Housing market signals a return to normality
Jan. 26—Numbers point to a slowdown in the Rockwall and Hunt counties housing markets; however, lack of inventory and continued demand for "correctly priced" houses continue to keep the market leaning toward sellers.
That was among the chief findings of a 2022 market recap and 2023 forecast issued by the M&D Real Estate firm in Rockwall.
After a torrid start, 2022's regional housing market gradually slowed as interest rate hikes and buyer's fatigue began applying the brakes.
About the only type of houses that experienced increased sales in 2022 in the Metroplex area were those worth $1 million or more, according to the analysis. Sales were up 23%.
Generally, the sales volumes for houses across the Metroplex were down 10% in 2022 compared with the previous year, according to the analysis. In addition, price appreciation also slowed considerably from the 25-30% range seen the previous year.
Individual counties, however, presented market indicators all their own.
For instance, in Hunt County, sales in 2022 were up 1.6% in 2022, while in Rockwall County total sales were down 4.4%, according to the M&D analysis.
Another indicator of the market's strength, average days on market, showed Rockwall County to be up 60% over 2021, and up 75% in Hunt County. Those who got used to seeing houses selling in a matter of days are now experiencing more normal times when it comes to days on the market.
Meanwhile, inventory still suggests a sellers market. In early 2021, the supply of Hunt County residential real estate inventory was well below two months.
By the end of 2022, it was just below 4%. In more balanced markets, inventory generally is between four and six months, according to the M&D analysis.
In Rockwall County, months inventory fell below one month in early 2021 but was above three months by the end of 2022.
Overall available inventory also showed plunged in 2021 and gradually grew in 2022.
New listings saw minimal growth in 2022 in both Hunt and Rockwall counties. December 2022 listings were down, but they appear to be picking up in January.
Another sign of a cooling market is average percent of listed price.
"Last year, we were getting an average of 104% over asking price on homes. As a buyer, you don't want to pay 6% interest rate and high prices. ... So, the difference now, is you are getting 92% of list price in Rockwall County. So, you are 10% or more off list price in all of these counties. For buyers, if you measure apples to apples, you might be paying higher in interest rates but your price is significantly lower than what you were paying before, which offsets that increase completely and you may even be coming out better," said M&D Real Estate's Founder and Managing Director Danny Perez.
Meanwhile, home prices overall are falling, said Perez.
"Have they fallen enough is the big question? I don't think they have quite fallen enough. They are getting closer. If we could get more inventory, I could be more confident about whether they need to fall anymore," he stated.
"In the market last year, we saw a pause in transactions essentially, including a 30 to 50% decrease in closed sales depending on the area. Buyers got priced out of the market with interest rates going from 3 to 7% and activity stopped. But the truth is, which we can see now and knew then, they are not out of the market completely. Because what we are seeing is when the homes are priced at the correct market price, there is still fundamental demand and those homes go under contract quickly," said Perez.
As for interest rates, M&D expects them to stabilize in 2023 around where we are now, which is about 6.46% for the national average on a 30-year mortgage.
