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May Housing Data Across Texas

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Red Pear Jack
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3:24p, 6/10/23
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NORTH TEXAS / DFW

  • Its been a crazy month up here and finally have some downtime. Its still a tale of two cities here in North Texas. The closer you are to the city core or in great school districts the more active the buyer pool will be.
  • Listings in the further suburbs were new construction and inventory is highest is taking longer to sell. Two years ago those would've been under contract in 3 days with multiple offers. Nowadays you have to be confident in your pricing, pay close attention to the average days on market and stay on course while actively keeping tabs on competing inventory.
  • However, new build communities in Frisco, or sub $500k homes in Plano have not missed a beat and all have either waitlists or multiple offer situations with people waiting outside to tour homes.
  • In 2022, the average age of first-time homebuyers was 36. This is up from 33 in 2021. A more notable stat, however, is that only 26% of homebuyers in 2022 were first-time homebuyers the lowest percentage since the NAR started tracking the metric.
  • As the metro with the most sales in Texas, Dallas had sales volumes that were consistent with 2022 across price cohorts. However, transactions for homes on the two tails below $200K and above $750K both shrank significantly. Transactions in the upper tail dropped to 805 units in March, falling more than 15 percent year-over-year.
  • Notably, Rockwall County still holding on to price increases.

Recent Transactions

  • Improved Lot Sale - Fantastic, almost two acre lot that had been prepped and ready to be built on. The lot had been listed for around 30-40 days when we tied it up under contract for 11.5% below list price.
  • Single Family Listing - Gorgeous, recently built, Perry Homes single story home in Denton county. This was a test of patience and trusting your data while also staying on top of the competition. Not only was there abundant new construction inventory, we sized up rather similarly to a house that was listed directly behind us.
    • Activity was slower than it was in the past and we had an opportunistic buyer throw out some low ball cash offers which we didn't take. After a couple weeks we managed to go under contract, prior to the house behind us, on an "all cash" offer.

    The Buyer used a mortgage provider that could close all cash on the home while they listed and sold their current home in order to not write a contingent offer.

    Even though it was a cash offer, it got a little rocky during the option period due to a dispute that came up on the Buyer's credit report. Not surprisingly the Lender didn't want to be forced to close on our home all cash without having it cleared up but luckily cooler heads prevailed and we were able to extend the option period slightly to get it done.


DFW


Dallas County


Tarrant County



Collin County



Denton County



Rockwall County



Parker County


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Red Pear Felipe
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9:37p, 6/10/23
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Austin-Round Rock Housing Data

I figured I use my time wisely as I'm sitting here at the Orlando Airport waiting for my flight back to Austin. We've been delayed again and it seems like we now won't be able to get in Austin until 3 AM. So here it goes...

ABOR Housing Data

Quote:
"Last month's housing market activity demonstrates not only a stable market, but one where optimism for the months ahead continues to grow," Ashley Jackson, 2023 ABoR president, said. "With the ebb and flow of mortgage rates, this is when the value of a REALTOR comes into play. They can help buyers find down payment assistance programs or identify financing options. Real estate remains the most powerful long-term investment and having a trusted expert in your corner is crucial."

This reads to me as, "PLEASE take advantage of Red Pear Realty's buyer rebate program!" It's FREE MONEY and comes to you at closing. What's not to like?! One of my current deals is going to get about $10K in credit on his closing costs. Half from Red Pear Realty and half from seller's concessions!

Quote:
"Nationally, from May 2022 to May 2023, homebuyers' purchasing power declined by an estimated 8% to 9% due to the rise in mortgage ratesMay's mortgage rates, averaging 6.4%, were among the highest they've been all year. However, in Austin, the moderation in home prices has helped to mitigate the decline in purchasing power. In fact, from May 2022 to May 2023, the monthly mortgage payment declined an estimated 3% to 4%."

More of a reason to use Red Pear Realty's buyer rebate to help buy down those points.

  • Big news is that we are finally over 3 months of inventory for the Austin-Round Rock market. Last month's data puts us at 3.2 months of inventory. That's up 2.2 months YOY.
  • Pending sales this past month were down just under one percent YOY.
  • Active listings are up 118% YOY. One of my buyer clients is enjoying the extra inventory in the market. We were able to get his house under contract for $23K less than asking. Sellers know there's more competition in the market and they are doing what they can to entice buyers.


Recent Transactions

  • I close on two deals this month which brings me to 6 deals closed for the year while still being a full time teacher!
  • My clients saved just under $11,000 by using our split commissions and 1.5% listing fees.
  • My listing in south Austin was under contract in three days and sold for over asking price!



