4 Signs the Dallas Real Estate Market is Cooling
Dallas has been a hot market since 2012 and seriously so since 2013. In fact, when I bought my own personal residence in 2013 it was a Multiple Offer situation and I paid over the listing price. It was the only home my husband and I could fully agree on so I couldn’t let it go. There were four other bids, one that equaled mine in price but I had a larger down payment and we are still living there.
4 Signs Market is Cooling
Why do I think the market is slowing when the numbers aren’t really showing it yet? There are four sure signals not previously seen in four years.
1.Agents in my office are asking why their listing hasn’t sold. Last summer this lament was heard only at the higher price points and now it’s being said at the lower price points. Just the other day an agent was asking why her $350,000 listing has been on the market for almost 60 days. And in April an agent with another brokerage lamented about his listing in McKinney, priced under $300,000, had not sold in two months on the market. And, to really cinch my belief this is happening, a well-known coach stated he has heard the same from some of his top clients across the nation.
2.Builders of new construction are offering more incentives to buyers and dropping prices significantly. My inbox is flooded with messages from builders who have available inventory and discounted prices on existing specs. One builder in Frisco, with home prices in the upper $500’s - $700’s was dropping $60,000 and more off the price of inventory homes. And, I’m seeing more new construction in the lower $300’s than previously. Two years ago it was nearly impossible to find new construction under $400,000 and builders offered no incentive or very little incentive to buyers. Negotiations at that time consisted of the builder saying this is the price; do you want it?
3.Fewer multiple offers on houses. While it’s true that some properties are still seeing a large number of offers, that is not as prevalent as it was two years ago. Now it’s likely there isn’t multiple offers on a house, and when there is it may be just two or three offers. That hasn’t always been true but today many houses are sitting longer on the market and may not receive multiple offers.
4.There is lesser talk about new jobs being created. For several years now if people weren’t talking about how hard it is to get a house, they were talking about the constantly increasing jobs market. And rightfully so. DFW has seen the addition of 100k+ jobs per year from 2012 to 2015 but 2016 didn’t see the same increase in jobs creation. According to an article in D Magazine’s July edition, 2016 new jobs created only equaled about 88,000 for our area.
Very soon we should be seeing data showing houses staying on the market a little longer, even in the lower price points. Does this mean prices will start rolling back? Absolutely not! It means that there’s finally available housing to choose from.
Spec Homes
What is driving this shift back to normalcy? Builders have provided sufficient inventory for those seeking new construction. As we were exiting the Great Recession Builders only built house that were already sold; they did not build houses on speculation. So as the jobs increased and more people moved here, completion on a new house was often 10 months or longer. Today Builders have properties that are move-in ready and some are even offering a Move-In package that includes Refrigerator, Washer, Dryer and Blinds on all the windows.
Available Apartments
In addition to this abundance of move-in ready new construction, we also have many new apartment complexes reaching completion in the past year for those who aren’t sure where they want to live or just don’t want a house at this time. The one sector we are still missing is the existing home sales. Would-be Sellers are not yet comfortable of where they would go or what it would cost for them to move so they are staying put at the moment.
Back to Normal
As the market cools and prices normalize, existing homeowners will feel more confident about buying their next home and will be willing to sell. As all these pieces come back into normalcy, we will have a stable market.
If you’d like a CMA (comparative market analysis) for your home, give me a call at 469-408-3148.
People often need help finding honest and trustworthy trades people such as air conditioning, plumbing, or white collar help like a financial planner or CPA. If so, give me a call or email me at BrendaPatton@Ebby.com ; I’d be happy to refer some really good people.
