In any business, low inventory is a bad thing. It’s a delicate balance of having a product, moving it, and having something to replace it.
Just recall looking for toilet paper in the pandemic’s beginnings. Wasn’t that fun?
Like it is on a national scale, the pandemic is impacting the Dallas-Fort Worth housing inventory. Prices are up and mortgage rates are welcoming, but the uncertainty about the pandemic outcome and whether sellers can get the best price for their homes is forcing them to the sideline.
In effect, this has caused a 35.8 percent inventory decline year over year and 6.7 percent in September in the D-FW area, Zillow points out in its Weekly Market Report. According to North Texas Real Estate Information Systems (NTREIS) data, inventory was down 40.9 percent in September. Either way, inventory is approaching Charmin or Cottonelle thin.
It’s also impacted the inventory supply-and-demand housing formula. In Texas, available inventory declined 1.3 months to 2.3 months of inventory, according to the 2020-Q3 Texas Quarterly Housing Report. A housing market balanced between supply and demand should have from 6.0 to 6.5 months of inventory, the Real Estate Center at Texas A&M University has determined.
“There’s just not enough houses,” says Rusty Hall of Century 21 Judge Fite in Fort Worth. “It’s a seller’s market.”
Zillow listed a few reasons why in an Oct. 27 survey of homeowners taken from Sept. 29 to Oct. 5. In the survey, Zillow asked 1,000 homeowners about factors related to whether they’d sell or list their homes.
The top three replies:
- 26 percent said they were concerned they would not be able to find or afford a new once their current home was sold,
- 22 percent listed general life uncertainty,
- 21 percent anticipated a more favorable sale price if they wait.
Health concerns and mortgage forbearance programs were cited far less often as reasons that homeowners aren’t selling.
Drilling down deeper, the survey found that 35 percent of millennials (born between 1980-1995) and Generation Z (1996 and sooner) homeowners listed completion of a home renovation was the main reason to stay put.
Thankfully, when compared to toilet-paper hoarding, cooler heads are prevailing when it comes to homeowners selling or listing their homes.
Other Notable Reports
- Housing Affordability Analysis: Dallas-Fort Worth homeowners spend 17.7 percent of their income on housing costs, according to a Zillow analysis. The national percentage is 17.5 percent. The national high is San Francisco, where homeowners spend 34.4 percent of their income on a mortgage. The low is Scranton, Pa. (10.3 percent). Read more here.
- Zillow Weekly Market Report: Pending sales, although slowing, remain nearly 20 percent higher than 2019, while median list and sales prices are up more than 11 percent, according to the Oct. 24 report. “Like butternut squash soup just seconds out of the pot, this market is still scalding hot,” says Zillow spokesman Mark Stayton, obviously in the holiday spirit. Read more here.
- NTREIS Monthly Indicators: New listings of North Texas homes were down 2.76 percent to 12,193, according to the September report. Pending sales increased 8.7 percent to 10,144, and inventory shrank 40.9 percent to 20,192 units. Median sales prices were up 10.3 percent to $290,000. Read more here.
- Apartment List National Rent Report: Rents in Dallas decreased 0.5 percent month-over-month, and are down by 2.6 percent since the pandemic’s start in March, according to Apartment List. Median rents in Dallas stand at $981 for a one-bedroom apartment and $1,176 for a two-bedroom. Read more here.
- National Rent Report: Irving and Plano were two of 13 cities posting record-breaking yearly decreases in one-bedroom median rental prices, according to Zumper. Irving dropped 10.7 percent while Plano fell 8.4 percent. Nationally, year-over-year rents fell dramatically in the Bay Area as San Francisco dropped a nation-high 20.7 percent and Oakland 19.2 percent. Dallas ranked as the 34th-most expensive city to rent in September, according to Zumper. Fort Worth ranked 55th and Arlington 72nd. The price of a Dallas one-bedroom unit fell 1.6 percent to $1,230 while two-bedroom units dropped 5.2 percent to $1,650. Read more here.
- National Housing Report: Dallas-Fort Worth home sales are up 19.6 percent over last year and home prices are up 10.3 percent, according to the RE/MAX report. In D-FW, median sales prices were $300,000, up from $271,990 in September 2019. Nationally, the streak of record-breaking homes sales reached three months in September, as closings rose 21.1 percent from a year ago. Read more here.
