DALLAS — It’s time to check on inventory!
We have houses for sale back on the shelf again in Texas.
We base this on state data. We will use May 2024 numbers since that is the most current month of data available for all the large metro areas in Texas. Many of them already have numbers from June that further support this, but the Houston area figures typically lag a bit, so we will use May.
In the Houston area in May, there were 3.93 months' worth of homes on the market. That was the most inventory of homes for sale since August 2019.
In DFW, there were 3.5 months of inventory in May, the most since November 2012 (and that spiked further to 3.78 months of inventory in June). In May, San Antonio notched 4.81 months of housing inventory, the most since August 2013 (and that number inflated to 5.19 months of inventory in June).
In the Austin area, there were 4.5 months of inventory on hand in May, the highest amount going all the way back to October 2011 (and the housing supply figure there also rose further in June to 4.84 months).
After many years of relative listing scarcity, all of a sudden sale signs are popping up. The quick turn is not surprising to Real Estate Broker Joe Atkins of Joe Atkins Realty, “I always say when things happen in real estate, they happen fast. Whether it's the shift upward or the shift downward."
I have been checking in with Atkins regularly since the pandemic. He is just one real estate broker of many in Texas. But his ongoing perspective has given valuable insight into things that are happening on the ground in Texas real estate.
Buyers, this is the first time in all of my check-ins with Atkins that I can remember him saying this: “I think we are 100% in a buyer's market”.
Price decreases
And that’s not just a vibe he’s getting. Atkins also shared some key data he says came from the MetroTex Association of Realtors, "You can see that there are 147 homes that have had price decreases as of 10:30 today. If you would have looked at this three years ago, price decreases were probably close to zero.”
Even though prices are still pretty lofty in places, some sellers are starting to come down because they have competition.
If your home isn’t priced competitively, Atkins says you can no longer count on the showing frenzy that we’ve been seeing for years, “Something just fell off a cliff. And you know, we have listings go on where typically in the first 48 hours you're getting…anywhere…two to four showings. And we had some listings we saw that weren't getting shown at all in the first three days and we're kind of like, hmm. That's interesting. I hadn't seen that in 10 years.”
Bidding war truce?
There are still homes that are getting multiple offers. But even in those situations, something may have shifted. Atkins was just networking with other real estate agents who shared an experience they’ve had with recent multiple offer situations. They said even though the buyers were competing with each other for the same home, they were all coming in just under the asking price.
That’s very different. And so is the fact that the potential buyers opted not to get into the expensive bidding wars we’ve seen for several years--and even earlier this year.
Remember those?
“People were like, what if another house doesn't come up and then we can't afford it?
Now people are like, you know what? We lose it…we lose it. We got three more to look at in the neighborhood, right? So I just think this is really something sellers really need to know.
Commission change
Sellers and buyers should also know about a seismic legal settlement that is changing how real estate agent commissions are determined and who pays them.
For a long time, it was traditional for the home seller to pay all the commission, which would then be split up between the buyer’s agent and the seller’s agent. The changes allow for the buyer to negotiate their own fee to their agent and the same thing for the seller.
But Atkins says he thinks much will stay the same for now, “Given where interest rates are…prices…it's hard enough for buyers to come up with just the down payment itself. So then now if you're going to ”burden” a buyer with now having to come out of pocket to pay their buyer's agent…chances are they're not going to buy. They're going to have to buy less house, which means that takes your house off the table, that they could have afforded if you would have been willing to pay the buyer’s agent."
But many sellers wary about paying traditional rates and paying both agents see the change as a welcome relief. After a lot of legal action to dismantle the long-standing system, we will see how it plays out in practice in the months ahead and what kind of new home-selling and home-buying options might emerge.