Austin-Round Rock


Bastrop County


Caldwell County


City of Austin


Hays County


Travis County


Williamson County







Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear RealtyAustin Monthly
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Red Pear Luke
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10:16p, 6/10/23
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Bryan / College Station Area Statistics:



  • Despite record interest rates hovering around 7%, the average home price is up 6% YoY to $382,600. To put this in perspective - the 2023 US national home price average is $389,000.
  • Average Days on Market has increased 29 days YoY to 92 days as compared to May of 2022. So an easy to look at this is the average home will sit for ~50 days before going under contract.
  • Inventory is up ~1 month from May of 2022 to 2.5 months of supply compared to 1.5 months this time last year. Early Summer is historically the strongest part of the selling season.

My Take and Transactions:
  • Seller's are taking the first reasonable offer that hit's their desk. An example - I tried to set up a showing for a client on a Friday afternoon but the seller's received an offer at lunch time and decided to shut it down. They weren't going to mess around.
  • These interest rates are really tough to navigate as a buyer. Especially if you are bidding on homes that are priced competitively. One of my client's took a few houses to make some offers on but were lucky in getting a bid accepted right at ask with a strong option period and earnest money deposit. It is important to show seller's you can provide a certainty of execution and will be there on closing day.
  • Interest rates in the early part of May were hovering around 6-6.25% but ended May at 7-7.25%, which I believe has had a slight cooling effect on buyer's appetite unless they have a lot of cash - especially so at the higher price ranges.
  • That all being said, we were still able to provide over $12,000 in rebates to our clients for the month of May - which is always a win in my book.





Bryan/College Station MSA:


Bryan:



College Station:




Brazos County:



If anyone has any other requests for surrounding counties - let me know and happy to help!
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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AggieCVQ
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In reply to Red Pear Jack • 1:16p, 6/12/23
Listings in the further suburbs were new construction and inventory is highest is taking longer to sell.


Wonder if that's caused by RTO.
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Red Pear Realty
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8:45a, 6/13/23
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Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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Red Pear Jack
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In reply to AggieCVQ • 3:24p, 6/14/23
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Maybe both but more so due to the fact that inventory is most abundant out in the far northern sections of the metroplex given that's were home builders have focused and there's ample cheap land available to develop.
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Eliminatus
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1:20a, 6/15/23
AG
Really appreciate y'all taking the time and effort for this and being so transparent. It's very helpful to some of us.
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Texker
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In reply to Red Pear Jack • 3:05p, 6/15/23
AG
Red Pear Jack said:
NORTH TEXAS / DFW

  • Notably, Rockwall County still holding on to price increases.
    • Interesting that you mention this as a relative just sold their house in Rockwall for somewhere around $10k above ask on a $500k+ list. Obviously, not as crazy as it was before rates spiked but they had multiple offers in a matter of 2-3 days.

    And thanks for posting the monthly updates.
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    Red Pear Realty
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    5:01p, 6/15/23
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    HOUSTON

    Let's start with just the facts:

    Year Over Year numbers
    • Inventory continues to creep up ever so slightly to 2.8 months.
    • Average / Median sales price is DOWN 1.6% / 3.1%
    • Number of sales is DOWN 12.5%
    • Inventory (active listings) is UP 45.4% (WOW)



    https://www.har.com/content/department/mls?y=2023&m=06

    My take:

    You ever feel like you got run over by a Mack truck? This month has been wild. Some notable transactions:

    • Helped a very nice Aggie family buy a house in Nottingham Forest. They had been seriously looking for a year, and we finally snagged one. Multiple offers, over asking price, strong terms, etc. HOWEVER, this one boiled down to the fact that both the buyer and myself believed that even with an above asking price offer, the comps still showed that my client was getting a good deal with some day one equity. Appraiser agreed. Good deal.
    • Closed a timberland deal in East Texas (my homeland) with an experienced buyer who will be harvesting the timber (that is worth a considerable percentage of the overall purchase price). This is my kind of deal!
    • I leased several properties, about half of which went for above asking price and had multiple offers.

    Some other thoughts:
    • My buyer client list is still several times longer than my seller list. I personally believe that there is a big contingency of folks looking to wait out interest rates until they buy. Not sure how much I buy into the idea that the Fed is done raising rates, but I definitely think the rest of 2023 will be interesting.
    • I have clients making offers on homes inside beltway 8 and in the suburbs of Houston and on homes listed for lease who cannot get homes under contract. Multiple offers, buyers still doing crazy things, buyers still moving in from out of state with money to spend. Interest rates are way up, but prices have remained high, meaning cost of ownership is also way up. I had a client place an application on an old house in the Heights that ended up getting 7 lease applications. Seeing doctors get turned down for leases has been a new low for me.
    • In my opinion, we are in early 2008 right now. The overall economy is likely going to get worse. How that translates to future pricing in Houston is still up in the air, but so far, I haven't seen much softening. If we see mass layoffs later this year or early next, 2024 should be a good buying opportunity. If we don't, buckle up, because its going to be crazier than it is now.
    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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    AgsMyDude
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    In reply to Red Pear Realty • 7:44p, 6/15/23
    AG
    Massive layoffs or maybe a total collapse of the companies like OpenDoor, etc. are really the only ways the market shifts quickly right?

