September marked the fourth consecutive month of declining North Texas home sales as buyers have pulled back due to affordability challenges, and sellers are seeing fewer showings, offers and deals.
Last month, 7,724 single-family homes sold in Dallas-Fort Worth, a 17% year-over-year decline, according to the latest multiple listing service report from the Texas Real Estate Research Center at Texas A&M University and North Texas Real Estate Information Systems.
“Anytime there’s change, people get a little bit cautious, and I think that’s what you’re seeing from buyers right now,” said Misty Michael, broker associate for EXP Realty, in a discussion held by brokerage Opendoor in late September.
The median single-family home in Dallas-Fort Worth sold for $404,000, up 13% from a year ago but down about 2.7% from $415,000 in August.
Higher rates combined with the still-rising prices has changed the math for potential buyers who have seen their monthly payments skyrocket. As of October 6, the average rate for the 30-year fixed-rate mortgage loan was 6.66%, according to Freddie Mac. A year ago, it was at 2.99%.
The region’s available home supply has risen dramatically, up 79% year over year to more than 19,000 listings. With 2.4 months of inventory, it is still far from a market balanced between buyers and sellers, which would have about six months of supply.
Michael said sellers still have the upper hand, but the market is shifting toward buyers.
“I think it’s coming back more to a healthy market; I wouldn’t say that we’re close to a buyers’ market yet,” Michael said. “I don’t think it’s a bubble at all, I think it’s a normalization of the market.
Bill Head, director of communications for the MetroTex Association of Realtors, said in the Opendoor discussion that the market is moving back from the auction-like environment of home sales caused by very low inventory last year and earlier this year, when many homes would see as many as 10 or 15 offers.
“When you have such increased inventory that we’re experiencing now and less buyer demand, you’re going to see the opposite shift,” Head said.
With the market not as favorable to sellers as it was, many people are moving because of life circumstances rather than because of what’s happening in the market. Travis Padgett and his wife, Kate, who sold their Richardson home in August, are an example of this. They purchased a home in Parker in May.
“We just needed to get into a larger house for everybody’s sanity,” Travis Padgett said. “We were in the position to buy the new house before selling the old house, which obviously helped.”
The Padgett’s agent, Anthony Graham of Re/Max Town and Country, said that if they listed the home in May instead of August, they probably would have had 60 showings instead of 20, easily eight to 12 offers and would have sold for $50,000 over the asking price. Instead, they only got one offer and it took five days to sell.
Graham said he started to really feel the market cool down in June.
“I haven’t seen situations where we’re having to drop our price significantly, or we’re not getting any showings or any traction, or seeing offers that are $50,000, $100,000 off asking price; we’re not really experiencing that,” Graham said. “But what I’m not seeing is 25 and 35 offers across the first weekend.”
