Despite continuing record low interest rates, the DFW market is rumbling with news of a market slow down. Is it true? What are the factors at play? Things like "buyer fatigue" setting in, after a
GOOD NEWS from DFW - August 2021
Dated: September 3 2021
The DFW metroplex is buzzing with activity every month. I collect news from all corners of our part of Texas that make it easy for you to stay informed on our market, brighten your day, and joyfully take in this great place we call home.
Make it a great day!
SCOTUS OVERTURNS EVICTION MORATORIUM
America's small housing providers have gained a much needed relief from the CDC's eviction moratorium which has made them face financial hardships for more than a year.
In a 6-3 ruling, the U.S. Supreme Court justices wrote, "The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means."
Instead, nearly $50 billion of aid is now available to cover up to a year and a half of combined back and future rent and utilities for tenants struggling to make ends meet. Each state has now launched a program to distribute those funds.
NAR commented on the ruling, saying "No housing provider wants to evict a tenant—it is always a last resort and reserved for the rarest cases. The best solution for all parties is rental assistance, and all energy should go toward its swift distribution."
NEW HOME CONSTRUCTION CHALLENGES SHIFT
It is no surprise to hear of material shortages and skyrocketing prices thereof, as it pertains to any projects in the construction business, but especially in new home construction. Earlier in the year, builders were hit with as high as 33% material cost increases, as well as shortages, causing them to halt contracting on new build-to-suit homes, inserting escalation clauses into their contracts, and orchestrating bidding wars on inventory homes.
It seems that lumber prices are normalizing and we are hearing less of material shortages; however, home builds remain untouched for weeks while buyers do drive-by's, dreaming of when they can move into their brand new homes. Closing dates continue to push out, and buyers are left having to figure out where to live in the meantime. Building challenges have shifted to the shortage of labor.
“We have what we call the ‘silver tsunami,’ which is the quantity of people retiring out of the industry, and they’re not being replaced — and that was even pre-COVID. So we can lose a lot of the industry if we don’t start encouraging people to go into the trade,” said Maurice Rahming, owner of O'Neil Construction Group.
In part, the shortage is due to the shift in focus from vocational programs to traditional colleges. The shortage impact has put a premium on quality workers. Workers are being "stolen" from one job site to the next with promises of higher pay, because in the end there is still only 24 hours in the day to do the work, so "it is what it is."
Until a shift can be made to attract more willing and able young people into the trade, builders are having to get creative with the outlined project's order of business. It may not make sense to install interior materials before the exterior is done, but if the tile is on hand and the brick workers are not, supervisors are shifting gears to keep their workers humming and the build timeline somewhat within reason. Next time you feel like your home build is all out of sorts, consider talking to a teenager about a career in construction - there is so much more to it than just back-breaking work.
MARKET COOL-DOWN FACT OR FICTION?
While we saw a nice boost to both new and existing home sales in July nationwide, the local market felt a slight cooldown this month. Many factors are at play here. Traditionally, August sees back-to-school preparations, last-minute vacations and a shift in routines. Add to that buyer fatigue from the constant bidding wars and a slight acceleration in inventory, and things may look like they are looking up.
But make no mistake, a bidding war among 50 buyers versus 12 may seem better like odds, but in the end, still only one can get the house. With continued low interest rates to support it, demand is still outweighing the supply, but supply in the form of inventory new homes, rental homes for sale and homeowners right-sizing, is seeing an optimistic up-tick.
Home prices however are still holding strong at the increased values, now supported with summer comps. Stay tuned for the August numbers in about a week!
If you're looking to sell, buy or invest in real estate,
I'm just a phone call away!
REALTOR®, GRI, Certified New Construction Specialist
Fathom Realty, LLC
When you need a guide on your real estate journey, Sherien Joyner is the right choice for you. With over sixteen years of experience as an executive in the advertising and marketing industry, Sherien ....