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As late as September 2022, real estate agents and number crunchers were saying that the housing market was cooling off and that prices would start to even out.
And then came first quarter 2023.
To try to stifle inflation, the Fed raised interest rates in February, March and May by one-quarter of a percentage point each time. It did cool consumer prices slightly, but now it’s even more expensive to buy a home. So, is it a good time to sell? North Texas real estate agents weigh in.
What’s happening now in the D-FW real estate market
“You aren’t seeing 20, 30, 40 offers coming in,” says Summer Graham, Graham Group principal with Compass Real Estate. “My last [listing] in Old Lake Highlands had three offers, and one in Lakewood Heights had eight offers. But it was a super desirable area. It had a pool; it was modern, very clean lines, and my sellers were very realistic as far as the list price.”
Although home sales are down slightly — just 2% — since last May, many homes still go under contract within days of listing, says Graham. “There’s still a record number of people moving here to Dallas every day, and there just aren’t a lot of homes in the areas people are looking.”
Data from the Texas Real Estate Research Center at Texas A&M University showed just 2.2 months’ supply of housing in D-FW for May 2023. A balanced market would have 6 months’ worth.
Part of the reason is that so many homeowners locked in low rates during the pandemic — now, people who normally would be ready to sell won’t do so, because today they would pay much more for less home than just a few years ago.
Even with higher interest rates in play, many real estate experts are advising buyers to continue looking for a home. That’s because when rates do go down, more people will come off the sidelines looking for a deal among a finite number of homes. “If rates drop into the five and lower sixes,” says Graham, “we’re going to go back to multiple offers because there is so much pent-up buyer demand.”
With fewer homes on the market right now, potential sellers might be wondering if repainting, staging, marketing and a realistic listing price is actually necessary. “It’s still a price war and a beauty contest,” says Jessica Maddern, principal for the Plano-based Maddern Team, alongside her husband Brad, with Keller Williams Realty.
Graham agrees. “Where sellers are having problems is if they’re trying to sell at the highest price point, instead of pricing right where the market says. That’s when you know that you’re seeing them stay [on the market] a little bit longer.”
Brad Maddern notes that compared with last year, there are more price decreases than what agents have seen in the past. Those who put in the effort to prep their homes and price at the right level see a higher sales price and much quicker closing times, affirms Jessica Maddern. “Average days on market is 23. Right now our team’s average is five.”
The impact of the school calendar on selling your house
Historically, spring was the time to list and summer was the time to buy a home. That’s because more people are willing to uproot and move in the summer, between school years.
“This year, we’re still seeing summer months are good for sales if the houses are priced correctly,” shares Brad Maddern. “We’re not seeing as many listings come on the market as we have in years past. We’re still in a seller’s market.” (Of course, once you sell, you’ll be a buyer in a seller’s market, so make sure you have options and are ready to buy under current conditions.)
If you’re not quite ready to sell this summer, you still have options, of course. As prices have risen, homebuyers are more willing than ever to look for deals, regardless of the time of year. And people who have been on the sidelines seem ready to get back in the market, says Jessica Maddern. “Over the last three to four weeks, we’ve seen more and more buyers say, ‘I really don’t think the interest rates are going to change. I’m ready to jump in. Let’s just go for it.’”
Graham agrees, but with the caution that if the market softens at all, buyers are going to get pickier. “People are always going to buy and sell their homes. It’s not [necessarily] going to be at the frenzied pace, of course. It’s going to be much more discerning. Those homes are going to have to be market-ready.”