May saw a continued trend towards slower home sales, but not in home prices. Home prices took off in 2020 and 2021 due to strong demand in a very low inventory market and a very low mortgage interest rate market. The impact of the pandemic and the Federal Reserves to bolster the economy led to the abnormal and rapid housing rush. Now in an attempt to correct for the inflation created by the fiscal stimulus, mortgage rates are following the fed rates on an upward march, peaking (so far) at 6% and today slightly lower, around 5 5/8%.
What is interesting is that home prices continue to hover around their higher levels, despite a slow down in sales activity. Sellers are tweaking their list prices in the face of additional days on market, but strong demand remains. However, instead of ten competing offers, sellers may see three or fewer or no competing offers. The softness that has developed is mostly with those that are having difficulty keeping up in the race to buy– the first time homebuyers (27% of the market) and Millennials (43% of the market). With these higher rates, they are having trouble with down payments and the larger monthly payments required to simply qualify for a mortgage. And while builders are working hard to keep up, it doesn’t help that new construction costs are higher. Just 9% of newly built homes sold in May were priced at $300K or lower, down from 23% of home sales (nationally) in May last year.
So, what’s next? Our economy is proving to be incredibly resilient, especially in the DFW Metroplex. But there are a lot of question about national policy and those in charge of decision-making. The housing industry is highly sensitive to interest rates, inflation, jobs and labor, materials and consumer confidence. So far, the market is dealing pretty well with all this. Let’s stay the course.
I mentioned last month that our Realtor association overhauled how our raw data is tabulated, requiring a few changes in how I can present the data to you. The biggest change was in the arbitrary definitions/boundaries we used for years, known as “areas”. We now breakdown the data by cities, which is less precise. For example, you see “Dallas” among the cities I follow below, but not the Uptown area, or Lakewood, or Preston Hollow, etc. On the other hand, we can separate University Park and Highland Park from the previous area definition that included these two cities plus some surrounding neighborhoods.
Check out the new “area” definitions in the list below:
Overall Single Family Market (North Texas):
Apr 22 vs 21: Sales down 3%, median price up 23%, DOM 23, down 18%.
May 22 vs 21: Sales unchanged, median price up 23%, DOM 19, down 10%
YTD 22 vs 21: Sales down 2%, median price up 23%, DOM 23, down 21%
Overall Condos Market (North Texas):
Apr 22 vs 21: Sales down 22%, median price up 22%, DOM 25, down 47%
May 22 vs 21: Sales down 16%, median price up 12%, DOM 23, down 52%
YTD 22 vs 21: Sales down 7%, median price up 16%, DOM 37, down 36%
Overall Townhome Market (North Texas):
May 22 vs 21: Sales down 5%, median price up 23%, DOM 27, down 16%
YTD 22 vs 21: Sales down 9%, median price up 23%, DOM 32, down 27%
Single Family Home Sales Trends:
May 2020: 7351 houses, $136/sf avg, 97% sold to asking
May 2021: 9067 houses, $165/sf avg, 103% sold to asking
May 2022: 9072 houses, $208/sf avg, 105% sold to asking
Condo Sales Trends:
May 2020: 189 homes, $173/sf avg, 95% sold to asking
May 2021: 451 homes, $206/sf avg, 98% sold to asking
May 2022: 379 homes, $240/sf avg, 104% sold to asking
Townhomes Sales Trends:
May 2020: 204 homes sold, $151/sf avg, 96% sold to asking
May 2021: 323 homes sold, $189/sf avg, 101% sold to asking
May 2022: 307 homes sold, $224/sf avg. 104% sold to asking
Here is a look at Single Family home sales by selected Cities for May YTD 2022 vs 2021:
Dallas: Sales 963 vs 986, Median Price $269/sf vs $215/sf, Sold vs Asking 105%
Richardson: Sales 90 vs 111, Median Price $233/sf vs $186//sf, Sold vs Asking 108%
Plano: Sales 251 vs 304, Median Price $236/sf vs $178/sf, Sold to Asking 110%
Frisco: Sales 270 vs 358, Median Price $$252/sf vs $184/sf, Sold to Asking 110%
Highland Park: Sales 11 vs 22, Median Price $755/sf vs $479/sf, Sold to Asking 111%
University Park: Sales 22 vs 40, Median Price $548/sf vs $445/sf, Sold to Asking 106%
Southlake: Sales 45 vs 56, Median Price $351/sf vs $274/sf, Sold to Asking 111%
Colleyville: Sales 32 vs 46, Median Price $259/sf vs $253/sf, Sold to Asking 104%
Coppell: Sales 37 vs 60, Median Price $256/sf vs $194/sf, Sold to Asking 109%
Carrollton: Sales 108 vs 128, Median Price $225/sf vs $177/sf, Sold to Asking 108%
Farmers Branch: Sales 31 vs 35, Median Price $240/sf vs $202/sf, Sold to Asking 105%
Allen: Sales 113 vs 152, Median Price $246/sf vs $175/sf, Sold to Asking 110%
If you would like information for another city, call, email or text me!
Bob Edmonson, Allie Beth Allman & Associates, 214-563-8540