DALLAS — Editor's note: This article was originally published in the Dallas Business Journal here.
Homes in Dallas-Fort Worth are selling far more slowly and for lower prices than they were a year ago, according to the latest report from residential real estate firm Re/Max.
Dallas-Forth Worth ranked fourth in the U.S. for the largest increase in days on market in May, with the average home selling in 37 days, up from 15 days last year. That’s an increase of 141.8% year over year.
Tampa, Fla., posted the highest year-over-year percentage increase in days on market, at 219.6%, followed by Orlando at 193.3%, and Phoenix at 143.2%.
The median home sale prices in DFW was down 4.5% in May compared to a year ago, according to the Re/Max National Housing Report. The median price of DFW homes sold in May was $402,000 compared to $427,881 in May 2022.
Nationally, the median of all 51 metro area sales prices was $423,000, down 1.9% from May 2022. The markets with the biggest year-over-year decrease in median sales price were San Francisco, down 10.7%; Las Vegas, Nev., down 10%; and Phoenix, down 8.9%.
DFW saw the second largest decrease in close-to-list price ratio compared to a year ago, according to the Re/Max report. The May 2023 close-to-list price ratio in DFW was 98.7%, down sharply from 104.7% in May 2022.
The close-to-list price ratio is calculated by the average sales price value divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price. If it's less than 100%, the home sold for less than the list price.
Only San Francisco had a bigger year-over-year drop in close-to-list ratio than DFW — although homes are still selling for more than their list price in the City by the Bay. The May 2023 close-to-list price ratio in San Francisco was 104%, dropping from 111.5% in May 2022.
Sales volume also dropped in Dallas-Fort Worth year over year. A total of 9,336 homes sold in May 2023, which is 4.6% fewer than the 9,789 homes sold in May 2022. On the other hand, May home sales in DFW rose 18.7% over April’s sales of 7,865 homes.
The sharply higher mortgage rates compared to last year are to blame for the year-over-year declines in sales volume and home prices, said Todd Luong of Re/Max DFW Associates.
It remains a tough market for shoppers looking to buy a home right now, Luong said.
“Despite the higher mortgage rates compared to a year ago, the demand for homes in Dallas-Fort Worth remains robust and healthy,” he said. “With a median home price of $402,000, Dallas-Fort Worth is still a comparatively affordable option for people relocating from more expensive parts of the country. As homebuyers adapt to the 'new normal' of higher interest rates, median sold prices have steadily increased since February. However, median sold prices are still lower than the peak in June 2022.”
Luong said would-be sellers paying a 3% mortgage on their current home are reluctant to move and be forced to pay a much higher interest rate on their next home.
“There are buyers right now who are calling me and asking me to help them buy a home in Plano, but I have no inventory to show them,” Luong said. “Sellers still have a tremendous advantage right now, creating a challenging situation for buyers. It would not be surprising to see further upward pressure on home prices in the near future.”
