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 October 2018)
Homes for Sale
When it comes to the numbers for luxury properties in Fort Worth, the numbers will always be smaller than the rest of the market. In September 2018, we had 386 homes for sale at this price point, which is about 5% higher than this time last year, when we took a slight dip. As a seller, it is good to know that the luxury market tends to be protected from the peaks and valleys experienced in other price points. With this in mind, you need to work with a real estate agent that understands long term planning and the need to always keep your property in the forefront of buyer’s minds. With less buyers looking, it is important that marketing and events are kept consistent so buyers realize the value of your property. For example, it is always good idea to have an open house by invitation only for your neighbors and family/friends. In this way, they can start to create a buzz about your property with their own spheres of influences. You should always request an in-depth marketing plan from any perspective listing agent.
As with current homes for sale, the number of new listings grew about 4% from this time last year. We had 78 new properties come on the market in September 2018. If you are a buyer at this price point, it serves you best to have an agent who is intimately familiar with the area you are interested in purchasing. These agents should have a good idea on properties coming up on the market so they can give you an advance warning. With the small number of new listings, you should be ready to offer on a property quickly as your agent won’t be the only one with advanced warning. Offers should be aggressive, but be something you can tolerate as far as the bottom line. It is also important to reach out to your mortgage professional to discuss different ways to fund the purchase as properties at this price point carry a different loan than the lower price points.
Average Sales Price
With such a wide range of prices in the luxury sector, the average sales price can be used as more of a guide on overall market forces driving sales price than an actual indication of what one can expect to get for a specific property. In this Fort Worth market update, you can see that the average sales price has gone down nearly 10 percent in the last two years. Sellers should be aware that their sector might be experiencing some results of other parts of the economy. Luxury properties tend to be flat historically so if the price is going down, you need to discuss with your listing agent about what is driving down the sales price of luxury homes. What do they see happening in your immediate vicinity that might cause you to lose some value in your home? What can you do to help rectify this drop?
Average Sales Price per Sq Ft
As with the average sales price, the average sales price per square foot at the luxury level is more of a guide for buyers and sellers in the current pricing trends in the market. We saw a slight 2% decrease in the price per square foot of homes in this price point. In the long run, this won’t mean much for the luxury buyer as the numbers are pretty much flat. However, with rising interest rates and different programs for luxury properties, it is very pertinent for a buyer to speak to their lender about how the current price fluctuation impacts their monthly payment and overall loan expenses. For those buyers new to the luxury sector, Investopedia has a great explanation of Jumbo loans.
How long will it take the current inventory of homes to sell out to the buyers on the market? This statistic, known as the months supply, gives us a good indication of whether the luxury sector in Fort Worth is in a buyers or sellers market. As many readers will undoubtedly know, most of the region has been in a fierce seller’s market for years now. In the luxury market, we are seeing the opposite, although the market has grown tighter by over 21% in the last two years. With 7.3 months supply currently on the market for luxury properties, buyers are going to find it easier to find properties for sale. With this in mind, sellers do need to make sure their brokerage is experienced in buyer’s markets and know what to do to get their property in front of buyers. What tricks and techniques do the listing agent employ to make your property stand out from the crowed? You need to be sure to interview several agents to find the one that knows how to perform in a buyers market.
In the Fort Worth luxury market, we closed 38 properties in September 2018, which is down 24% from this time last year. As you might know, 2017 was a bit of an oddity in terms of closed sales for the luxury market as we saw many sellers try to take advantage of the strong real estate market and buyers were moving fast to avoid higher interest rates. It looks like 2018 has come back down to some more of the normal historical numbers we have seen in closed sales. Buyer beware, however. You never know when the market might creep back up in terms of competition. You need to be sure your real estate agent has a clear understanding of the type of property you are wanting so you can move quickly if it is listed.