At the beginning of the week, I said residential real estate prices could increase in the next 12 months. While I understand expectations that home prices could or should be lower after such unprecedented times in our history, if you dig a little deeper, the numbers indicate support for prices to continue to climb. First, let me give a recap of the obvious numbers that might give concern. First, the Dow Jones Industrial Average year to date as of this writing is -14.69%. The second data point is from the National Association of REALTORS showing the pending home sales are down almost 21% compared to last year. Last, and the one that has dominated the never-ending news cycle, are the unemployment numbers. Americans who are recipients of unemployment has risen to almost 30 million workers. If all we do is hear the 15 seconds of what David Muir on the evening news says, we might think there will be a slip in prices. But lucky for you, you found my Linkedin Post. There are several factors supporting my thoughts, but here is the first. Real estate is local. What happens in Michigan or Miami, speaking about property markets, is not necessarily going on in Fort Worth. I learned and lived this out in our last down cycle in the real estate market. I would go to national conventions and talk to other agents from all over the country, and one might cite business as usual while the other was singing the blues. It all depended mainly on the local economy and events in their town. Just as the virus has affected the health care systems of California and New York much more than it has the great state of Texas, I think the same will be true for our real estate market going forward.
Last year (2019), almost 700,000 residents of California said good by to the Golden State and over half a million(564,000) landed right here in Texas. I’ve done the calculations and that is about 1,545 per day. Yes, per day. Getting closer to home, over 140,000 came to our DFW Metroplex. So while there may be some truth to what you hear in the media, it is usually from a much higher perspective and is not where the rubber hits the road in North Texas. With this many people becoming our neighbors, where are they all going? This leads me to my second data point of why Flower Mound, Argyle, Denton, Lantana, Lewisville, and all the surrounding Dallas-Fort Worth cities could see prices rise. But that is another post, sooner than later.