Analysis: Shift occurring in housing market
Jul. 19—A change is slowly taking shape in the local housing market with price appreciation expected to moderate as market inventory grows.
The situation is expected to yield a win-win scenario for buyers and sellers alike. Buyers are beginning to see more inventory on the market and properties are staying there longer. Sellers are still seeing demand for homes as well as appreciation in prices — just not as great as before.
Those broad findings are according to a new in-depth analysis of the DFW-area real estate market by M&D Real Estate.
"There is a huge shift in the market going on right now," said M&D Real Estate Managing Director Danny Perez. "The part of the shift we are in currently is what I call, the pause. I call it the pause, because on one hand, there is a seller up here expecting 25% year-over-year growth like we had been seeing. Then on the other hand, there's a buyer down there saying, 'Hey, wait a minute.'"
In this environment of rising interest rates, Perez sees the pause as temporary.
"We are in a great market in DFW. Buyers want to be here and then sellers still want to sell, because we still have a ton of appreciation in our homes right now," said Perez.
Average prices are still up right now — 18% in Hunt County and the Greenville area with more inventory just now coming in, according to M&D. Therefore, sellers will see their properties sit on the market a little longer than they have recently.
"The sellers will have to be the ones to come down from those 25 % appreciation number expectations to more normal numbers to meet the buyers where they are at," said Perez. "Not all the way down to (market) correction territory; I don't believe that is going to happen in this area. But down to a more normalized expectation. These are still crazy numbers on price appreciation for last month."
On average, price per square foot is also still going up. It went up 13.5% in Rockwall County, 17% in Kaufman County, 20% in Dallas County and 30% in Hunt County.
As for average days on the market, Hunt County is up 25%. As for inventory of homes on the market, Hunt County is up 47%.
For number of homes for sale, it's up 84 % in Rockwall County, 89% in Kaufman County, and up 72% in Hunt County.
In terms of new listings, Rockwall County is up 33%, Kaufman is up 64.5%, Dallas County up 6.8%, and Hunt County is up at 45%.
On another note, builders are also slowing down their production, too. They are slowing down because they see the buyers slowing down, according to the M&D analysis. "That will help to free up some labor shortages for builders. That will also help to free up supply issues we have been seeing — windows, for instance, if you're trying to build a house ... trying to get in the windows and find the appliances has not been easy. So really, all of this is pretty healthy for our market," said Perez.
Across the region, the number of closings is also down. Hunt County, however, was an outlier.
"Last month, we were down 6% in Rockwall County, it was up 3.1% in Kaufman County, but also down 13.8% in Dallas County and then up 18% in Hunt County," noted Perez.
