by Seth Fowler
(This article appeared in Candy's Dirt. It is specific to the Ft Worth side of the Metroplex, but the facts are the same for all of North Texas.)
Some will agree, and some won't, but data doesn't lie — we are heading into a real estate slowdown.
First of all…R-E-L-A-X. No, we are not heading toward a recession. No, the housing market isn't crumbling. No, it's not time to sell your home, stock up on canned beans, ammo, and get off the grid. But the real estate market is changing … dare we call it a slowdown?
How Can You Say It's a Slowdown?
How can I say this? We are in the midst of an historical real estate boom like we've never seen before and everything we hear and read says the market is hot, hotter, hottest! Please hear me: the Dallas/Fort Worth Metroplex is still by far the absolute best place in the world to live, work, play, and own real estate. The daily, weekly, monthly growth that is happening to this part of the state is still out of this world.
But the market is experiencing a slowdown. Interest rates are rising . Municipalities are getting more and more greedy with property taxes. Home values are increasing at a rapid pace. New home construction is increasingly expensive and not meeting demand. Wages aren't increasing as quickly as prices and that's causing a slowdown in the real estate market.
In Part One we will look at those factors and how they combine to cause this slowdown. In Part Two next week, we will discuss whether or not an actual slowdown in the real estate market is a good thing, a precursor to doom-and-gloom (again, R-E-L-A-X), and what it means for buyers and sellers in this brave new world.
Just The Facts Ma'am
According to the Fort Worth Housing Report distributed by the Greater Fort Worth Association of Realtors, the median sales price of homes is going up, up, and up. Up 9.7 percent from February 2017 to 2018 at $214,000. Up 9.3 percent from March 2017 to 2018 at $219,750. Up 7.3 percent from April 2017 to 2018 at $220,000. We see that the overall price continues to increase, but the percentage from year-to-year is falling a little bit. Across the country home prices increased 8.7 percent over the past year according to a recent Zillow report. Increases like this simply are not sustainable in the long run for a stable economy. While sellers enjoy their large return on their investment, fewer and fewer buyers are able or willing to pay these steep increases.
Active Listings And Days on Market
From same reports active listings were up 3.4 percent from February 2017 to 2018 at 1,668 homes. Up 6.4 percent from March 2017 to 2018 at 1,851. Up 17.1 percent from April 2017 to 2018 at 2,105. The more listings the better right? Well, yes and no is the answer. Yes more listings on the market the better for buyers. But that's only if they are good listings that are priced correctly. Days on market has also increased. Homes sat for one day longer in February 2018 than 2017 at 43 days. Seven days longer in March 2018 than 2017 at 44 days. Seven days longer in April 2018 than 2017 at 37 days.
No — not time to panic — but numbers don't lie. Buyers are gaining some control.
Word on The Street
While considering this article over the past month or more, I have talked to many agents, lenders, and title company officers in the D/FW area and 100 percent of them have mentioned how it appears that the buyers are finally pushing back at the skyrocketing prices. Sellers have been in control for a number of years when it comes to asking price. Depending on the range, sellers have tended toward higher asking prices and buyers have very little recourse. If a buyer wants a house then they'll meet asking price … or go higher. As inventory increases (albeit slightly) we are seeing buyers be a little pickier and price conscious. It's not as if buyers are offering 50 cents on the dollar, but more than ever in the past year we are seeing lower offers as homes sit longer on the market. Of course there are variables like price range and location and condition of homes — I know that — so these stats might not apply for all homes universally.
We have been living in the longest real estate boom in the history of ever. It's not going away, it's just not booming like it was, and I contest that it will not boom like that again. A slowdown is happening and will continue to happen. While this might cause panic for some, it could also be just what our overall economy needs — balance. Come back next week and see what else I have to say. If you disagree with this article — or if you agree — hit me up, let me know, I'd love to hear YOUR perspective.
Well that's all from Tarrant County this week Dirty Readers. Thanks for reading and following and sharing! As always, if you have questions, comments or great ideas for a blog … hit me up!
Seth Fowler is a licensed Real Estate Sales Professional for Williams Trew Real Estate in Fort Worth, TX. Statements and opinions are his and his alone. Seth has been involved with the home sales and real estate industry in the Fort Worth area since 2004. He and his family have lived in the area for over 15 years. Seth also loves bowties! You can reach Seth at: 817.980.6636 or [email protected].