Welcome to my monthly post about real estate in Fort Worth. Each month I go over some numbers that I believe exemplify the local real estate market. I also go over three news stories I found interesting. These stories might not be the biggest news of the month, but I love the way they show a different side of the real estate game. As many of the regular readers know, April is a busy month for me. My children celebrate birthdays this month. My youngest turns 18 this year so I am the proud father of two adult children. They both have turned out to be great people!
For my first news story, we turn to my favorite real estate blog over at the Dallas Morning News. In one April post, they highlight the fact that we added more people in the last decade than any other urban area in the country. I know I love living here. We now know that a lot of people agree with me. We have added more than 1 million people in eight years. Seven and half million people now live in the region. Denton county has been the most busy county while Frisco, Mckinney and Plano has been adding people at the largest clip. What does this mean for real estate? It means higher prices as we have to spread out further away from the employers which means our commutes get longer. The closer locations to work bring the highest real estate prices. Of course, it also means inventory will continue to be a challenge.
For my next news highlight, I venture over to my new favorite subject. The disruption of the real estate industry by the so-named Ibuyer companies. For those who are not familiar, these are mega corporations with a business model where they buy homes directly versus selling the home for the owner. Keller Williams, the real estate brokerage in Austin, has decided to enter the fray and start buying homes later this year. This traditional brokerage joins companies like OpenDoor, Offerpad, Zillow and Knock. I really like this market watch article because it does a great job of breaking down these companies’ market share over the next decade. The bottom line is that the real estate market is so large that none of them think that they will dominate the market. For example, Phoenix has had most of these companies for a couple of years now and the Ibuyers only own 6% of the market. Traditional real estate is not going anywhere anytime soon.
My last news item is a about me being the news. I was honored to be quoted in an article on bobvila.com. It was an article highlighting things real estate agents never knew about the job before starting it. Here is my quote. I got a whole slide to myself : Slide 3.
As a new Realtor, the biggest surprise for Adam Wright, an agent with NextHome Integrity Group in Fort Worth, Texas, was that home buyers are super savvy when it comes to house shopping, thanks to all the listing information available online. “I had to change my tune from being a tour agent to someone who would experience the house with them as they viewed it for the first time,” Wright says. “Buyers know what they are doing and expect agents to be more advisers than information gatekeepers.”
March Months Supply
In Fort Worth real estate, we have seen an increase of 15% in the months supply in March. In 2017, the number shows to be 1.8 months which is 21.4% lower than March of this year. Just a reminder that a six months inventory is considered a healthy market. We have a 2.2 months supply in 2019.
What this means for sellers: For sellers, this increase might not seem like a lot but with the tight inventory we have had the past several years, even this jump to over 2 months supply is enough for buyers to notice. Homes are staying on the market longer because many sellers are still pricing their homes too aggressively. With buyers having more choices, they don’t feel compelled to overpay for a home. Sellers need to work with their listing agent to ensure the list price is in the right range for the market.
What this means for buyers: Buyers are seeing homes staying on the market longer. Buyers should note that the market is still strongly in favor of the sellers so should work their buyer’s agents to get offers in quickly, especially when a house shows well and is priced correctly. Agents in the field are still reporting multioffer situations where a large number of buyers are submitting very aggressive offers.
Average March Days on Market
It now takes an average of 48 days for a home in Fort Worth to find a buyer. This is number has increased by over 30% in two years. The number for 2017 is 35 days and 43 days last year.
What this means for sellers: Sellers have to realize the days for most of them to have a quick first weekend sale might have come to an end. However, if you do what is needed to present your home well to buyers, you might still get this kind of attention the first weekend. You have to stage your home, which means making each room look appropriate for its function. Clutter has to be cleared out of the house including any personal items. Finally, you should always have clean walls and floors. A messy house distracts from what makes your home great so you need to be sure to keep it sparkling as well.
What this means for buyers: Buyers can now look at more options and not settle for the one or two houses currently on the market. Competition will be lessened somewhat, but only for homes that do not show well. It might be fruitful to look beyond the clutter or mess of a house that does not show well. Many buyers will bypass these homes even though they might be a perfect fit once the curtain of ugliness is raised. In other words, hidden gems could be had and you might even find yourself getting a bargain. Property Brothers got that part right!
Average March Sales Price
The average sales price in Fort Worth has fallen to a single digit increase with a 3.6% increase from 2018 to 2019. This ends multiple years of double digit percentage increases in Fort Worth. For example, 2018 is 13.6% higher than 2017. The current average price to purchase a house in Fort Worth is $271K.
What this means for sellers: Sellers might have waited too long to sell if they were hoping to see double digit percentage increases in 2019. The single digit appreciation is still nice for sellers looking for the market to top off, which it will do eventually. Sellers can’t price their home 5 to 6% above the previous months sales and expect buyers to make offers on it. When it comes to list price, it is best to stick to the sales comparable in the neighborhood and price the property within the range you are given by your listing agent.
What this means for buyers: Buyers are still feeling pain when it comes to the raising sales prices in Fort Worth (and the entire region). Buyers can rejoice in the slight slowdown, but when many buyers cannot afford anything more than $200K, even single digit appreciation will give them heartburn as their wages have not kept up with the house appreciation in the area.