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Housing Price Bubble: Is TX at Risk?
Posted on: June 26, 2015 by Newmark Insurance
In recent news, the northern Texas housing prices are at an all-time high. This spike is due to an increased demand for housing in the Dallas-Fort Worth area. This development is proving to be largely beneficial to local and statewide real estate agents. However, when sharing information with potential buyers, it is important to be honest about the state of the real estate market in order to avoid any professional liability issues. To better protect your real estate firm, apply your TX Real Estate Professional Liability policy today.
According to The Dallas Morning News, Texas homes, specifically those located in northern Texas, have increased 14 percent in May, one of the largest year to date gains on record. What’s more, the average purchase price for a single family home is $215,000.
Although this recent spike stemmed from legitimate need, Real Estate Center of North Texas economist Dr. James Gaines says “I don’t know if what you are seeing now can be defined as a bubble, but if you have an extended period of time of double-digit price increases, you are creating a potential problem in the future.” He clarifies that this shift doesn’t necessarily mean a crash in the housing market next year, but the growth will catch up with the market eventually.
Gaines also states that a decline in employment or a mortgage interest rate surge will definitely play a part in lowering housing prices. Further, home prices in the Dallas-Forth Worth area appreciating at three times the typical rate. However, the house prices are still comparable to that of the median income, so it is technically not a bubble.
With this housing market spike and inevitable increase in clients, protecting your firm is imperative. At NewMark Insurance Services, we work with you to determine your risk exposures and insure you accordingly. For more information about our professional liability options, as well as our other offerings, contact us today at (855) 777-6549.