Texas Housing Market Boom
May 6, 2002
It's All About The Listings
By Bridget McCrea
Inman News Features
Texas real estate agents are reporting booming housing markets characterized by strong demand and little inventory of well-priced homes for sale. But sales figures may reveal an underlying softness in the state?s housing markets.
Realtors Kurt and Darla Buehler with Keller Williams Realty in Flower Mound, Texas, usually have about 40 to 50 of their own active listings. But these days that number is hovering around 23, thanks to a booming housing market in the Northwest Dallas area, especially for low- to mid-priced homes in good condition.
The Buehlers are trying every possible tactic to get more listings from stepping up their mailing campaign to following up with past clients and attempting to be more competitive in the marketplace, where the average home costs about $220,000.
"(Homes are) very affordable here, and that makes this area very attractive, particularly for relocating companies and individuals," said Kurt Buehler.
Some segments of the market are strong, but other areas are not, according to Linda Berg, president and COO of Coldwell Banker Dallas-Fort Worth, an 1800-agent company with 32 locations in the state. She said overall the entry-level and move-up buyer markets are strong while the high-end of the market is soft.
Housing markets are also soft in areas of expansion and new homes, where resale houses are being sold head-to-head with new construction.
"When inventory is in short supply and demand is strong, there?s bound to be a bit of a boom in the marketplace," Berg said.
Berg attributes some of the demand to an increase in the number of companies relocating to Northern Texas. Low mortgage interest rates have also had a strong impact, she said, as has immigration from Mexico.
"Within the Dallas-Fort Worth area in particular we?ve seen an optimism because of the companies that see this as a viable market and choose to locate here," she said. "It?s happening regularly, and many of the new entrants haven?t even been announced yet."
Berg said all of Coldwell Banker Dallas-Fort Worth?s agents are very productive right now, and some are forfeiting their summer vacations so they can stick around and take advantage of the increased business.
"They?re working hard, trying to capture it while it?s still this way," she said.
The company is outperforming both last year?s sales and this year?s expectations, said Berg, who added that "office inventory is strong, but not so strong as to create an overabundance."
But while Texas Realtors and brokers appear to be riding a housing wave, hard numbers tell a somewhat different story.
Sales of single-family homes in Dallas in March totaled 3,841, a 14 percent decline compared with the 4,441 homes sold in the same month last year, according to the Real Estate Center at Texas A&M University.
And 15,995 single-family homes were sold statewide in March 2002, an 8 percent drop compared with the 17,473 homes sold in March 2001.
The North Texas Real Estate Information Systems reported a total of 30,315 single- family homes, condominiums and town homes were for sale in the North Texas region in March 2002. That was a 20 percent increase compared with March 2001, but it was an increase that NTREIS CEO James Harrison said may be deceiving.
Compare the number of completed and pending sales in the region with the number of new listings, he said, and the result is a market that?s eating through inventory built-up last year when people held back on buying homes.
"Comparing new listings to sales and pending sales reveals an inventory balance that will start decreasing," said Harrison. "Pent-up purchase demand is starting to be expended."
John Pollock, president of RE/MAX Pinnacle Group Realty, which has 65 agents in one Arlington office, said he has started to see pressure on commissions due to decreased supply in certain price ranges.
Pollock said that pressure is mostly hitting houses priced at less than $500,000.
"Supply is low and interest rates are favorable, so demand is high," said Pollock. "Home owners are holding back and refinancing and adding on to their existing homes and improving them instead of putting them on the market."
Still, Pollock said business is very good, especially in the $150,000-to-$200,000 price range in which RE/MAX Pinnacle?s agents tend to work.
"Good homes in good condition sell right away and get multiple offers," said Pollock. "But buyers come naturally if you have the listings, and getting (listings) is definitely tougher in this market."
Copyright: Inman News Service