If the economy is so bad, why are home prices still high in Dallas-Fort Worth?
Not even the worldwide spread of a dangerous virus can cool off Fort Worth’s hot housing market.
Real estate prices in Dallas-Fort Worth are still sizzling, despite the COVID shutdown, data provided by real estate researchers shows.
Why is that?
At a time when COVID-19 and governments’ response to it has shuttered hundreds of Metroplex restaurants and retail stores — and 340,000 Dallas-Fort Worth residents have been added to the unemployment rolls since March — the price of buying a home continues to rise.
Amy Gay, a mother of three young children, said she and her husband were surprised to discover that there had been no COVID-related dip in Fort Worth housing prices. The couple recently visited a Cape Cod-style, 2,100-square-foot home in far north Fort Worth’s Colonial Heights neighborhood with an asking price of $245,000.
That’s about the same price that existing homes of that size were selling for before the pandemic.
“It is what it is, especially if you’re looking for a house that has everything you want,” Gay said, adding that she and her husband had rented homes for more than 20 years. They are willing to engage in a bidding war for a house if necessary, she said, but only if the house fits all their needs.
“We’re willing to wait,” she said. “Maybe it will work out in our favor.”
Crystal Zschirnt, a real estate agent with the brokerage firm Redfin who represents buyers mostly in the Tarrant County area, said the explanation as to why home prices have remained so high during the pandemic is simple.
Many potential sellers pulled their homes off the market in March and April because they didn’t want strangers inside their homes. As a result, there were fewer homes for prospective buyers to choose from in March and April, leading to greater competition and higher prices for the limited number of dwellings that were available for sale.
“We do feel the biggest issue with this pandemic going on, the sellers really didn’t want to let us in because that was their safe space,” Zschirnt said in an interview. “Even when we were doing listing consultations, we were doing a lot of them virtually. They didn’t want us in the house.”
That concern has diminished since last month, she said. By May, more sellers were ready to put their homes on the market and let visitors inside for a look.
More than six of every 10 people making an offer on a North Texas home are in a “bidding war” with other prospective buyers, according to Redfin.
Dallas-Fort Worth was the second most competitive market in the United States in May, with 60.8% of homes facing competition among hopeful buyers. In April, just 43% of North Texas homes were being bid on by multiple buyers.
Boston was No. 1 nationwide, with 64% of homes being competitively bid last month, Redfin data shows.
Another real estate service, ShowingTime, said visits to homes available for sale shot up 23% in May compared to the same month a year ago in the southern U.S., which includes Texas. That increase came after two months of dramatic decreases in house showings — down 17.2% in March and 32.5% in April.
The median sales price of a home sold by Redfin in the Dallas-Fort Worth region was $307,000 for the four-week period ending June 16, data shows. That’s a 2% increase compared to the same period a year ago.
The strength of the Metroplex market has real estate professionals hopeful that the uptick in home sales that typically occurs during the spring is simply being delayed by a couple of months, and pushed deeper into the summer.
Arlington and Fort Worth are the 13th and 15th strongest housing markets in the U.S., respectively, according to RealtyHop, a property listing service. RealtyHop calculates this metric by comparing the sales price of homes when they are first listed to the price paid at the close of sale.
Arlington and Fort Worth homes each sell for an average of $5,100 — or 2.2% — below asking price, according to RealtyHop.
Gilbert, Ariz., is considered the No. 1 strongest housing market in the U.S., with the sales price of homes just 1.77% below the original asking price.
“Bidding wars ... jumped in May because home buyers felt they were starting to get more clarity around where the economy was headed, with cities around the nation lifting stay-at-home orders. This gave house hunters more confidence to compete,” Taylor Marr, Redfin lead economist, said in an email.
Construction in Dallas-Fort Worth has already returned to pre-coronavirus levels, according to a report published last week by the Associated General Contractors of America. North Texas and Miami were the two metro areas to bounce back quickest in the U.S., according to the report.
Only 8% of construction companies planned to lay off or furlough workers in June, while 21% of companies plan to add workers during the month, according to AGC.
“But with coronavirus cases back on the rise in many states,” Marr added, “only time will tell whether that confidence is sustainable.”
This story was originally published June 29, 2020 at 5:45 AM with the headline "If the economy is so bad, why are home prices still high in Dallas-Fort Worth?."
