Buying a home in Fort Worth? How coronavirus is upending a red-hot real estate market
Fort Worth’s housing market, which just weeks ago was one of the hottest in the United States, has been thrown into uncertainty by the coronavirus.
And it’s happening during what is supposed to be the busiest time of the year for home shopping.
“We’re finding that people who don’t absolutely have to move are staying home, but you’ve got re-locations, too. They’ve already sold their existing home, and they have to move,” said Bryan Farmer, a sales counselor at Meritage Homes.
He said prospective home buyers were still visiting model homes at his company’s Fort Worth developments, although at a slower pace than just a couple of weeks ago. Visitors to model homes must answer questions about their potential exposure to COVID-19, and if they are deemed to not be at risk for spreading the virus they are escorted to visit homes for sale.
“If they pass that test, we can show the homes, as long as we keep social distancing,” Farmer said.
So far, there isn’t much evidence that the price of newly built homes in Fort Worth is dropping. Since 2014, the median price of a home in Fort Worth has increased 58%.
The Dallas-Fort Worth region — especially on the Metroplex’s west side — has long been known as a mecca for affordable, high-quality housing. But the cost of new homes has jumped 58% during the past seven years, and the once-ample supply of houses priced at $250,000 and below in neighborhoods with low crime and highly-rated schools has all but disappeared.
Even new homes priced in the $250,000 to $350,000 range have been gobbled up quickly after they were advertised for sale — often by first-time owners, or older “empty nesters” aiming to downsize.
Economists say the coronavirus likely will lead to a noticeable decline in North Texas homes sales, although they still expect the region to finish 2020 with an increase in sales over the year before.
Fort Worth homes still for sale
This week around Fort Worth, there were plenty examples of builders trying to keep the customers interested in buying their homes.
In the Berkshire neighborhood of far north Fort Worth, near U.S. 287 and Bonds Ranch Road, real estate agents are being offered double commissions if they can close their deals on homes starting in the $300,000s by the end of March.
In Northlake near Texas Motor Speedway, builders in the master-planned Pecan Square development are asking prospective buyers to come out and see the homes for sale by appointment.
The National Association of Realtors is predicting a much slower than previously projected spring sales period, with many homeowners staying out of the market for a new home because of concerns about their wages, difficulties in selling their existing homes and complications with closing on their mortgage loans.
Fort Worth and Tarrant County officials this week passed emergency declarations requiring non-essential businesses to close, to slow the spread of COVID-19. Construction projects are among the services deemed essential, and may therefore continue during the emergency declaration — although in some new residential developments it appears that the construction workers have stopped working and gone home.
Longer term, a key issue will be whether prospective buyers still have jobs — and an appetite for home ownership — once the worst of the coronavirus pandemic is over, said Ken Simonson, chief economist for the Association of General Contractors.
“If they have the income to apply for a mortgage, there’s going to be more people who can afford those monthly payments,” Simonson said in an interview, noting that declining interest rates have made mortgages more attractive to buyers. “But whether people are going to be willing to commit to buying a home, it’s going to be one of those things we’ll have to see.”
Simonson said he still expects the residential construction industry to end the year with growth, but less than 1 percent above 2019. Statewide, 357,238 homes were sold in 2019, an increase of 4% over the year before. Previous estimates made before the COVID-19 pandemic had projected the growth at 5 to 10% this year.
Statewide, Texas gained 34,900 construction jobs in the past year, according to Bureau of Labor Statistics through January. That was a 4.6% gain, the largest gain of any state, according to the Association of General Contractors.
But the sudden economic downturn caused by the coronavirus happened abruptly in March, and up-to-date job figures that reflect the pandemic aren’t yet available.
This story was originally published March 26, 2020 at 11:00 AM.
