Is the Real Estate Market Cooling?
For six years now Texas has celebrated steady growth in existing home sales. Some years saw double digit sales and price increases. Is that happy party in the process of winding down? Both nationally and locally, signs may be indicating that it is.
The number of homes on the market is up significantly throughout Collin County. The peak number of homes for sale throughout the county has risen each year since 2015. More inventory means more choices for buyers and contributes to longer days on market. Sales price increases have slowed to a crawl.
In McKinney, where Gigley Real Estate Group has its offices, the total number of homes on the market in July was 1,252 which was up 12+ percent from July of 2017, which in turn was up 42 percent over 2016. The shortest number of days on market each year, which typically comes in the prime summer selling months, has been higher this year than in the recent past. The optimum lowest days on market in July 2015 was 41 days, in 2016 it was 34 days, in 2017 it hit 41 days and for July of this summer, 53 days.
The two figures, inventory and days on market, go hand in hand. As the number of homes in inventory rises, the number of days homes have stayed on the market during the all-important summer months has been ratcheting up.
These figures reflect a broader trend in North Texas and nationally. Real Estate writer Steve Brown of the Dallas News says year over year prices slid and that the Metroplex now lags behind the national value increases:
“Dallas-Fort Worth home prices increased by only 4.6 percent in the second quarter from a year ago, according to a new study by Attom Data Solutions. That’s less than the nationwide median home price increase of 6.3 percent.
And D-FW prices were growing at only about half the year-over-year percentage rate increase in second quarter 2017. Home prices gains in North Texas have slowed significantly this year after a long stretch of double-digit increases.”
The Federal Reserve has been instituting a series of interest rate hikes, with the next one scheduled this September. Fed rate hikes don’t directly increase mortgage rates, but can definitely influence them.
We believe that rising interest rates have influenced both sellers and buyers. Sellers understand that rising interest rates could mean the market for selling is topping, so they rush their home onto the market in order to cash out their equity while they still can. This produces a flood of new inventory, weakening prices. For buyers, it means that there are so many homes to choose from they can be more selective and take their time, forcing sellers to make deals.
Has the luxury market been affected?
These increases haven’t impacted the luxury home market around Collin County as much except in Allen, where the number of homes priced at $800,000 and higher rose 68 percent over year July of 2017. Otherwise McKinney and Frisco were near last year’s figures. Despite the spike in inventory, Allen has not seen a significant increase in days on market.
Days on market in McKinney have actually improved, now about one third of the number of days last year. Overall, luxury home sales in Collin County remain healthy for now, despite the trends in the general housing market in the Metroplex.
In a changing luxury market it is imperative that you hire a Luxury Home Specialist!
At Gigley Real Estate Group, our team specializes in the luxury home market. We have experience and a successful track record as one of the best luxury home sales agents in the Metroplex. Even though the luxury market hasn’t yet seen the full impact of rising inventory and interest rate hikes, we have our eye on current events and will craft a strategy to sell your home in a timely manner and sell at market value. We will help you set a strategic, yet competitive sales price from the start and will invest in the marketing needed to showcase your home. Over 87 percent of home shoppers today find homes online. We pull out all the stops placing your home on all home-selling search engines, with professional high end photos, custom videos, virtual tours, personal websites, implementing the most advanced social media marketing strategies available, and more. If the market turns into a true buyer’s market, price concession is not the only strategy used to sell your home. Other strategies are available, and we believe with the systems and procedures we put in place along with the correct staging, marketing and pricing of a home, that lowering the homes price should only be implemented when proven necessary.
The Gigley Real Estate Group offers experience and the results needed to help you sell your luxury home, time and time again. We would love to help you with all your luxury real estate needs. Let us know how we can help you!