Is there a spot that you visit so often you’d like to purchase property? Or are you thinking of buying a vacation home that you will rent out when you’re not staying there? Whatever your
Our Shifting Market
If you have been thinking that signs are staying in yards a little longer this year than they have for the past few years, you’re right. Homes are taking a little longer to sell and some of the chaos you’ve heard about on the news is subsiding. Though things may feel different this summer, experts don’t believe there is anything to fear, and many think the change is a good thing overall.
The Dallas-Fort Worth area housing market had been experiencing a sudden increase in demand due to several new companies bringing thousands of jobs to the area, in addition to the usual buyers in to the market. Add investors looking to expand their portfolios, and a construction labor shortage, and you’ve got a perfect storm for a crazy hot market. Basic economics taught us all that when high demand is met with supply, prices will go up. For several years, there had not been enough homes on the market for everyone looking to buy, so multiple people were competing for the same homes. The DFW area experienced record home inventory lows and record demand at the same time. So what happened?
Builders have been able to catch up some, more homeowners decided to sell their homes, and demand tapered off as some of the larger companies got to work and interest rates started rising. As inventory began to increase, home shoppers began to have choices again. At a certain point, home owners and sellers are preparing to feel the sting of new tax regulations as well. A clause in the new tax bill will cap the amount of property taxes that a homeowner may deduct, and this cap will impact homeowners in the mid $400’s and up, in many parts of our area. But did the market “flip” to a “seller’s” market? Not quite.
According to the numbers, lower price ranges (homes priced $200,000 and under) are still in very low supply, while the upper end’s supply and demand are just about balanced. This is measured using a standard called “months of inventory” that basically means that with current demand, the homes currently available on the market would sell out in X number of months, if nothing new is listed or built. A 6-month supply is conserved balanced. Anything less is a “seller’s” market, meaning demand exceeds the available inventory of homes for sale, and more than 6 months indicates an inventory surplus. Across DFW, the “months of inventory” for homes priced under $400,000 are at about a 2-4 month supply, and homes across the board are averaging 28-59 days on the market before accepting a contract.
While sellers may not be getting a stack of offers during the first few days on the market, when priced right, most homes are selling in a reasonable amount of time. On the flip side, buyers aren’t having to over-bid, making it easier for those without stacks of extra cash to finally purchase a home.
Compared to last year, the volume of overall homes sold remains about the same, so things are still relatively healthy and we’re seeing a more “normal” real estate market.
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