Dallas real estate has long been a barometer for the rest of texas. But now, in the recession, the city is behaving out of character. One day things might look promising; the next, not so good. With the rest of the state looking for guidance, it is easy to see how many realtors are concerned. But the truth is the market is trying to work itself out. It is vulnerable to the economy. It is aggressive in its method. And it will not go away. Gently. So, the big question is when and how the market will recover, not if it will recover.
There's no sign of a thaw in the frozen credit markets. If anything, the situation is getting worse for the real estate business.
The number of new loans for commercial properties plunged 70 percent in the first quarter from a year earlier, the Mortgage Bankers Association said Tuesday. And nationwide mortgage originations for the quarter were down 26 percent from the end of 2008.
"In the first quarter of 2009, we saw the effects of the continued recession, coupled with little demand from borrowers and a constrained supply from lenders as a result of the credit crunch," Jamie Woodwell, a Mortgage Bankers Association researcher, said in the report.
A lack of lending for commercial real estate deals has put the brakes on most new projects in the Dallas area and made it almost impossible for investors to finance purchases of offices, shopping centers, warehouses, hotels, apartments and other buildings.
Nationwide, the biggest drop in funding – 88 percent – was for hotels. Lending through mortgage-backed securities fell 96 percent from a year ago and bank loans for commercial real estate slid 80 percent, the trade group said.
With the standstill seemingly at a stalemate, only home sellers and home buyers can determine which way the market moves. The best bet is to invest wisely. To make sure you have capital, security, and appropriate credit.
Michael Russell writes about a variety of subjects. This article discusses
Dallas real estate. For more information, visit the Real Estate Book.
