Denton TX home sales hit the breaks in July. It would appear that the summer selling season peaked a little sooner than normal in the Denton County area this year. It looks like both the city of Denton and the greater Denton County area saw home sales volume peak in June. Closed home sales in the city of Denton are off by 20 percent according to preliminary stats this morning. Pending home sales in Denton are off by 10 percent. Denton County looks like it will squeak out a 1 percent sales increase for July, but pending sales for July are currently showing a 13 percent decline.

If you are wondering why July sales numbers for Denton are a bit soft, it’s all about affordability, or more importantly a lack of it. Denton experienced a record-breaking June in terms of home sales, but the record-breaking prices in July turned out to be too much of a good thing. The average price of a home in Denton eclipsed $282,000 in July. That may sound like a great thing, but not when you consider the median and average incomes of Denton residents.

Builders are still churning out more new homes in the DFW area than any part of the country so far this year, but if they’re going to sell them, median and average prices could be coming down. It’s a simple mater of math. The Bureau of Labor and Statistics recently released an updated report Real Earnings for July 2018 and not surprisingly it showed declining real wage growth. Unfortunately home price inflation continues to outpace wage increases for most Americans, and that includes those living in Denton County Texas.

The DFW area posted positive year-over-year home sales for the month of July, but July totals were still below sales numbers for May and June. Pending sales numbers suggest that August sales activity will also be soft. Home sales could be soft through the remainder of the year. The sharp drop in DFW commercial construction starts this year and the Dallas Fed’s own warning that Texas’ red-hot economy will likely slow in the second half of the year are pointing to a cooling housing market.

Ironically the Dallas Fed even has a nice graphic of the softness in Texas home sales. You know you are late to the party when a Federal Reserve bank branch explicitly tells you about the slowdown. Of course there is no mention of Fed’s massive balance sheet expansion that led us to the current state of affairs. You probably won’t hear the Fed lament on the massive tax break to their Wall Street handlers either. The latest monthly Treasury statement for July shows what an epic con job the recent tax really is. Corporate America is now contributing almost a third less in taxes compared to last year even as the interest on the national debt balloons. Meanwhile, real wages of working Americans are stuck in the mud.

Based on the preliminary home sales numbers being reported for July, it would appear my inquiry into the algorithm being used by the RECenter for calculating DFW home sales resulted in a change to the formula. The preliminary estimated July sales figures look like they may be off by a percentage point or two, but certainly closer to reality. As I told you a few months ago, publicly-reported (parroted) DFW home sales were artificially inflated in recent years due to a consistent over-estimation of late closings. Following up on my previous post, that 9 percent home sales increase which was reported for May STILL shows to be an increase of only 1.7 percent.

DFW residents might even wake up one day and find that real estate “editor” Steve Brown finally learns that “preowned” is the same thing as “resale”. We can always hope.