Happy September! Welcome to my monthly musings about real estate in Fort Worth. It has been a crazy summer for real estate as buyers flocked to take advantage of the low interest rates, while housing prices continue to appreciate. We are still in a extreme inventory shortage and there is a lot of doom and gloom in the news about the economic so you should feel great about reading my post today. I help to make sense of real estate in Fort Worth. For those of you new to my monthly post, I go over the numbers that I believe show the current state of real estate in Fort Worth and touch on some news that caught my eye. First the news….
When you think of our great country and all the wonderful places to live, you have to ask yourself from time to time (at least I do) which areas of the country are the most desirable places to buy a house. Would you believe that WalletHub thinks North Texas? You would not be wrong. According to this post from CultureMap Dallas, we have five cities sitting at the top of the list: Frisco, McKinney, Denton Carrollton and Allen.
The personal finance site reviewed the average number of days a home stays on the market, share of newer homes (built between 2010 and 2017), building-permit activity, affordability, population growth, and others metrics for each city.
Frisco is number two with only Boise, Idaho beating it. Denton is number five with the rest being “McKinney at No. 6, Carrollton at No. 7, and Allen at No. 9.” What about Fort Worth? We came in at 13 and number 2 overall in big cities. Dallas is 112. Yes, you read that right. Dallas is 112th.
As you know, our traditional real estate model is getting challenged daily by new ventures. We have well-funded flippers (Ibuyer companies) making it super easy to buy a house, but at prices that make the average homeowner question if easy is worth it. You have other companies experimenting with flat fee structure where no matter the value of your home, you only pay the same price(Door). You even have companies that are coming into the area promising to make your house beautiful and you don’t pay for it until your closing (Curbio). Dallas Innovates outlines how these two companies, Door and Curbio, are joining forces to give home owners a competitive advantage over other sellers. By “breaking molds of their respective industries”, these two companies feel their combined services will be a no-brainer for sellers. You make more money and get your house sold more quickly due to it looking its best for buyers. Overall, their idea is a solid one, but I am waiting to hear some reviews before I pass judgement.
Our last news item comes from the Dallas Business Journal. In this post, they outline how new homes sales have slowed down over the last two months, going from 1364 in June to 1270 sales in July. The post goes further into how things are looking from an overall New Home market in the entire region and state. Bottom Line: New homes are not doing as well as they have been, but nothing to panic about quite yet.
Now let’s get to the Fort Worth numbers!
August Months Supply
Months supply is measured by looking at home long it will take the current available homes to sell out to the buyers looking for properties. Six months is considered a healthy market. Fort Worth currently has a months supply of 2.5 months, which is over 20 percent higher than 2017. In 2018, we had 2.2 months.
What this means for sellers: Sellers should still feel good about the months supply. Two and half months supply means we are still firmly in a seller’s market, although we are seeing this number slowly creep up over the last two years. Sellers should still heed their realtor’s advice to make their home as presentable as possible by clearing out clutter and cleaning before every showing. Nothing puts off buyers more quickly than a dirty house. If you want your house to sell quickly, don’t give buyers any reason to say no to it.
What this means for buyers: Buyers can expect homes to stay on the market longer with the increase in the months supply. It might not seem like a lot for it to go from 2 months to 2.5 months, but it does make a big difference as inventory has been so low so long. Buyers should still move quickly on properties that show well, and are priced aggressively. These homes are still selling fast, often with multiple offers. However, most buyers will wait for the right house before making an offer which means homes will stay on the market longer time periods.
August Average Days on Market
With Days on Market, Fort Worth has seen a 16.7% increase to 42 days. Sellers had to wait 36 days in 2018 and 32 days in 2017.
What this means for sellers: With homes staying on the market longer, sellers will have to be careful not to overprice their properties from the outset. If a house is overpriced, the market will reject it outright with no showings or offers over the first two weeks. If this does happen, you will have to make up for lost time by dropping your sales price to regain the interest of buyers. Once you reach 30 days on the market, buyers will always be asking if there is something wrong with the house that it did not sell. It also means buyers will tend to make lower offers thinking sellers will be more willing to negotiate as stress increases without an offer.
What this means for buyers: Buyers will have more time to find a home. In recent times, if a house was not viewed the first weekend on the market, there was a good chance the buyer wouldn’t see the house at all. In the last two years, buyers have been able to put off seeing homes until their schedule allows them. Buyers can also go into negotiations knowing that many sellers will be more flexible in their terms due to houses staying on the market longer. Bargain hunters might be able to make more traction with sellers.
August Average Sales Price
Sales price appreciation has slowed down to only 3.5%. In previous years, we have seen much larger upticks in value. For example, there is a record of a 6.8% increase in the sales price in 2018. Average sales price in 2019 is currently at $261,902.
What this means for sellers: Amazingly, sellers are still seeing the value of their homes going up every year. The low housing inventory with just enough buyer demand to keep the prices going up slightly. It is still a great time to sell a house! Sellers should take advantage of the current market and get what they can out of their home’s equity.
What this means for buyers: Although prices are still going up, buyers can find some relief in the low numbers we have seen the last two years. Buyers have seen prices going up so fast that it made it difficult for them to find anything affordable. Although prices are still historically high, new buyers entering the market can lock in their interest rate for 90 days without fear of having rising sales prices forcing them to purchase a lesser valued home.