DFW Real Estate Trends 2017: Alex Doubet, CEO of DOOR

Shortly before our holiday pause, we reached out to several agents and asked them to look into their crystal ball and tell us what we think the real estate market is going to look like this year. I have my own ideas. Naturally, we had to grab Alex Doubet, the somewhat controversial young hot shot founder of Door, a tech-enable flat fee real estate brokerage. As you can imagine, Alex predicts big changes ahead for the real estate industry and the entire commission structure. He is not alone: Inman’s Brad Inman predicts that one year from now, Opendoor will be the second-largest broker in the U.S., second only to NRT. That’s huge. Brad says that by unit count — and, most importantly, by revenue — the exchange platform will give a segment of the market the certainty they generally cannot get when unloading their homes the traditional way. In other words, instant liquidity:

This coming year, technologists and venture capitalists will zoom in on home sellers, with the $60 billion commission pie up for grabs. Opendoor, Knock and to a degree transparent bidding features are examples. Using technology, more companies will figure out how to give sellers more certainty around their home sale.

“Study after study ranked Dallas and its surroundings as one of the hottest real estate markets in the country, fueled by a boom in businesses relocating to the area, a generous tax structure, and a thriving construction industry more than happy to keep building new homes,” says Alex.

But with 2016 in our rearview mirror, will all of that momentum carry on into the new year? You bet, he says. Here are the trends that will dominate North Texas’ real estate market in 2017:

Millennials will continue buying tons of houses (and the media will keep pretending they aren’t). More than 75 million 18-35 year-olds make up the nation’s most populous generational group. You surely don’t need to be reminded that a common narrative about young people is that they are eschewing homeownership in favor of renting, or moving back into their childhood bedrooms.

But here’s the thing: The median age of Americans buying their first home has historically remained unchanged at about 31 years old. More than two thirds of this bloc aren’t buying homes, but not on the grounds of some grand philosophical principle. They just aren’t old enough to… yet. Despite all that, Mills have made up the largest percentage of homebuyers for four years in a row. That figure will only continue to grow in the coming year.

He’s right: NAR’s chief economist Jonathan Smoke predicts that the 2017 U.S. real estate market will be in the middle of two massive demographic waves that will power demand for at least the next 10 years: millennials, making up 33% of buyers in 2017, and boomers emptying out of those big nests.

The mythical Toyota buyer will continue to be DFW’s very own unicorn. Did you hear the one about the guy who moved to town to work for Toyota? Or Liberty Mutual? Ameritrade? Despite the 100,000 jobs being created each year here in Dallas, we’ve yet to be overrun with a herd of Los Angelenos or New Yorkers – though we sure do love to talk about their omnipresent threat to our way of life.

The truth is that for every Californian who moved to Dallas County in 2016, seven other Dallas residents fled the city for Denton. One million Texans will hop from county to county in 2017, but remain here in the state itself. The largest population of people moving to a new neighborhood in Texas in the new year will be…Texans.

Another year of graywashing. No, you aren’t imagining it. 2016’s most depressing color trend will continue on into the new year. Gray on gray on gray color stories will persist, along with open floor plans, pesky red wine stains on otherwise gorgeous marble countertops, and a particularly Dallas habit of parking a Bentley or Rolls Royce in the garage during MLS photo shoots.

Oh wait, does that Bentley belong to the agent?

And on the topic of “the more things change, the more they stay the same…”, lot sizes will remain unchanged, even as homes continue to grow and yards continue to shrink. Price per square foot will drive the market in 2017, necessitating even bigger luxury homes on increasingly cramped lots.

Price increases will downshift (just a touch) from cheetah to hare. At the start of last year, the average price of single-family homes, condos and townhomes was $242,108 in North Texas. By the end of November, that figure stood at $281,628. Home prices rose 6.6% in 2016, on top of the 7.6% increase they made in 2015. Continued growth will be the name of the game in 2017.

Million dollar listings will continue to fascinate, but rarely impact the market. For all the talk of 7-figure stunners in DFW’s most well-to-do neighborhoods, a lack of inventory will continue to mean that these Texas palaces won’t move the needle all that much on the industry as a whole. Of the more than 100,000 homes sold in North Texas in 2016, just barely more than a percent were million dollar listings. Little will change in that regard in the coming year.

(But that doesn’t mean we have to stop oohing and ahhing over photos of them any time soon.)

The 20% down mentality will persist. Of course 2017 will bring with it its fair share of renters, somewhat due to the psychological barrier of a down payment. But creative financial options do exist for those who are interested in breaking through. There are areas that only necessitate a 3% down payment and no PMI within a mile of Uptown, but good luck finding them on your own.

People will stop overpaying their real estate agent. The math on this one is beginning to paint a picture that much of the establishment won’t like. In 2015, the average agent commission was 5.3%. A year later, it decreased to 5.2%. Little by little, consumers are beginning to realize that the traditional 6% agent fee model is entirely negotiable.

By now, much of the North Texas real estate community knows what we do here at Door. Full-service for a flat fee of $5,000. Our agents are salaried, with benefits. We use technology that allows us to be seven times (and growing!) more efficient than traditional agents. But a year into the business, what people may not know is the unprecedented growth and success that we have experienced with Door. We transacted nearly 100 homes in our first year, representing nearly $50 Million in volume. Door is not only working here in Dallas, it’s thriving. In 2017, the sky’s the limit.

Alex Doubet is the founder and CEO of Door, a Dallas-area, tech-enabled real estate brokerage. We welcome and invite your 2017 predictions!