Assaad, a broker associate and team leader for The Assaad Group at Compass in Southlake, said her clients were outbid by a buyer who offered $85,000 over the list price.
Like many others, Assaad and her clients find themselves struggling in the housing market. Data from the Texas Realtor Data Relevance Project shows homes across the Dallas, Fort Worth and Arlington metro area had a median price of $376,500 in the first quarter of this year. That was a more than 21% increase from the same time last year.
These trends can also be found in Grapevine, Colleyville and Southlake, according to data from the Collin County Association of Realtors. When comparing the median price of homes sold between April 2021-April 2022, Grapevine’s price went up nearly 8%, Colleyville’s went up almost 38% and Southlake’s went up more than 31%.
In addition, increasing mortgage interest rates have diminished purchase affordability, making it difficult for lower-income and first-time buyers to afford a home, according to the Texas Real Estate Research Center at Texas A&M University.
But amid the inflated home prices and interest rates, the Grapevine, Colleyville and Southlake area is seeing high demand and a recent uptick in new homes on the market, according to Assaad and other local Realtors.
Assaad said many buyers in Grapevine, Colleyville and Southlake are being misled by national news reports that the housing market is shifting with the increase in interest rates.
“It has not changed the demand on houses in our area,” Assaad said.
A few weeks ago, Assaad said she was one of 25 bidders on a home in Grapevine-Colleyville ISD. Her clients did not get the house.
“We still see multiple offers,” said Sophie Tel Diaz, broker, owner and Realtor at Sophie Tel Diaz Real Estate in Colleyville. “Now, depending on the price point, we see more or less—it kind of depends. But we still see a very healthy market where there still are a lot of buyers for every home.”
Diaz said the increasing interest rates need some context. The 30-year fixed rate mortgage average in the U.S. on Jan. 20 was 3.56%, according to Federal Reserve Economic Data from the Federal Reserve Bank of St. Louis. On June 9, the 30-year fixed rate mortgage average in the U.S. was 5.23%.
“As far as interest rates, I know they’ve gone up some, but if you remember 2007, interest rates were between 6% and 8%, depending on credit, down payment [and] many different things,” Diaz said. “So we are [in] something that’s really not bad.”
Alisa Runge, a Realtor with Berkshire Hathaway HomeServices PenFed Realty Texas, said there is not enough inventory to offset the number of buyers. That is why homes have so many offers and such high prices, she said.
“It’s unprecedented for us how fast houses come on the market and how fast they go,” Runge said.
Alisha Minteer-Rosse is the director of sales, sales partner, listing specialist and associate broker and Realtor for the Minteer Real Estate Team with Keller Williams Realty in Grapevine. She said, for homes that look great and are priced right, the demand is exceptionally high.
However, Minteer-Rosse noted that she has seen a slight decrease in demand for homes that do not meet buyers’ expectations.
“We had four homes go on the market in the last week and a half, and some are getting 20-plus showings, and some are getting two to three showings,” Minteer-Rosse said. “That’s why it’s really important right now for sellers to make sure that they’re pricing their home right and making it as presentable as possible to really give themselves the best opportunity to take advantage of the market.”
Uptick in new listings
While many places are seeing a shortage of new homes, data from the Collin County Association of Realtors shows the number of new homes on the market in Grapevine, Colleyville and Southlake has increased since the beginning of the year.
Between January and May, there has been an over 54% increase in new home listings in Grapevine, a nearly 86% increase in Colleyville and a more than 25% increase in Southlake, the data shows.
“We’re moving to more of a healthier market than we have been over the last year or so, which will give buyers the opportunity to find a great home and sellers the opportunity to really take advantage of the appreciation we’ve seen over the last year [to] two years,” Minteer-Rosse said.
The increase in new home listings is partly due to the time of year, Assaad said, with more people looking to buy and sell while school is out.
However, another major trend has homeowners selling their homes and moving into rentals, Assaad said.
“I have a rental in Southlake—it’s $6,000 a month—and I’ve gotten multiple offers on that because sellers are selling their house and wanting to just rent,” Assaad said.
A lot of the reason has to do with the higher selling prices, she said.
“People are wanting to take advantage of this market and cash out,” Assaad said. “They may be moving out of state and want to sell now while the market is hot … or they’re waiting until the interest rates go down next year or waiting for the right house to come on the market.”
Runge said sellers are noticing how much interest rates have increased.
“We’ll probably lose a few buyers along the way because interest rates are going to probably go up to 6%, maybe even a little higher, which might push some buyers out of the market,” Runge said. “So sellers are hearing that and wanting to go ahead and just capture the opportunity while they can.”
However, Diaz said she would advise against renting a home while waiting for prices to go down, as no one can predict interest rates.
“At least when you are a homeowner, you’re not paying rent somewhere else,” Diaz said. “But I understand people are looking at where we were last year, and they feel that interest [rates] are going up, and it is true. But we don’t know whether they’re going to continue going up or what’s going to happen.”
The future of real estate
Every economic forecast meeting that Runge has attended indicates that the Grapevine, Colleyville and Southlake area is “still in a hot seller’s market,” she said. People are still paying more than what a house is appraising for, she said.
“I don’t see it stopping anytime—at least not in 2022,” Runge said.
Minteer-Rosse said she anticipates that the demand in the region will always be high as more people move into the area. She said she predicts the real estate market will stay robust despite the relatively low inventory of homes, and the increased demand should eventually subside.
“We’ve seen such high appreciation over the last year [to] year and a half, it still gives the sellers [the ability] to tap into the equity that they’ve seen,” Minteer-Rosse said. “But it’ll also give buyers a great opportunity to buy into the market, too, where they may have felt like they couldn’t compete in the past.”
Joe New, vice president of production and a loan officer with Cherry Creek Mortgage in Colleyville, said he expects increased mortgage interest rates for the time being.
But looking back to the 1970s when inflation was 13% and interest rates topped out at 18%, New said, “it wasn’t long after that where you saw rates come down.”
“Historically, after every storm, there’s some type of recovery,” New said. “I believe the future looks bright.”
Similarly, Diaz said many are worried that the real estate market is just as bad as it was in 2008 when the housing market crashed. The main difference today is that more people have built up equity in their homes, she said.
“So even if there were a slowdown, which no one can really predict, then people could just put their homes on the market and have a little less equity, but still get some money back versus waiting and going through what we had experienced in the past with short sales and foreclosures,” Diaz said. “So, to me, it seems that we are in a fabulous location for real estate ownership.”