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. It is still a hot market with many of the news articles indicating an over reaction to the slowdown. We are still a strong market, just not an overheated one.
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 December 2018)
Homes for Sale
When it comes to the number of homes for sale, we have seen a dramatic uptick from two years ago when we only had 555 homes for sale in November. Two years later, we are up by a startling 74.5% in this price range to over a 1000 homes for sale. One reason for this large increase is that less homes are selling each month. We could also be seeing more new listings being put on the market (see next statistic to find out)
What this means for sellers – Sellers should set their expectations that their home might not sell as quickly as it has in the last few years. With more competition, homes are taking longer to sell. We have seen some more sales price reductions in this price range across the region. Sellers should also realize that their home might not get the sales price of the house down the block from six months ago. Sales comparisons (which should have been presented to the sellers by the listing agent) should be limited to the last 90 days. Sellers should expect to lower sales prices.
What this means for buyers– With more homes on the market, buyers should be able to relax a bit from the overheated market we have seen the last few years. Buyers should not have to worry about every one of their possible homes going under contract immediately. However, buyers should still work with their buyer’s agent to get offers in quickly if a home shows well and seems to be getting a lot of interest. Some homes will move quickly so have your top offer ready to go if the situation calls for it.
As one would expect from the large number of homes on the market, we are seeing more new listings put this year than the previous two years. We have seen an increase of 43% in the number of new listings in this price range for total of 450 new listings this last November. The higher number of new listings is most likely a result of sellers attempting to take advantage of the historically high sales prices, and many coming to realize the days of double digit sales appreciation is in the past. In other words, many sellers are realizing the market might be topping out so they want to get their homes on the market before they see prices start to fall back down to earth.
What this means for sellers – Sellers putting their homes on the market need to be sure their agent is not showing them comparable sales from six months ago. As the market was a much different beast in June than it is now, the list price might be artificially inflated if you use sales comparisons from that time period. It is a better practice to look at sales comparisons from the last 90 days. If your listing agent shows you older data, you should ask them to locate more recent sales to use for determining the listing price. There is nothing that contributes more to the slow sale of a home than over pricing it. It is worth taking the time to price it right!
What this means for buyers – Buyers should not settle for homes that don’t necessary meet their every wish. It is still important to be flexible when shopping for a home, but you can shop knowing that there will be additional homes coming on the market. You should request that your realtor set up a MLS portal for you that will notify you when new listings come on the market. In this way, you can get a head start on looking at these new listings.
Average Sales Price
The average sales price for this range has stayed steady from this time last year improving to $241K from $239K. However, it is gone up from $228K since 2016. With the perception that the market is red hot for sellers (as it has been), many homeowners are going to attempt to price their homes at the top range given to them by their realtor. The continuing increase in sales appreciation in this price range could be symptom of seller’s over confidence.
What this means for sellers – Despite the many numerous news reports to the contrary, this market is still very strong and will be into 2019. Sales appreciation might slow down as the market begins to cool off from its historical tight inventory, but sellers should expect the sales price to continue to go up, many experts say 2% to 5%. Sellers on the fence about selling should seriously consider entering their house in the market in the next few months to take advantage of this still hot seller’s market.
What this means for buyers – Buyers should not be too deterred by this statistic. After all, the best use of this statistic, as mentioned in other Fort Worth Market updates, is to help determine a budget for the house hunt. With this price range’s average sales being in the mid-240s, buyers should expect to find more homes at this price point (and even higher). Buyers should adjust their expectations accordingly.
Average Sales Price per Square Foot
Average price per square foot has not as stayed as steady as the average sales price, increasing by over 15% since 2016. With the overall sales price appreciation being slower than the average price per square foot, one has to consider that homes are still being put on the market at artificially high sales prices. Smaller homes are being compared to larger homes driving up their price despite the smaller square footage.
What this means for sellers – As has already been written in this Fort Worth Market Update, many sellers are being presented with data from sales comparable properties that are not true apple to apple comparisons. If the listing agent did sloppy work and presented sales of larger homes as justification to price a smaller home, the seller needs to push back to ask for some other comparable properties be presented.,
What this means for buyers – As with average sales price, buyers should use this statistic as a guide to help them determine a budget. In addition, the statistic can be a interesting insight into how sellers are feeling about the market right now. If sellers are optimistic enough to overprice smaller homes, you know sellers will continue to expect buyers to give more concessions than the seller. Buyers should work with their agent on how to approach negotiation if an offer is countered carelessly with no regards to the offer made by the buyer.
As one would expect when more new listings are coming on the market and with homes are staying on the market longer, the inventory has slowly gone up where we now have 2.4 months of homes available for sell to buyers. This statistic has gone up nearly 20% from 2016 when we had 2.0 months on the market. One would hope that the inventory would be even higher, but some experts have indicated the exit of many buyers (due to higher interest rates) is causing inventory to stay down because we don’t have as many buyers in the market looking for a new home.
What this means for sellers – Sellers should let this statistic drive their optimism of their chances of selling their home close to asking price. We still are seeing more buyers than homes on the market so prices will continue to stay high and do so into 2019.
What this means for buyers – Buyers should realize that buyers in this price range might not be seeing the same slow down we are seeing in other price ranges. With this in mind, buyers should consider feel more relaxed about the market, but not lull themselves to sleep and miss the chance to get a nice home. Buyers should remain diligent, but calm in their approach to house hunting in this price point.
Closed sales for this price range actually went down over 9% to 909 properties closed in November of this year. This is an adjustment from 2017 when we saw an increase of 11.5% from 2016 with nearly 1000 homes closing in this price range. We are still on the plus side from 2016 when we only saw 893 homes close in November.
What this means for sellers – As we have written before in this Fort Worth market update, sellers should be ready for their homes to stay on the market longer in this market in transition. Sellers should take extra care to keep the presentation of their homes in top notch condition. Selling is all about presentation. If you don’t present your home well because you have grown tired of the showings, there is a higher likelihood the property will stay on the market even longer as buyers have a difficult time imagining your home as their own place.
What this means for buyers – As we have seen throughout this Fort Worth market update, buyers should feel optimistic as more homes are staying on the market for longer time periods. Buyers should stay alert to this changing number from month to month to see if they need to change their strategy any from one of calm aggressiveness to just plain aggressiveness.