By Maxine Shapiro, KERA 90.1 commentator
Dallas, TX – Two of the largest Metroplex home-building and construction companies in the country reported amazing earnings for the last quarter. So how much credence can we give a new study saying that Dallas area home prices may "tumble," as the Dallas Morning News puts it. I'm Maxine Shapiro with KERA Marketplace Middays.
Yesterday, Arlington-based D.R. Horton announced its 98th consecutive quarter of growth in revenues and net income. Just for their last quarter, net income increased 72%. No one expected it to go that high. Then this morning, Dallas-based Centex, another one of the largest home construction companies in the country, reported their highest-ever quarterly results. That makes it their 6th consecutive record year. And both companies had an optimistic outlook.
So where do they see home prices "tumbling" in the Dallas area? First off, the use of the word "tumble" could send anyone into a panic. Poor choice of words, Dallas Morning News. The study that the paper was referring to was conducted by PMI, a San Francisco-based mortgage insurance company. Dallas does fall 5th on their Risk List, citing that those cities that got hit badly by the high-tech industry turnaround can look for a "significant decline in housing prices."
I decided to call D.R. Horton to ask them what they thought. Spokesperson Stacy Dwyer doesn't quite agree with the study. Ms. Dwyer commented that job growth would have to just go away for there to be a significant decline. She explained it's really a supply situation and there is no oversupply in the Dallas-Fort Worth area. In fact, Dwyer went on to describe how most municipalities in the Metroplex keep a tight control over their housing permits. Frisco and Flower Mound are current examples. Of course, existing homes might be a little more vulnerable.
But compared to San Jose, where any decline would be welcomed, Dallas prides itself on being one of the most affordable cities in the country. We don't want to be too affordable, do we? For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.