Welcome to the next edition of the Fort Worth Market Update. For this update, we will be looking at homes in the price range of $200K to $300K. After you looking over the numbers, you will see that much of the inventory in the market in Fort Worth falls into this range. It is the one area of the Fort Worth market that appears to have enough options for buyers.
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 have seen a dramatic increase in the number of homes of sale in this price range in Fort Worth. As can be seen from the graph below, we have seen nearly a 90% increase in the number of homes for sale going from 572 to 1172. Sellers with homes in this price point need to realize that the days of having the only house for sale in your subdivision might be coming to an end. Of course, there are data points for the entire DFW region pointing to a slowdown in the market so this increase could be a result of this overall slowdown. It could also be that sellers are finally realizing that this market is a prime opportunity to sell their homes at the highest sales prices they have ever seen in their respective area. Industry leaders are coming out to say that the slower appreciation will continue into 2019 with single digit increases versus the double digit ones we are used to seeing in today’s market. If you are thinking about selling your home, it might be a good time to move on that feeling as you might not see prices this high again until the cycle comes back around.
New listings went up 10 percent from this time last year going from 489 to 536. With more listings available, buyers should be encouraged that the days of market madness could be coming to an end. Buyers should still be diligent in their house hunt and have their agent ready to move on properties very quickly. At the same time, if a home doesn’t check off enough items from your “must have” list, you have more of luxury of waiting for a better home to come on the market, more closely matching what you really want to purchase. In other words, buyers can be more selective in the offers they make than in the past. As listing agents see their listings stay on the market longer, many will start to employ ways to attract buyer’s agents to their properties. One trick is to offer the buyer’s agent a “bonus” or up their commission split with the buyer agent. Be sure your agent is not directing you to only these properties. Buyers should ask their agent for them to reveal anytime they are prone to receive additional compensation for any particular property. As a buyer, you have a right to see any property fitting your criteria, no matter what the compensation your agent receives in the transaction.
Average Sales Price
After losing slight ground in the average sales price in this price range, we saw it tick back up to the 2016 levels where the average sales price is now just north of $240K. You should not jump to too many conclusions for this particular statistic for any specific price range, as it is more an indication of where the average number of homes fall in its respective price range. However, both sellers and buyers can get a good idea that many homes in Fort Worth will be around $240K. When determining a budget for purchasing a home, knowing that many homes will be at this price point will allow you build a more concise strategy on where you should be looking for homes. Buyers with a budget of $300k will know that they will have more options in the lower part of the range than in the upper part of the range. Sellers could also realize some insight from this statistic to know that if your property falls close to the average, you will have more competition than in other price points in the range. Sellers in the $240K to $250K range should be ready to discuss with their listing agent additional ways to market the property so it stands out from the crowded field.
Average Price per Sq Foot
With the 8.4% increase in the average price per sq ft, owners of smaller homes should rejoice as one explanation for this steady increase is that smaller homes are coming on the market at higher price points within the range. Buyers should be cautious of what this means for their purchasing power, The mortgage interest rate is also slowly ticking up with more well-qualified buyers seeing a 5% or more from their lenders. Buyers might have to settle for a smaller home if they want to purchase a home with a lower monthly payment. One trick buyers can try is to find a home that is a fixer upper. You can work with your lender to get a rehab loan where the cost of repairs and upgrades is built into the mortgage. There are plenty of sellers who do not want to get their homes ready to sell, but prefer to sell it at the price the current condition dictates in the marketplace. If a buyer can find a larger house for thousands cheaper and can fix it up to living conditions with the rehab loan, they can then work on getting it to pristine condition gradually as they live in it.
As it has been written before with these Fort Worth market updates, you can sometimes see some confusing and contradictory statistics when the market is in flux. Months supply gives a good indication if we are in a buyers or sellers market. It shows to us how many months it would take for the current inventory of available housing to sell to the current number of buyers. With this month, we saw a decrease of 4% from 2.5% to 2.4%. The lower number indicates a sellers market since it would only take about 2 and half months for the current inventory to sell. Buyers markets are realized at six months or higher. With the number of listings on the market and the new listings this month, one would expect this number to grow higher. However, it went down. One possible explanation is that more buyers are coming back to the market, which makes sense considering we are starting to see signs of it being more favorable to buyers.
With closed sales this month, we saw an increase of 8.3% to 442 homes being sold. Fort Worth is a very large city with over 800k+ residents within its city limits. Homes are just not being bought at a pace that makes sense for a city this size. One possible cause is that the increase mortgage interest rates makes it difficult for most buyers to justify the expense. This article from Housingwire seems to indicate that it is too expensive to buy a home at this time. It points to a potential increase of 10% in monthly mortgage payments by July 2019, which means a buyer will have qualify for a higher priced homes and many will not be able to do so in this tight wage market.