Even with slower growth, D-FW’s homes are overpriced, analysts warn | Real Estate | Dallas News
“The pace of home price growth in the United States appears to be slowing from a gallop to a trot,” Fitch’s latest price report finds.
Nationwide, home prices grew 3% nationally and just 2.6% in the D-FW area in the first quarter compared with a year ago, Fitch analysts said.
“Annual home price growth is now at the slowest rate in seven years, but the slowdown should plateau due to the recent drop in interest rates and the limited supply of new homes,” Fitch managing director Grant Bailey said in the report.
Even with the decline n appreciation rates, by Fitch’s estimates home values in the D-FW area were 10% to 14% overvalued in the first quarter. That’s a slight improvement from a year ago, when Fitch estimated that North Texas residential prices were as much as 19% overheated.
Seven of the country’s top metro areas had overvalued home prices in the early months of 2019.
The biggest excess was in the Las Vegas area, where home prices are 20% to 24% ahead of where they should be, according to Fitch.
Along with D-FW, prices are 10% to 14% out of whack in Phoenix and Portland. And home values are as much as 9% overheated in Atlanta, Denver and Tampa.
“Fitch estimates that home prices in approximately 20% of the country’s metropolitan areas are more than 10% overvalued,” the report finds. “Close to half of these counties are in Texas, Florida and California.
“Only a limited number of housing markets appear to be at risk for a price correction.”
The D-FW area has been on Fitch’s home price watch list for several years now.
After growing at double-digit percentage rates, home appreciation in North Texas has slowed dramatically since last summer.
While price growth is moderating, home costs in the area are still up more than 50 percent in the last decade.
In May, the median price of single-family houses sold by real estate agents in North Texas was $275,000 — an all-time high.
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