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Tuesday, August 9, 2022

DFW new home sales ‘flying off the shelves’

Home sale prices in DFW continue to rise and are up 19.5% over last year, according to RE/MAX.

DALLAS — New homes in Dallas-Fort Worth are selling at their fastest pace ever recorded, while pre-owned home sales plummet, according to two new reports.

New homes were on the market in DFW for an average of just 53 days last month, down from 96 days in July 2020, according to the 3-month moving average of the HomesUSA.com New Home Sales Index.

Meanwhile, the RE/MAX National Housing Report, which includes primarily pre-owned homes, showed home sales in DFW down 20.8% in July compared to last year, the largest drop recorded in the metro this year and the second-largest drop in the United States.

Only Salt Lake City, with a 22.5% year-over-year drop, had a bigger decline in home sales.

Home sale prices in DFW continue to rise and are up 19.5% over last year, according to RE/MAX. The current median home sale price in Dallas-Fort Worth is $358,418 — the highest price recorded in the report’s 12-year history.

July housing inventory posted a 10% boost over June, but it wasn’t enough to stop the slide in year-over-year homes sales, said Kendra Norwood, owner of RE/MAX Innovations in DeSoto.

“There just isn’t any inventory,” Norwood said. “With historic low interest rates stimulating mortgage loan refinancing earlier in the year, lenders are seeing an uptick in new loan applications. However, more families are opting to not sell or continue to rent in hopes that the market will stabilize and prices become more affordable.”

Traditionally, the housing market tapers off in August as kids head back to school, Norwood said. This year, though, many parents are opting to home school until mask mandate concerns are resolved, so workspace for school and office is still needed, she said. That will likely further ratchet down supply, she said.

“As the supply of available homes continues to decrease, and demand increases, we can only anticipate the median sales price to be driven higher,” Norwood said.

Turning to the DFW new-home market, demand also continues to exceed supply, and the time it takes to sell a new home, known as days on market, has “collapsed” said Ben Caballero, owner of Dallas-based HomesUSA.com.

“New homes in Dallas are flying off the shelves,” he said.

RELATED: DFW leads Texas in new home sales in last decade, prices double

Statewide, new homes were selling in just 62 days on average, down from nearly 100 days in July 2020, Caballero said.

The HomesUSA.com August new homes report – covering Dallas-Fort Worth, Houston, Austin and San Antonio – is based on data from the North Texas Real Estate Information Systems, Houston Association of Realtors, Austin Board of Realtors Multiple Listing Services, and San Antonio Board of Realtors.

HomesUSA.com first started tracking days on market data, or DOM, with the launch of its News Home Sales Index in 2017. Historically, in a typical real estate market, new homes take about 100 days or more to sell, Caballero said.

“Dallas builders are selling homes so fast they are not even making it into the MLS (Multiple Listing Service),” Caballero said, which means some new home sales are not being tracked and reported in a timely manner by a central source.

“We really don’t know the total for new home sales, as non-MLS sales data is not available,” he said.

Based on MLS data, the HomesUSA.com August report shows that new homes sales are falling, as low inventory continues to lower sales in DFW and statewide.

The three-month moving average for new sales in Dallas-Fort Worth was 1,140 last month versus 1,257 in June. Home sales were lower in all four of the state’s major new home sales markets.

Surprisingly, the average new home prices were mixed, with the DFW three-month moving average decreasing to $414,444 in July, down from $416,057 in June. New home prices were also lower in Austin, while San Antonio and Houston both saw significant increases in average new home prices, according to the report.

“It’s important to note that while we may see home prices month-to-month fluctuate, the trend is that Dallas builders are offering new homes over the last several months at their highest average prices ever,” Caballero said.

RELATED: Exclusive: DFW homebuilders skip buyers’ agents, MLS as demand rocket

National builders are attempting to slow down their home sales pace to match current production levels as they simultaneously build out the new infrastructure need to support more housing starts. A report by MarketNSight notes that 70% of the builders they polled said homes are being released for sale only after the framing stage, Caballero said.

A majority (58%) of builders cite the “unpredictable nature of current supply pricing” as the main reason for slowing sales, the MarketNSight survey showed.

In fact, DFW pending new home sales are trending down, based on MLS data. The three-month moving average of pending new home sales for Dallas-Fort Worth in July was 1,198 versus 1,275 in June. Pending sales in DFW totaled 2,362 in July 2020.

The three-month moving average showed 2,338 active new homes listed for sale in Dallas-Fort Worth in July versus 2,687 in June. A year ago, there were 6,552 active listings, a year-over-year decline of 64 percent.

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