Welcome to the next edition of the Fort Worth Market Update. For this update, we will be looking at luxury homes, which are classified as $500k or higher. Luxury real estate has a market unique in itself so you might see some numbers here that are very different.
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 March 2019)
Homes for Sale
In February, the number of homes for sale was below the year before by 3.3%, with 324 properties for sale in this price range. This decrease happened after a 11% increase from 2017 to 2018.
What this means for sellers: For luxury properties, any reduction in the number of homes for sale is a good development for sellers. Luxury properties tend to stay on the market longer due to the smaller number of buyers. If there is less competition, the sellers have a better chance of attracting one of the buyers. Be sure to have your listing agent execute their marketing plan as outlined before the house was listed. You paid them for the marketing expense so they need to be carrying it out.
What this means for buyers: Fewer homes for sale means luxury buyers will face stiff competition for the few properties available. Buyers should be diligent in visiting any new listings that appeal to them and work with their Realtor on a strategy to make an offer if the property warrants one. With fewer homes for sale, all the other buyers will be doing the same so be sure to submit strong aggressive offers.
As with homes for sale, we saw a decrease in the number of new listings in February 2019 as compared to February 2018. We saw 103 new listings as compared to 125 in 2018, which is a 17.5% drop. In 2017, there was 84 new listings.
What this means for sellers: New listings are always a worry for luxury property owners because with so few buyers, the latest addition to the market carries a buzz about it. With the reduction in new listings, sellers can relax a bit as buyers will have less properties to visit, and hopefully will have more eyeballs on their listing. Sellers should be pushing their listing agent to hold multiple events to keep the buzz about their property afloat in the minds of buyers.
What this means for buyers: Buyers will have less fresh listings to explore which means they might have to settle for something that has been on the market, or step away from the market altogether to wait for new listings to appear again on the market. Buyers stepping away, however, need to keep in mind the mortgage interest rates as many feel it will increase this year. You should keep close contact with your lender and make sure they know to inform you if anything changes in the mortgage rates.
Average Sales Price
The average sales price for this price range saw a dramatic decrease from 2017 to 2019. In 2019, we saw a average sales price of $644k while the year before it was $697K. Two years ago, we saw the average price much higher at $888k.
What this means for sellers: As with other price ranges, this average sales price for a specific range should only be used as guide for sellers to help build their strategy. Average sales price gives sellers an understanding of where most luxury properties are being listed. If your home is close to average, you will have more competition than if you are higher or lower than the average. Sellers finding more competition should be looking to their Realtor to get the attention of buyers for your property, like smart digital marketing campaigns, or video.
What this means for buyers: Buyers know that if their budget is close to the average, they will have more options. With more options, buyers find themselves in a better negotiation position with sellers. Sellers will know that there is competition for their property and if they receive an offer, any offer, they will be more prone to work with it. Buyers should work with their Realtor to determine a strategy on contract terms.
With the luxury market, you tend to see a higher inventory numbers due to the lack of properties and the limited buyers searching in this sector. In 2019, we saw a months supply of 5.9, which was much higher than the rest of the market. Technically, it is a seller’s market. In 2018, this number was 7.1 and it was 6.9 in 2017, which were strong seller’s markets.
What this means for sellers: Sellers should rejoice that the market supply is lower, but they should also realize that this lower months supply could simple be a product of less new listings being added to the market. Despite the reason for the smaller inventory, sellers should still be diligent in keeping your Realtor on top of things when it comes to selling your home. You should make them earn their commission.
What this means for buyers: Buyers already know that the pickings are slim for them in the luxury market. With this statistic, it reinforces the message that buyers need to be on their toes with any new listings that show well and a priced correctly. All other buyers will be looking over the property with them and the competition will be great. Buyers should work with their Realtors on a timetable to get offers for new listings to sellers.
To say the least, we saw a lot more closed sales with luxury properties in February than this time last year. Forty Four properties closed in February which is 109% increase from last February which only saw 21 properties close for sellers. In 2017, we saw 35 properties close during February.
What this means for sellers: Sellers should rejoice at such a large increase in closed sales. Why February? It could be the impending mortgage rate increases spurred some buyers to action, or it could be buyers had more options on the market so they were able to finally find that dream home. Sellers with properties on the market should speak to their Realtor on how to take advantage of this increase in closed sales. For example, the agent could run some print ads on the benefits of your property.
What this means for buyers: Buyers are closing on more houses in this price range. With buyers still looking, they shouldn’t let their fear of missing out drive them to make a decision they will regret later. This level of purchase deserves to be treated with patience and care. Don’t rush it! You need to make sure your realtor doesn’t either.