The North Texas housing market is red hot for sellers going into the spring.
Houses in sought-after neighborhoods are selling in a matter of hours, or even before listing. Bidding wars are pushing selling prices above what houses were listed for. Buyers are making multiple offers on different properties only to come up empty-handed.
Jaci Coan, owner of Re/Max Trinity and president of the Greater Fort Worth Association of Realtors, has seen the housing market go up and down in her 37 years, but this market has her concerned.
“It’s tighter than I’ve see it in a very long time,” Coan said. “But the thing with this market is we don’t see an end in sight.”
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There are almost 15 percent less homes for sale in the DFW housing market than last year, according to Zillow, the online housing search tool. Overall, homes in this market are selling in just 74 days, or more than a month faster than the national average, Zillow said.
You need to have the funds ready and checkbook in hand.
Jaci Coan, owner, Re/Max Trinity
Meanwhile, home values have gone up 14.2 percent in the past year, ranking DFW second in the country behind Denver at 15 percent, said Skylar Olsen, a senior economist with Zillow.
“Low inventory is fueling that along with growth in demand,” Olsen said.
Coan said that developers and home builders haven’t been able to keep up with demand and that there is a shortage of developed lots.
“There’s not a lot of force behind future inventory,” she said.
And the tight market is having an influence on homeowners concerned about where they can go next.
Homeowners are reluctant “to sell their houses when they don’t know where they’re going,” Coan said. “A lot of sellers are accepting this and going into temporary housing or moving into their relatives’ homes.”
So if you are stuck at Dad’s house trying to get into this tight market, tyou can still do a number of things to land your dream house. Here are five steps:
1. Get preapproved for the mortgage. Coan says this involves more than just getting pre-qualified, which some lenders will do over the phone without looking at your tax returns and other financial records. Getting preapproved means the mortgage company has researched your financial records and determined a value that is approved for a mortgage. This results in a letter from your mortgage company to show potential sellers.
“You need to have the funds ready and checkbook in hand,” Coan said.
2. Be ready to buy. Coan said this is not a market where you can go home and mull over a home purchase for a couple of days. You may need to commit to a contract on the spot. This also means you may need to drop what you’re doing the minute your real estate agent calls, so try to make arrangements with your employer for home shopping drills and have backup help for child care or other family needs.
3. Shop yourself, and get help. The Greater Fort Worth Association of Realtors revamped its website last summer and now the multiple listing service, or MLS, is one click away from the association’s home page at http://www.gfwar.org/. Once a proprietary tool for real estate agents, the MLS includes photos; basic descriptions of the house including price, square footage and year built; and a way to email the listing agent.
The MLS also has search options with parameters like subdivisions or ZIP code, list price range, square footage, year built and number of bedrooms. An advanced search will let you narrow your field by type of property, including houses, condos and town homes; acreage; county, city or school district; and other options. Also included is a way to search for open-house dates.
“The MLS provides real-time data,” Coan said. “Other housing search engines are feeding from the MLS, so may not be as up to date.”
Another good feature of the MLS: If you sign up with your name, phone and email, you can receive email updates of new and updated listings that match your search criteria.
“We recommend home shoppers go online and familiarize themselves with the market,” Coan said. “They can see home prices they’re considering and it will help them narrow their search into neighborhoods they want to be in.”
Olsen said Zillow includes homes that are not listed, such as recent foreclosures, and even some that are not for sale, such as “Make Me Move” listings that provide a valuation that could get a homeowner to move. Also, for-sale-by-owner homes are on sites like Zillow, he said.
With speed essential to landing a house in this market, hiring a real estate agent is also a necessity, Coan said.
4. Texas home buying tax credit. The Texas Department of Housing and Community Affairs offers a Texas Mortgage Credit Certification program for qualifying first-time and returning home buyers of low and moderate income. A Mortgage Credit Certificate allows the home buyer to claim a tax credit for some portion of the mortgage interest paid per year. It is a dollar-for-dollar reduction against their federal tax bill, making it typically a bigger tax break than the traditional home mortgage interest deduction.
The size of the annual tax credit is 40 percent of the annual interest paid on the mortgage loan, up to $2,000 per year. For information, go to www.tdhca.state.tx.us.
5. Other resources. Whether you are a first-time home buyer or returning to the market, it’s important to educate yourself about home buying.
The state housing department recently launched Texas Homebuyer U, at education.myfirsttexashome.com. This is a free online tool designed to give buyers a greater understanding of what to expect when buying a home and prepare them for the many new expenses and responsibilities that come with homeownership.
Texas Homebuyer U offers two courses: A pre- and post-purchase tutorial and an introductory course to the Texas Mortgage Credit Certificate Program.
In addition, the Consumer Financial Protection Bureau also has home buying education — specifically related to getting a mortgage — at www.consumerfinance.gov/owning-a-home.
Teresa McUsic’s column appears Saturdays. TMcUsic@SavvyConsumer.net