House hunters’ lament: Rising prices and scarce listings roil Dallas-area buyers

Written by MLHA Team

May 8, 2021

When Matthew Muff waded into the deep end of the North Texas home market, he wasn’t expecting to spend more than six months hunting for a house.

He’s still not willing to give up.

“I’ve made seven or eight offers,” said Muff, who’s renting in Addison. “I keep missing out.

“I’m going to keep looking. I’m tired of living in an apartment.”

Muff’s advice to Dallas-area home shoppers is to make as many offers as you can, and don’t get discouraged.

“See the house as soon as it comes on the market,” he said. “Some are selling within a couple of days.”

A severe shortage of housing in North Texas and an explosion in demand from buyers have created one of the most out-of-whack real estate markets ever.

Many sellers are getting dozens of offers as soon as they put out a “for sale” sign. And lots of those properties are trading for more than the asking prices.

The COVID-19 pandemic surprisingly juiced up the market, as more renters decided to make a move to their own digs. Plus, Dallas-Fort Worth leads the country in population growth, and construction is not keeping up with demand.

In one new home subdivision in Ellis County, more than 100 buyers lined up recently for a chance to purchase a few dozen properties. Builders can’t put up houses fast enough to make a dent in buyer appetites.

“I have lived in Dallas for 40 years, and I have never seen anything like this,” said real estate agent Todd Luong, who’s with Re/Max DFW Associates. “Some people have given up looking for a home.”

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

“If you are a seller and get 50 offers, you are going to select either a cash offer or people who have the highest down payment, or people who are willing to waive the appraisal contingency,” Luong said. “Your goal is to make sure you pick the best out of those 50 offers.”

Making it even tougher to score a deal, some buyers are putting contracts on several homes.

“They’ll make multiple offers and terminate all but one,” Luong said. “That’s making sellers cautious before they accept an offer.”

There just aren’t enough houses to go around. The Dallas area has record low home inventories and no sign of relief.

“Many potential sellers are not selling because they have to find another home and there aren’t any,” Luong said.

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

“In a city of 285,000 people, how is that even possible?” asked Dallas real estate analyst Paige Shipp. “D-FW is experiencing massive in-migration, which is fueling demand.

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

In Carrollton and Farmers Branch, there were only 57 active home listings in the first quarter. And in Irving, there were just 50 single-family homes listed for sale with real estate agents.

Dallas-area houses are selling in about 30 days on average, and there is less than a one-month supply of houses listed with agents — a sixth of what’s considered a “normal” market.

The lack of inventory is holding back sales in many Dallas-area neighborhoods.

In the first quarter, home sales by real estate agents were down year-over-year in about two dozen residential districts The Dallas Morning News tracks. Most of the declines in home purchases were in areas with moderate-priced properties — neighborhoods that have some of the thinnest supplies and fierce demand, according to data from the Texas Real Estate Research Center and North Texas Real Estate Information Systems.

Stephen Brown and his wife just bought a home in Fairview after more than a year of shopping the market.

“We started looking in November of 2019, then the pandemic hit and we paused,” Brown said. “We started looking in earnest in June.

“We toured around 80 or 90 homes and put offers on 15 to 20.”

Brown paid the asking price for the house and believes having his financing pre-arranged gave the couple a leg up over competing buyers.

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

Mortgage loan officer Mark Raskin of PrimeLending said he’s prequalifying 40 to 50 Dallas-area homebuyers a month.

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

“If someone can only put 3% to 5% down, it’s unlikely that they will find something that will work, as most decent homes in the sub-$500,000 range are going for well over market,” he said.

Prices are rising so fast that some potential buyers with approved financing have to go back to the lender and for an even higher loan amount.

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

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

Real estate agents say they are scrambling to match eager buyers with the dwindling pool of properties.

“I wrote 14 offers last week for one buyer and two for another buyer,” said McKinney agent Johanna McDaniel. “I have three more active buyers that we’ve been putting in offers for a couple of months each now.

“Eventually they find something that sticks, but it always comes down to timing and cash availability. First-time homebuyers are in an extremely tough spot right now.”

Sellers are also putting the squeeze on property agents by sometimes demanding lower commissions because of the hot market.

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

“This is a strange time — I’ve never seen anything like this in my career,” said veteran housing analyst Ted Wilson of Dallas-based Residential Strategies Inc.

Wilson doesn’t see any sign that the North Texas home market will downshift. Only a run-up in mortgage rates would slow things down, he said.

“You are looking at the economy starting to reopen from COVID, and we expect to see more relocations to Texas from the West Coast and East Coast,” he said. “I think we are kind of at the beginning of the recovery.

“We think housing demand in this area will continue to be very strong.”

Some articles from around the MLHA Nation you might like...

0 Comments

Submit a Comment

Getting More Local

Setting Up Shop In Your Area Soon!

Coming Soon!

My Local Home Value

MARKETPLACE

Interactive and Intuitive Digital Magazine focused on the housing markets and home values of Your Area.

Sample is of 

My Seattle
Home Value
Marketplace

Coming Soon!

Vounce HOME VALUE

MARKETPLACE

Interactive and Intuitive Digital Magazine focused on the housing markets and home values of Your Area.

Sample is of 

My Seattle
Home Value
Marketplace

Coming Soon!

My Local Home Value

MARKETPLACE

Interactive and Intuitive Digital Magazine focused on the housing markets and home values of the area you live.

Sample is of

My Seattle
Home Value
Marketplace

Appraiser Interview Guide

We have a combined 70+ years of appraisal experience. It makes us happy to share this with you. Let's jump right in then!

1. The first thing is a lot like many things you might get ready to do is to get your ducks in a row, and have a game plan for setting up your appraisal. And of course  you can't know everything about everything so the right appraiser will provide those answers, and you will get the best results.

2. Have your property information readily available when talking with the appraiser...

Get the complete Appraiser Interview Guide delivered directly to your email box in a readable and downloadable format, there's no cost.

Locations By State

We have all Current Certified Residential and Licenced Appraisers in the country. You can simply get started anytime.
We have also setup in many cities and metro areas as well as a centalized base for many rural locations. We will setup more locations each week.

Washington  |  Oregon  |  California  |  Texas  |  New York  |  Illinois  |  Florida  |  Pennsylvania  |  Washington DC

Locations By State

We have all Current Certified Residential and Licenced Appraisers in the country. You can simply get started anytime.
We have also setup in many cities and metro areas as well as a centalized base for many rural locations. We will setup more locations each week.

Washington  |  Oregon  |  California  |  Texas  |  New York  |  Illinois  |  Florida  |  Pennsylvania  |  Washington DC

Home Office

Portland, OR

Phone

503 781-0448

Contact Us

Copyright ©2021 • My Local Home Appraiser

Copyright ©2021 • My Local Home Appraiser

Phone: (503) 349-3765  Home Office: Portland, OR  |  Email: contact@mylocalhomeappraiser.com

  Email: contact@mylocalhomeappraiser.com