Happy September! Happy Birthday to my great Father who turned 40 for the 32nd time last week. This is my monthly column about real estate in Fort Worth and surrounding areas. In this column, I amaze you and thrill you with news from around the real estate world as well as share some numbers you need to know for real estate in Fort Worth. If you haven’t read my past columns, go check them out. I do this every month.
The real estate market in the whole region continues to be very hot, despite school starting. In fact, Texas as a whole continues to be a great place for real estate. Wallethub did an analysis of the different real estate markets from around the country using 16 key metrics of 300 cities to figure out which ones had the most insane markets. The Dallas Business Journal celebrated because Texas had 10 cities on the list.
Overall, there wasn’t a lot of diversity for the number of states represented in the top 25 list, with Texas and Colorado boasting an overwhelming majority. Here’s the breakdown by state:
- Texas — 10 cities
- Colorado — 7 cities
- Tennessee — 2 cities
- Kansas, Nebraska, North Carolina, Idaho, California and Washington — 1 city each
CultureMap Dallas went on to list out the cities making the list. North Texas had three cities rank 1,2,3 (Frisco, McKinney, and Richardson). Allan is number 6 while Plano is number 9. Fort Worth comes in at 23 while Dallas ranks 42. Denton (12) and Carrollton (17) also made the list. The 10th Texas city to make the list was Austin. If you take a look at the metrics used, you can see that Wallet Hub did a pretty extensive job determining where the hot real estate markets exist. They used stats from the real estate market itself, like average days on market and turnover rate (stats I use every month in this column), and stats from economic environment and affordability. To say the least, we live in a nice hotbed of real estate activity and it keeps churning along.
In my coverage area (see below), we have seen an outburst of restaurants opening up along the 114 corridor, according to the Fort Worth Star Telegram. . Roanoke, Trophy Club, Southlake and Grapevine have all seen both small and major chain restaurants open their doors in the last two years. Why should you care about this? Other than this is a great for our economy as whole (not to mention satisfies the foodie in me!), we can also look at national chains as a way to gauge real estate market viability. Crazy, you say! You would be surprised. Some real estate investors use Starbucks as a guide on where to invest next with their funds. In a piece from the Wyatt Investment Research, we are introduced to The Starbucks Real Estate Investment Strategy.
This activity has a very positive effect on real estate prices. A recent study from real estate website Zillow (NYSE: Z) looked at homes within a quarter-mile of a Starbucks location. What they found was that between 1997 and 2014, the homes located near a Starbucks increased in value by 96%. Meanwhile, the average home in the U.S. increased in value by 65%.
Pretty freaky huh! I am sure if you look closely at some of the other national chains, you would see similar growth patterns as Starbucks. These businesses want in areas where “redevelopment and gentrification” are taking place. With homes going up more around these types of development, you might want to look closely at the 114 corridor as you next investment area.
One final note on a trend I have noticed of late. We are seeing more and more investor properties coming on the MLS. I have been able to find around 50 possible flip properties a week on the MLS. If you are interested in seeing these properties. send me an email and I’ll make sure you get them every morning.
Before I launch into the numbers, here is my coverage area again. It is off season so I am currently working all over the region so don’t be shy in talking to me about real estate located on the Dallas side.
August Inventory of Homes
This number continues to be very low. We real estate professional like to look at this number as one way to gauge the health of a housing market. Six months supply of inventory is a healthy market where you have a good balance of buyers and sellers. With the 1.8 month we are seeing this year, actually even down from the 1.9 from last year, we are seeing a very tight sellers market. For sellers, this is a great time to sell your home, especially if you have some contingency plan in place on where to live if you home sells very quickly. For buyers, it is a frustrating times with many homes going into multi offer situations the first few days on the market. You have to move quick and be able to view a home the same day it comes on the market, or you face losing the home to another buyer. Buyers are also still being forced to make outrageous offers (at least in my opinion) on homes that are artificially escalated so they will end up being underwater as soon as the market turns. For investors, you will see more of them making blind offers just to get the property under contract. Luckily, I am seeing more investment homes coming on the market in the last month, upwards to five to 10 a day that are 70% to 80% ARV. I plan to watch this closely to see if this is a flag for a buyer’s market on the horizon.
August Days on Market
Twelve days on the market is the median for real estate in Fort Worth. This is down by over 50% from this time last year. Days on market is a good indication of how long most sellers will have to wait to sell their homes. Twelve days is very fast, which means that the pain of showing a home is decreased, you will tend to get higher bids for your home and you can move on with your life much more quickly than in previous years. Sellers need to be sure to put on a good presentation with their homes by keeping it clean and clutter free. If you can afford to do some upgrades, do them in the kitchen and bathrooms. Floors are also a good investment for sellers. Roofs give owners the greatest return on their investment, sometimes getting a return as much as 120%. If you have had a storm go through your area recently, I highly recommend calling your insurance company to see if they will replace the roof for you. I have had several deals die this year over a disagreement on the roof. It is a very touchy subject for both the buyers and sellers. Sellers can eliminate this issue altogether by working with their insurance company before listing their home.
Average August Sales Price
There is not really much to write here that I haven’t already covered this month. Home prices continue to climb with real estate in Fort Worth as it does all over the area. Homes in the $150k range last year are now being listed in the $180ks as sellers and listing agents move to take advantage of the market. In my target area, the prices rose another 3% from this time last year. It has slowed down a bit as we saw a 7.9% number last year, but homes continue to be advertised at outlandish prices. You should probably enjoy the ride now as this will end eventually. If you do want to get started, let’s chat about how Integrity 1st Real Estate can help you!