Dallas housing is still one of the chepest in the country...

Even with big price declines in some major cities, Dallas has some of the cheapest housing in the country, according to a new report by Coldwell Banker Real Estate.

The residential sales firm looked at home prices in almost 300 markets for its annual Home Listings Report.

The cheapest place to buy a house is Detroit, where the average four-bedroom, two-bath property will run you only $68,007.

The same size house will cost an average of $1.83 million in Newport Beach, Calif., the most expensive market on Coldwell Banker's list.

In Dallas, a similar home is $180,228 – the 56th-lowest price in the ranking.

Coldwell Banker uses its nationwide home listings to come up with the annual report. Relocating workers sometimes use the study to compare the cost of homeownership in various markets.

"Our study shows that homeownership in the United States is generally affordable, with nearly 30 percent of the studied markets averaging $200,000 or less for a four-bedroom, two-bathroom home," Coldwell Banker CEO Jim Gillespie said in the report.

Coldwell Banker found 25 U.S. housing markets where the average was more than $750,000. In 10 cities, it topped $1 million.

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Investing extra dollars: mortgage vs. stocks

While there’s no one-size answer on whether to retire home debt or invest excess cash elsewhere, there are a couple of rules of thumb on the matter — and plenty of exceptions, depending on your age, cash flow and risk tolerance.

Other considerations aside, to determine which is more advantageous, compare the mortgage rate you have with the return you can get from another investment. Keep in mind the tax benefits of mortgage interest deduction; if you’re in a marginal tax bracket of 20%, for example, a 5% mortgage is more like one at 4% if you’re deducting the interest.

“If you believe over the next 10 years you can achieve a rate of return of X, then if your mortgage is higher than that, you should be paying off your mortgage. If the rate that you think you will be able to get from however you are comfortable investing is higher than your mortgage, then you wouldn’t pay it off,” said Norman Boone, president of Mosaic Financial Partners in San Francisco.

So, for example, if your choice is paying off a 4.5% mortgage or investing in a 2% certificate of deposit, it’s better from an investment standpoint to pay down the mortgage. Conversely, if you’re holding a 4.5% mortgage and you’re confident enough that you can earn 6% annually in the stock market, stocks are the better bet.

Of course having confidence in this unsteady economy could be the challenge: “Most people are probably not going to get a 6.5% return on their portfolio in the next 10 years” as the economy struggles to recover, Boone said.

Their mortgage debt, however, is guaranteed to linger until it is paid in full. And that makes paying down the mortgage — even in with today’s low rates — a wise move right now for some borrowers, especially those nearing retirement.

That said, if you have a longer investment horizon, it could be a different story. The total annualized return on a portfolio of 60% stocks and 40% bonds, rebalanced each year, is 9% over the past 50 years through August, according to Ibbotson Associates, a unit of investment researcher Morningstar Inc.

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Ally's GMAC Mortgage Halts Home Evictions in 23 States

Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.

The company will also suspend sales of properties on which it has already foreclosed. The letter tells brokers to notify buyers that the company will extend the closing date on all sales by 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter.
GMAC Mortgage ranked fourth among U.S. home-loan originators in the first six months of this year, with $26 billion of mortgages, according to industry newsletter Inside Mortgage Finance. Wells Fargo & Co. ranked first, with $160 billion, and Citigroup Inc. was fifth, with $25 billion.

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Dallas-Fort Worth home listings rise 15 percent in a year

The number of for sale signs is growing in North Texas neighborhoods, and an increase in foreclosed houses coming on the market is part of the cause, analysts say.
Sales listings in the Dallas area have grown almost 5 percent in the last three months, according to a new report from Altos Research. The number of houses on the market is 15 percent higher than a year ago, the latest statistics from the Realtors' Multiple Listing Service show.

"When you look at year-over-year inventory counts, we're much higher, and most sellers don't want to first list their properties for sale in August or September," said Altos Research vice president Scott Sambucci. "This would indicate that the new sellers hitting the market are going to be distressed or bank foreclosures to an extent.

"But banks are smart – they aren't going to just throw a bunch of inventory on the market during a seasonally slow time of year," Sambucci said. "So while some of the inventory is REO [real-estate owned], not all of it is."

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Banks' Plans for Foreclosed Homes Will Drive Market

The speed at which house prices fall over the next few months could depend less on mortgage rates and Americans' appetite for home buying than on how banks decide to manage the huge number of foreclosed homes they own or may take from delinquent borrowers in the near future.

Unlike home owners, banks often are much quicker to slash prices to unload properties quickly.

The upshot is that, the more homes being sold by lenders, the faster prices tend to fall. That pattern was clear over the past two years: Price declines that began four years ago accelerated rapidly in 2008 as banks dumped foreclosed properties at fire-sale prices. By January 2009, the share of distressed sales had soared to 45% of all sales nationally; it was even higher in hard-hit markets such as Phoenix, according to analysts at Barclays Capital.

Even though mortgage defaults kept mounting, housing markets began to stabilize early last year as low prices and government interventions broke the downward spiral. Policy makers spurred demand for homes by holding down mortgage rates, offering tax credits for buyers, and extending low-down-payment loans through the Federal Housing Administration.

The government also attacked the supply problem. Regulators relaxed mark-to-market accounting rules, giving banks more flexibility in valuing certain real-estate assets and removing some of the impetus for banks to quickly foreclose. Meanwhile, the Obama administration put in place an ambitious program to modify mortgages.

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Dallas-area home prices rose just 1.2% in June

Dallas-area home prices are still ahead of where they were a year ago, but the rate of increase has dwindled from earlier in 2010.

In June, home prices in Dallas area were up just 1.2 percent from a year ago, according to the latest Standard & Poor's/Case-Shiller Home Price Index.

That's a fraction of the more than 4 percent year-over-year gain the area saw in January.

And the Dallas area's June increase was much less than the 4.2 percent nationwide gain, Case-Shiller found.

"We've been saying all along that we think the second half of the year will not look good – maybe even worse than it really is," said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University.

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