DFW Home Sales Drop

Dallas-Fort Worth home sales drop 33%

11:42 PM CST on Tuesday, December 9, 2008
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com

Sales of pre-owned homes in North Texas dropped by a stunning 33 percent in November as worries about the national economy kept homebuyers on the sidelines.

The decline in local home sales from last year is the largest since records have been kept and is evidence that the national housing downturn is finally hitting Texas.

The median price of homes sold in North Texas was also down, by 7 percent – more than double the rate so far this year, according to statistics released Tuesday by Texas A&M University's Real Estate Center and North Texas Real Estate Information Systems Inc.

November's drop in home sales compared with last year was almost double the decline in October.

"Not just Realtors but also builders noted that November sales and traffic were extremely weak," said D'Ann Petersen, an economist with the Federal Reserve Bank of Dallas. "There were reports from builders that cancellations were outpacing closings, and some buyers were just walking away leaving deposits.

"With economic and financial worries at the forefront, buying a home is definitely one of the last things on consumers' minds at this point."

And homebuyers haven't been wooed to the market by lower interest rates and bargain pricing.

"A lot of buyers have been spooked by the downturn in the credit and equities markets and just don't have the confidence to close today," said Dallas-based housing analyst Ted Wilson of Residential Strategies Inc.

"Most builders say that the buyers are looking for some good news to give them confidence to purchase, only the news continues to be bad."

The dips keep coming

North Texas real estate agents sold just 4,146 pre-owned homes last month through the industry's Multiple Listing Service. That's the lowest monthly total in more than five years.

And last month's median home sales price of $133,900 is down 15 percent from the peak in the summer of 2007.

The decline in overall home prices is partly due to the large number of sales of foreclosed homes. The National Association of Realtors reports that in the third quarter, more than 40 percent of home sales nationwide were distressed properties.

Ms. Petersen said foreclosed home sales by lenders are also affecting the North Texas market and no doubt contributed to November's larger-than-expected price declines.

"It is unwelcome news for an industry that has been hurting for some time," she said. "Hopefully, though, we will not see the double-digit declines that have been recorded in some other areas of the country, where job losses are steep and foreclosure rates are much higher."

Through the first 11 months of 2008, real estate agents have sold just over 71,000 homes in the 26-county area, a decline of 14 percent from the same period of 2007.

The drop in condominium sales in November was even steeper than in the single-family market – down 44 percent.

On a positive note

The one bit of positive news in the latest local housing report is that there was a significant decline in the number of homes listed for sale.

A total of 39,255 single-family homes are on the market in North Texas. That's a decline of 14 percent from November 2007 and the lowest total in more than three years.

The average time it takes to sell a house was unchanged at 80 days.

Longtime Dallas real estate agent Barry Hoffer said the November sales drop reflects a slowdown that hit when the stock market began to drop in late September.

"Buyers have become apprehensive in making a decision to purchase a new home with the constant bombardment from the news media about layoffs, bailouts and impending bankruptcies," said Mr. Hoffer, who works with Ebby Halliday Realtors. "This too shall pass, and we look forward to an improving local housing market by spring."

Jim Fite, president of Dallas-based Century 21 Judge Fite Realtors, said home sales are traditionally slow before a presidential election, and this year there were added worries about the stock market and the economy.

"It's a really a perfect storm," he said. "Buyers are sitting on the fence."

There's talk in Washington about cutting mortgage rates, which could be holding homebuyers back while they wait for lower rates, he said.

And, Mr. Fite said, November's grim report shouldn't be taken out of context. "As we know, a single month does not make a market."