North Texas Home Prices Remain on the Red Flag List
Despite a slowing in home price gains this year, the North Texas housing market is still considered overheated in Nationwide’s third-quarter report.
"The biggest concern with regard to the housing market in 2017, especially as the year ends, is that persistent price gains are reducing affordability," David Berson, Nationwide's Senior Vice President and Chief Economist, said in the report. "The housing market is still moving forward thanks to solid job gains, but it's showing signs of strain.
"We're watching to see if household formations, income, job, and mortgage trends can sustain the market's health."
Over the last four years, the average sales price of homes in D-FW has soared 40 percent because of increased housing demand caused by a booming economy and influx of corporate relocations. While the rate of price growth for pre-owned single-family homes was 10 percent in 2016, homes have only edged up 4 percent in the first 11 months of 2017, which better aligns with wage increases.
Though a booming economy landed North Texas on Nationwide’s list of troubled home markets — New Orleans, the Dakotas, and Victoria, Texas are on the list because job cuts in the oil industry have adversely affected their economies. And about 25 percent of the nation’s metro areas still haven’t recovered from the Great Recession housing crash.
Nevertheless, Nationwide analysts aren’t the only ones to raise a red flag about D-FW’s unsustainable home price gains. Reports from CoreLogic and Fitch Ratings have noted similar concerns.