The current landscape:

As of October (it always takes a couple months to gather accurate data), home prices were down another 3.1 percent from a year before (already a poor year). October was the fourth consecutive month with a price decrease, and the largest year-to-year decline since early 2009 when the crash was still in full force. The Dallas decline was nearly three times as bad as the national average.

Thanks to a slew of federal initiatives and tax credits aimed at boosting the housing market, there were some rays of brighter days to come early on in the year—but these new numbers show that the initial rebound turned out to be (what one commentator called it) a “dead cat bounce.”

The problems:

Basically, it’s a couple things:

1. Lagging unemployment in Dallas, naturally, chills movement in the housing market. Unemployed people are, quite obviously, highly unlikely to jump into a big long-term investment like a home—even if the move is an attempt to downsize and save some cash, they’re more likely to rent until they get back on their feet. But perhaps more damaging is the uncertainty this environment creates among the still-employed—for many people with jobs, the increased possibility of eventually getting laid off keeps them from buying a home as well. The unemployment effect is therefore multiplied in the housing market. Until unemployment fully runs its painful cycle, we won’t see this sort of fear and uncertainty disappear.

2. Huge, ominous shadow inventories of unsold houses skew the market. Many banks, lenders, and homeowners are with homes ready to sell are simply waiting until the market improves to do so. With thousands of such homes just sitting there waiting for other homes to make the first move, you can imagine the effect on the overall economy.

What to expect for 2011:

Ask ten experts, and you’ll get ten different answers. After all, there was plenty of optimism heading into 2010—until unexpected factors like the foreclosure mess hit this fall. For Dallas, according to the Dallas Morning News, here’s the basic gist of what economists are saying:

The good:

There are a few bright spots heading into 2011. The apartment market has taken off again, with strong leasing and more construction. And job gains in North Texas are some of the best in the country. An increase in commercial property sales and an uptick in development should make for better days in the year ahead.

The bad:

“Jobs are key—not only the number of jobs, but equally important are the kinds and quality of jobs, incomes associated with new jobs and the permanence of the jobs created,” said James Gaines, economist at the Real Estate Center at Texas A&M University. “If all the new employment is for low-wage, temporary workers, it won’t have much positive impact on the housing market. [...] Best news is probably that we don’t see things getting worse, but we also don’t see significant improvement. Tight credit and slow job gains will keep home sales relatively flat. As the job market does improve and more people are employed, there may be a slight increase in volume, but I don’t think it will be more than a few percentage points, at best.”

How this affects you:

One man’s housing slump is another’s golden opportunity. If you’re securely employed and in position to buy a house (especially without having to sell a house), the Dallas housing market is still uniquely favorable to potential buyers. Interest rates are low. Home prices are low. Home builders are eager. Inventory is sky-high.

But for most people, the lagging recovery is simply painful. Homesellers are having a tough time doing just that. Foreclosures are continuing apace. And since our economy is so closely tied to the housing market, housing woes dampen all forms of business and commerce.

Thankfully, at Texas Lending, we offer a slew of services that can help ease the pain—tools like home equity loans and reverse mortgages, which can provide homeowners with a welcome injection of cash and stability in a time without much of either. Contact our Dallas reverse mortgage and home lending experts for more information—we’ll help you ride out the storm.