Rising prices and scarce listings roil Dallas-area buyers

When Matthew Muff plunged into the depths of the North Texas home market, he hadn’t expected to spend more than six months looking for a home.

He’s still not ready to give up.

“I made seven or eight offers,” said Muff, who rents in Addison. “I keep missing out.

“I will search further. I’m tired of living in an apartment. “

Muff’s advice to buyers in the Dallas area is to get as many deals as possible and not be discouraged.

“See the house as soon as it comes on the market,” he said. “Some sell within a few days.”

A severe housing shortage in North Texas and exploding demand from buyers have created one of the most unconventional real estate markets of all time.

Many sellers receive dozens of offers as soon as they put out a sale sign. And many of these properties are trading for more than the asking price.

The COVID-19 pandemic took the market by surprise as more and more tenants decided to start their own business. Also, Dallas-Fort Worth is a leader in population growth and construction is not keeping up with demand.

Recently, more than 100 buyers lined up to buy a few dozen properties on a new residential area in Ellis County. Home builders can’t build homes fast enough to curb buyers’ appetites.

“I’ve lived in Dallas for 40 years and I’ve never seen anything like it,” said real estate agent Todd Luong, who is with ReMax. “Some people have given up looking for a home.”

Others are priced out of the market or passed over in favor of more money buyers.

“If you’re a seller and receive 50 offers, choose either a cash offer or people with the highest down payment,” Luong said. “Your goal is to make sure you choose the best of these 50 offers.”

Some buyers are contracting multiple homes to make it even harder to hit a deal.

“They will make several offers and cancel all but one,” Luong said. “That makes sellers cautious before accepting an offer.”

Low stocks remain

There just aren’t enough houses to walk around. In the Dallas area, home inventories are low and there are no signs of relief.

“A lot of potential sellers don’t sell because they need to find another home and there isn’t one,” Luong said.

In March, only about 100 houses were offered for sale with real estate agents in all of Plano.

“How is that even possible in a city with 285,000 inhabitants?” asked Dallas real estate analyst Paige Shipp. “D-FW is experiencing massive immigration, which is fueling demand.

“The demand is real and unfortunately the shortage of supply is also real.”

There were only 57 active property listings in Carrollton and Farmers Branch in the first quarter. Only 50 single-family homes have been offered for sale by real estate agents in Irving.

Homes in the Dallas area sell in about 30 days on average, and there is less than a month’s supply of agent-listed homes – one-sixth of what is considered the “normal” market.

The shortage of inventory is holding back sales in many areas of Dallas.

In the first quarter, house sales by real estate agents in around two dozen residential areas were down year-on-year. According to the Texas Real Estate Research Center and North Texas Real Estate Information Systems, most of the declines in home purchases were in areas of moderate-priced real estate – neighborhoods with some of the thinnest offers and strong demand.

Shop for a year

Stephen Brown and his wife just bought a house in Fairview after shopping in the market for over a year.

“We started looking in November 2019, then the pandemic and we took a hiatus,” Brown said. “We started looking seriously in June.

“We visited around 80 or 90 houses and made offers for 15 to 20 people.”

Brown paid the asking price for the home, believing his upfront funding got a head start on competing buyers.

“If it wasn’t cash, you had to be prequalified for a loan,” he said.

PrimeLending mortgage lending officer Mark Raskin said he qualifies 40 to 50 Dallas homebuyers each month.

Raskin said some sellers are mistaking for buyers who can make larger upfront payments.

“If someone can only cut 3% to 5%, they are unlikely to find something that will work, as most decent homes are well above the market in the under $ 500,000 range,” he said.

Prices are rising so quickly that some potential buyers will have to return to the lender with approved funding for an even larger loan amount.

Big price increases

Median home sales prices in the Dallas area rose more than 13% in the first quarter.

Some of the largest year-over-year price increases for single-family homes were in Celina (28%), Fairview (24%), and southeast Dallas (23%).

Real estate agents say they strive to balance eager buyers with the dwindling pool of real estate.

“I wrote 14 offers for one buyer and two for another buyer last week,” said McKinney agent Johanna McDaniel. “I have three other active buyers that we’ve been selling for a few months each.

“At some point they’ll find something that sticks, but it always depends on timing and the availability of cash. First-time buyers are currently in an extremely difficult situation. “

Sellers also charge real estate agents by sometimes asking lower commissions due to the hot market.

Of course, everyone wonders how long the apartment frenzy will last.

“This is a strange time – I’ve never seen anything like it in my career,” said senior real estate analyst Ted Wilson of Residential Strategies Inc. of Dallas.

Wilson sees no signs that the North Texas home market will downshift. Only an increase in mortgage rates would slow things down, he said.

“You are seeing the economy reopen from COVID and we expect more moves from the west and east coasts to Texas,” he said. “I think we are at the beginning of the recovery.

“We believe that the demand for housing in this area will continue to be very strong.”