Arlington woman buys home for $11,000 more than asking price
Lynn Courtney has been homeless for six months.
Courtney sold her home in south central Arlington in November but quickly discovered buying a smaller house in a safe neighborhood could be frustrating. Since then, the 60-year-old church finance director, her belongings tucked away in storage, has lived with two friends and her former mother-in-law during the search.
“I can’t tell you how many [homes] I looked at,” Courtney said. “I haven’t slept in my own bed since November, or in a room with all my furniture in it since June.”
Last week, Courtney’s struggle to find a new place to call home finally came to an end when she bought a 1,300-square-foot, pier-and-beam, wood-frame home near Arlington High School. But she only got to change the locks and call it hers after agreeing to pay $141,000 — $11,000 more than the asking price.
According to the most recent appraisal, the market value of the home is $117,108. Two years ago, its market value was only $58,800, making that a 100 percent increase, according to Tarrant Appraisal District records.
I found that you couldn’t hesitate. If you found a house that was close to what you wanted you had jump on it or it would be gone. ... And I think most of it was overpriced.
Lynn Courtney, home buyer
Courtney said she looked at probably a dozen homes, but some of them landed offers almost immediately. Some didn’t even make it to the multiple listing service used by Realtors.
“I found that you couldn’t hesitate. If you found a house that was close to what you wanted, you had jump on it or it would be gone. ... And I think most of it was overpriced,” Courtney said.
Courtney isn’t alone. A hot market has house hunters in Tarrant County waiting months to find a home, and when they do, sometimes getting jilted because someone else is willing to pay more — often tens of thousands of dollars more — than the asking price to get one of the limited number of properties.
New appraisal notices being issued this month by the Tarrant Appraisal District reflect that market. Officials say the taxable value of homes went up an average of 5 percent to 8 percent, but that market values went up an average of about 10 percent.
Dig deeper into the data and there are more startling statistics. The average market value for homes between $100,000 and $199,999 went up an average of 11 percent this year, and those selling for $200,000 to $300,000 saw a bump of 9 percent. Only when you get above $500,000 do increases moderate to a modest 6 percent.
It’s not hard to find neighborhoods in Tarrant County where the market value went up more than 10 percent.
“Homes under the $200,000 price point are in more demand and therefore selling for better prices,” said Jeff Law, TAD’s chief appraiser. “As a result, those homes are seeing the larger percentage of increases than the higher price-point homes.”
It’s a brutal market
Real estate agents working in the trenches confirm Law’s analysis. They say there simply aren’t as many moderately-priced homes available and that the supply won’t be adequately replenished anytime soon because homebuilders aren’t as active in that market.
“Try to find a new home at under $250,000 — there is no new supply, it doesn’t exist,” said David DeVries, a broker with Re/Max Pinnacle Group Realtors in Arlington. “There are a ton of people chasing the same thing. You’ll get 25 people bidding on one house. It is brutal and as a Realtor it is not a lot of fun.”
In 2011, roughly 74 percent of the sales in Fort Worth were for homes valued under $200,000. But five years later, about 52 percent were under that amount and the number of sales in that category were declining, said Jim Gaines, chief economist at the Texas A&M Real Estate Center.
Dig deeper into the data and there are more startling statistics. The average market value for homes between $100,000 and $199,999 went up an average of 11 percent this year and for those selling for $200,000 to $300,000 the bump was 9 percent.
“The inventory of existing homes at that price point is very low — $150,000 or less — and they are being gobbled up by investors who are converting them into rentals,” Gaines said. “All in all, it creates a tight market for someone looking to buy a home under $200,000.”
And don’t look for the bubble to burst anytime soon, Gaines and real estate agents say. In February, Texas A&M said there was a two-month supply of homes for sale in Dallas-Fort Worth, while a five- to seven-month inventory is considered by the industry to be healthy.
“I don’t think it’s a bubble unless the whole economy collapses for some unknown reason,” Gaines said. “The housing market is reacting as it should. There is high demand and low supply. It is not reactive, excessive exuberance,” he said.
