A Seller’s Market Again? What DFW’s New Home Sales Suggest About the Spring Season
Transactions and home prices held up from a year ago, despite higher rates.
Dallas-Fort Worth homebuying activity saw a slight improvement in February after 11 months of year-over-year declines.
The metro area had 6,247 single-family home sales in February, up 1% from a year before, according to the latest report from North Texas Real Estate Information Systems and the Texas Real Estate Research Center at Texas A&M University. The report includes new and existing homes sold through the multiple listing service used by agents.
Single-family transactions had been down since last March and declined in double digits since July.
Buying activity varied widely across different counties. Transactions increased in double digits in Collin County (23%) and Denton County (14%), but decreased 14% in Dallas County and 5% in Tarrant County.
Condo sales decreased 34% to 235 transactions, and townhome sales declined 6% to 226 transactions.
The median single-family home price grew 1% year over year to $388,812. Prices grew slightly in Collin and Dallas counties and sunk slightly in Denton and Tarrant.
Realtors saw an influx of buyers in January after the average 30-year mortgage rate dropped about a percentage point from early November, when it surpassed 7%, according to Freddie Mac. However, rates have risen back to 6.7%, increasing monthly payments. That could temper homebuying activity in the traditionally busy spring months.
“We’re not going to return to the same payments that we used to have before; that would be a massive drop in housing prices,” said Adam Perdue, an economist at the Texas Real Estate Research Center. “Prices are definitely going to level out.” Even with rates inching back up — and far higher than the 3.85% average rate of a year ago — many properties are still getting multiple offers and selling for more than the list price, said Michael Coburn, owner of Re/Max Town and Country. People are still moving when life-changing events happen, like when they get married, get divorced or move closer to their kids.
Driving a sellers’ market is the metro area’s lack of available inventory. Active listings are up 154% from a year ago because there are more properties sitting on the market, but D-FW still only had two months of available supply in February. A market balanced between buyers and sellers would have about six.
“Inventory is still very low; that’s the main problem,” he said. “People need housing.”
Many people are holding out on selling because they purchased with a much lower rate during the last few years, keeping inventory tight.
“They’re gonna sit tight because they’ve got a nice rate, good payment,” Coburn said.
Houston single-family home sales saw a much sharper drop of 23% in February, according to the Houston Association of REALTORS®. “Dallas is still performing economically really well, which is then being reflected in the real estate market,” Perdue said, comparing the region to other Texas metro areas. “It is not pulling back to normal housing trends as fast as everybody else.”
Source: Dallas Morning News