This time we're going to briefly talk about home sales. At the end of August, there were 16,282 homes for sale on MLS, which is down from 29,405 at the end of August 2019 -- and many of the 16,282 figure were already under some form of contract.
"The Dallas-Fort Worth real estate market is hindered by the extremely low inventory of homes for sale,” Wolfe said. “It seems that this issue has finally caught up with our market.”
Wolfe is the broker/owner of RE/MAX DFW, which has 335 agents over seven locations.
Even July to August was an inventory drop: the DFW inventory dropped by 2,325 homes, or 12.5 percent, from the end of July to the end of August. Time on the market fell from 45 days in July to 41 days in August.
What's interesting is that two of the hottest months across the last 13 years for home sales have happened during COVID. Year over year, August U.S. home sales rose 4.3 percent, marking the third-highest total in the report's 13-year history. July 2020 holds the report record for most home sales, followed by June 2017.
As summarized by Adam Contos, the CEO of RE/MAX:
“Buyers are moving forward in record numbers, unfazed by inventory challenges and consistently higher prices," Contos said. "Homeowners in a position to sell are seizing the opportunity – and benefiting from the one-two combination of enthusiastic, competitive buyers and significantly quicker turnaround times.”
So what does this all mean?
It's an interesting series of trend lines. To wit:
- Sellers took open houses and walk-throughs off the market in the early stages of COVID, which drove supply theoretically down as demand was static or going up (people looking for new options, not knowing what was going to happen health-wise). That led to prices increasing.
- DFW is still relatively cheap across the 50 biggest metros, although that will change over time. It's a good location for companies, for overall business, for cost of living, etc. So, it's attractive to people, as seen in our 2009 to 2019 population surge.
- We are overbuilding apartments, potentially, but the supply inventory for single-family isn't at the same pace (yet).
- People are thinking about bigger life decisions and moves because of everything swirling around with COVID and the inability to pinpoint "the end date."
- Are the suburbs at play earlier in life, for example?
- It's a bit chaotic out there and people are making the best decisions they can for their family -- plus interest rates are low. So, the pursuit of a home purchase might be more common right now, driving inventory down, which might short-term to intermediate-term drive prices up, which could theoretically push a few more people into renting. We've seen that trend in recent years, actually: DFW renters were becoming older and richer.
- At the same time, industrial investment is growing 25%. Industrial rents are going up 14%. So that could be a concern in terms of businesses wanting to move here, but ... if you consider many of the moves come from California/west coast, it's a better tax and educated workforce position in many ways, even if industrial rents are growing quickly.
Keep an eye on this space and we will try to keep educating you about the various interplays of renting and buying.