Is It a Buyers’ or Sellers’ Market for North Texas Housing Now?
Supply is way up. Prices dropped a little, and sales are up. What comes next?
Things are changing ever so slightly in the Dallas-Fort Worth housing market.
July saw median home prices drop nearly 2% and sales jump nearly 5% over last year.
The data, released by the Texas A&M Real Estate Research Center, the MetroTex Association of REALTORS® and the North Texas Real Estate Information Systems last week, are just two of many key data points offering a glimpse into the region’s housing market.
Year-over-year prices fell for the second straight month. A national real estate group estimates the 12-month price drop is one of the most substantial in the nation. This comes after months of increasing inventory.
Where does that leave buyers and sellers?
A DFW real estate agent and a University of Texas at Arlington real estate professor offered their takes on where things stand.
There are hints that the market is looking better for buyers. Interest rates are continuing to drop. But all may not be as it seems.
Prices are still high, and there’s concern that the supply bump could be coming from more expensive homes hitting the market.
The Data
The median price of a DFW home in July was $403,806. That’s a 1.7% drop from last year.
It’s also a decrease from the month before. The median price in June was $405,000. This figure includes existing single-family homes, condos, townhomes and other similar properties sold last month.
The median price of a single-family home in DFW last month was $410,000, down 1% year-over-year.
Real estate agency RE/MAX reports that DFW had the second-largest drop in home prices over the last year. However, its data differs from the MetroTex and Texas Real Estate Center’s July report.
RE/MAX data shows DFW median home prices falling from nearly $409,000 last July to $400,000. The 2.2% drop was second only to Bozeman, Mont. Closings were up 4.6% over last July, according to the MetroTex report. Sales are a lagging indicator, reflecting what was on the market 60 to 90 days earlier.
Active listings hit 29,300, up nearly 49% from last year. Months of housing inventory was 4 months — the highest since October 2012. That figure tracks the time it would take to sell the current supply of homes on the market under the current sales pace.
From listing to final close, homes in DFW were on the market for 78 days, a week longer than last year.
Active listings were up in every North Texas county. Pricing and closed sales trends differed slightly across the market.
In Dallas County, sales and median prices were relatively flat. The median home price was $362,750, a decrease of less than 1%. There were 1,869 closed sales, a less than 1% increase.
Collin County’s median home price was $498,000, a near 3% drop from last year. There were nearly 1,500 closed sales, a 4.4% increase.
Kaufman County’s $312,480 median price saw a 7% drop from last year. Its 320 closed sales represented a nearly 23% increase from July 2023.
Tarrant County saw its median home price hit $362,250, a more than 2% increase. Closed sales topped 2,100, a more than 7% increase from last July.
What’s Going On?
Todd Luong, an agent with RE/MAX DFW Associates, said it’s too early to tell if buyers will flood the market.
With the recent supply increase, Luong said it feels like a more balanced housing market. Inventory has not yet hit the five- or six-month mark that typically signals balance.
However, he said buyers appear to have more power in most of his recent transactions. Some buyers who put their housing search on hold last year have returned to the market.
“I think the power has kind of changed a little bit,” he said. “Every offer I’ve seen is below listing price right now. … Some parts of town (have) 50% to 60% more inventory. I think that’s hurt sellers a lot.”
Still, prices are high, and people aren’t able to afford homes, Luong said.
“It may take a little bit of time before we see that the market goes hot again,” he said. “The drop in interest rates helps a little bit, but I don’t know if that’s going to be enough to turn the corner yet.”
For Sriram Villupuram, a professor of finance and real estate at the University of Texas at Arlington, the supply bump hasn’t mattered because it hasn’t translated into larger shifts in prices or sales.
“That is all meaningless because listings aren’t being converted into sales,” he said. “One-tenth of the listings are translating to sales. … There’s a mismatch here.” Villupuram said the data continues to suggest that affordable properties are hard to find and much of the supply coming onto the market may be higher-priced homes.
Villupuram cited other factors, including a relatively short days-on-market period, to argue that it’s not a buyer’s market yet in North Texas. By July, most transactions are closed for the summer selling season, he said.
“I believe sellers still have power in DFW,” he said. “If sellers were desperate, they’d come down on price, and we’d see more sales. I’m not seeing that. … Maybe there’s a slight turn there, but it doesn’t mean much.”
Both Luong and Villupuram are watching interest rates. Federal Reserve officials are gravitating toward a September cut, Reuters reports. Traders also see multiple interest rate cuts for 2025, which could bring mortgage rates down.
From mid-April through much of May, the average 30-year mortgage rate was at or above 7%.
In July, rates fell slowly. In August, the drop has picked up. For the week ending Aug. 15, the average 30-year rate hit 6.49%, the lowest in more than a year.
Villupuram predicts more housing supply will show up in March and April 2025 with May and June being a pretty active selling season. The drops could get families in starter homes to move up, freeing some needed entry-level housing stock.
“Interest rates hold the magic button,” he said.
Source: The Dallas Morning News