2016 Home Values Have Changed

Well, it’s the close of the 2016 Real Estate Market and let me just say, “WOW!!”. The DFW real estate market has been one of the craziest I have seen in my 12 years in the industry. We have seen the median home prices rise 12+% over the last year. This created a lot of excitement for home sellers and anxiety for home buyers. We have seen our “Months’ Supply of Inventory” (how long it would take to sell homes on the market) drop to 2.5 months which is a 13% drop from 2015. As you can see this is a sellers’ market. A balanced market would be around 5 to 6 months of inventory. This puts stress on buyers by having to deal with multiple offers on the home they want, having to pay over market value and still not getting their dream home. You would think that the sellers would love it. Mostly they do, but what if you are a seller that is staying in the area, once your home sells you are now a buyer!! Yikes!! Also, when a buyer must go over list price to get the house, they are more demanding during repair negotiations, or they submit what I call “Hold” offers. These are offers on multiple properties at once to see what they can get and then decide which house they want. This can drive the sellers crazy.

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There is a lot of reasons we are seeing this type of market. The DFW market is seeing an influx of companies relocating to the area. Toyota, State Farm, Liberty Mutual, JP Morgan Chase, and Mortgage giant FANNIE MAE, just to name a few. The low-interest rates are another big reason for the crazy market. As of this writing, a 30-year conventional rate is around 4%, that is up a bit from the mid-2016 season of 3.5%. We are also starting to see the millennial generation enter the housing market. All this is creating the perfect storm for the DFW housing market.

So, with all that said what does 2017 look like? The short answer, more of the same. It will be real interesting to see how everything flushes out with the new administration starting and with the Feds raising interest rates.

DFW has seen a steady increase in new home starts over the past year but still far below the pre-recession days. The median price for a new home in North Texas was up 13.2 percent year-over-year to $336,381, according to data from Residential Strategies Inc., which analyzes the North Texas housing market.

So, as I reflect on 2016 I am amazed at the growth we are seeing in the DFW market. It’s exciting for sure and good for me since I am in the Real Estate business. Hang in there it could be much worse.

Dan Sexton – Renee Mears Realtors