Daily Real Estate News  |  January 11, 2005  |   Texas: Dallas Market Roundup New housing in the Greater Dallas area boomed throughout 2004, but the region's existing home market flattened slightly in September and October, according to statistics from the Real Estate Center at Texas A&M University. September sales were down 0.7 percent compared to September 2003, and October sales dropped 6 percent compared to the same month in 2003. However, yearly performance has been strong. As of October, Dallas' year-to-date existing home sales were ahead of 2003's numbers by 7 percent, with 45,209 transactions closed through September 30, 2004. Inventory levels were the same as those of October 2003, at 6.3 months. Average sales prices were up 3 percent to $192,900 in October 2004, compared to October 2003's average of $186,800. Mark Wolfe, president of the Greater Dallas Association of REALTORSŪ, says the numbers have since picked up to top off a good year for area real estate brokers. "Since the election, we've seen a healthy upswing in home sales," Wolfe says. "I think some homebuyers were sitting on the fence, waiting for the outcome. They've since jumped in." Wolfe says existing homes are selling well in all price ranges, while new housing is particularly strong. Through September 30, 2004, the Real Estate Center reported 90,101 new single-family building permits in Dallas County, compared to 74,914 for the same period in 2003. "The resale market maintained a standard pace, while our new housing market set all-time records," says Wolfe. With builders offering affordable prices and year-end incentives on new homes, new home sales have outpaced existing sales in the last months of 2004. Wolfe sees the key market drivers as low interest rates, a brisk first-time homebuyer market, and a growing number of corporate transferees moving into the Dallas market. If the economy remains strong and transferees continue to come to Dallas, he expects another good year in 2005 for Dallas real estate brokers. As the second largest MSA in Texas, Dallas is home to about 1.2 million people (2000 U.S. Census) who are employed by a variety of high-tech companies, manufacturing, and service industries. Its major employers include AMR Corp. (with 26,500 workers), Lockheed Martin (15,500), Texas Instruments (11,300), and Raytheon (8,000). The region's unemployment rate has stayed more or less on par with that of the state, with Dallas’ October's rate of 5.5 percent down more than 1 percent from the October 2003 rate of 6.6 percent, according the U.S. Bureau of Labor Statistics. That compares to the October 2004 statewide unemployment rate of 5.3 percent. However, recent layoffs may raise unemployment figures. The Dallas region learned in December that Delta Air Lines would end most flights at Dallas-Fort Worth International Airport by February. The pullout will cost the local economy more than $700 million a year and 7,000 jobs, according to a study by economists at the University of North Texas. Several Dallas-based companies also scaled back operations in 2004, including clothing and accessories retailer Gadzooks Inc., which in December filed for Chapter 11 bankruptcy protection and is expected to close 150 of its 410 national stores. Despite the challenges, Judy McCutchin, ABRŪ, CRSŪ, with RE/MAX Premier in Dallas, says her sales were up in 2004, particularly on those homes priced at $250,000 and below. "December was a phenomenal month," she says. McCutchin credits low interest rates with helping to drive the market. In 2005, she'll be keeping a wary eye on the gradual interest rate increases being instituted by the Federal Reserve Bank, which she says "could hurt the lower end of the market." McCutchin also is concerned about the high cost of building materials, which were exacerbated in 2004 by the building boom in China and natural disasters like the four Florida hurricanes. "I expect new home market prices will rise pretty drastically, and more than likely the resale market will follow," McCutchin says. —By Bridget McCrea for REALTORŪ Magazine Online