For the past two years, sales of pre-owned northwest Dallas suburban homes have been 40.7 and 37.3 percent lower in January than in the preceding December. This year, however, the number of homes sold during January was down only 22.3 percent.

January's 321 home sales jumped 18.9 percent from the 270 homes sold during the same month a year ago, according to data compiled by North Texas Real Estate Information Systems Inc., which is equally interesting. This increase breaks, in a fairly dramatic way, a six month string of sale volume decreases, and while a single month increase in sale volume usually does not have much significance, in this case it may be serving notice that this particular market is becoming positioned for a pretty significant change in direction.

The potential for a change in market direction is supported by the number of homes listed for sale increasing this January at a much lower rate than during the past several years. Approximately 1,795 pre-owned, single family homes were listed for sale at the end of January in the northwest Dallas suburbs, a 3.2 percent increase over the number of homes listed at the end of December. Last year, during this same period, the number of available homes increased by 8.6 percent, and two years ago it increased by 4.6 percent. It must be noted, however, the potential dark cloud to this otherwise sliver lining is that at the end of January last year, only about 1,485 pre-owned northwest Dallas suburban homes were listed for sale, 17.4 percent fewer than this year.

Further indicating that a change may be in store is the inventory of pre-owned homes available for sale in this area increased by only 22.2 percent during January, from 4.5 months supply to 5.5 months supply. This is significantly less than the 62.9 percent it increased between December 2005 and January 2006 when pre-owned home inventory in the northwest Dallas suburbs increased from a 3.5 to a 5.7 months supply. Similarly, during the same period two years ago, this area experienced a 53.5 percent inventory increase.

As likely would be expected, home value appreciation also ratcheted up. Homes sold during January were priced on average 4.6 percent higher than homes sold a year ago. This is up substantially from the revised 1.5 percent price increase for homes sold during December and a bit more modestly from November's again revised 2.4 percent increase.

Appreciation in home values extended across all price ranges. Compared to a year ago, the square foot price of a typical $250,000 northwest Dallas suburban home sold during the three months ending in January increased by 4.3 percent, to $94.70 and the square foot price of a typical $350,000 home sold was up .3 percent, from $103.72 to $104.05. The square foot price of the typical $450,000 home rose by 1.3 percent, to $121.11. The average square foot price of homes selling for less than $200,000 was up 2.2 percent and the square foot price of homes selling for more than $500,000 was up 2.8 percent.

The median price of pre-owned homes sold during January in the northwest Dallas suburbs climbed to $292,900, a 2.8 percent increase over the $285,000 median price posted last January. Two years ago, the median price of these homes was $245,000, 16.4 percent less than the current median price.

The average length of time required to sell a home increased to 64 days in January. This is 10.3 percent longer than the revised 58 days required to sell a home during December, but exactly the same as required during January a year ago.

Market Highs And Lows

The northwest Dallas suburbs with the largest annual increase in their three month average home prices were Colleyville and Trophy Club. The average price increase in Colleyville was 7.4 percent. In Trophy Club, it was 5.5 percent.

Highland Village had the least price increase. Homes there sold for .7 percent more than during January a year ago. Coppell and Grapevine did only marginally better, each eking out a .9 percent price increase.

Grapevine had the lowest inventory of pre-owned homes among the northwest Dallas suburbs with 3.2 months supply of homes available for sale. A 3.7 months supply of homes available for sale put Flower Mound in second place.

Southwest Frisco had the highest inventory with 11.1 months supply of previously owned homes for sale. The Argyle, Bartonville, Copper Canyon and Double Oak area had the next highest inventory with 9.3 months supply.