Marie Walton, ABR, CRS, GRI, SRES

The Dallas Morning News reported Friday that there was a record number of foreclosures posted for July. Well maybe it is but there is one problem. Many of the homes posted were also posted for foreclosure in May and some of them were also posted in April. The total number reported in the Dallas News of over 35,000 home foreclosure fillings so far for this year includes these homes that have been posted multiple times. I did a quick check and found that 49 homes were posted in Richardson for July and out of these 22 had been previously posted. In the North Dallas area 158 were posted and of these 80 had been previously posted. So you can see that there is a lot of double and sometimes triple counting of the same home.

Historically about 40% of the homes posted for foreclosure are actually foreclosed on. Over the last few months however, the number actually foreclosed on has been between 20% and 25%. I can not tell you with any certainty why the numbers are down, but they were. Because of the moratoriums earlier in the year and the decrease in the number of foreclosures, the amount of foreclosed properties on the market has been dropping. Bet you didn't read that in the newspaper.

Due to the size of the north Dallas Area, I break the report into 2 sections.

North Dallas north of Northwest Hwy. and south of LBJ:

This area continues to struggle. Sales were of by 18% and the average sales price declined by 15%. this does not mean that all of the homes declined by this much. there are a great many homes in this area above $800,000 and this end of the market is having a very hard time. Interest rates are high on non-conforming loans and demand is low. The fact that the upper end is not selling is pulling the average sales price down. The number of active listings increased in May by 18% and this increase coupled with slow sales have combines to create a 19.3 months supply.

SALES: 50

AVERAGE SALES PRICE: $785,802

MEDIAN SALES PRICE: $567,500

PENDING SALES: 43

NEW LISTINGS: 125

ACTIVE LISTINGS: 739

DAYS ON MARKET: 93

MONTHS OF INVENTORY: 19.3

North Dallas north of LBJ

While sales were off by 19% in this area, the average sales price was only down by 1% and the median price by 3%. the number of active listings increase by 1% giving us a months of inventory figure of 7.5 months. the average sales price in this area of north Dallas is lower and most of the homes fall in the conforming loan category making financing much easier and at a lower interest rate.

SALES: 83

AVERAGE SALES PRICE: $325,039

MEDIAN SALES PRICE: $287,900

PENDING SALES: 68

NEW LISTINGS: 169

ACTIVE LISTINGS: 548

DAYS ON MARKET: 61

MONTHS OF INVENTORY: 7.5

For May sales in the metroplex were off by 24% and the average sales price declined by 5%.

Richardson fared much better. Sales were down in Richardson by 13% but the average sales price was up by 2% while the median sales price was down by 2%. These 2 small changes in price really indicate a flat sales price. While the number of active listings and new listings continued to decline, pending sales saw an increase for the first time in months.

The continued decline in the number of homes on the market is creating a real shortage in the market place. The homes that are priced correctly and have been updated are going very quickly. Sometimes in 1 day.

If you are thinking about buying a homes in West Richardson you better be prepared to make an offer on the first home you see that meets your wants and desires because if you wait for several days to make up your mind, it will probably be gone.

MAY SALES DATA:

SALES: 90 A 13% DECREASE

AVERAGE PRICE: $181,954

MEDIAN PRICE: $162,000

DAYS ON MARKET: 54

PENDING SALES: 86

NEW LISTINGS: 143

ACTIVE LISTINGS: 307

MONTHS OF INVENTORY: 4

The last 2 weeks have seen buyers coming back into the market! I'm currently working with several buyers and Realtor I talk to says they are too. I don't know if the increase in mortgage rates have gotten buyers off center or just a better feeling about the economy but what ever it is it's a very positive sign.

If you are a buyer you better have a good agent who can get you in the homes the day they come on the market because the best homes are going fast.

Interest rates on bonds shot up last Wednesday then retreated Thursday and Friday but finished higher for the week. This caused a spike in mortgage rates that are closely tied to the 10 year bond. Today the 10 year bond yields again climbed as supply exceeded demand. Yes, the basic law of supply and demand that we learned in Economics 101 in high school is still in play. Nobody has the power to alter it!

There were several reasons given for the rise by the financial news people that included selling treasuries by mortgage brokers as hedging for future inflation, the large amount of Government borrowings, and a re-allocations of funds away from bonds and into stocks. Probably all of these are true and combined to cause the increase.

What can we expect in the future? The Government is going to be in the market selling massive amounts of bonds to raise money for all the spending that is going on. This is going to cause rates to rise. The only option the Federal Reserve has to keep rates in check is to buy bonds but this is the same as creating money(running the presses) and will cause inflation which will cause rates to rise. The Feds only option to check inflation is to raise interest rates to slow down the economic which will cause people to lose their jobs and that will require more Government spending to stimulate the economy.

SEAMS LIKE A VICIOUS CIRCLE TO ME!