In 2022, we’ve already seen cost increases in everything from energy to essential goods such as groceries and pharmaceuticals. With a rise in inflation and a recovery protocol from one of the biggest pandemics in history, markets are moving in odd directions. Speaking of odd directions, have you seen the North Texas real estate market?
Since January of 2021, the volume of North Texas home sales increased by just 4 percent while the price per square foot skyrocketed 22 percent according to new numbers from MetroTex Association of Realtors. This means factors beyond simple supply and demand drove increases in home prices and decreases inventory in the North Texas real estate market.
According to Taylor Walcik, 2022 MetroTex President, the vast separation between supply and demand could continue to cause lower increases in sales volume.
“Sales prices probably aren’t going to come down drastically in 2022 but they could begin to flatten out,” said Walcik. “We still have high buyer demand and hopefully will see more listings in the 2022 selling season this Spring and Summer.”
At the end of January, there were 5,620 active listings throughout the coverage area of the local MLS (North Texas Real Estate Information Systems). The number of active listings represents a 28 percent decline compared to the same time last year.
Why The Sudden Home Price Spike?
Since the pandemic set in during the summer of 2020, we’ve seen shortages in everything from labor to materials as the cost of goods increases substantially. The real estate market is no stranger to these circumstances.
Like so many others, East Dallas Real Estate Group‘s Britt Lopez is grappling with this recent run on real estate.
“I’ve never seen this type of market in my 20 years as a Realtor,” Lopez told Daltxrealestate.com. “Last year was crazy, but this year seems out of control. I have been showing countless homes and writing countless offers. I began running spreadsheets to see what homes are selling for and it’s shocking.”
Britt says she’s seeing homes in the city selling for anywhere between 5 to 15 percent over the asking price. In the suburbs, homes are closing 25 to 40 percent over asking.
“Buyers are also waiving appraisals to even the playing field,” she said. “Many buyers settle below budget to pay cash on homes that appraise well below their offer.”
A Compound Crisis
Jason Saucedo, a Realtor with Hewitt Saucedo Realty Group, sees this inventory shortage as a dual dilemma.
“It seems like there’s a crisis for sellers as well as buyers,” Saucedo says. “The problem is two-fold. On one hand, you have people not wanting to sell because they’re not confident they’ll find that next house. Then, there are a lot of people who found really good interest rates in the last couple of years. They fear losing that by moving on to another purchase.”
According to MetroTex’s numbers, over 75 percent of the sales in the North Texas real estate market are priced between $200,000 and $600,000 while the number of listings in the same price point makes up 63 percent of the active market. So, with so many people staying put, inventory decreases, demand increases, and prices go through the roof. Talk about a vicious cycle.
As for any relief, who can say? Lopez tells us it’s too early to estimate.
“I’ve been in this business a long time,” Lopez explained. “I’ve seen buyer markets, seller markets — you know it goes back and forth. But this is unlike anything I’ve been a part of, personally.”
