Prices Are Dropping: Blame it on the Heat?

Blame it on the heat?

The Texas temperatures are going up, up, up…does it really affect home sales?

We certainly can’t Blame it on the Rain like the great Milli Vanilli song once suggested.  But can we blame a slower summer home sales market in Tarrant County (and others in D/FW if they are truthful) on the Texas heat?

There’s no slowdown you say?  Really?  Then why is it that my email inbox looks like the coupon section of the Sunday paper?

Takes me back to 9th grade days

It’s not Rob and Fab’s fault it’s hot and home sales are slowing down … they blamed it on the rain

One week recently I received over 400 emails from realtors all across the Dallas-Fort Worth Metroplex with headlines and phrases such as:

  • Price Improvement
  • Price Reduction
  • Motivates Seller
  • Super Motivated Sellers
  • Amazing Opportunity
  • Priced to Sell
  • Additional Agent Incentives (how about your incentive is to do your job well?)
  • Lowest Price for Fully Renovated Home in Area

You Get The Picture

My favorite nom du jour in real estate has to be the: Price Refinement!  Kudos to John Zimmerman of Briggs Freeman Sotheby’s International for that one! That’s why he’s the $200 million man, I guess.

Price Refinement, Price Renaissance, Price Confusion, Price Contusion … it all means the same thing. Prices are dropping.

In the swanky Fort Worth ZIP code of 76107,  which serves the Monticello neighborhood — an area of only 10 square miles — there are 104 homes listed for sale with a price tag of $500,000 or more.

Most of the million-dollar-plus homes never make it to the Multiple Listing Service.  If those homes were made known, the number of available homes would be even greater.

Another area of Fort Worth that is highly sought after, the 76109 zip code with reputable Tanglewood public schools and only .634 square miles, has 74 homes at $500,000 or higher.

At that price point those neighborhoods average 150 and 90 days on the market respectively.  That’s not an eternity for a hefty price tag, but they’re certainly not flying off the shelves like in previous years.

Not Just Upper End Market

It’s one thing for the $500,000 and higher market to be slowing down, but we are also seeing homes under $500,000 get price downgrades as well.

It’s not just the upper-end homes with high prices that are dropping … and that’s good news to many buyers!

In the city of Fort Worth there are 2, 407 homes under $500,000 on the market.  As of time of this exciting blog, there have been 402 price decreases in Fort Worth and 379 decreases in the past seven days.

What Does This Mean

Prices are dropping.  Homes are sitting on the market longer.  Buyers are finally wising up and saying, “NO!” to high prices for homes that aren’t in tip-top shape, an amazing location, or priced so well that the homes are snatched up in seconds.

This does not mean homes aren’t still selling quickly or that multiple offers are a thing of the past.  Just this week I’ve had two situations of multiple offers (didn’t get either) where contract price went above asking.

Real estate agents and sellers must come together and price homes correctly and be realistic about the home in this slowing down market

What this does mean is that sellers have to be realistic and real estate agents have to do a better job of educating and being honest about the home with their sellers, who need to make sure they understand the market and area, and certainly can’t just slap a high price tag to a home and expect it to be gone by midnight.

Blame It On The…

You can blame it on the heat.  Later this month blame it on school starting.  In October blame it on Halloween.  November? Blame it on Thanksgiving.  December? Blame it on Christmas … you get the gist.  Excuses never end.

We could blame an event during every month of the year why homes aren’t selling…but what about looking at price?

Let’s stop shifting the blame on a slowing down real estate market on anything and everything.  We are still living, working, and playing in a terrific, growing area and economy.

Yes it’s hot.  Yes school starts in August.  Yes there are holidays and seasons when homes don’t sell as quickly.  If agents and Sellers realize the true value of the home and that the market is shifting — it won’t matter the season — homes will still sell.

Well, that’s all from Tarrant County this week Dirty Readers.  Thanks for reading and following and sharing!  As always, if you have questions, comments or great ideas for a blog … hit me up!

Seth Fowler is a licensed Real Estate Sales Professional for Williams Trew Real Estate in Fort Worth, TX.  Statements and opinions are his and his alone.  Seth has been involved with the home sales and real estate industry in the Fort Worth area since 2004.  He and his family have lived in the area for over 15  years.  Seth also loves bowties!  You can reach Seth at: 817.980.6636 or seth.fowler@williamstrew.com

5 Comment

  • Thank you Scott. This is the best local analysis I have seen yet. It all boils down to affordability under attack by increasing home values, interest rates, and lack of wage growth. And yes, I too am guilty of blaming the heat.

    • mm

      Thanks for support and reading, sharing Tarrant County Tuesday. It’s certainly not end of world or Recession part deux, but I think it’s a huge cop-out by realtors (who probably shouldn’t be in the biz) to blame anything and everything instead of looking at their part and getting real with Sellers and Buyers alike. Keep reading! OH….and it’s Seth, not Scott (no worries – I get Scott and Sean weekly)

      • I agree, Seth… same thing in many parts of Dallas. We still have strong market fundamentals and a diverse economy, as well as continued population growth. I like to think the market has simply normalized.

        • mm

          Agree, agree, agree…I also think a normalized market is good for everyone in the long run…just need realtors and sellers to get on board – which they will when listings are sitting and prices are dropping in order to move product. Thanks for reading, following, sharing…Stay Dirty!

  • Supply and demand dictate where the market will go. If we continue to get an increased number of new listings in the MLS (May and June both record breaking months) pricing will flatten because of increased selection.