The Post-Election Real Estate Market: What Now?
Explore post-election real estate trends: interest rates, inventory, and strategies for buyers and sellers. Navigate the market like a pro.
In this market update, we’ll cover a lot of ground. We’ll dig into the recent rate cuts by the fed and impact of that, plus what we expect to see in the future regarding interest rates.
Then, we’ll dive into the home buying frenzy of new construction homes that appeared in August spurred on by price drops. And we’ll discuss the continuing inactivity in existing home sales as those prices remain flat and we see more of the same.
Finally, we’ll break down all the numbers for you, county-by-county across the metroplex so you know exactly what’s happening in your market right now and why.
Lastly, we’ll offer you the best advice we’ve got if you’re a current home buyer or sellers on how you can best capitalize on this real estate market we’re in right now.
So, let’s dive in!
The recent interest rate cut is unlikely to significantly affect mortgage rates in the immediate future. This is primarily because the market had already factored in the anticipated rate decision, causing mortgage rates to adjust even before the official announcement of a rate cut.
Bankrate reports the average interest rate for a 30-year fixed mortgage is at 6.21%. This is a substantial decrease of over one percentage point since May, with an even more significant drop from the peak rates last October.
Mortgage rates typically mirror the yield on 10-year Treasury bonds. Interestingly, despite the Federal Reserve’s rate cut on Wednesday, the 10-year Treasury bond yield saw a slight increase, contradicting the expected downward trend.
While the immediate impact may be minimal, experts anticipate a gradual decline in mortgage rates throughout the remainder of 2024 and into 2025.
These projections suggest that mortgage rates could indeed see a downward trend as investors become more confident in the sustainability of falling interest rates.
The Dallas-Fort Worth metroplex has experienced a notable decline in median property prices over the past year. The decrease ranges from a modest 2% in Rockwall County to a more substantial 6.5% drop in Dallas County, reflecting a varied but consistent downward trend across the region.
As we’ve been telling you in these market updates, prices coming down is ultimately the biggest factor in getting homes sold. This month is an even bigger confirmation of what we’ve been advising our sellers regarding what to do in this market.
And we see it again this month, especially in new construction. New construction prices in Kaufman County are down 10.9%, for instance, and this month, pending sales of new construction homes in Kaufman County are now up a whopping 90% year over year.
In Dallas County, the median price of new construction homes is down 6.8% and pending sales of new homes are up 78% year over year. In Rockwall County, new construction home prices fell 9.4% and pending sales are up 53%.
We see the uptick in activity more so in the new construction realm because for them, it’s a business transaction. They need to sell homes and move units, so they make the business decision to lower prices – then, they see activity and buyers coming to them.
But when you look at the resale market, current homeowners have been much slower to lower prices. As a result, homes are sitting longer, and transactions are stagnant. For example, in Dallas County, median prices on resale homes are flat year over year. Then, pending sales are down -.01%. This is the same across the board. Prices are mostly flat across the metroplex for resale, and so are home sales and transactions.
So, looking at the data, if you’re a seller, this tells you that even dropping your price by 10-15% could create so much more activity on your listing. And the good news is that when you turn around to go buy a home after your sale, you’ll make that up on the buy-side.
Plus, many sellers still have an enormous amount of equity in their homes – even if you do come down on the price by 10%. On average, most people have seen a gain of 40 to 50% on their home values just since 2020.
If you bought your home for $335,000 in 2020, that same home is probably worth at least $480,000 today.
If you’re curious about your home’s exact value, just reach out or click here.
We can provide you with a free home valuation anytime – and it’s no obligation and completely complimentary.
You can see here that on average, new construction prices are much lower than resale prices across the board, with two exceptions: Kaufman County and Tarrant County. However, in Tarrant County, prices are down 1.4% for resale and up .8% for new construction – so you’d expect to see that. Then in Kaufman County, resale home prices have seen bigger drops than in other areas of the metroplex.
Here’s the difference between new construction prices and existing homes on the market in DFW, county by county:
So, you can see that pending home sales for resale homes are down to flat across the board compared to new construction home sales that are up anywhere from 10 to 100% year-over-year.
For the market to resume normal activity, prices are going to have to come down by at least 10% for resale homes before we see the type of activity we’re now starting to see in new construction. Except for Kaufman County, resale home prices have remained flat and thus home sales for resale homes are flat.
Our advice to buyers is the same as last month: Continue to make those offers. Sellers ARE getting fatigued.
As you can see, transactions are low in the resale market so sellers are fatigued. With the advice of your real estate agent, make those offers under-asking by 10-15% or more. See what you can get. Or, new construction is a good option right now, as their prices as shown above are on average, around 10% less than an existing home.
For sellers, it’s like we’ve been saying. If you price it right, it’s going to sale. If you’re willing to come down by 10 to 15%, you’ll see the buyers and market come your way.
Explore post-election real estate trends: interest rates, inventory, and strategies for buyers and sellers. Navigate the market like a pro.
The Dallas-Fort Worth housing market is experiencing a “hyper-supply” phase with an explosion of homes for sale, driven by an affordability gap. Despite strong demand and job growth in the area, many homes are sitting on the market due to high prices, with experts suggesting that even small price corrections of 5-15% could significantly increase sales and draw down inventory. This market situation presents opportunities for buyers to make offers below asking price, while sellers may need to adjust their expectations to see more activity.
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