DALLAS-Stewart Title Guaranty Co. chief economist Ted Jones says the Dallas-Fort Worth Metroplex is in much better shape than the rest of the nation when it comes to the overall economy, job growth and real estate values, both residential and commercial.
Speaking before a crowd of more than 150 people at the Hilton Park Cities hotel here, Jones said: “It’s different here – it’s better here.”
Part of the reason is the Lone Star State’s attitude toward business and its political leadership over the past several decades. “I find it amazing that Ann Richards, a Democrat, and George W. Bush, a Republican, ran the state in a very similar way,” he said.
To illustrate his point that North Texas is unique to the rest of the US, Jones compared national and local job growth numbers. According to his research, the US had 1.7 million fewer jobs in August 2010 than it did in August 2000. Since Jan. 1, 2008, 7.84 million jobs have been lost.
In comparison, the Dallas-Fort Worth area had 92,300 more jobs in August 2010 than it did in August 2000. “That’s just amazing,” Jones said, referring to the difference between the national and local numbers. “The stimulus is clearly not working for the country.”
Similarly, the Dallas-Fort Worth housing market is in much better shape than other national markets. “When your values don’t go up as much, you don’t go down as much,” he reiterated. In fact, he contends local housing sales have nearly recovered to a “normalized market” – those seen prior to the housing boom of 2005 to 2008.
On the commercial side, Jones’ noted property values have dipped across the Metroplex, but not as much as they have in other markets. On average, national property values are down 39% to 40% from 2007 peak pricing. In comparison, Dallas-Fort Worth multifamily values are down 10% to 15%, for example.
Even though values here have not declined to the extent they have elsewhere, Jones strongly advised local property owners to challenge property tax appraisals. While many appraisal districts across the nation have acknowledged falling property values by either decreasing assessed values or keeping them the same, assessed values in North Texas counties have increased substantially. He points to one particular situation in which an apartment property’s assessed value increased 20.6% between 2007 and 2009.
“You are leaving thousands, if not tens of thousands of dollars on the table if you don’t challenge your property taxes,” Jones said. “You’ve got to fight for every penny.”
During his presentation, Jones made a number of predictions related to the national economy: no major increase in commercial lending over the next 12 months; $5 gas within the next 36 to 48 months; an 100 basis point increase in interest rates in the coming months; and a bankruptcy for California in 2011.
With all that said, Jones told the crowd that commercial real estate investors have a tremendous opportunity today: “This is the most incredible buying opportunity since 1988.”
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