The DFW housing market is NOT sustainable (Houston, Dallas: real estate market, to rent)

[Leonard123]

Originally Posted by Cicnod

No it didn't.

A list price is purely arbitrary. If I price a $1,000,000 house for $1 and it sells for $1,000,000 then the headline is "house sold for $1,000,000 over asking".

The reality is a house is worth what a party or multiple parties are willing to pay. People are offering $100,000 over asking because they don't want to have to offer $100,000 over asking a year from now after the property has gone up another $100,000. If every party but 1 was offering list and only list and 1 other person offered $100,000 over asking then you could say common sense seemed to have left that one party but in this instance multiple parties are valuing properties over the arbitrary list price.

So a house listed at $900,000 with offers from multiple parties offering a range of $50,000 to $100,000 over asking is common sense. It purely means the house was worth $1,000,000 and not some arbitrary list price of $900,000.

I have to laugh at people saying this isn't sustainable. CA has a median income of $80,000 or so and look at the property values across the spectrum there. People argued that wasn't sustainable 10 years ago. They were wrong. They are also wrong here. We have a long way to go before this isn't sustainable.

Their loss of common sense has gone far beyond money and housing. It's more an issue that people with common sense don't panic shop. They wouldn't buy under the current conditions regardless of the money. They don't buy sight unseen on a whim. We would have never gotten into this spiral in the first place had people not had a lack of common sense caused entirely by the pandemic.

Regardless, normal people aren't buying houses anywhere near $900K-$1M. It's an extremely tiny segment of the population.

Incomes have not gone up that much, neither wage jobs nor higher paid salaried positions.

[crazyforger]

Originally Posted by Cicnod

No it didn't.

A list price is purely arbitrary. If I price a $1,000,000 house for $1 and it sells for $1,000,000 then the headline is "house sold for $1,000,000 over asking".

The reality is a house is worth what a party or multiple parties are willing to pay. People are offering $100,000 over asking because they don't want to have to offer $100,000 over asking a year from now after the property has gone up another $100,000. If every party but 1 was offering list and only list and 1 other person offered $100,000 over asking then you could say common sense seemed to have left that one party but in this instance multiple parties are valuing properties over the arbitrary list price.

So a house listed at $900,000 with offers from multiple parties offering a range of $50,000 to $100,000 over asking is common sense. It purely means the house was worth $1,000,000 and not some arbitrary list price of $900,000.

I have to laugh at people saying this isn't sustainable. CA has a median income of $80,000 or so and look at the property values across the spectrum there. People argued that wasn't sustainable 10 years ago. They were wrong. They are also wrong here. We have a long way to go before this isn't sustainable.

California is over regulated.
Texas has lot of land available to be built out AND permissions are much easier.
Big difference.

[hereticiam]

Originally Posted by Leonard123

Their loss of common sense has gone far beyond money and housing. It's more an issue that people with common sense don't panic shop. They wouldn't buy under the current conditions regardless of the money. They don't buy sight unseen on a whim. We would have never gotten into this spiral in the first place had people not had a lack of common sense caused entirely by the pandemic.

Regardless, normal people aren't buying houses anywhere near $900K-$1M. It's an extremely tiny segment of the population.

Incomes have not gone up that much, neither wage jobs nor higher-paid salaried positions.

Even the tiny segment that can afford $900K to $1 Million dollar homes cannot get the home they desire in this market. I have a friend who made 10 offers to buy a home in DFW. They offered well above the asking price but did not waive the inspection contingency. They did waive the appraisal contingency. They lost all 10 times. So they ended up purchasing a home in North Atlanta. Even there they had to offer $60K above the asking price and waive all contingencies but they got the home.

We just bid on 1 home and offered $1.15 Million and it sold for $1.42 Million. My previous home was purchased in 2006 so that experience has affected us. No one can predict when the housing market will slow down. Most predictions do say that this price increase is not sustainable. No one is predicting a crash like 2008 but slow will happen. So we will wait it out and hope for the best.

[DFW_FTW]

Originally Posted by Leonard123

I find those numbers kind of hard to believe. Beyond just McKinney, I don't know of any house that sat on the market 14 days or more. For McKinney, maybe it's skewed by inventory from home builders, and maybe it's a very recent change and those numbers looked differently in January. I've actually seen prices pick up just recently. I can't vouch for accuracy, but Redfin actually shows Stonebridge Ranch only went up in price 24 percent, so I think the new construction skews it. According to Zillow, my house is up about 25 percent, but who knows. There hasn't been much on the market lately. As long as I've lived here, I don't think I've ever seen so few houses go up for sale.

Originally Posted by DFW_FTW

Look at the facts and separate your opinions.


You know what they say about opinions.

Originally listed in Stonebridge Ranch for $405,000 - April 2021

https://www.redfin.com/TX/McKinney/7.../home/31779464

Open door offer in less than 12 months for $533,300

https://www.realtor.com/realestatean...1_M70542-35922


Price increase of 31% in less than 12 months. Completely in line with Redfin 33% increase.

Look at the facts. Leave your opinions out of this.

Here is more facts for you on a house in Stonebridge Ranch / McKinney.

OpenDoor has increased their offer to buy this house by $16,700 (3%) in 1 week since I posted the original link. New price: $550,000 / 1 Week old price: $533,300.

https://www.realtor.com/realestatean...1_M70542-35922

[Leonard123]

Originally Posted by DFW_FTW

Here is more facts for you on a house in Stonebridge Ranch / McKinney.

OpenDoor has increased their offer to buy this house by $16,700 (3%) in 1 week since I posted the original link. New price: $550,000 / 1 Week old price: $533,300.

https://www.realtor.com/realestatean...1_M70542-35922

Opendoor just decreased its offer for my house this week. Recent comps from my agent show two sales BELOW list price and two about 10 percent above.

You are linking to a much newer section of Stonebridge. I'm referring to the original sections. The price gap between newer and older is way, way, way too high, and that's true all over.

[Jtxg]

Originally Posted by SyZ

Looking at median household income for DFW residents only completely fails to account for the hordes of people moving here from out of state with out of state money

People seem to also forget many people sold their existing house and cashed out a lot of equity tax-free, and are putting that equity into the more expensive house they are buying. Can someone who makes $70k afford a $400k house? If they have $200k equity from their previous house they can.

[Cicnod]

Originally Posted by crazyforger

California is over regulated.
Texas has lot of land available to be built out AND permissions are much easier.
Big difference.

Sure which is why the $900,000 house here is only $900,000 and not $3,000,000.

[DFW_FTW]

Originally Posted by Leonard123

The price gap between newer and older is way, way, way too high, and that's true all over.

This is your opinion. Facts are buyers prefer newer and will pay for it.

[Leonard123]

Originally Posted by DFW_FTW

This is your opinion. Facts are buyers prefer newer and will pay for it.

That's true, but it's grown larger as a percentage than it has been historically. This essentially makes a home a depreciating asset if you live in it long enough. Whether this pattern continues remains to be seen.

[DFWGuy422]

Originally Posted by Leonard123

This essentially makes a home a depreciating asset if you live in it long enough.

That's an extreme stretch