nicer place (it helps that it's new construction so my maintenance and repair costs are almost nothing - I have yet to pay for a single repair that wasn't covered under warranty). It would have been better to buy five years ago obviously, but DFW real estate is by no means a bubble - solid economic forces are raising prices.
At the end of the day, nobody really knows the future, and if you want to buy and it's a good financial decision for you, don't let the fear of a collapse in DFW home prices hold you back, because that's unlikely to happen. Best of luck!
You were very lucky -- as were we -- that you bought in an incredibly unusual upward swing in the real estate market. This trend is definitely not the historical norm for DFW. Historically, you are lucky to ever see much equity at all here.
I have been a long time "lurker" on these boards. My husband and I moved from California 6 months ago, he is a native Texan born in Fort Worth while I have never lived anywhere but Southern California until now. We were not in a position to buy a home here until recently (as finding an apartment was our first order of business) and this concerns me: D-FW home prices are 10 to 14 percent overvalued, says Wall Street firm | Real Estate | Dallas News
Any thoughts from those also home searching right now? Thoughts from those who went through the last housing downturn here? It wouldn't seem like prices were so crazy if I hadn't been looking at homes here every November for the last 6 years when we visited my DH's family in Fort Worth for Thanksgiving. I truly don't know if we should "pull the trigger" and buy or rent for a couple years and see what happens. It seems like the cost of home ownership is cheaper than California but when you figure in the highest homeowner insurance rates in the nation and high property taxes the picture doesn't look as rosy. Yes, houses are cheaper but those are sunk costs that do not pay down principal. I'm also seeing $1000 and $2000 dollar deductibles for hail and tornado damage which seems to happen a lot here...Would love some opinions. Feeling like an indecisive fence sitter!
I wouldn't rely on stories based on what Fitch comes up with.
We all know what has happened with pricing the last two years. Bottom line, don't be taking anything from Fitch seriously. This is one of the same firms who were slapped with lawsuits for their role in overvaluing subprime mortgages during the last housing crisis. They know about real estate pricing around here about as much as Tony Romo knows what it's like to QB for the Cowboys next season.
Your first point is well founded fact, based on numerous sources and data.
Your second point is only your opinion, which is odd, seeing as how you said you didn't have one on the matter.
Neither of those were points I was making. I was simply saying that both of those points could be true. There is no incompatibility in them. I made it clear in my post that I wasn't claiming the second point.
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