By Paul Kaihla, CNNMoney.com
The horror show of America's residential real estate market just keeps getting scarier, what with the sub-prime mortgage crisis threatening to slash demand for homes while the inventory of unsold properties continues to pile up. It's enough to send any prudent investor fleeing to the relative sanity of, say, the stock market. 

By Matt Woolsey, Forbes.com
Home sales have sunk to their lowest levels since 2001. Investors are jumping ship, foreclosures are mounting and lenders are exercising caution.

By SANDRA BAKER

Star-Telegram Staff Writer

SPECIAL TO THE STAR-TELEGRAM/CLUFF BOSLER ILLUS.

Home prices in Fort Worth and Arlington are expected to remain steady even as the housing bubble bursts and prices plummet in many other cities nationwide, real estate experts say.

Phoenix, Boston and Orlando and Sarasota, Fla., have seen dips in median existing-home prices ranging from 2.4 percent to 11.25 percent in the 12-month period that ended in June. In Dallas-Fort Worth, prices have risen a modest 1.7 percent to $156,500.

A recent study of housing prices in the country's 50 largest metropolitan areas shows, on average, a 32.9 percent chance that home prices will decline in the next two years.

But in Fort Worth-Arlington, the chance of decline is 8.9 percent, putting the area next to the bottom among the 50 areas, according to PMI Mortgage Insurance, the U.S. subsidiary of the PMI Group. The chances of a decline in the Dallas-Plano-Irving area is 9.5 percent, also among the country's lowest.

The hardest-hit areas are likely to be in Nevada, California, Arizona and Florida, where the chances of home prices falling in the next two years are better than 50 percent, PMI found. In Riverside-San Bernardino, Calif., the chance that prices will fall is 60.8 percent, the country's highest, the study says. Part of the reason is that home prices have jumped in those areas in recent years: In Riverside-San Bernardino, for example, the median sale price rose 37.6 percent from 2004 to the third quarter of 2006, according to the National Association of Realtors.

In Texas, home prices have been gaining about 4 percent annually, experts said. So will they remain stable?

In North Texas in September, the median selling price of homes rose 3 percent to $147,500 from a year earlier, although selling a home is taking longer. Homes now stay on the market for an average of 74 days before closing.

Housing prices in Texas never became inflated like in other parts of the country, particularly California. Of the 11 metro areas where the risk of a price decline is greater than 50 percent, seven are in California, PMI said.

"We did not have the bubble," said Jim Gaines, a real estate economist at Texas A&M University's Real Estate Center. "We didn't have the inflated prices. Those high prices made no sense. People just couldn't afford to keep paying those kinds of prices. It's all coming home to roost now."

LaVaughn Henry, PMI's director of economic analysis, said the areas of Texas included in the study scored well because the state has low price volatility.

The study takes into consideration how prices have moved historically, homeowners' ability to pay for their mortgages and local job creation and employment numbers. Home prices in Fort Worth-Arlington, for example, have grown modestly, and the area has some of the country's most affordable prices, Henry said.

"Texas has more of a conservative mentality," Henry said. "When things are in balance, your market is stable."

Texas A&M researchers say home prices statewide could rise about 4 percent annually for the foreseeable future.

"There's nothing on the horizon to suggest that prices are coming down," Gaines said. "Right now, we're doing pretty good."

The national median price for an existing single-family home was $223,800 in the second quarter, down 1.5 percent from $227,100 in the second quarter of 2006, according to the Realtors' association.

Median second-quarter home prices ranged from $71,700 in Elmira, N.Y., to $865,000 in the San Jose-Sunnyvale-Santa Clara, Calif., area, the association reported.

In the Sarasota region, which includes the cities of Bradenton and Venice, median home prices fell more than 11 percent, to $311,400 in the second quarter of this year from $350,900 a year earlier. Prices dipped about 2.4 percent in Orlando and 2.7 percent in Phoenix.

The largest increase in median home price was in the Salt Lake City area: $233,100, up nearly 22 percent from a year earlier, the group said.

Ted Wilson, a partner with Dallas-based Residential Strategies, a market research firm, agrees that pricing will remain strong in North Texas and that many of the discounts on new homes are being offered by builders who want to reduce their inventory.

Builders are already building fewer speculative houses and will start to focus more on building to suit, he said.

In recent weeks, the country's largest home builders have announced plans to construct far fewer houses. Fort Worth-based D.R. Horton said it has already greatly improved its cash flow because of building reductions.

"I really don't see our inventories being that out of whack," Wilson said. "With the lack of new starts, we're hopeful the housing inventory gets mopped up. If anything, what we've seen in new home prices is that they're edging higher."

Sue Meyer, president and chief operating officer of Coldwell Banker Residential Brokerage Dallas/Fort Worth, who oversees about 1,100 real estate agents and brokers, agrees that prices in the Metroplex will remain steady. She said that the value of all the houses sold this year in the Metroplex should surpass $17 billion, placing 2007 among the top-producing years.

About 49,000 houses are on the market in the Metroplex, she said.

"We're still going to see some price appreciation," Meyer said. "The area keeps growing. If you want to sell, you have to be competitive. The majority of homeowners are pricing it right."

Lawrence Yun, a senior economist with the National Association of Realtors, is also upbeat about home prices nationwide.

"Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006," Yun said in a report. "The fundamental momentum clearly suggests stabilizing price trends in many local markets."

1.7 percent Increase in median existing home price in Dallas-Fort Worth in the second quarter of 2007 from the second quarter of 2006

1.5 percent Decrease in median existing home price nationwide in the second quarter of 2007; prices declined sharply in many markets

Risk of declines in value

Percentage risk of declines in value in areas of Texas that PMI studied.

Austin-Round Rock, 15.4 percent

San Antonio, 12.1 percent

Dallas-Plano-Irving, 9.5 percent

Houston-Sugar Land-Baytown, 9.4 percent

Fort Worth-Arlington, 8.9 percent

Riskiest areas

Top five markets for expected highest decline and percentage risk.

Riverside-San Bernardino-Ontario, Calif., 60.8 percent

Las Vegas-Paradise, Nev., 58.7 percent

Santa Ana-Anaheim-Irvine, Calif., 57.9 percent

Phoenix-Mesa-Scottsdale, Ariz., 57.5 percent

Los Angeles-Long Beach-Glendale, Calif., 53.6 percent

Source: PMI Mortgage Insurance

MARKET APPRECIATION

Average market value of single-family houses in selected Tarrant County cities, with percentage increase from 2005

Arlington up 4.6% $135,658

Bedford up 2% $153,555

Colleyville up 12.1% $379,399

Euless up 5.7% $137,080

Fort Worth up 12% $115,470

Hurst up 3.7% $134,606

Mansfield up 8.5% $179,152

Southlake up 13.5% $451,732

Source: Tarrant Appraisal District

Sandra Baker, 817-390-7727
sabaker@star-telegram.com

11:49 PM CDT on Tuesday, July 1, 2008

By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com

The latest home price risk forecast shows that Dallas-Fort Worth is overall the safest place in the country for stable home values.

The latest report by mortgage insurance company PMI Group ranked the D-FW area dead last among the 50 cities it rates for possible declines in home prices.

That means PMI is betting there is less than a 1 percent chance that average home prices here will be lower two years from now.

PMI's summer 2008 risk ranking for D-FW is similar to the insurance company's previous studies.

As in other PMI reports, the U.S. cities with the biggest run-up in home prices in recent years are at the greatest risk for losses.

During the last year, some markets have seen a significant increase in the number of existing single-family homes for sale, PMI chief economist David Berson said in the report.

"Given the magnitude of the inventory overhang, we expect national home price declines to continue into at least 2009," Mr. Berson said.

In North Texas, however, the number of pre-owned homes listed for sale has declined during the last year.

Although PMI Group's report about D-FW home prices should be encouraging, Mr. Berson said that doesn't mean there won't be short-term declines in values.

"It is also an average for a metropolitan area, so individual neighborhoods and houses could behave differently," he said, perhaps considerably so.

PMI SUMMER 2008 PMI U.S. MARKET RISK INDEX

DFW ECONOMY

Its little wonder that Dallas-Fort Worth is such an inviting place to live and why so many families are attracted to the area. The local economy is booming, with affordable median home prices and job growth second only to New York. The Metroplex is currently ranked as the #1 growth market in the U.S.

The strength and stability of the local DFW economy is based in its diversity. The area is home to a wide range of industries, from transportation, technology, trade, aviation, oil and gas and advanced services, providing startup and relocating companies with a favorable business environment where they can flourish and prosper.

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Affordability

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DFW & Houston Rank As The Most Affordable Housing Markets of the 20 Largest U.S. Cities

Housing affordability means that most families in North Texas can afford a bigger, nicer house. A household income near $60,000 likely is able to afford the median priced new home in DFW.

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DFW’s Affordable Housing Means Future Growth PMI Mortgage Insurance Winter U.S. Market Risk Index (see #10 below)

Housing affordability is one of the major reasons companies and families relocate to North Texas.

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Job Growth

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Texas Leads The U.S. In Job Growth (LAUS)

Job growth is the most important market driver in creating housing demand. Texas created 218,600 jobs in 2007.

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DFW Ranks As the #2 Job Growth Market in the US

DFW’s diverse and strong economy produced 65,800 new jobs in 2007.

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Job Growth Is Steady In DFW

DFW has maintained a steady production of new jobs.

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Low unemployment

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Unemployment Is Low In DFW

The unemployment rate has steadily declined in DFW this decade. At year end 2007, the unemployment rate for DFW was a very low 4.2%.

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Population Growth

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Population Growth—DFW Is Now the 4th Largest Metropolitan Area In the United States

The D/FW area adds 370 residents every day. The Dallas/Fort Worth area has been consistently growing for decades because of its central location, outstanding airport, low cost of living, housing affordability, pro-business environment and temperate climate. The metroplex is the largest metro area in Texas and ranked #4 largest MSA in the nation at over 6 million in population

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Population Growth — Near Term Outlook

Economy.com ranks DFW as the #1 growth market in the U.S. for 2006-2011 with over 630,000 estimated population growth

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Population Growth — Long Term Outlook (NCTCOG 2030 Forecast)

Forecasts put population growth at a little over 100,000 persons per year

What is going on in Texas? We hear that question a lot lately. The business community in this country and abroad wonders how the Texas economy continues to grow as the nation struggles under the weight of declining housing markets, rising energy prices and the falling dollar.