DFW MLS Statistics: March 2023
Architectural Corner: Spanish Revival
A classic architectural style found all over the world, Spanish Colonial first appeared in the Americas in the 1600s when Spanish settlers arrived, using local resources like adobe with a stucco finish for both interior and exterior walls, and clay tile roofs. While the Colonial period ended in the 1800s, the style was revived in the 1900s, becoming very popular with homebuilders.
Best suited for warm climates due to their adobe/stucco construction, Spanish Revival also features small and infrequent windows which facilitate airflow, wooden support beams, very few (if any) decoration, and typically an interior or exterior courtyard complete with an outdoor kitchen that prevents unduly heating the home’s interior.
A great many higher-end new construction homes in Dallas’ most premier neighborhoods are Spanish Revival.
Timing the Market: Is it Really a Thing?
I get it; we all want to time the market. To quote Louis Winthorpe III: Buy low, sell high. Everyone wants to tell friends and neighbors they got in while the getting was good and sold at the top of the market, but is there really a trick to this or is it just luck? Is there a secret to timing the market?
It all boils down to knowing the market and market trends. If you know trends, you stand a better chance. If you don’t, well, there’s always luck.
How Long Do Homes Stay on the Market? – A “buyer’s market” is typically defined as a market where the average house takes more than 6 months to sell (Dallas is fickle and a lot less). In a buyers market prices are down and sellers tend to be more flexible, the opposite is true in a seller’s market.
What Time of Year is It? – There’s always a seasonal dip in the fall and winter for both prices and inventory. Now, many of the homes that are driving average prices down were those that didn’t sell in the summer, almost always because price and condition didn’t match, so don’t assume that a great house can suddenly be bought at a discount in November.
Where Are You Buying? – Geography plays a part in market cycles. The closer you are to population densities, the shorter the seasonal market declines. Now, the Great Urban Exodus of 2020-2022 saw the exact opposite happen, but now that people are going back to their offices, that trend is lessening.
What is Everyone Else Doing? – This is anecdotal but valid. Does everyone say, “Don’t buy a house right now.”? If so, the time to buy may be at least approaching because it takes time for the geniuses in the media (sarcasm) to be bludgeoned with enough data to acknowledge shifts in market trends.
Let’s acknowledge homebuying is subjective. It’s a rare buyer who only sees a property as solely an investment; not a lot of people choose a property to call home for 5 years just because it’ll appreciate the more than other choices. But again, sometimes you’re just lucky. My wife and I bought in 2010, not because it was the bottom of the market, but because we were recently married and she told me to get her the heck out of my 1 bedroom condo.
Vague Specifics – February 2023
If you look the most recent MLS statistics, the signs are all over the place. Median days on market is still very low comparative to historic averages, but market inventory has doubled and interest rates have certainly stretched home affordability. While I’ve been told we’ll see rates in the upper 5’s this spring and summer, recent economic reports have shown that current rates are not cooling down inflation. It would appear that the “soft landing” we were hoping for will turn into a recession. To those of us who remember the Great Recession, it’s unlikely we’ll see anything like that. Real estate was a if not the primary driver then, now the market slowdown is just a byproduct of more money that has ever been printed in human history being pumped into the US economy.
If there is a positive statistic to the market leveling off, it’s home affordability. Dallas was historically one of the most affordable major metropolitan areas in the United States (probably due in part to our crippling summers and lack of natural topography…). Since the 80’s, however, DFW has worked very hard to present a very diverse economy, and the benefits are being reaped in the form of mass migration to the area. Unfortunately, basic rules of supply and demand have driven up home prices because as the old real estate idiom says, “They ain’t making any more dirt.”.
A housing index of 100 means the median income home can afford the median-priced home. We’re hovering slightly below that right now, and it’s not being helped by the slow return to normal homebuilding rates. It’s likely going to drop a bit over the next few months as it does the first half of every year, but I wouldn’t be surprised if it eclipses 100 in the winter, which is when many are predicting the recession is going to arrive. Hopefully I’m wrong.
MLS Statistics – January 2023
Architectural Corner – Log Cabin
Tracing it’s roots back to the Bronze Age (roughly 3,500 BC) northern Europe, the log cabin is the epitome of function and the use of local materials. As early as 1640 they were recorded as having existed in North America. Seven US Presidents were actually born in log cabins, the most celebrated of whom was Abraham Lincoln.
Constructed of logs laid horizontally, usually with notches at the end to facilitate interlocking and minimize space in between, log cabins relied heavily on the site upon which they were built. Both drainage and sunlight were critical to their longevity. Styles, sizes and layouts varied greatly over the years and regions. Roofs were either rafter or purlin (horizontal logs notched to wall logs). Front porches were also very important to their design, especially for the hot summer months.
Vague Specifics – January 2023
The steroid-infused, powerlifting champion market of 2020-2022 is over and into the new market of 2023 we go. Higher interest rates, a seasonal cooldown and looming recession have put the brakes on the hottest real estate market in DFW history. Let me reiterate that while I’ll miss the short contract periods and sellers giddly as schoolgirls by the offers they receive, it was wholly necessary. It’s going to take a long time for wages to catch up with prices.
What does that mean for you’re considering selling? A return to reality, mostly. It means you’ll have to pay attention to the market analysis I provide you, that the hardest part of my job isn’t going to be preparing the spreadsheet to facilitate choosing between 20 offers, and darn it means negotiating. The below graph is fascinating.
Does this mean the days of wheeling-and-dealing are back? In some instances yes, but it also means sellers need to be realistic about asking prices and not price speculatively. While it’s amazing we’ve touched 2012 levels of sales-price-to-original-list-price, it doesn’t mean every house you see will be willing to drop their price to 92% of list. Also, if you bought your house in mid-2022, especially if you went over list price and issued an appraisal waiver, you’ll likely need to stay put for a few years. The rule of thumb used to be you could sell your house and make a decent profit if you lived in it for 3-5 years, it appears to be the rule of thumb yet again.
All this said, it is the best time in years to buy. Rates are going to drop at some point and another mini-sellers run will begin. You have more inventory than you have had in several years from which to choose, and there are creative ways to buy down interest rates or just wait for them to drop and then refinance.
MLS Statistics – December 2022
Architectural Corner – Prairie Style
Chances are you’re going to be surprised by this. Originating in Chicago in the early 1900’s, Prairie style architecture placed a great emphasis on craftsmanship, simplicity and access to nature. it’s most celebrated architect was Frank Lloyd Wright.
Prairie architecture combined various ideals of the Arts & Crafts movement, and featured sprawling footprints with strong geometry, brick or stucco exteriors, open and asymmetric floorplans, and connected indoor and outdoor spaces. Sprawling but rarely tall (Wright referred to the style as “Married to the ground”), Prairie homes emphasized the horizontal and minimized the vertical. In fact most vertical features such as downspouts are routinely cut out.
Many of the bolder, less-appalling newer construction homes can be defined as Prairie.