June 2022 – DFW Housing Market Update
July 15, 2022
July 15, 2022
As DFW buyers and sellers are adjusting to the new reality of higher interest rates, a new trend is starting to set in. There are fewer buyers shopping for homes, but those who are in the market at the moment are making offers quickly (possibly rushing to lock in the current rates before they go up again). The overall number of homes for sale is similar to last year’s volume, but the number of showings per house is down significantly from the same month last year.
How do those changes affect the homeowners who are planning to sell this year? I think it is important to start by looking at the trends that the realtors’ data is showing for the 4 main counties in the DFW area: Dallas county, Collin County, Tarrant County, and Denton County.
Let’s take a look at the main indicators.
Home Prices Plateau
We can see that Collin county is showing the sharpest decline in prices for the 2nd month in a row, but Dallas and Tarrant counties plateau while Denton county prices continue to rise after a short interest-rate-related shock. The overall trend is encouraging for all counties except Collin so far.
Bidding Wars are Less Fierce But Still Continue
The graph below shows you how much in terms of percent of the asking price the house sold for. For example, “100%” means the house sold exactly for the same amount as the listing price. “110% SPLP” means the house sold higher than the listing price by 10%, while “90% SPLP” means the house sold for less than the listing price by 10%.
We can see that ALL counties in the graph show a sharp downward trend. But Collin and Denton counties are still selling around 5% on average above the asking price (as compared to 7%-10% above asking two months ago) while Dallas and Tarrant counties are trending only around 2%-3% above asking (as compared to 5%-7% just 2 months ago)
Days on the Market Are Stable
Days on the Market is an indicator of how many days the house was “not under contract” (means, available for viewings).
As you can see, all four counties are showing nearly identical trends. So far, the days on market have plateaued around the same level they have been prior to the interest rate increase. This is a good sign that shows that, despite the interest rates increase, the properties are moving under contract swiftly. That means that the inventory is still relatively low, the buyers are acting decisively (although they are not bidding as high), and the number of buyers outpaces the number of available properties in the market.
Bidding Wars are Less Fierce But Still Continue
The graph below shows you how much in terms of percent of the asking price the house sold for. For example, “100%” means the house sold exactly for the same amount as the listing price. “110% SPLP” means the house sold higher than the listing price by 10%, while “90% SPLP” means the house sold for less than the listing price by 10%.
We can see that ALL counties in the graph show a sharp downward trend. But Collin and Denton counties are still selling around 5% on average above the asking price (as compared to 7%-10% above asking two months ago) while Dallas and Tarrant counties are trending only around 2%-3% above asking (as compared to 5%-7% just 2 months ago)
Are More Homes Available for Sale Now?
Based on the graph, the number of homes for sale is higher than a few months ago.
As expected, many buyers and sellers are trying to move during the summer months and before school starts. But we can observe that for all counties, the number of homes for sale is higher than it was at the same time a year ago, which should lead to slightly less competition and less intense bidding wars. It also looks like Ft Worth and Dallas area homes are more likely to be selling now than homes in Denton or Collin counties.
New Homes Coming on the Market Are Slightly Higher Than What They Were Last Year
Based on the graph, the number of people looking at homes is nearly half of what it used to be just a couple of months ago (thanks to rising interest rates). If in January or February the average home had 20-40 showings before going under contract, in June those numbers dropped to 8-10 showings.
That means that there is less competition among the buyers, leading to buyers making less generous offers.
Months of Inventory
Months of inventory measurement is meant to determine how many months’ worth of purchasing activity could the area sustain if no new homes were listed for sale. Usually, any number below 4 months is supposed to indicate a seller market, any number above 4 months is supposed to indicate a buyer market,
As you can see, all four counties are sitting at the 1.1-1.5 months of inventory mark, which still makes for a strong seller market. Also, the current months of inventory indicators are very similar (but slightly higher) than what we were seeing last year while the interest rates were still low. This is an encouraging sign for the sellers.
The Number of Buyers Looking at Homes Declines Sharply for Two Months in a Row
Based on the graph, the number of people looking at homes is nearly half of what it used to be just a couple of months ago (thanks to rising interest rates). If in January or February the average home had 20-40 showings before going under contract, in June those numbers dropped to 8-10 showings.
That means that there is less competition among the buyers, leading to buyers making less generous offers.
What should home buyers and home sellers do in this changing market? I will be writing more on this topic shortly.
72sold advertising opportunities blog buy4cash Canadian citizens cash offers dfw housing market update events financial fitness for buyers for homeowners for investors for renters for sellers holidays houses industry news international home buyers itin knowledge articles legal and financial market updates monthly updates mortgage moving to Texas owner financed houses rent-to-own seller financed houses selling as-is special program stats stats and trends taxes tips and tricks videos videos for home buyers videos for investors videos for sellers
