North Texas Real Estate Blog

After five years of record sales for new and existing homes, the recent 2-percent drop in total home sales in the United States has not happened in forty years.

As of June 2007, the 29-county North Texas real estate region reported that sales have fallen again here.  Only 7,254 total homes have sold, down 6.5 percent from a year ago.  Beyond Southlake real estate, Colleyville real estate, Grapevine real estate and on into Tarrant County and Denton County real estate, the numbers are only slightly better than the entire North Texas real estate region. 

However, North Texas real estate is still faring better than some other parts of the nation.  For example, sales in the Northeast fell 8.8 percent.  Overall, the National Association of Realtors reported that sales of existing homes dropped to the lowest level in four years:  2.6 percent.  Median home prices also fell 0.9 percent over the last year to $220,900.

Additionally, there are a record total of 4.2 million existing homes on the market right now with 394,000 of those entering the fray in April alone.  Analysts expect this huge overstock to drive prices down for buyers.  Sellers will have to reduce prices in order to compete.

Why are there so many homes on the market today?  The complex picture can probably be reduced to a handful of factors.  One contributing factor is the large number of people who purchased homes only to sell them and make a gain during the boom.  Another sector of homeowners have not been able to make house payments because of sub-prime and option-ARM loans; some of these are actually going to foreclosure and banks are now selling their homes.  Finally, indignant sellers who paid more during the boom are having a hard time easily cutting prices to sell their homes.  Some of these homes have kept their values but the sellers will not be making a profit when they sell.    

Experts say that the course will right itself eventually.  As lenders are forced to use more conventional mortgage products, buyers are certain to have a better experience.  It could take another year, though, before the trend is turned around. 

Cautious optimization, a conservative approach, and more time to fix up little things that sellers will not overlook may be the prescription.  As the cost-of-living is rising, maybe it is all for our own good.