Realtor.com is hailing it the longest inventory decline in two decades. According to a new report from the online property search site, there were 11 percent fewer homes available in June 2016 than the previous year. The drop marks the 24th consecutive month of falling inventory – the longest streak in 20 years. Home prices also reached a new record, selling for 9 percent more than in 2016. Together, these trends present enormous hurdles for buyers.
Currently, median inventory age in Dallas hovers at only 38 days, well below the national average of 60 days. As the Realtor.com’s 11th hottest real estate market, Dallas feels the strain keenly, but it certainly isn’t alone. “More markets than ever are struggling with inventory problems,” said Javier Vivas, manager of economic research at Realtor.com. “In 80 percent of markets there are fewer homes for sale currently than this time last year.”
While the number of homes to hit the market rises each spring, that peak sinks each year. Only high-end, luxury homes saw a rise in availability this year, but that hardly helps the bulk of buyers. “It’s good to see that more homes are coming onto the market, but the bulk of those homes are too pricey for the largest, most desperate group of buyers,” said Vivas.
Market Leaves Buyers Feeling Frustrated
As demand surges and inventory plummets, real estate agents like Modtown Realty’s Britt Rhodes are feeling the exasperations of their buyer-side clients. “I have a handful of clients I’m working with right now and it’s been so frustrating for them,” Rhodes said. “It’s such a fast-paced market. They’re being beat out, many times by multiple offers, because the inventory is so low.”
The market is also edging out first-time homebuyers, or at the very least, forcing them to consider less-than-ideal properties. “It’s really tough. And unless you have the stamina, and the cash flow, and/or the ability to take out a construction loan, that’s what these buyers are having to do. They’re having to make pretty big sacrifices.”
A Great Time to Be a Seller
Earlier in the spring, the nationwide median home list price pushed above $250,000 for the first time. Up 9 percent from 2016, $275,000. Yes, the situation in Dallas remains a bit rosier, with median prices at around $236,000. But let’s not forget that Dallas-Fort Worth saw median home sale prices rise 12.6 percent from 2016 – one the nation’s largest year-over-year increases.
However, the situation is not all gloomy. You could be a seller. With demand so high, sellers are jumping through fewer of the standard hoops to get their properties sold.
“One thing that’s been really advantageous for sellers this season is utilizing the hip pocket sale,” said Rhodes. “A lot of these homes are not even hitting the market. It certainly is a great time to be a seller. You can post a home on social media and sell it before it hits MLS. The owners don’t have to go through the fuss of doing the showings, keeping the house clean every day. Most of these homes I’m seeing are selling within hours of going on hip pocket.”
Realtors Double Down on Efforts to Assist Buyers
As record lows in inventory push real estate agents to try new tactics, social media reigns supreme. Instagram and Facebook, in particular, provide much needed outreach tools. “Especially this season, I’ve noticed agents using the advantages of Facebook and Instagram,” Rhodes said. “It’s been a really helpful tool to utilize all of my network, and everyone else’s network, to help these buyers out. I’ve been able to say, ‘Hey, I have a buyer need,’ and I’ve had quite a bit of success from it. You can put up a Facebook post, and five minutes later, you’re getting a phone call. It’s wonderful.”
Asked if she saw inventory easing up in the near future, Rhodes was not so sure. “It’s something that we talk about as agents and wonder. I scratch my head because there are so many people moving into Dallas, it’s hard to think that it would. I’m hopeful that it would. But I’ve noticed through the spring and summer markets that it’s just getting tighter. It’s been more challenging, honestly.”