The average price of a single-family rental home in Denton Texas was $1629 in December 2018. As the year came to a close single-family leasing activity was relatively flat compared to a year ago, with average prices that were slightly lower. Denton County experienced a 14 percent drop in leasing activity in December 2018, but prices were higher compared to last year.
As the Dallas-Fort Worth real estate market enters 2019 in correction mode, it will be interesting to see how the residential lease market unfolds. For the time being average prices are still holding steady thanks to the employment growth in the area. Average rents have fared better than home sale prices in some cases. I will be posting a chart for DFW average rents when the December press release comes out during the next week. RentCafe’s 2018 year-end apartment report shows a modest 3.5 percent rise in rents in Denton Texas. This compares to a 2.7 percent rise in Dallas and a 3.8 percent increase in Fort Worth.
The December NTREIS press release is going to be a shock to many people, including the clueless real estate desk at the Dallas Morning News. Area home sellers who were trying to unload their overpriced inventory into a softening housing market are beginning to experience what a market cycle actually means. The Federal Reserve, along with coordinated efforts of other major central banks, have spent the better part of a decade attempting to eliminate market cycles and prevent the consequences of greed and excess. If you thought the home price inflation in the Denton area was strictly the product of organic economic growth, 2019 could well be our wake up call.
The Fed never sees asset bubbles, because their economists are paid really well to ignore the bubbles right under their noses. The Fed continues to shrink its balance sheet, and there is talk of a few more rate hikes in 2019, but additional rate hikes are already looking like a difficult prospect with global market volatility increasing as central bank liquidity wanes.
When Jerome Powell visited the Dallas Federal Reserve late last year, the interview between two multi-millionaire Wall Street alums featured a rather patronizing tone as both Powell and Kaplan pontificated on the merits of the fabulous U.S. economy and the wonderful efforts of the Fed officials who facilitated asset bubbles far and wide. Just a few short months later, both Powell and Kaplan have caved as the markets turned ugly and the asset bubbles started to unravel in December resembling the closest thing to a panic we’ve seen since the Financial Crisis.
Powell’s private equity roots were readily visible last week as he turned tail and dangled a carrot for his Wall Street constituents. In case you weren’t paying attention, that market melt-up Friday had nothing to do with the strength of the real economy or the massaged jobs report. It was all about Federal Reserve jawboning as Powell reversed course, claiming the Fed’s balance sheet normalization was not on auto-pilot after all.
“We don’t believe that our issuance is an important part of the story of the market turbulence that began in the fourth quarter of last year. But, I’ll say again, if we reached a different conclusion, we wouldn’t hesitate to make a change,” he said. “If we came to the view that the balance sheet normalization plan — or any other aspect of normalization — was part of the problem, we wouldn’t hesitate to make a change.”
2019 is already shaping up to be a very interesting year. You can expect more waffling from the Fed. It may not matter what they do at this juncture, because the asset bubbles have already been blown, and the Fed has little room to maneuver. If you are in the market to buy, sell or rent a home be careful who you get your advice from. There are a great many real estate agents who have no idea what’s coming, and that could be hazardous to your finances.