    I can see inflation cooling over time allowing the market to slowly adjust but I still don't think people with sub 3% mortgages will be in ANY rush to sell unless they are forced to.
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    Red Pear Luke
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    8:18p, 6/15/23
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    BCS is up!
    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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    Red Pear Realty
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    In reply to AgsMyDude • 10:09p, 6/15/23
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    I agree with you. The only way we see meaningful price declines is if we see similar unemployment movement that forces a lot of people to sell. The other thing I thought of a couple of days ago is that a major flood event could do something similar in Houston as well.
    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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    Texker
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    In reply to Red Pear Realty • 10:45a, 6/16/23
    AG
    Red Pear Realty said:
    I agree with you. The only way we see meaningful price declines is if we see similar unemployment movement that forces a lot of people to sell. The other thing I thought of a couple of days ago is that a major flood event could do something similar in Houston as well.
    Do you have any insight with apartment rents? The kid's 12 month Houston apartment lease renews at the end of August and management bumped the rent $255/mo if they sign now, $305/mo if they wait to sign. I've had them go back and ask about a lower rate if they renew for more than 12 months. Waiting on an answer.
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    Red Pear Luke
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    In reply to Texker • 12:57p, 6/16/23
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    Texker said:
    Red Pear Realty said:
    I agree with you. The only way we see meaningful price declines is if we see similar unemployment movement that forces a lot of people to sell. The other thing I thought of a couple of days ago is that a major flood event could do something similar in Houston as well.
    Do you have any insight with apartment rents? The kid's 12 month Houston apartment lease renews at the end of August and management bumped the rent $255/mo if they sign now, $305/mo if they wait to sign. I've had them go back and ask about a lower rate if they renew for more than 12 months. Waiting on an answer.


    Rents in Houston are pushed cause limited supply.

    But $255 x 12 = $3,060 more for the year. If they decide to look for another apartment to move into that is cheaper or at their current rate AND they can move for less than $2500. That works out more in their current favor and saves them more in the long run.
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    Red Pear Realty
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    In reply to Texker • 7:25p, 6/16/23
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    I get the feeling that the rental market is just about tapped out. The only way for renters to willingly pay more next year will be for salaries to exceed inflation. I've had several leasing experiences this year that led me to believe the market is just about tapped out. We are all getting it from all sides…grocery store, gas station, tax bill, water bill, etc.
    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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    Red Pear Jack
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    In reply to Red Pear Realty • 7:30p, 6/16/23
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    More than nine of every 10 (91.8%) U.S. homeowners with mortgages have an interest rate below 6%, according to a new report from Redfin.

    Another reason sellers are staying put is because they bought recently; a record 60% of mortgage holders have lived in their home for four years or less, further contributing to the supply shortage

    https://investors.redfin.com/news-events/press-releases/detail/930/nearly-everyone-with-a-mortgage-has-an-interest-rate-below
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    Red Pear Felipe
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    7:00p, 6/18/23
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    Austin-Round Rock data is up!
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    Red Pear Felipe
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    7:04p, 6/20/23
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    Austin Heat Map

    Woof! My zip code in 78737 with a 42% drop in median sales price.

    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear RealtyAustin Monthly
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    Red Pear Felipe
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    9:36p, 6/20/23
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    Temple/Belton

    • Bell County as a whole saw a drop of 3.8% to a median sales price of $276,000.
    • Both Belton and Temple saw drops to their median sales price with Belton seeing the biggest drop in price at 18.2% YOY.
    • My clients and I were able to close on a home in Temple at the end of last month. They got a great deal with the sellers agreeing to sell at the appraisal price. Their new house has all the bells of whistles and was recently renovated to look like a Chip & Joanna special!

    Bell County


    Belton


    Temple


    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear RealtyAustin Monthly
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    Red Pear Realty
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    In reply to Red Pear Realty • 2:43p, 6/21/23
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    Red Pear Realty said:
    I get the feeling that the rental market is just about tapped out. The only way for renters to willingly pay more next year will be for salaries to exceed inflation. I've had several leasing experiences this year that led me to believe the market is just about tapped out. We are all getting it from all sides…grocery store, gas station, tax bill, water bill, etc.


    Per HAR's latest rental market update, rents are basically flat YOY:

    https://www.har.com/content/department/newsroom?pid=1955


    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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    Texker
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    2:23a, 7/15/23
    AG
    So the kid decided to renew. The property has been bought by a California company. Their first contract was 15 pages. The renewal contract is 56 pages.
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