House Prices Are Going Up Because Everyone Is Moving Here (Dallas: for sale, 2014)

[NP78]

Originally Posted by Kenro911

Well, I’d say you’d be tough to find a house in Frisco at 17% YOY. More like 40% YOY closing price when all said and done.

I agree with whole cash thing. Thing is, the supply is x9 lower than usual. Even if demand remained same, it would cut a lot of people out.

I believe that the people that are left buying now are the golden over qualified, big cash group. Which is always there - but its a minority when supply is high.

Median household in my opinion will remain the same while disposable income will be less. Prices are going up all around, its true. The whatever savings people had from Covid will burn pretty fast on flashy holidays etc.

In about a years time, the buying power of median frisco household would be less than a year ago at this rate. The only way the house prices will remain this high is if builders and land owners collude to keeping supply at current lows.

We are at the point where median frisco family income can not afford a median home in Frisco. Something will give.

I just see in near future more copy paste neighborhoods north of frisco at 450- 550k which is exactly what median household can afford. It should bring values to that level.

If anything we might over-develop and cause a decent correction. Builders will be building non to spec homes non stop as soon as they can get stable supplies.

Frisco isn’t up 40% YOY. Other than that I agree with you that housing prices are outpacing HHI and isn’t really close.

Agree that development will catch up and moderate prices. Interest rates will probably have to rise in the short to mid term as well.

[Leonard123]

Frisco has a disproportionate share of McMansions that, among other things, skew median prices. I doubt anything exceptional has happened there the last year compared to surrounding cities. You would have to find an apples-to-apples comparison, and there is more involved than median prices and city limits.

Plano cannot be driving the real estate market. I think some of those relocations are within the metro area, and too many people are moving too far away. That would also not favor Frisco over other adjacent cities. We don't really have any data to confirm what is contributing to demand or how much money buyers have and how they are paying. We can only speculate.

[KathrynAragon]

Just so y'all know, housing prices are up just about everywhere, not just in the Dallas area. For some perspective.

[Boompa]

Originally Posted by Kenro911

Well there is plenty of demand for amount of houses. The supply is really low statistically speaking. March 2021 saw 71 houses on market. Meanwhile March 2019 had almost 600.

So the 9 fold decrease of supply left only the cash heavy and over qualified buyers in the market. Once supply increases, there should technically be less and less of cash heavy over qualified buyers.

Wouldn’t “overqualified” be some who can pay cash without borrowing.
This is all effect of COVID. A House is with the cost of the land it sits on plus the cost of building the house plus taxes.

[Kenro911]

Originally Posted by NP78

Frisco isn’t up 40% YOY. Other than that I agree with you that housing prices are outpacing HHI and isn’t really close.

Agree that development will catch up and moderate prices. Interest rates will probably have to rise in the short to mid term as well.

The problem is that these houses in Plano, Frisco, Mckinney are really 40% YOY at close. Yes you can play with numbers and say its 40% from 2015 when they were built.

However, then you pull up comps on MLS and see houses that sold for 510k in 2015, their direct comps in neighborhood sold for 500-530k in 2019 and early 2020. The prices were flat more or less and under/performing since 2014 to early 2020 especially on new builds.

All those exploded since last year.

[Kenro911]

Originally Posted by Boompa

Wouldn’t “overqualified” be some who can pay cash without borrowing.
This is all effect of COVID. A House is with the cost of the land it sits on plus the cost of building the house plus taxes.

Yes there are lots of cash offers. In my experience, many buyers are offering waived appraisals aka dump cash on top to close the gap.

Many houses do not even accept offers without appraisal waival contingency because they know bank will not appraise full price.

You need cash heavy, over qualified buyers who can pull these stunts. As market supply increases, they should be diluted. Right now the market is so small that they are the only ones left

[Rakin]

Originally Posted by KathrynAragon

Just so y'all know, housing prices are up just about everywhere, not just in the Dallas area. For some perspective.

Our market is pretty similar to what's going on in hot spots like Reno, Phoenix, Denver, Austin and many cities across the US. We are hotter than many but not near as crazy as some such as Austin.

[Rakin]

Originally Posted by Kenro911

The problem is that these houses in Plano, Frisco, Mckinney are really 40% YOY at close. Yes you can play with numbers and say its 40% from 2015 when they were built.

However, then you pull up comps on MLS and see houses that sold for 510k in 2015, their direct comps in neighborhood sold for 500-530k in 2019 and early 2020. The prices were flat more or less and under/performing since 2014 to early 2020 especially on new builds.

All those exploded since last year.

Are you a Real Estate Agent? You have not identified yourself as one.

How do you pull comps from the MLS?

[Leonard123]

Originally Posted by Boompa

Wouldn’t “overqualified” be some who can pay cash without borrowing.
This is all effect of COVID. A House is with the cost of the land it sits on plus the cost of building the house plus taxes.

What makes you say this is all Covid? If that were the case, then things would now have calmed down instead of heating up. If it's due to recovery, then we might expect this to happen as the backlog of buyers dries up. There are likely more than enough people waiting though to the point that it could not ease up unless people stop wanting to move at all.

In any event, we have no data to back up what's driving the demand or to what extent. People move for many different reasons. I don't quite get why supply does not equal demand because people have to be moving from somewhere, and I haven't seen evidence of an equally mass exodus.

I don't know about Frisco. It's possible people in some parts of the city will flee as they get fed up with the traffic patterns that make getting anywhere impossible. In general though, Texas does an abysmal job on its roads and highways. It's almost to the point of a third world country.

[tmtex]

Back to the title of this post, people are moving here even without jobs. I guess they think they will save money from living up north or CA.