Strong local economies, high inventory, and lower prices have created a perfect scenario for prospective home buyers in this buyer’s market. They now face less competition while their agents are gaining more confidence in the market.
Earnings & Unemployment Rate Improvements Driving Growth
Unemployment currently sits at historic lows of 3.8% nationally, along with earnings up almost 4% from a year ago. This means that homebuyers are employed and making more money than ever before. It also means that companies are making more investments and leading aggressive growth, resulting in expansion and subsequent new home builds — a recent Bloomberg figure suggests that a staggering 245 people per day are relocating to North Texas. Finally, with strong employment and wage growth, individuals are more inclined to make investments such as buying a home or upgrade from their existing home.
Inventory Increases Continue in 2019
2018 was the second straight year we have seen significant gains in the total number of annual listings. It was also the first time since 2013 where we have seen the Number of Months Inventory in North Texas finish greater than 2. This is excellent news for prospective homebuyers as it reflects increasing supply to match the high demand for homes in our area. Riding the wave of a sellers’ market, many of the late majority home sellers are still trying to capitalize on gained equity that peaked in 2018. More houses on the market, with more sellers ready to cash out, means more opportunities for home buyers.
Home Sales Prices Declining, Increasing Buyer’s Market Trend
“At the end of December, home prices at the national level had fallen 0.3% from November for their fourth consecutive monthly decline,” said Black Knight’s Data & Analytics President Ben Graboske. “As a result, the average home has lost more than $2,400 in value since [its peak during] the summer of 2018.” Although we still expect home equity growth for 2019, we do not expect the explosive year-over-year gains that we have grown so accustomed to in North Texas. “December marked the 10th straight month of slowing annual home price appreciation, falling from a high of 6.8% annual growth in February to 4.6% at the end of the year.” Although “hot” areas may still reflect some trends of past summers – low local inventory at a neighborhood level, for example — trending market signals all point to 2019 being the first time in over 5 years that the buyer will truly hold the upper hand when shopping and writing offers on potential homes.