Welcome to the next edition of the Fort Worth Market Update. For this update, we will be looking at homes between $150k and $200K. This price range tends to have the fewest number of homes available compared to the buyers looking in that price point.
Our methodology for this Fort Worth market update is straightforward. We use the North Texas Real Estate Information Services (NTREIS) to present you with a broad overarching look at Fort Worth for this price range. For those who do not know, this multiple listing service is the place real estate agents advertise their houses for sale. Each listing will have certain required data. NTREIS then compiles and manages this data to allow for use by its members to keep buyers and sellers appraised of the market conditions in the Dallas-Fort Worth area.
If you are looking for a specific region to get numbers, please let us know. We can focus specific areas from certain neighborhoods, zip codes and draw specific areas We will work with you to give you the data you need.
With this Fort Worth market update, we would first like to show you the spread of the location of houses in this price range. (as of October 2018)
Homes for Sale
We had 351 homes for sale in this price point in September, which is 4% drop from this time last year. This drop is a disappointment after we saw a increase of nearly 16% in 2017. Sellers in this price range should realize that they will have a lot of interest in their homes when they list them with a real estate agent. Many millenniums will be interested in homes at this price point. In fact, a recent Bank of America study showed that many value home ownership more than having a family. It would be a good idea for sellers to ask their agent how they market to this generation of buyers. If the agent doesn’t have a solid answer, you might want to keep looking for another agent.
With new listings, we also saw a decline with 13% drop from this time last year. It is amazing to only have 262 new listings come on the market in a city with 800k+ population. Buyers will have to be persistent and patient in their pursuit of their home. They should work with their employer to allow them to go see homes as they come on the market and make sure they have agent that can show homes quickly to them. Offers should be aggressive with the offer price and don’t attempt to put too many other costs on the seller like a residential service warranty or closing cost assistance. Investors should realize that many sellers will not be open to working with them on sales price since they will be able to most likely find a traditional buyer. Many homes are marketed directly to investors so those should be the ones investors focus their efforts.
Average Sales Price
Average sales price in this price range has been flat over the last three years with on nominal increases of 1.8 percent. Investors need to be sure to have a long range plan in place for their investment activities if they are shopping in this price point. Do they flip properties or buy properties for appreciation? Do they want the properties strictly for cash flow? You need to play these questions out in your mind before getting into real estate investing. What if you already have a long range plan? In this time of market transition, what might have been clear three years ago, might be more foggy now. With this in mind, you might have to revise your long range plan to accommodate what you feel the future will hold. It might even be time to institute a wait and see approach.
Average Sales Price Per Sq Ft
Aveage per square foot has some gains again this September like the year before. We saw nearly an 8 percent increase in the aveage price per square foot from this time last year and 15.1% from 2016. Smaller homes are coming on the market at the higher price points to push up the price per square foot. Sellers should be careful here when pricing their homes based exclusively on what they see in price per square foot. This statistic is not always an apple to apple comparison. For example, you might have a house that is 500 square feet bigger than any other house in the subdivision. Does this justify a $50k+ price increase in the list price? No, of course not! You would never sell your house at that inflated price. It is not always best to have the biggest, most updated home in the neighborhood. Your real estate agent should be able to guide you through the process of making a decision on sales price including the many different data points to consider while determining the best price.
How long will it take the current homes for sale to sell out to the buyers? This is the statistic we call Months Supply. The lower the number, the stronger the market is for sellers. Higher numbers mean we are in more of a buyer’s market. For this price range in Fort Worth, we are currently 1.4 months, which means the sellers still rule the market. It is hard to believe that this has actually gone up nearly 38% since 2016 when we had a 1 month supply. We simply do not have enough homes in this price range.. Why even bother if you are a buyer in this tight market? As was written before, you have to patient to be a buyer in this market. It might take some time for you to find the home you can purchase. You should be sure you have the right agent to help you through this process and one that is dedicated to you versus the quick sale. Some buyer’s agents have policies that they do not show more than 5 properties to any one buyer. In this market, that policy would fall flat as you might be shopping for weeks before you land a home.
As you would expect with this Fort Worth market update, the number of closed sales has fallen dramatically in the last two years. We are looking at a decline of nearly 45% in the number of closed sales in two years. Investors should be on the lookout for homes that have been on the market for an extended period of time. Sellers get tired of the showings and the hassle of selling their home. Many sellers are much more willing to bargain if the property has not sold in 90 or 120 days. With this large decrease in the number of closed sales, one possible cause is that homes are staying on the market longer and not selling. It is a good idea to have your agent dig into the data to discover these homes for you. You might pick up a good investment property with this approach.