Hello! How are you? Happy spring 🍀🌸🌧☀️. It’s already April 2022, so we all know it’s time for another Lochwood Market Update!
Below you’ll find a year-over-year snapshot of the Lochwood housing market, along with a summary of the home sales that closed in March. Ten of the twelve sales that closed last month sold for 100 percent or more of the seller’s original asking price. The median number of days that a home was on the market before going under contract dropped from 14 days in March 2021, to only 7 days. The number of homes listed for sale was about the same, year-over-year. Much like other neighborhoods around Dallas/Fort Worth, prices were up considerably.
Looking ahead, I believe that April will be another strong month for the neighborhood. Overall, we will probably have about 10 home sales close, with an average of 10 days on market. STRONG! 💪
Housing Bubble Concerns
One thing that I keep hearing from my clients and neighbors is concern about a housing bubble. Wouldn’t it be wonderful if the people who reported on the housing market were actually experts and not just regurgitating what they read in a press release without any actual data to support the opinion? Let’s take a closer look…
In order to have a housing bubble, the market has to have the ability to do three things:
1) Lose value because of too much speculative inventory. Housing supply, whether it’s existing resale homes or new construction, is extremely limited.
2) Easy financing. In 2008, when the housing market crashed, mortgage standards were at an all-time low for credit scores and down payment requirements, as well as proving income and assets to purchase the home. Current mortgage guidelines are already pretty strict and will get even more strict, making sure that borrowers are financially secure and able to repay their loan.
3) Negative equity. Because there is limited supply, homes actually have equity. In 2008, homeowners were basically using their homes as ATMs and pulling all the equity out, causing them to be upside down. This time around, equity levels are extremely high, which means that an owner could see a slight decline in value without concern. That being said, the potential loss of value in our area is extremely low due to the lack of inventory and high demand for housing from our growing population and job creation.
Rising interest rates will cause some buyers to pause and rethink buying a home. The immediate impact will likely be that homes are on the market for two or three weeks before going under contract. However, as buyers realize values are not going down because of……you guessed it….lack of inventory….they will adjust accordingly and come back to the market.
That’s all I have for today. I hope you find this information helpful. Call me if you want a second opinion of your value assessment from the Appraisal District and be well!
I will be in touch soon!