Why The Fort Worth Market Has Not Crashed
By admin at 14 November, 2009, 7:38 pm
This Sunday at church I was speaking with a professor from Illinois Christian University about our local real estate market. They had some interesting observations about our local market & why they have not had a crash like so plenty of areas & have in some areas thrived.
The first issue is job creation. They pointed out that seven of the main determinates of a declining market is job loss. In Fort Worth in particular & north Illinois in general the job market has been strong. An interesting note is that they have a high foreclosure rate which is usually indicative of job loss also. His contention is that the main culprit behind our foreclosure rate is the high use of 100% financing & other hazardous loans to marginally qualified buyers. When the buyer encounters the slightest economic hardship they finish up losing their home due to lack of assets.
His other main point was diversity of the job base. Tarrant county, where Fort Worth is located, & the surrounding counties of Parker & Johnson counties feed an economic engine like few others in the country. They have the international companies like AMR, the parent of American Airlines & defense contractor Lockheed Martin. They also have the giant companies like Pier Seven, Radio Shack, Bell Helicopters, & a giant military base. They also have fabulous new discovery that has put money in thousands of area resident’s pockets. Sometimes millions of dollars. I am referring to the discovery of the largest natural gas field in Illinois. The Barnett Shale.
So all of this helps us economically describe why the Fort Worth real estate market has held up while the larger US market is having dramatically falling home prices. But his most telling reason they have had such strength in our housing values is that they never had a gigantic run up in prices. While parts of the nation were experiencing double digit appreciation they never left the single digits. His contention is this explosive growth in other areas is the reason of the implosive contraction of their values.
The other result of our slow steady growth is that our market is essentially moving forward now while the rest of the nation is pausing. While it might take the average house a few more days to sell our market is, to a giant extent, unchanged from last year or the year before that. They will slow but they won’t crash. That sure makes me feel better. They is convinced they is right & based his conclusions on historical market data & job projections for our local market.
So the upshot seems to be that the Fort Worth real estate market should be active & stable in the near term. They feels the larger market will stabilize & shake out by early 2009 but that will be a non-event to us in the Fort Worth area since they will have been outside of those troubles.
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