“Declining home sales” . . . likely your first reaction when you read those words is this must be a sign of bad economic times.
Well not this time.
In North Texas, there has been a drop in Dallas-area pre-owned home purchases in the first quarter of this year due to a lack of inventory of homes available on the market. The same can be said for Central Texas, where Austin has experienced a similar decline in home inventory.
Supply and Demand . . . Rising Prices
The current inventory has created a housing demand where sellers are presented with multiple offers within days of going on the market. Almost 40 percent of Dallas-area houses have a sales contract within two weeks of hitting the market according to data from Redfin.com. The increase in housing demand combined with this less than stellar home inventory is pushing prices and home values much higher. This is not only a local phenomena but is occurring in many places across Texas.
Increased housing prices for the most part are fueled by rising demand and supply. Currently the market is experiencing a substantial decrease in single-family residential listings which makes for a promising summer buying season, especially if you are the seller.
According to Steve Brown, Real Estate Editor for the Dallas Morning news, the most popular Dallas metroplex neighborhoods including Richardson, Plano, Grapevine, Allen, and McKinney have less than a third of what is considered normal inventory of houses for sale. This is not good when you consider that you have thousands of people coming to the Dallas area and no place to live.
In the market to buy a home?
If you are wondering if this is a good time to get in the market, consider the fact that mortgage interest rates are at or near all-time lows. In the opinion of many economists, rates are likely to rise based on the Feds change in policy over Quantitative Easing which has been a catalyst keeping rates so low. The Feds policy has kept inflation at bay but how long that will continue is anyone’s guess.