The North Texas Real Estate Information Services has reported a falling trend in the housing market over the past couple of months. In January, the retail information provider reported that closed sales in Collin County had declined 8.8% when compared to the same period last year. Fast-forward to September and that number sat at 26.4%.
A new report, via Dallas Business Journal, shows that in Dallas and Collin counties closed home sales dropped 37% compared to last year. This is more than double the decrease the same market saw during the Great Recession in 2008-2009. During the peak of the recession, Dallas’ closed sales fell 23% and Collin County’s 10%.
Another indicator for the months to come is the number of pending sales, which, right now are not looking too good either. Pending sales to close in November are 44% down in Dallas and 39% in Collin County.
Despite this, average home prices are still high. In an interview with the Dallas Business Journal, managing director of M&D Real Estate, Danny Perez, explained that the difference with the Great Recession is that people don’t really need to sell. “We’re not getting the new listings. Whereas before, we were getting a lot of inventory, new listings are down year-over-year. That’s what’s killing us on seeing a price correction.”
Of course, there are other differences between this drop in sales and the Great Recession. While the lack of sales today can be explained by the high prices driving away potential buyers, during the Great Recession, a big issue was the employment rates. According to Perez, 298,000 new jobs opened since last year. “That’s a huge difference maker,” he said.
All things considered, we might be seeing a slowdown in the housing market altogether. The latest Re/Max housing report showed that home sales across the country declined 9.7% since August, although they are still up when compared year-to-year.
“The days of bidding wars and buyers offering over asking price are behind us,” said Micael Coburn, broker and owner of Re/Max Town & Country in Allen to the Dallas Business Journal. “That type of market was not sustainable long term.”
In case you missed it, here’s Local Profile’s report on rents in DFW.