Vivo Realty’s Nick Surguine and Fairway Independent Mortgage’s Kelly Rogers (LinkedIn, Kelly Rogers, Getty)
What comes up, must come down. After a pandemic-fueled boom in the single-family home market across Texas’ major metros, the return to reality has been gloomy, but local agents say there are still plenty of opportunities for those who are savvy.
Creative financing solutions from experienced realtors and lenders are enticing Texas buyers to embrace the less-competitive market. Two-one mortgage rate buy-downs, realtors slashing closing costs, free home warranties, two-year refinancing options and even lenders cutting personal margins to offer lower interest rates have been in-play, according to Kelly Rogers, area manager and loan officer for Fairway Independent Mortgage in Houston.
“It has shifted to a buyer’s market, and sellers are willing to pay for closing costs. And if they’re paying for closing costs, they’re not having to reduce the sales price of the house, which actually helps the market keep home values high,” Rogers said.
Evidence of this can be seen across Texas, especially in Dallas-Fort Worth markets, according to the latest data from the Collin County Association of Realtors. Home inventory was up 230 percent in December in Collin County compared to a year ago.
“In December, a home seller had to wait a few days for an offer. That wait has made for more negotiable sellers, and we are seeing the reemergence of seller concessions,” said Shana Acquisto, president of the Collin County Association of Realtors.
Sellers are now willing to negotiate across markets, but that doesn’t mean buyers should expect a bargain anytime soon. With supply way up and demand reportedly down, prices should be dropping, yet the median sale price of a home in December was $491,000, an increase of 7 percent compared to the previous year, according to the Collin County data.
Fewer cash buyers
There is a clear decline in the number of sellers across the DFW market, said Nick Surguine, a realtor for Vivo Realty who focuses on the single-family market in Dallas, Plano and Richardson. But the current lack of investment firms scooping up housing stock with cash deals, a massive driver during the market boom, is creating opportunities for the average buyer to secure a home at a reasonable price, he said.
“You might have to have a crappy interest rate for a couple of years, but you can get the house now that you’ve been looking for the past two years but haven’t been able to compete. It is opening up a window for some of the lower-priced homes to be bought by actual first time homebuyers and not just scooped up by investors,” Surguine said.
Almost a third of all homes sold in Texas in 2021 were purchased by institutional investors that paid cash, according to a report from the National Association of Realtors.
In 2021, the Lone Star State had the highest rate — 28 percent— of homes sold in the U.S. go to big investors, more than double the national average of 13 percent. But recently high-interest rates and economic uncertainty have scared off the suits, Surguine said.
The strong Texas economy, compared to the rest of the country, is continuing to drive optimism in the local markets, Rogers said.
“Our market slowed and has had some price improvements or corrections, but not to these huge extents that you’ll read about in national media,” she said. “Right now you can actually get a home that you saw a couple of days ago, and it will still be on the market when you put an offer in, whereas, six or eight months ago, you wouldn’t have a chance.”
The opportunity is there not only for buyers, but for agents and lenders as well, she said. An influx of new players jumped into the game during the pandemic to take advantage of the hot market, but as the going gets tough, many of those opportunists aren’t willing to play ball, she said.
“It’s the people who are willing to work, who are still hitting their goals. We’ve seen a number of lenders and realtors who basically took off the fourth quarter, and who aren’t even sure if they’re going to come back,” she said.
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—Erick Pirayesh