The housing market in Dallas-Fort Worth is experiencing a significant shift, as inventory reached nearly a decade-high in June.
With around 38,700 homes available for sale, this marks the highest level of inventory since 2018.
According to a recent study by Zillow, housing inventory in North Texas has surged by 24% year-over-year and increased by 3.1% compared to May.
This balance between buyers and sellers, observed for the first time since 2019, indicates a change in dynamics after years of sellers holding the upper hand.
In a noticeable response to market conditions, sellers are also cutting their asking prices.
Data indicates that nearly 36% of listings in the Dallas-Fort Worth area had price reductions in June.
Homes are currently going under contract in a median of 29 days, which is 10 days longer than in the previous year.
Interestingly, new listings from sellers remain steady compared to the same time last year.
Kara Ng, a senior economist at Zillow, shared insights on the current market dynamics.
Ng noted that the Dallas-Fort Worth housing market possesses a record number of homes for sale, providing buyers with ample choices.
While negotiating power tilts slightly towards buyers, the competition is expected to ease further into fall, potentially enhancing buyer leverage even more.
Another key inventory metric has reached a 13-year high, with the months of housing inventory now sitting at just over 4.8 months.
This metric reflects how long it would take to sell all the available homes at the current pace, the highest level recorded since June 2012.
Additionally, there were over 8,900 closed sales in June, marking an increase of more than 8% compared to last year.
Sriram Villupuram, an expert in real estate and finance at the University of Texas at Arlington, provided an analytical perspective on the evolving market.
He acknowledged that while buyers have more options, the assumption that they possess greater negotiating power may be overstated.
Villupuram described the current situation as a stalemated housing market, where many sellers are benefiting from low mortgage rates and low holding costs.
Sellers who do not urgently need to move have the option to rent their homes, which affects negotiations.
Buyers, on the other hand, are facing higher mortgage rates and various economic uncertainties, coupled with softening rents in the region.
Despite the recent uptick in sales providing some encouragement for buyers, Villupuram pointed to a notable statistic—approximately 18% of homes that went under contract in June fell through, as buyers or sellers withdrew.
He asserted, ‘This is not a market where sellers are desperate to sell.’
With many sellers not feeling pressure to sell immediately, they hold significant leverage and may be less inclined to negotiate.
Villupuram anticipates that more inventory will become available if interest rates maintain their current high levels.
He suggested that a decline in interest rates might foster a more favorable environment for negotiations as sellers become more open to finding buyers for their homes.
While this shift toward a neutral market is noteworthy, Ng cautioned that it does not imply a straightforward pathway for buyers.
Concerns surrounding affordability continue to loom large, especially for first-time buyers.
In June, the median home price in the D-FW area was approximately $405,000, remaining relatively stable year-over-year.
As of mid-July, the average 30-year mortgage rate slightly increased to 6.75%.
Ng reiterated that although negotiating power is becoming more balanced, the ongoing affordability crisis presents a significant barrier for many intending buyers.
Despite these challenges, Ng expressed optimism about future trends, forecasting modest improvements in affordability as 2025 progresses.
She projected that home values in the D-FW area may decline by 2.1% throughout 2025, potentially providing better opportunities for buyers in the near future.
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