Supply continues to struggle to meet demand in the DFW area as we hit the mid-year point of 2016. Residential real estate markets are performing as predicted, with the supply of inventory dwindling in this seller’s market. The market is becoming increasingly competitive as buyers attempt to find the best deals in the most desirable areas. Sellers have been getting a higher percentage of their asking price, which is encouraging further growth.
According to the latest report from North Texas Real Estate Information Systems (NTREIS), new listings were up 1.5 percent in June 2016 to 14,023. Prices also moved higher with an 8.8 percent increase to $236,000. For comparison, at this same time last year, the median sales price in the DFW area were at $217,000. While it may not seem like much, this 8.8 percent increase could mean the difference in some families’ ability to take out a loan (especially low-income or first-time home buyers).
According to a recent article by Thomas Randall at Marketwatch, “The prices that are being slapped onto some homes are unsubstantiated. Recently a 2-bedroom, 1,400-square-foot home in the M-Streets — an ever-popular neighborhood because of its central location, excellent elementary schools, and limited area — was listed at $525,000. Less than one year ago you could have gotten a comparable home with well over 1,400 square feet and an extra bedroom in the same condition for under $500,000. This same home would have been listed in the $200,000 range during the Great Recession less than a decade ago.”
Fortunately, interest rates are the lowest they’ve been in years – and economists speculate that they may go even lower later in the year. This makes it an excellent time to buy, despite the rising prices and competitive market. In fact, home prices are going up around the country. Compared to many of the more popular places to live (think California, New York, Colorado), North Texas is still a very affordable option. With our healthy job market and economy overall, it’s actually a great time to invest in DFW real estate. Home appreciation is at an all-time high, promising significant returns on investment in the near future.
“Texas has 1,200 people moving here every day,” continues Thomas Randall. “Half of those people are coming to the Dallas-Fort Worth Metroplex. Dallas development has always progressed north. The suburbs, new-home developments, and population have been going north for over 20 years.”
“But there has been an immense change in the last five years. With no more room to expand north (unless you wanted to go into Oklahoma), Dallas expands internally. Downtown, Uptown, State Thomas, Harwood, Oak Lawn, M Streets, Bishop Arts, Oak Cliff, Lakewood and anywhere within a 2-5 mile radius of Downtown starts to build upwards. Thousands of high-rises and apartments are on the drawing board.”
When considering looking for a home, resale or new construction, it’s crucial to enlist the help of a real estate professional. According to the NTREIS report, inventory of homes for sale dropped 3.9% in June 2016 to 24,776 homes. Month’s supply of homes for sale dropped a whopping 9.7% to just 2.8 months. To give you an idea of how low this actually is, the Texas A&M Real Estate Center cites 6.5 months as a balanced market.
It’s definitely a seller’s market, and the climate is VERY competitive. Sellers are getting 98% of their original list price, on average. However, this number includes the less desirable areas, homes with problems, and fixer-uppers. A well-maintained home in a popular neighborhood with great schools, amenities, and entertainment nearby will almost always sell for above listing price. Many times these homes will also have multiple offers on the property as well. So, having an agent that can navigate the market and share their expertise on how to win a property is essential. Potential homebuyers who take advantage of low interest rates and mortgage incentives with the help of their trusty agent will be on the way to home ownership in no time!