We just emerged from the Spring Market, and as expected it was not our best. Half way through the year, single family home sales are down 6%, townhome sales down 7%, and condo sales down 24%. It appears the trend is starting to level out as it begins its inevitable return to positive territory (chart below). Following an 11-year runup in prices, there are some buyers and sellers with fear of another downturn as occurred in 2008 and some buyers and seller with fear of having missed out on 2-3% mortgage rates. Well, there won’t be another foreclosure run as in 08, as there is now $27.8 trillion in home equity, with 39% of homeowners free and clear and another 29% with 50% or more equity in their homes.
Many of the financial writers and mortgage professionals now see several reasons why we are bottoming out his summer. Demand is still high. Demographics show the Millennial population, larger than the Baby Boomer population, is now reaching or already at the statistically optimum home purchase age of 34-35. They want to buy a house. Plus, there are 3 million renters nationwide that earn more than $150,000 and good candidates for ownership. Many sellers have to move for relocation and many other reasons, and they are not just a source of buyers, but new inventory of course.
Home prices only go up. There are “corrections”, which is always a good time to buy, and we’ve been in one for a while. The problem is a shortage of available homes to buy. Presently, we are witnessing lower inflation reports, indicating the Federal Reserve’s interest hikes are working. But just as the Fed is sometimes a bit slow to begin rate hikes, they can be a bit slow to let go. So while we anticipate inflation to continue slowing, we may interest rates dropping slower than we’d like. The betting crowd is predicting 5 1/2% mortgage rates the end of this year and 5’s for most of 2024 and 4’s in 2025. The pent up demand from buyers and sellers will likely be released when rates reach the low 5’s and 4’s, which will take us into the next buying frenzy.
So, what to do now? I like the expression, “buy the house and rent the rate”. Buy the house before the lines form again, and refinance the mortgage when rates are again favorable.
Check out last month’s performance in selected sub markets in the list below. Only sales transacted through the MLS are recorded, so sales are always understated to a small extent.
Overall Single Family Market (North Texas):
Feb 23 vs 22: Sales up 1%, median price up 1%, DOM 40, up 48%.
Mar 23 vs 22: Sales up 29%, median price up 4%, DOM 39, up 44%.
Apr 23 vs 22: Sales down 8%, median price down 5%, DOM 52, up 160%.
May 23 vs 22: Sales down 2%, median price down 5%, DOM 45, up 137%
June 23 vs 22: Sales down 4%, median price down 5%, DOM 30, up 45%
July 23 vs 22: Sales down 6%, median price down 3%, DOM 39, up 95%
Aug 23 vs 22: Sales down 8%, median price down 1%, DOM 40, up 60%.
YTD 23 vs 22: Sales down 6%, median price down 3%, DOM 49, up 123%.
Overall Condos Market (North Texas):
Feb 23 vs 22: Sales down 34%, median price up 12%, DOM 51, up 4%.
Mar 23 vs 22: Sales down 39%, median price up 8%, DOM 36, down 12%.
Apr 23 vs 22: Sales down 22%, median price down 4%, DOM 34, up 62%.
May 23 vs 22: Sales down 10%, median price unchanged, DOM 42, up 91%.
June 23 vs 22: Sales down 10%, median price up 5%, DOM 24, up 4%.
July 23 vs 22: Sales down 19%, median price up 7%, DOM 31, up 63%.
Aug 23 vs 22: Sales down 22%, median price down 3%, DOM 30, up 20%.
YTD 23 vs 22: Sales down 23%, median price up 3%, DOM 37, up 16%.
Overall Townhome Market (North Texas):
Feb 23 vs 22: Sales down 6%, median price up 6%, DOM 65, up 76%.
Mar 23 vs 22: Sales down 7%, median price up 5%, DOM 66, up 89%.
Apr 23 vs 22: Sales down 2%, median price up 2%, DOM 60, up 102%.
May 23 vs 22: Sales up 4%, median price down 7%, DOM 42, up 67%.
June 23 vs 22: Sales down 10%, median price down 1%, DOM 48, up 78%.
July 23 vs 22: Sales down 12%, median price up 1%, DOM 47, up 81%.
Aug 23 vs 22: Sales up 7%, median price up 3%, DOM 54, up 69%.
YTD 23 vs 22: Sales down 6%, median price up 2%, DOM 57, up 90%.
Single Family Home Sales Trends:
Jun 2023: 8750 houses, $198/sf avg, 98% sold to asking
Jun 2022: 9146 houses, $208/sf avg, 103% sold to asking
Jun 2021: 9907 houses, $171/sf avg, 104% sold to asking
Condo Sales Trends:
Jun 2023: 313 homes, $248/sf avg, 99% sold to asking
Jun 2022: 348 homes, $245/sf avg, 103% sold to asking
Jun 2021: 516 homes, $205/sf avg, 98% sold to asking
Townhomes Sales Trends:
Jun 2023: 305 homes sold, $223/sf avg, 98% sold to asking
Jun 2022: 340 homes sold, $230/sf avg, 103% sold to asking
Jun 2021: 368 homes sold, $187/sf avg. 101% sold to asking
Here is a look at Single Family home sales by selected Cities for June 2023 vs 2022:
Dallas: Sales 821 vs 898, Median Price $244/sf vs $259/sf, Sold vs Asking 97%.
Richardson: Sales 93 vs 103, Median Price $228/sf vs $239/sf, Sold vs Asking 99%.
Plano: Sales 206 vs 268, Median Price $220/sf vs $228/sf, Sold to Asking 100%.
Frisco: Sales 229 vs 235, Median Price $249/vs $262/sf, Sold to Asking 99%.
Highland Park: Sales 12 vs 12, Median Price $761/sf vs $639/sf, Sold to Asking 97%.
University Park: Sales 14 vs 15 , Median Price $585/sf vs $535/sf, Sold to Asking 98%.
Southlake: Sales 61 vs 54, Median Price $340/sf vs $358/sf, Sold to Asking 97%.
Colleyville: Sales 29 vs 37, Median Price $259/sf vs $265/sf, Sold to Asking 99%.
Coppell: Sales 46 vs 46, Median Price $263/sf vs $254/sf, Sold to Asking 100%.
Carrollton: Sales 100 vs 125, Median Price $221/sf vs $224/sf, Sold to Asking 101%.
Farmers Branch: Sales 19 vs 32, Median Price $216/sf vs $241/sf, Sold to Asking 99%.
Allen: Sales 102 vs 124, Median Price $220/sf vs $231/sf, Sold to Asking 100%.
If you would like information for another city, call, email or text me!
Bob Edmonson, Allie Beth Allman & Associates, 214-563-8540