Dallas Fort Worth homes will hold their values

By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
One of the biggest worries for today’s homebuyer is the continued drop in home prices.
While cheaper housing costs are appealing, many consumers fret that prices will keep falling after they buy.
Texans shouldn’t be so concerned, according to a new report by the Center for Economic and Policy Research and the National Low Income Housing Coalition.

The analysis of the 100 largest U.S. home markets shows that Dallas-Fort Worth homebuyers are more likely to preserve home equity during the next four years.
Houston, D-FW and San Antonio are among the tops in the country in this forecast.

The study is based on a purchase of homes priced at 75 percent of the median price, which is about $150,000 in D-FW. The home purchase is financed at between 6 and 8 percent interest.
By 2012, the purchaser of a mid-priced home in Houston, D-FW and San Antonio will have, on average, more than $80,000 in equity in the house, the researchers predict.

While such forecasts are often academic, the trend it highlights toward higher home equity here is important. Almost a third of the metropolitan areas in the report are forecast to see a net decline in home equity during the same period.

The study concludes that home prices in “many communities have yet to hit bottom and significant price declines must be reckoned with.”
The remaining downside is worst in regions of the country that saw big run-ups in home prices before the current decline.

The researchers warn that it would be a mistake for governments to try and stop the current housing market correction and “maintain what are historically unprecedented high home prices.”

The positive outlook for Texas home equity growth isn’t a surprise to Mark Dotzour, top economist with Texas A&M University’s Real Estate Center.
“It confirms that there never was a price bubble in any Texas city and consequently the likelihood of equity increase is higher,” Dr. Dotzour said. “I find it interesting that their policy decision is to recommend that government allows prices to continue to fall.”
Median preowned home prices have fallen by between 2 percent and 3 percent in North Texas since peaking in mid-2007.
During the last year, nationwide home sales prices have dropped by more than 15 percent.

WHERE'S THE EQUITY?
Forecast of average home equity a buyer of a home priced at 75 percent of the median price could see during the next four years. From a comparison of 100 largest U.S. housing markets.
GREATEST INCREASES
McAllen
$90,795
Houston
$82,735
Dallas-Fort Worth
$81,338
San Antonio
$81,308
Rochester, N.Y.
$78,947

SHARPEST DECLINES
San Jose
-328,394
San Francisco
-226,489
Los Angeles
-168,069
Bridgeport, Conn.
-164,671
Oxnard, Calif.
$148,076