DALLAS — Could the housing fever be cooling off here just a little?
Throughout the pandemic, I have been regularly taking the temperature of the real estate market with broker Joe Atkins of Joe Atkins Realty to see what he sees happening in real time. He just had an open house for a new listing.
I was curious to find out how that went, because back in February he had buyers coming out of the woodwork for an open house, "I told you I had up to 70 people come through that open. Well guess what Jason? I had about the same amount of people--if not more--at this one.”
Californians still coming, but bidding wars have subsided recently
Atkins says among those showing up were plenty of people still moving here from other states, “The Californians are still coming. They haven't stopped. I had no less than ten come through my open house on Saturday, so they're still here. “
But a big asterisk also came to that open house and other very recent listings Atkins has observed. He’s noticing more buyers who are ‘shopping’.
Unlike what he, and so many other realtors have been seeing for a while, bidding wars aren’t starting immediately, “What we're seeing is a little slight slowdown as far as people making decisions."
"So, where we were getting offers right out of the gate--I'm talking the first five hours on the market--a lot of these now aren't coming in until day 2 or day 3.”
Historically speaking, it is still super competitive to receive multiple offers (including above asking price) two or three days after a home is listed.
It is possible that what Atkins is witnessing is just anecdotal---and limited to a handful of recent listings. But it is also quite possible that there is a shift underway in the housing market.
It may be giving some buyers pause that home prices exploded last year. And that trend has continued in 2022.
These are the median prices now in major Texas cities, according to the latest data available from the Texas Real Estate Research Center:
Median Home Price
San Antonio $318,999
And this is how much those median prices have gone up just in the first three months of 2022 (only two months of data for Houston, because March numbers weren’t published as of this writing):
Change in Median Home Price in first 2-3 months of 2022:
D-FW + $31,585
Houston + $17,835
Austin + $45,234
San Antonio + $18,999
Also since January, mortgage rates have risen about 2%.
Why home prices may stay stubbornly high
Combine rising prices with rising interest rates, and many people who bought their homes when prices and interest rates were lower might be committed now to staying put and not selling, just because they don’t want to have to be buyers on the other end, trying to find another place to live.
Atkins says that describes him personally, “I’ve got a 2.5% percent rate on my house and I can tell you we're not going anywhere…maybe ever”.
That’s part of the reason why Texas only has about a three-week supply of available houses, instead of the ideal six months of inventory. That extremely low supply still equals really high demand and higher prices. It is still a seller’s market on steroids.
But...notice to sellers: Don’t get too greedy
Since the dynamics of the market have been changing so rapidly, Atkins advises sellers not to simply focus on how much a nearby home fetched months ago, “Just because your neighbor down the street got X for their house four months ago…well, four months ago is a different market."
"And if that house had crummy windows that needed to be replaced, people didn't care four months ago. But now they're going to factor that in, and that can kind of shoot you in the foot if you're pricing high.”
He adds that a good real estate agent will help you to market and price your property appropriately. And beware, Atkins says: If you ignore that professional advice and start out with a price that is too high, seller’s market or not, the market may punish you and cost you many thousands of dollars.
“If you priced too high and they see you having to go slash at that price…man, you're like a…bloody fish in shark infested waters," Atkins says. "People are like oh man, there's something wrong with that…we're offering way less!”