Potential homebuyers who have been waiting for prices to cool down a bit may start to see some better deals as the housing market continues to moderate.
The median sale price of a home in the Dallas-Fort Worth area was $421,000 in July, up 15% from July 2021 but down 3% from June, according to the latest numbers from the Texas Real Estate Research Center at Texas A&M University and North Texas Real Estate Information Systems. This is the largest month-to-month decrease in price since at least 2020, even though homes still cost $100,000-plus more than they did two years ago.
“We’re definitely seeing a cooling off on the market, but it’s still hot and it’s still moving,” said Marissa Benat, president of the Collin County Association of Realtors and a real estate agent for eXp Realty. “But it is at a point where for buyers that had been previously sitting on the fence, now is a good time to get back in and go ahead and get that house, because they’re not necessarily having to go as high over list as they had been.”
Higher mortgage rates, as well as the sticker shock of higher home prices and the pressures of inflation, have stopped or delayed some buyers from entering the market.
“The rate increase definitely adds to buyer fatigue,” Benat said. “For some, it’s run them off completely because they just can’t afford the house that they were really needing, and they should have pulled the trigger probably six months ago.”
The number of existing homes sold in Dallas-Fort Worth in July saw a 14% year-over-year decline from July 2021 to 2022, with 8,214 sales in the region, but sales were so strong last year with record-low mortgage rates that the decline is no surprise.
“It was such a remarkably good year that it was going to take a miracle for [sales] to go back up again,” said Jim Gaines, an economist at the Texas Real Estate Research Center. “It was going to take the continuation of 2% and 3% interest rates, which didn’t happen, of course.”
The count of active listings across Dallas-Fort Worth increased 59% to 18,378 homes because properties are sitting on the market and selling less quickly. In just three months, the market saw inventory increase by an entire month’s worth of supply, from 0.9 months in April to 2.2 months in July. That’s still far behind the inventory level that’s considered a balanced market between buyers and sellers, which is about six months of supply.
With more inventory available, agents are being more conservative on pricing, listing homes closer to the minimum or average price of homes sold in a community rather than shooting for the highest possible price, Benat said. A separate report from Realtor.com showed that 27% of properties on the market in Dallas-Fort Worth have had their prices reduced.
Michael Hershenberg, a real estate agent in Southlake for Keller Williams, said that as the market softens, buyers who get VA and FHA loans and therefore can’t always pay tens of thousands over the asking price against cash buyers are now finding more success in getting under contract.
“It’s the correction that needed to happen,” he said.
Hershenberg said he believes home prices will continue to rise going into 2023, just not at the same rapid pace seen this year.
“The country has some uncertainty in areas, but with the amount of people that are packing up from states like California and New York and Florida coming to Texas, it’s really hedging the market and giving a little bit of stability there,” Hershenberg said.
Home prices in Collin and Denton counties have increased the most over the past year, with Collin still having the highest median price at almost $550,000.
Read More: Home prices are dropping across Dallas-Fort Worth