FORT WORTH (CBSDFW.COM) – Last year’s wild and unprecedented race for real estate in North Texas is finally over, according to experts in the field.
The historic growth in value, evidenced by demand exceeding supply in DFW, caused a frenzy where buyers found themselves bidding for homes and sellers receiving an astronomical amount of bids for their homes. .
The combination of low mortgage rates, new residents of Texas and a never-before-seen housing stock created a combination for the market to explode, experts said.
Home prices averaged over $ 350,000 in DFW for the first time, and homeowners were seeing their value increase year over year by up to 20%.
In addition, sellers with sought-after properties received dozens of offers sometimes within hours of visits.
Dr. Luis Torres, a research economist with Texas A&M’s Texas Real Estate Research Center, said the trend is over.
“Now the months of inventory are slowly increasing. Registrations are multiplying. The days on the market are increasing. So this wide array of metrics tells you that you’ve reached a peak binge and are now returning to normal days, ”Dr Torres said.
Dr Torres said the 20% year-over-year increases in value are neither sustainable nor healthy. Instead, he says 5% is a lot more manageable. While the DFW market has yet to fall to a 5% margin, Dr Torres says we are heading in that direction.
“I think that was the peak and now you’re going to go back. Back at 4:15, until you get back to 5% annual growth like what we saw before the pandemic, ”he said.
He said that another factor leading to a return to normal is the rise in mortgage interest rates for borrowers.
At its lowest, new borrowers were receiving loans with interest rates below 3%, now those numbers are above 3% and climbing.
“The lower rates we’ve seen that fueled the frenzy are behind us, aren’t they? We will be moving into higher mortgage rates in the future, ”said Dr Torres.
In summary, experts say crazy trends don’t last forever.
They remind consumers that the laws of economics dictate that there is always a return to normalcy.