North Texas’ runaway housing market headed into the spring buying season with unheard-of increases in sales and prices.
Real estate agents sold 10,152 single-family homes in April — 28% more than a year earlier. Condominium sales more than doubled.
And the median single-family sales price set a record at $325,000, 18% higher than in April 2020, according to the latest data from the Texas Real Estate Research Center and North Texas Real Estate Information Systems.
The surge in local housing activity shows no sign of abatement, fueled by low mortgage rates and thousands of people moving to the Dallas-Fort Worth area.
“I’m running out of adjectives to describe the market — astonishing, astounding, mind-boggling, but in reality, the best way to describe it is ‘insane,’ ” said Paige Shipp, a Dallas-based housing analyst with CDCG Asset Management. “A year-over-year increase of 28% is unprecedented for D-FW and frankly, unsustainable.
“With monthly sales over 10,000 and under 7,000 homes for sale, that equates to 20 days of inventory,” Shipp said. “I never thought in my career I would be using days instead of months as the metric for inventory. With so little inventory, monthly sales growth over 25% cannot continue.”
The supply of houses listed for sale with North Texas real estate agents at the end of April was almost 70% less than a year earlier, which already was a tight market. There is less than a month’s supply of housing on the market.
And homes in the area are selling in less than a month.
“Digging into the median price increase of 18%, it’s interesting to see an increase of 64% in dollar volume,” Shipp said. “That tells me that prices are not only appreciating but that buyers are also purchasing higher-priced homes.”
Through the first four months of 2021, real estate agents have sold 33,381 single-family homes in the more than two dozen counties included in the North Texas numbers. That’s an increase of 7% from sales in the first four months of 2020.
Median sales prices in the area are up by 15% so far in 2021 compared with the same period last year, according to the Texas Real Estate Research Center.
“The D-FW housing market continues to be very perplexing,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies Inc. “The wave of housing demand created by the confluence of low mortgage rates, relocation buyers and millennials continues to envelop North Texas.
“Both the new and existing home markets have been stripped of inventory, and what little inventory that is out there has not been able to satisfy current demand,” Wilson said. “The shortage of houses is also causing significant housing inflation.”
The Dallas-Fort Worth area added almost 120,000 people to its population last year, according to the latest U.S. Census estimates. Almost 75,000 of those new area residents moved into the area — one of the largest such migration totals during the COVID-19 pandemic.
The flood of newcomers and a wave of homebuyers coming out of rentals have added to the strain on North Texas’ housing supply.
“In the meantime, we are watching mortgage rates and house prices closely,” Wilson said. “If house costs and interest rates continue to rise, we will begin to see some buyers get priced out of the market.
“I would also imagine that the sales pace of existing homes starts to flatten at this point as there simply aren’t enough units available for sale to add to future growth.”
One reason last month’s annual increase was so large is that home sales stalled in April 2020, said Frank Nothaft, chief economist at CoreLogic.
“Part of the eye-popping percent increase is because April 2020 was the first full month of the pandemic,” Nothaft said. “Some home sellers asked their agents to pull their homes off the market, and some buyers avoided open houses in 2020. “For homes that did sell a year ago, the seller often accepted a discount from the list price,” he said. “Remarkable what a difference a year makes. April 2021 was a seller’s market, with contract sales prices often above the list price.”
Nothaft and other economists are still hoping to see home listings grow later this year as the pandemic eases and more owners decide to sell.
“As more owner-occupants become vaccinated and comfortable with prospective buyers coming for an open house, I expect we will see an increase in inventory in coming months,” he said. “And mortgage rates will gradually rise above 3%, which should temper demand.
“Double-digit annual home price growth will likely prevail through the spring, but we expect a slowdown in annual price growth in the second half of this year.”
The recent surge in the local housing market and higher home sales in many areas of the country came as the COVID-19 pandemic put thousands of Americans out of jobs and sent many others to work at home during lockdowns.
“It’s surreal to think that precisely 12 months ago, the single-family residential real estate industry wondered if it could survive the impacts of the pandemic,” Shipp said. “Here we are, a year later, and our industry has arguably been the biggest benefactor of the lifestyle shift caused by the pandemic.”
Source: Dallas Morning News