Fort Worth-based D.R. Horton, the nation’s biggest homebuilder, is finding strong demand for lower-priced homes. In 2014, it launched its Express brand of more affordable new homes. By last year, Express was in 53 markets nationwide and accounted for 29 percent of the company’s home sales, with an average selling price of $209,000.
Mike Hale, the real estate agent who represented Courtney, said well-maintained, small wood-frame homes are going for $120 to $125 a square foot. He worked with Courtney for more than a year.
“Even for a Realtor, it is shocking, but it’s a fact,” Hale said. “There is a demand and there is no supply and if you want a roof over your head you’re having to pay. ... I was excited for her to get a house, but not for what she had to pay.”
First-time buyers’ nightmare
For some in the real estate business, this day has been a long time coming.
In DeVries’ opinion, the Dallas-Fort Worth real estate market has been undervalued for years. Home buyers moving here from New York, Los Angeles, Atlanta and Seattle to work at Alcon, Lockheed Martin, State Farm and Toyota, for example, are accustomed to paying far more for much less, DeVries and others said.
It is going to make it tough for young people today who will either have to live way out or in a tertiary town or rent for a while and move up into home ownership when they can afford it.
Jim Gaines, chief economist at the Texas A&M Real Estate Center
“Dallas/Fort Worth is going through a serious correction and I don’t see it going back down,” DeVries said. “It will just settle ... flatten out. We are still undervalued.”
The competition for available homes has driven up median home prices. In Tarrant County, the median price is now $210,000, a 15.4 percent increase from a year ago, according to the Arlington Board of Realtors and Texas A&M. In Dallas-Fort Worth-Arlington, the median price has jumped 13.5 percent to $244,000. In Arlington alone, the median climbed to $195,500, up 18.5 percent.
After the economy crashed in 2007 and 2008, companies that specialized in building the type of moderately priced houses bought by first-time homebuyers and others went out of business, DeVries said.
“It is going to make it tough for young people today who will either have to live way out or in a tertiary town or rent for a while and move up into home ownership when they can afford it,” Gaines said.
Homeless in a tight market
Rod MacDonald said his son, who moved back to the area from Austin last summer, put down multiple offers on homes before finally buying a house. The North Richland Hills home he bought got nine offers in three days and his son paid $10,000 above the list price to get it.
“It was just an emotional roller coaster. Going to make an offer on a house and then not getting it,” said MacDonald, a real estate broker for Better Homes and Gardens in Arlington.
I was excited for her to get a house, but not for what she had to pay.
Mike Hale, Arlington real estate agent
Allen Crumley, a real estate broker at Williams Trew in Fort Worth, said buyers need to be aggressive and be willing to budge on their wish list to get the home they want.
“They can make offers on two to five homes sometimes and the first-time buyers might be a little more timid but after they’ve lost a couple, they learn to be more aggressive,” Crumley said. “It’s brutal if you’re a buyer’s agent. It’s wonderful if you’re a seller’s agent.”
Crumley recommends that if you’re thinking of buying another house and selling the one you’re in, be ready.
“Get your ducks in a row and have a plan in place before the sign goes in the yard because you will become homeless,” he said.
Courtney can identify with that. The sale of her previous home was tied up in probate court after the death of her ex-husband. For a while, she was forced to live in her previous home with just a lawn chair, a dorm room refrigerator, a mattress and box springs. She actually started her new home search in August.
“But nobody wanted to take an offer on contingency,” Courtney said.
She only made one other solid offer before taking a chance on the home she bought, and even it is not exactly what she wanted. She said the electrical and plumbing need some work, but the house is structurally sound with hardwood floors. It has two bedrooms and the old porch has been closed in and a deck added.
If she could have bought it six months earlier, “when the demand wasn’t so high and the market had a few more houses in it,” Courtney believes she could have paid closer to $110,000.
Still, she can’t wait to move in and gets her stuff out of storage.
“It’s going to feel like Christmas when I unpack it. I don’t remember what I have anymore,” she said.