Buying and selling real estate in Keller and neighboring cities is “a good market, but a stressful one,” says Jackie Black, broker/owner of Texas Best Properties with nearly 20 years in the business.
Indeed, it is the best of times, but also the worst of times in residential real estate. Although there are plenty of potential buyers, there are not enough homes to meet the demand. That means buyers might be forced to expand their search into a large number of wonderful North Texas communities to find their perfect home, which means home sellers must offer desirable upgrades to stay competitive.
Inventory of Homes
A Keller-area home at the right price point — under $350,000 and looking good — can be on the market less than 21 days.
The Texas A&M University Real Estate Center says there is a 3 1/2-month inventory of homes in the Fort Worth area and less than that in the hot northwest Tarrant County market. (Inventory refers to the number of homes for sale and, on average, how long it takes to sell them all. Due to this area's low inventory market, an average sale takes about 3 ½-months.) A Keller-area home at the right price point — under $350,000 and looking good — can be on the market less than 21 days, says Tom Schneider of Keller-Williams in Southlake.
Cecily Verloop of Ebby Halliday in Southlake has seen homes snapped up much sooner and encourages her clients to prequalify and have financing in order. “Be in a position to make an offer as you walk down the hallway of a home you like,” she explains. Individuals looking in a higher price range may have a little more time on their side.
Demand for housing has weathered the increase in mortgage rates, which are expected to continue to rise in 2017 as are home prices, according to the Real Estate Center. Adding to the housing shortage in this area is new construction starts have declined due to a shortage of construction workers, who are leaving to join the reanimated energy market for higher paying jobs.
Population increase expected
The Dallas-Fort Worth area’s population is expected to increase by more than 50 percent by 2040 and the influx of new employees working for the likes of Fidelity, Facebook, Ikea and Toyota promises a vibrant housing market for years to come.
“Keller is growing at about 2 percent a year, and that is what we can handle, but Keller is running out of land to build on. The north Fort Worth area is huge for new home construction,” says Black.
Be prepared - financially
Having your financing in place before you start looking is wise advice, says Jefferson Aldredge of Supreme Lending in Keller, especially when those starter homes under $200,000 may have 10 offers. Most of those seeking mortgage lending are first-time buyers 28-35 and those moving up to a bigger home because of a growing family, Aldredge says.
“I find young, first-time buyers have done extensive research on the Internet,” Aldredge says. He recommends a financial coaching program (available through organizations like the United Way, and even some lenders) for first-time buyers starting at least six months in advance of their home buying. That way, they can improve credit scores, learn about the variety of home loans and figure out what is right for them.
Aldredge says it is not hard to get a loan if you have a consistent income and normal credit score of of around 700. Most lending institutions have the same products offered by Wall Street. What potential home buyers need is a local, accountable lender that they can trust and offers customer service. “You don’t get that from online lenders who don’t know you personally and don’t know the local real estate scene,” says Aldredge.
Despite a limited inventory, home buyers are discerning. “Buyers’ first interest is location, good schools, overall quality of life, town amenities and easy commute,” explains Schneider.
“In the $350,000 range, they want a newer home with an open floor plan, large, bright (but not necessarily white) gourmet kitchen, and an entertaining area, preferably on the first floor,” says Verloop.
Home buyers want energy-efficient homes, but not necessarily smart homes. They want updated appliances, air conditioning and heating, but figure the smart home technology can be added later.
And what’s not…
Gone is the interest in media rooms -- families don’t use them. They want an entertaining area downstairs or an outdoor kitchen. In Texas, having a pool is nice and a home will sell faster. “Buyers don’t want to have to update a kitchen or add a pool. They are thinking at this price point, the home should have these amenities,” adds Verloop. She also notes the growing interest in one-story homes.
Couples want a smaller, manageable yard, preferring to put their money toward a larger house -- no “tiny homes” for them. Those little nuggets of modest living may be hot stuff on TV home shows, but local real estate agents can’t think of anyone they know who is buying them.
Renovations and additions
“People thinking about moving are looking around and liking their big mature trees and large lot and deciding to upgrade their current home. It costs a lot less to renovate than to buy another home with those amenities,” says Kevin Reid, sales and marketing manager of DFW Creative Homes.
Home remodelers report the addition of an outdoor living area is by far in greatest demand.
Reid says kitchen and bathroom upgrades, as well as build-outs of second-floor and attic spaces, remain popular, but the addition of an outdoor living area is by far in greatest demand.
Also popular is adding a safe room, usually by taking space from a master bath and closet. Also, there is an uptick in adding a room over a garage or creating another suite for aging or visiting parents or the millennial who has yet to leave home.
Barndominiums — metal homes built to look like a barn with living quarters inside — are less popular in this area than bars inside of sheds (newest man cave innovation) or She Sheds — the female version of the man cave. Reid speculates the reason is because barndominiums take up more room than the sheds on a city lot.
Buyers are more sophisticated
Jackie Black notes that “people are intelligent about buying homes these days and buying what they can afford with the expectation of buying a bigger home in a few years. They buy a small starter home without the fancy outdoor kitchen, but know that they can add that later.”
The low inventory has created problems for those in the 40-50 age group who are financially solid. Black says, “The problem is that sellers are hesitant to put their house on the market until they find a house to buy. That sets up a contingency sale (a sale that is contingent upon - or depends on - the sale of another property), which many sellers don’t want because there are so many other buyers (from which to choose).”
“I see a lot of them doing cash deals,” Black says, “or selling the home but renting it back from the new buyers for a few months until a new home can be purchased.”
A new niche market is seniors over 55.
A new niche market is seniors over 55. They deal almost 90 percent in cash. Black says. “They don’t have to depend on financing. They are downsizing from their 5,000-square-foot home, but they don’t want to give up luxury or amenities. It is functionality over price.”
What do picky buyers mean for home sellers? They are taking time to update their homes. Many are influenced by the home-flipping success of TV shows, but you have to watch that your upgrades don’t eat up your profits. “Sellers are putting in the granite and wood floors and updating kitchens and bathrooms to stay competitive,” Black says. Like she observed earlier -– a good market, but a stressful one -– for both sides of the real estate equation.