Spring of 2021 is officially here, and with it brings a different reality than spring seasons of years past in the North Texas market.
Let’s start this month’s market update by taking a look at the latest trends.
As we covered last month’s market update, our MLS in North Texas showed a 10% decrease in new sellers hitting the market in 2020. Looking at 2021, 34% fewer sellers have hit the market compared to last year, further influencing the existing shortage of homes for sale.
Through February, the month’s supply of inventory for single-family, pre-owned homes is at 1.1 months, down 54% compared to last year. For reference, “month’s supply of inventory” is the number of months it would take to sell all current inventory at the market’s current pace. While this is often compared to what is typically considered a normal month’s supply of 6 months, our market here in North Texas has mainly stayed between 2 and 3 months over the past 5 years.
Looking at contracts, the overall number of contracts written so far this year is almost identical to last year’s figures. While the number of contracts written rose consistently last year, in the past 45 days we’ve seen a slight decrease in contracts, which is not surprising given the lack of inventory on the market. This is not to say that the market isn’t highly competitive — that is still very much the case.
Median sale prices have increased by 12.7% in the past year, which is to be expected given the increasing population here in North Texas coupled with the lack of homes for sale on the market. Interestingly enough, we’ve seen a 6.7% increase in median sales prices just from January to February of this year. While this is certainly noteworthy, we’ve seen pronounced spikes like this in years past, and especially in election years.
Finally, interest rates have begun to creep upward. Rates are still very low historically speaking, yet the increase will still be felt by investors and buyers that are buying at the top of their budget. This is something for us to watch moving forward.
So, what does this all mean?
If you’re a buyer...
Representation matters more than ever. As competition continues to rise, your agent’s knowledge of the market, ability to make your offer stand out, and hard work to find off-market opportunities will be key to your success.
Expectation setting is key. If you’ve been looking at homes over the past year, or even the past few months, comparing what you might have purchased to what is currently on the market won’t be productive. With prices expected to continue to rise and rates still low, finding a win in today’s market is still your best bet for success.
Cash offers are winning offers. If you’ve been putting in offers on homes, you likely have heard that many homes are selling to cash buyers, giving them the ability to offer sellers a quick close and eliminating the uncertainty that can come with financing. For this reason, we’ve introduced our Cash Purchase Program, which allows buyers to make a winning cash offer, then buy their home using traditional financing methods.
If you’re a seller…
Having a plan is critical. With days on market down by 61% compared to last year, homes are selling quickly. If you don’t have an idea of where you’ll be going next, you could be forced to move twice as a result of having to find interim housing while you search for your next home. This is another opportunity where our Cash Purchase Program shines. The program allows sellers to buy their next home with a cash offer, then put their home on the market once they have moved into their next home.
If you are a buyer or seller and would like to learn more about our Cash Purchase Program, give us a call at 214-267-9222 and we would be happy to walk you through the process.
Finally, if you’re an investor…
Now is a great time to contact your lender. In some cases, the rate increases we’re seeing have not been widely publicised, and you may still be able to secure lower rates. If you’re in need of quotes, we’d be happy to connect you with a few lenders our investors have had good experiences with.
As we move forward through spring, we’ll continue to keep a close eye on the market here in North Texas. Our daily logging and analysis of market data allow us to spot emerging trends in real-time, keeping you ahead of the curve. Happy home selling!