See city-by-city home sale numbers, as D-FW buyers find busy spring market
RESOURCE: The Dallas Morning News
by Steve Brown

Adam and Lindsey Radford try not to get discouraged as they shop for their first home.

“We’ve now made five offers unsuccessfully,” said Adam. “One of the most recent houses we were after had 30 offers.

“It’s really challenging.”

For the third spring in a row Dallas-area homebuyers are getting hammered with too much demand and not enough supply.

Home prices this year are up by more than 10 percent from last year in most Dallas-area neighborhoods.

And there’s less than a 2-month supply of houses listed with real estate agents as of the first quarter.

In some markets even fewer homes are for sale.

In Plano, where the Radfords have been shopping for a house, there’s only about a 1-month supply of houses to chose from.

Many houses are under contract the day they hit the market.

“We’ve expanded our net to Frisco, Murphy, Allen, Richardson, McKinney — you name it,” Radford said. “You have to be super quick.

“When you look at a home you have to be willing to make a decision then and there.”

Even that’s no guarantee. If another potential buyer offers more money or better purchase terms, you’re out of luck.

“You have companies like Toyota coming in here from California and folks who are selling very high value homes,” Radford said. “They are able to make cash offers on these homes, which is something we can’t compete with.”

With their apartment lease coming up in June the Radfords are in a hurry to find a house.

They also are watching sales prices soar higher.

“We’ve seen a dramatic increase in prices just since we have been looking,” Radford said. “That hurts.”

Tanya Rutledge, their sales agent with Keller Williams Realty, said it’s hard for buyers not to get discouraged in a market like North Texas where prices are at record levels and the inventory of houses on the market is near an all time low.

“Each offer we make puts all three of us on an emotional roller coaster,” Rutledge said. “They are hanging in there, and we are all focused on finding their first home.”

“This is happening to everyone,” she said. “This is what the market is like today.”

As one of the biggest job and population growth markets in the country, the Dallas-area should be used to its runaway home market.

Home prices have shot up by more than 40 percent in the last five years. And while home sales are at records, there still aren’t enough properties to go around.

Even with the tight market, some Dallas-area residential districts have seen stout increases in sales in the first quarter of 2016.

Sales are up this year by more than 25 percent in a handful of markets, including Mesquite, Irving and the Colony. Overall sales are up 10 percent from first quarter 2015 in the almost four dozen residential areas The Dallas Morning News tracks each quarter.

“Dallas is really leading the way in Texas,” said Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University. “Your employment growth is still going strong.

“Some of what is happening in your housing market is because of all the corporate moves announced over the last two or three years,” Gaines said. “Some of that is just now coming into plan and there is still another year or two to go.”

Gaines said so far the slump in Texas’ energy sector and worries early in the year about the bumpy stock market have been shrugged off by homebuyers.

“Your prices this year are going to be up almost another 10 percent more,” he said. “The only thing I think would slow the market down is a recession because Dallas is so tied to the U.S. economy.”

Dallas area homebuyers who stepped back from the market last summer hoping things would calm down are now regretting that move, sales agents say.

“We all thought the builders would catch up with more construction and people would feel better about selling their property and the inventory would go up,” said Russell Berry, president of the MetroTex Association of Realtors. “But a lot of people still aren’t putting their housing on the market because they don’t have anywhere to move.

“They are waiting until it’s a better time for them.”

While the number of for sale signs this year has increased by a fraction in some Dallas neighborhoods, it’s still not enough.

“We still have massive amounts of people moving here,” Berry said. “People are paying more for properties than ever before.”

Many houses that go under purchase contract won’t meet appraisal standards for mortgages. In those cases buyers have to come up with more upfront money or walk away — if they can.

A growing number of sellers are requiring potential buyers to agree to the purchase regardless of the appraisal with special clauses in the contract.

“We are seeing that on four out of five contracts,” Berry said. “We never ever saw that before.”

Twitter: @SteveBrownDMN

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