Here’s a quick question… true or false… If your home appraised for $360,000 last year, on average in our current market it would be worth about $468,000.
That answer is TRUE!
In Rockwall County, prices have increased an average of 30%. With our average price point around $360,000, that’s an average increase in equity of $108,000!
Is this a bubble?
I wouldn’t call this a bubble. Yes, prices have gone up higher than we’ve seen in recent years. But when you look at the data and adjust for inflation, it wasn’t until March of 2020 that we surpassed the last peak of home prices from November 2006. Our last bubble burst because lenders were not making smart loans and it came back to bite all of us. Because so many buyers could now get a loan who previously couldn’t, prices were driven up from that demand. Then when they started defaulting in droves, that supply flooded the market and there were fewer buyers in the market to absorb the inventory.
Today’s demand is happening because homeowners are not willing to sell and interest rates are great. In February of 2021 for ALL of Texas we had 46,184 properties for sale. In February of 2020, we had 91,615 for sale. That’s a 50% drop in one year. We went from having three months of inventory to 1.4 months of inventory.
The current price increase trajectory is not sustainable and at some point, it will slow down. The small increase in interest rates is already tapping the brakes on demand and homebuyer demand is only 8% above pre-covid levels. Interest rates are at 3.18% with .7% in fees and points for a 30-year fixed-rate mortgage.
We’re also beginning to see buyer fatigue where buyers are deciding to pause their home search to wait for the market to cool down.
And what about prices? Will they go down when the market cools down? It’s doubtful. We have a solid economy and according to the Case-Shiller Home Price Index, Dallas is still about 26 points below the national index. This index tracks the value of single-family detached homes.
All of this to say that I wouldn’t call this a bubble, so there’s nothing to burst. What I see on the horizon is a slowing of the rate of price increases.
Now for a look at what’s happening here.
For this local market data, I use numbers from single-family home sales in Rockwall County. These numbers are based on sales data from March.
The average sales price is at $424,045. That’s a 26.7% increase from just one year ago.
The number of homes for sale is at 175 homes. We are down 73% in the number of homes available to buy in Rockwall County.
Rockwall County had 186 sales in March, a 3% increase over last year.
Homes sold 54% faster in March than they did last year, and we averaged 32 days on the market.
Our months of inventory is down more from last month and is now at .7 months. This number tells us that based on current demand, if no new listings came on the market, it would take just about two to three weeks for all of the current inventory to be purchased.
We listed 194 homes in March which is 30% less than last year.
Our average sales price per square foot is at $152 per square foot, a 17.8% increase from last year.
If you’re contemplating selling your home, now is the time to do it! The Patty Turner Group has put together resources to answer questions a lot of potential sellers have in this market right now.
What if I don’t have a home to buy by the time I sell?
How much more will I have to pay for what I want in my next home?
With multiple offers, how will I know which one is best?
How can we live our life in the middle of all these showings?
What if I don’t have the time or energy to get my home ready to sell?
If had any of these questions, let’s talk. You can visit crazyrealestatemarket.com for answers to these questions or contact me by calling 214-803-4444.
Jennifer Shannon is a Texas real estate agent and broker, licensed since 2006.