Happy July to you! I hope you had a fun Independence Day weekend. It is always nice to have four days in the middle of the summer to unwind a bit and enjoy a nice cool drink on a patio. With real estate in Fort Worth, nothing has cooled down about the market. We are still in the midst of a major seller’s market with homes moving blazing fast and more buyers than available homes. I discuss the market in a little more detail in this monthly installment about the state of real estate in Fort Worth and surrounding areas. I share news and numbers for you to have a better idea of what it is going to take to buy a home, sell a home or invest in real estate. It is a great time to be in the market!
Vacant land has been in the news lately. I had a guest explain how you can buy land as an investment and it is as hot market as the rest of the industry. Channel 5 ran a story about the escalation of these lots for any level of buyer. The largest price tag I have seen on a lot was a .36 acre lot just west of Fort Worth, priced at $899,000. The NBC piece also does a great job of showcasing how things have changed for real estate in Fort Worth since the big crash ten years ago.
“The population is growing really quickly,” Northern Realty Group’s Will Northern said. “There’s more jobs here, more people moving in and they’re not making any more land, so prices are naturally going to go up.”
Northern researched property values as part of a recent presentation about the rapid growth in the Near Southside and surrounding neighborhoods and found that the median single family home sold for $145,750 in 2006. By 2016, that figure had more than doubled to $297,500.
We have also seen movement by some of the super rich in the area in the last month. Alice Walton (of Wal Mart fame) recently took a deep discount of 16 percent and 23 percent on her two west Fort Worth ranches. How much is this in dollars? It went down from a combined $48.5 million to $38.6 million. Her reason for reducing deals with the lackluster market for ranch property due to the recent dive in oil and gas money. If you are interested in looking into this further, please let me know and I will drop everything to meet with you!
When it comes to real estate investing, we have seen some light at the end of the tunnel for flippers. I have been noticing many more properties coming on the market that fit that traditional true flip. The Dallas Morning News noticed it as well. Steve Brown put out another great article on the topic indicating a 20 percent rise in houses being flipped in North Texas. I found the part about accidental flippers the most interesting part. In these cases, home owners bought their homes with every intent to stay in them, only to change their minds and flip the high-priced property. It is still not easy to flip in the area as we are only seeing about 5.8% of the homes being flipped while the national average is 6.6%, but I see hope for those investors looking to get some quick capital for their investment goals.
Let’s get to the monthly numbers. Just a reminder that my marketing coverage area is below. This area represents where I spend a majority of my marketing dollars, so I focus my monthly columns on it. I will talk real estate with everyone and do business all over the metroplex.
June Inventory of Homes
Homes available for sale have actually fallen 10 percent from this time last year. We are at 1.8 months supply of homes on the market right now. As a reminder, those in the know consider 6 months supply a healthy market. If it is lower than six months, it is considered a seller’s market while higher than six months means we are looking at a buyer’s market. We are much lower than six so you can picture easily why buyers are salivating over any home coming on the market. We just do not have enough homes on the market right now so buyers go to extreme measures to get a property. Many of the tactical decisions they are taking involve making their offer so attractive that no seller would turn it down. I have seen offers go for ten to fifteen above asking with a clause that the buyer would pay the offer price despite what value the appraisal gives the property. Buyers are offering to pay for title policies, survey and residential service contracts, which is fine, but these fees traditionally fall to the seller. It is a tough time to be a buyer. If you are seller, however, now is the time to sell as long as you have several contingency plans when you sell your home more quickly than expected.
June Days on Market
How long will it take a seller to sell their home? It is actually about 30% quicker this year than this time last year. As you can see from the graph below, we have dropped down to 32 days It is almost 40% faster than two years ago. Most homes will be financed so they will take about four to six weeks to get it all finalized, but any homes that are still on the market after seven days is an oddity in this market. If the home shows well, it will get an offer, probably several, before the first weekend is over. What can a seller do to make sure their homes sells this quickly? Check out our website failed2sell.info for some guidance. This website focuses on reasons why a home might not have sold during its listing period (you can take a quick five question survey and we will get back to you with an opinion), but you can also use the website as way to get ready to sell your home. Check it out if you are even thinking about selling your home and make sure you don’t end up being a home that failed to sell.
June Median Sales Price
Drum roll, please. This number seems to draw the most interest from readers. What is my house worth and how much can I make by selling it? On the buyer’s side, buyers want to know what it will cost them to get a house today. The answer is really no different from the numerous times I have written about them in the past. We saw a median sales price of $217,000 in June, up from $201,000 in 2015, a 8.9% increase. To put all of this into perspective, my home was worth about $150,000 three years ago. With all the improvements I have made over the last two years and the market appreciation, my house was recently valued at $205,000. We are seeing a lot similar spikes in all areas of North Texas. I do have to caution that there is still a real danger in pricing your homes too high, driving away potential buyers. I showed a house this last weekend that was clearly trying to take advantage of the market by asking more than $20,000 over market price. Remember, a good way to gauge if your have priced your house too high is two fold. If you do not get any showings in a week, or no offers in two weeks, you have priced yourself out of the market. Here at Integrity 1st Real Estate, we must be doing something right as we have sold every one of our listings in the last two years. Since pricing a home is 80% of the marketing of a home, we must be doing well in pricing our homes.