DALLAS — Homes are selling for increasingly more above the listing price in Dallas-Fort Worth than in any other market in the nation, according to a new report.
The DFW housing market had the largest increase in the close-to-list price ratio in the U.S. year-over-year, according to the latest Re/Max National Housing Report.
The close-to-list price ratio is the average value of the sales price divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price. If it's less than 100%, the home sold for less than the list price.
The May 2022 close-to-list ratio in DFW clocked in at 104.7% compared to 98.4% in May 2021 — a 6.4% year-over-year percentage change.
The next highest percentage change was Burlington, Vermont, which jumped to 106.7% in May 2022 from 100.6% in May 2021 for a 6.0% year-over-year percentage change.
Trenton, N.J, had the third-highest percentage year-over-year increase, and Los Angeles had the fourth.
Trenton’s close-to-list ratio climbed to 105.2% in May from 101.3% in May 2021, for a 3.9% year-over-year change. L.A.’s ratio rose to 103.3% in May 2022 from 99.6% in May 2021 for a 3.7% year-over-year percentage increase.
In the DFW market, the current median sales price is $430,000 — up 18.5% from April and 8.2% over last year.
Home sales are down in DFW by 4.2% compared to this time last year. Active inventory in North Texas is up 45.8% over last year.
The North Texas housing market is shifting fast as rising interest rates and volatility in the stock market make their mark, said Michael Coburn, broker/owner of Re/Max Town & Country.
“Since 2020, we have been in a crazy seller's market with home prices increasing year over year over 20%,” Coburn said. “This was due to very high buyer demand, low inventory of existing and new homes, low-interest rates, a good economy, low unemployment and high stock market. That's changing very quickly. The stock market has been down since January 2022 by over 20%, interest rates are now over 6%, and the real estate market feels like someone has put on the brakes.”
Last year and early this year, real estate agents would put a house on the market on a Thursday and have multiple offers, sometimes 25 to 100, at far above the list price by Sunday, Coburn said.
“Sellers would see a home sell in a neighborhood for $400,000 that was listed at $300,000, so they would price their home at or above $400,000 and sell for $450,000 to $500,000, and the next seller would price at $500,000,” he said. “In the last two years, a seller could get away with doing that. Buyers and sellers did not care about comps — it was a free for all.”
Now, however, sellers are looking at market trends, using accurate comps and listing their homes at reasonable prices, Coburn said. He’s seeing more price reductions and properties staying on the market longer.
“This by no means is a bubble about to pop,” he said. “It's just a long-overdue correction in the market.”
Nationwide, closings in May 2022 were 8.5% lower than in May 2021 even though May is historically one of the most active months of the year for home sales, according to Re/Max.
Sales, however, did climb 5.8% over April.
The median sales price of $430,000 nationally grew 1.2% over April's $425,000 and was 13.2% higher than the $380,000 recorded in May 2021.