In mid-year 2008, we began seeing a trend toward leasing of homes in Prosper that came on quick as the recession hit DFW. As I have been saying all year, the demand for residential leasing in Prosper in 2009 has been astronomical. I predicted a strong year of leasing, reminded the residents of Prosper throughout the year when we had greater demand than we had supply of leases, converted some homes for sale into homes for lease, and advised residents that this was no short-term trend. It will continue into 2010. Now that we're at year's end, we can and should look back to ensure that the prediction was correct:
Current residential lease inventory (available homes in the MLS for North Texas in the Town of Prosper as of 12-08-09):
16 homes
Price range: $1050/month to $11,000/month
Average asking price on a lease in Prosper: $.75 - $85/sf for a 4-bedroom, 3 bath home with 3-car garage and lot size averaging higher than .25 acres.
Current residential leases pending full lease:
1 home
There is one 6-bedroom home on Chapel Hill that is currently in negotiation of a $2600 per month lease that took less than 60 days to receive an offer.
Current residential leased properties that went into leased status in 2009:
53 homes
Lease range of homes: $1145/month to $5,000/month
Average leased price of a home in Prosper in 2009: $.70/sf
Why the trend toward leasing? The recession is over in DFW, right? Not completely. We can certainly see that some areas of DFW were barely grazed by the downward trend in the economy. Some areas briefly dropped between Fall, 2008 and Spring, 2009. We saw steady improvement in home sales all year across the region. But, some neighborhoods still maintain higher than normal foreclosure and short sale inventory that has yet to clear out. But, even those areas are seeing thinning of distressed inventory (and at a pretty rapid pace, too). So, why would the trend toward leasing continue? Because a big portion of the buyer pool in Dallas/Fort Worth each year is made up of people moving from other parts of the country who have homes to sell before they can buy here. And, where do our buyers come from? Other major metropolitan cities with large corporate bases, just like us. Chicago, Los Angeles, Seattle, New York City, Tampa, Houston, and San Francisco's Bay Area are major target markets for Dallas/Fort Worth's housing market. What do all of these cities have in common? Their housing market is still trending downward or just starting to settle. The recession isn't over yet. Until we see those markets rebound, the trend in DFW's housing market will be a continued demand for residential leasing.
If you are considering selling or leasing your home in 2010, the best advice I can give you is to list the house both ways and let the market dictate what works for them. We've worked some pretty funky customized leasing arrangements in 2009 to make the situation work for both parties. That's actually been challenging and exciting. The strangest lease I did in 2009 was a 5-month fixed rate lease with a 7-month term of month-to-month leasing at a higher rate. This allowed the tenant time to get through their purchase contract in California and then gave them time to decide whether to buy the home they were renting or time to view other home options during the back half of the lease. The tenant ended up buying the home in the 4th month of the back half of the lease. I believe it came down to the fact that they leased a house that they would consider buying, moved in, their family got settled into schools and the neighborhood, and the thought of moving again at the end of the year just wasn't that important. A little flexibility by the 'seller/landlord' up front was rewarded with a purchase contract before the lease was up. Pretty cool.
Have a blessed day!
Ronda
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