With this edition, the South Denton County Market Watch Newsletter becomes the Northwest Dallas suburbs residential real estate market conditions | Market Watch Newsletter. The newsletter's new geographical area of coverage adds Southlake, Colleyville, southwest Frisco, west Plano, Coppell, Keller, Westlake and Trophy Club to Flower Mound, Highland Village, Argyle, Double Oak, Bartonville and Copper Canyon.

This expanded coverage will provide prospective homebuyers and interested homeowners a broader perspective on current residential real estate market conditions in the towns that most people living in the Dallas Fort Worth area probably would pick as the best places to live in the entire metroplex.

Area Home Market Improved In December, Maybe

The number of existing homes sold in December in the northwest Dallas suburban area appears to be essentially unchanged from a year ago. In the towns covered by this newsletter, 336 MLS-listed homes were sold this December, versus 335 homes sold a year ago. Other indicators are mixed, but overall seem to point to a marginally stronger residential real estate market.

The broadest indicator that this area's housing market may be beginning to grow stronger is that average square foot sales prices for the past three months have increased by 4.3 percent over a year ago, from about $93 a square foot to just under $96 per square foot. This increase occurred pretty much across the board with only mid-priced homes failing to post significant price gains.

Inventory of northwest Dallas suburban homes listed for sale remains quite high but did move lower to an average 6.1 months supply in December, down from 8 months supply in November. This decrease was the result of 51 more homes being sold in December than in November while at the same time available homes inventory dropped from about 2,280 homes to just under 2,050 homes.

The most disheartening news for area homeowners who are trying to sell their home is that the average length of time it is taking continued to climb to what is a pretty hard to believe level. Homes that sold last month averaged 106 days on market compared to homes selling in December 2002 averaging 73 days on market and homes selling in December 2001 averaging 61 days on market.

However, days on market, by its very nature, lags behind other market performance indicators. When it comes to forecasting the overall direction in which the northwest Dallas suburban residential real estate market will move in the next several months, it seems somewhat more probable that recently increasing sales prices and lower inventory levels will prove to be the more meaningful indicators.

Contrary to what is generally being reported across the entire metroplex, it is the highest-priced homes segments that currently are strongest in the northwest Dallas suburbs. For the past three months, the number of homes selling for $500,000 and above was up 49 percent over the same period the previous year, 120 homes versus 87 homes, and the average per square foot price increased to $144.13, up 7.2 percent. Per square foot prices of homes selling for $400,000 to $499,999 was similarly up 7.2 percent, to $115.64, and sales volume increased 12 percent, to 83 homes sold.

The average per square foot price of homes selling for less than $200,000 was up 1 percent over the previous year, to $80.23, but the number of homes sold dropped 3 percent, from 329 to 319 homes. Homes selling for $200,000 to $299,999 showed a 4 percent sales volume increase, up to 289 homes sold, and average per square foot prices were essentially flat at $86.68. The total number of homes selling for $300,000 to $399,999 dropped by 10 percent, from 188 to 169 homes sold. The average square foot prices of these homes also dropped, by .6 percent to $97.92.