What $1 Million Buys in Dallas, Texas

Real estate bubble? What real estate bubble? Welcome to Dallas, where the real estate crisis never really hit.

Aug 31, 2014 at 8:37AM

Dallas Kessler Prkwy Zillow
It's a seller's market in Dallas, Texas. Source: Zillow.com.

(Want to learn more? Be sure to check out what $1 million will buy you in Phoenix, Miami, New York, and San Francisco!)

In Dallas, Texas, a million bucks isn't what it used to be. At least not in the single-family real estate market.

Take this 3,304 sq. ft., three-bedroom home in Dallas' Kessler Park neighborhood. The house is spacious, comes with a pool, and is genuinely very, very nice. But with an asking price of $998,000, you don't get quite the same bang for your buck as you would in other cities, like Miami or Phoenix.

Oh, and the price is actually on the rise. This property was listed for $967,000 in March of 2013. It came back on the market on July 1, 2014 at the current asking price, which is more than 3% higher. 

Housing bubble? What housing bubble?
The strength of the Dallas housing market, and the relative lack of post-bubble bargains, is directly attributable to the metro's strong economy. In fact, Texas powered through the recession with relative ease.

Consider that, during the past year, job growth in the Dallas-Fort Worth metro area has been nearly twice the national average. Texas saw personal income grow 4.9% last year, putting it in the top four of all U.S. states. The state's average home price is already above the pre-recession highs, and is still growing at a robust 8.7% annual clip.

US Unemployment Rate Chart

U.S. Unemployment Rate data by YCharts.

This broad-based strength is largely based on the explosion of U.S. oil and natural gas exploration and extraction. This reliance does create some risk for the area if commodity price fluctuations, or new regulation, create significant headwinds for that industry. However, Texas -- and Dallas specifically -- has also seen strong expansion in other sectors, with technology being particularly robust.

Focusing back on the housing market, Texas has fewer foreclosures, mortgage delinquencies, and underwater mortgages than the national average. From a fundamental economic perspective, the housing market in Dallas, and more broadly in Texas, looks poised to continue to rise.

While the U.S. market went boom and bust, Dallas barely noticed.

Case-Shiller Home Price Index: Composite 20 Chart

Case-Shiller Home Price Index: Composite 20 data by YCharts.

A unique market
At the end of the day, a million bucks still buys a very nice home in the Dallas-Forth Worth metro area. This 4,000 sq. ft., four-bedroom, four-and-a-half-bath home with views of White Rock Lake is a great example of that fact.

But what makes Dallas unique among most other major U.S. metro areas is that it's a seller's market. That 4,000 sq. ft. lake-view home was actually purchased two years ago for just $319,000. The new owner gutted the home and completely rebuilt the entire interior. Today, a short two years later, the property is back on the market with an asking price three times higher than before.

Taking a speculative risk like this wouldn't be feasible in many markets around the U.S. today. There's just too much weakness to justify taking on that much risk. But in Texas, things are different. The market is strong, and appears to be getting stronger. Supply and demand are in balance.

And that's why a million dollars won't buy you quite as much home in Dallas as it would in other U.S. cities.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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