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Collin County Housing Market Approaching Balance; Still Better to Be a Seller

The Collin County Association of Realtors (CCAR) reports that the real estate market continues to favor sellers, but if trends continue, North Texas may soon find itself in a more balanced market. Over the past 12 months, median sales price has increased 1.5 percent to $301,500, which is 6 percent less of an increase than the year prior.

Simultaneously last month, the real estate market experienced 15 percent more homes for sale as compared to October 2017, supplying the market with 3.2 months of inventory. A market is considered balanced when it has six months of home inventory, a seller’s market if it has less, and a buyer’s market if it has a surplus above six months of inventory.

“It is important to remember, despite an increase in home inventory, those homes are still selling, and for more money than the year before,” says CCAR President Melissa Hailey. “It is still a great time to be a seller, Collin County is still experiencing growth, and buyers are excited to buy.”

The CCAR Pulse, which delves into the real estate markets of 37 local communities, supports Hailey’s thoughts, projecting that year-to-date closed sales have increased by 9.4 percent.

For the buyer, Hailey has encouraging news, “You are less likely to find yourself in a bidding war, and sellers are open to reviewing comps and setting a competitive listing price.”

On average, buyers paid 95.4 percent of the original list price of a home in October and homes stayed on the market an average of 49 days. The most popular segment of homes among buyers purchasing in October were those priced from $300,000-$499,999.

Last month, the housing affordability index declined 14.8% compared to the same time last year, hitting its lowest point in 2018. In addition, median household income was only 98 percent of what is necessary to qualify for the median-priced home under prevailing interest rates.

While many are anxious to see if the market continues to trend towards balance, the month of October gave both buyers and sellers reason to smile.

Collin County CCAR Pulse Stats

Market Shows Early Signs of Steadying after Record-Charting Year

While the real estate market in Collin County remained strong during the month of July, it began showing early signs of stabilizing after a year of record-breaking sales.

According to data from the latest Collin County Association of Realtors (CCAR) Pulse report, three areas that are beginning to show signs of a balancing market include new listings, inventory of homes for sale, and days on market. New listings increased 4.8 percent in July compared to last year, and the supply of available homes rose 13.5 percent from July 2016. In addition, the average number of days a home was on the market last month was up 6.7 percent to 32 days.

“Seeing the amount of new listings increase in July, coupled with inventory going up, could mean that the Collin County area is very slowly making its way to a balanced housing market, which is a good thing,” says Jonna Fernandez, CCAR Chief Operating Officer. “Six months of inventory is considered a balanced market. At the beginning of this year, our inventory was only at 1.8 months—an extremely strong seller’s market. Seeing the supply of homes at 2.7 months for July is encouraging.”

Although the housing market may be showing some very early signs of stabilizing, there are still many indicators of our years-long seller’s market. Median sales price is up 8.5 percent to $305,000, which has also impacted how much home buyers can afford. Currently, the median household income is 113 percent of what is necessary to qualify for a median-priced home under prevailing interest rates. This is a 10.3 percent reduction in housing affordability from last year, when household income was 126 percent of what was needed.

“It is no surprise that we see the housing affordability index has decreased in the past year, given the strong seller’s market that we’ve experienced” notes Fernandez. “When you have multiple offer situations, homes often sell for more than their list price, thereby increasing the median sales prices of homes over time. An increase in home prices, means that a potential buyer with a median household income is finding it more difficult to find a median-priced home.”