Foreclosure listing prices and non-foreclosure house prices in Dallas are nearly 32 percent below normal values, according to home price studies by Massachusetts-based real property research firm IHS Global Insight.
IHS Global also said that home price levels in Dallas have largely remained unchanged in the first quarter compared to last year’s first quarter.
The undervaluation findings are supported by online real estate company Trulia, which reported that over 30 percent of owners of foreclosure listing properties and non-foreclosure homes have to cut down their prices at least once.
Trulia also reported that nearly 40 percent of owners of homes priced at $1 million and above in the Dallas metro area had to reduce their asking prices.
While the average price reduction across the nation is 10.6 percent, the average reduction in the Dallas metro area is nearly 8 percent.
Jeannine Cataldi, senior economist of IHS Global Insight, explained that when a housing market is undervalued, it means that the market can handle price increases without harming the market. She added that the Texas housing market has always been undervalued.
Cataldi also reported that the housing market nationwide is undervalued by over ten percent. She said that during the market boom in 2005, houses were overvalued by over 24 percent.
Up to now, Cataldi said, even if markdowns have become pervasive in many markets, homes in Washington State and in New Jersey are still overvalued. Cataldi explained that IHS Global uses housing density, population density, previous foreclosure listing prices and non-foreclosure home prices, income and interest rates to determine overvaluation or undervaluation.
Wages in most cities across Texas are lower than those in other major cities.
The IHS Global report explained that Texas houses have always been undervalued because of large tracts of land across the state where houses could be built.
However, according to the report, while foreclosure listing prices and non-foreclosure home prices are below normal levels in Texas, real estate taxes and insurance premiums are among the highest in the country.
Based on the IHS Global report, the other most undervalued markets as of the first quarter are Vero Beach in Florida, which is undervalued by 42.5 percent; Houma in Louisiana, undervalued by 41.4 percent; Las Vegas, undervalued by 40.9 percent; and Merced in California, undervalued by 40.1 percent.
Meanwhile, according to Trulia’s report, the biggest price reductions were in Detroit, Las Vegas and Miami.
Across the U.S., average foreclosure listing prices and non-foreclosure prices are below normal levels by 10.6 percent, according to IHS Global Insight.
Related Posts:
- North Texas Home Sellers Cutting Foreclosure Listing Prices
- Dallas Residential and Commercial Foreclosure Lists Attract Buyers
- Lists of Homes for Single Families Are Closer to Actual Number in Dallas
- Sales of Statewide and Houston Bank Owned Homes on the Rise
- Burden of Foreclosed Real Estate Home Listings Is Lighter in Texas
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