After our market saw a considerable jump in inventory coming into August, we’ve seen inventory stabilize at just shy of 10,000 homes.
What’s causing the slowdown of inventory growth? Is the market slowing down? Year-over-year comparisons show decreases across the board — yet last year was an anomaly. We experienced abnormal seasonality, with a greater percentage of home sales happening later in the year.
Given the fact that the data trends for 2021 are closer matched to the years prior to 2020, year-over-year comparisons don’t necessarily tell the full story when it comes to the market here in Dallas-Fort Worth.
Let’s take a closer look at what’s been happening in our market over the past six months.
In March, record demand drove inventory to historic lows, causing property values to increase. For many buyers, the combination of these forces led them to suspend their home search.
Meanwhile, heavy competition and rising prices have benefited sellers greatly in the past 6 months. Given the lack of balance in the market, seller confidence increased, which has led to a subsequent increase in new homes on the market for the past several months.
As more sellers have come on the market — some testing asking prices above market value — demand remained high, albeit relatively flat, allowing for inventory levels to increase.
Which brings us to today’s market. Inventory has risen enough to be noticed, and we’re seeing buyers that had previously pulled out of the market revisiting their searches. Coupled with a slight decrease in the weekly averages for the number of sellers coming on the market this month (which matches seasonal trends from years prior to 2020), and the slowdown in inventory growth makes sense.
Given the recent COVID surge and the changes we’ve seen in the last few months, we’ll be keeping a close eye on the numbers heading into the fall.
Is it no longer a good time to sell?
If you’ve considered selling, now is still a great time to get top dollar for your home. As mentioned above, demand remains strong, and historically speaking, overall inventory numbers remain low.
Looking at the overall US housing market, home values have increased beyond historical growth averages, and the past suggests that a correction in the market will eventually come. When will that correction come? Unfortunately, we don’t have a crystal ball — just history to show us that this breakthrough is one we should pay attention to.
Is it a good time to buy?
There are a couple of things working in buyers’ favor right now. First, interest rates remain very low. This provides buyers with increased spending power, helping to offset the price increases we’ve seen in the past year. Again, we can’t read the future, but are hearing predictions that interest rates will go up in the next year. Remember that for every 1% of interest rate increase, your spending power decreases by around 10%.
Second, inventory is up, which provides buyers with more choice than they had 6 months ago. That being said, demand remains steadily high, which means you should still expect competition and take a decisive approach when considering a purchase.
Our team will continue to track our market closely to keep you informed of the latest developments. If you have any questions about the market, we’re standing by to assist you. Give us a call today at 972-267-9222.