The year 2017 continued the recent housing market history of concerns with rising prices and home affordability. Yes sellers continued to benefit, but buyers became more cautious and particular as available housing inventory increased as the year moved on. The reality is that D-FW area and North Texas home prices are at record levels, as we have consistently been one of the hottest housing markets in the country over the last five years. Yes the market is strong, but definitely the demand and focus is on homes under $400K and especially $300K and under. Through November 2017, the North Texas housing market was at $300K median price sold and $365K for avarage price sold. Without question, the market needs more entry-level homes, but the margins for the builders on those homes are not as appealing as the more expensive higher-end and luxury homes. The primary factor is that North Texas pre-owned housin prices rose ten percent in 2016 and nine percent in 2015. An estimated eight percent increase this year still means that D-FW area and North Texas home prices will be more than 40 percent higher than before the recession a decade ago.
As we head into 2018, here are some thoughts gathered from housing analysts and experts from across the country.
1. Most economists anticipate and are predicting slower market pricing gain in the D-FW and North Texas area. The number I continue to hear the most is at or around 5% increase.
2. You can expect that the inventory on higher-end homes will continue to increase as the demand is substantially less.
3. Home affordability will continue as a major concern and especially for first-time homebuyers and young families. The reality is that home prices have grown at a much faster pace than annual wage increases.
4. New home construction will continue to be an intriquing option for those buyers that can afford them. New home builders have lots of inventory on the ground and there are great deals due to both price reductions and special promotions.
5. With overall housing inventory about ten percent higher than last year, NOW is a good opportunity for buyers.
6. If you are thinking of selling, many sellers reach out to real estate agent like me in mid-January and February, as they want to be prepared when the amount of buyer activity increases and continues through the summer.
As I stated earlier, many analysts, economists and housing experts are forecasting that 2018 will still be a good year as strong demand will continue as 80,000-100,000 new residents move into the North Texas area due to job growth opportunties and corporate relocations. The increasein home prices and and sales will be slower, but a modest increase is still expected.
Source: NTREIS, The Dallas Morning News
Steve Lester, REALTOR® is with Keller Williams Realty living in Allen, Texas.