Everything has changed in real estate over the past 3 months. So how have the rising interest rates affected the buying and selling of homes in Frisco, Texas?
The GREEN LINE is the number of sales in each price range. Most sales are happening in the 400k to 600k range. That makes sense, as the majority of homes are in that price range. But let's go one step further... How long did it take for those sellers to find buyers?
The BLUE LINE is the Cumulative Days On Market, or CDOM. It's great to see that all these homes were sold, but that doesn't tell how long it took for these sales to happen. In a healthy market, the CDOM needs to be in the 15-30 day range. In the 400-600k price range (the busiest), it took an average of 38 days to find a buyer. Oh my.
Let's break down what's happening in Frisco price ranges.
The 20 or so sales took about 41 days to sell (on average). What's driving this is more about the condition of these properties than the number of buyers willing to purchase in this price range. The majority of these homes were NOT MOVE-IN READY and overpriced. So negotiations have to happen in order to find the right price/true value for each of these homes. Buyers are choosing to either wait until pricing becomes more realistic OR purchase in other cities where the "hype value" from the past years of low-interest rates is much lower. Buyer's Win this price range. The real winners will be the rental investors who will get a nice discount on these income-producing properties that need renovations/repairs, so they can reap the rewards of the high rental rates in Frisco for years to come.
About 90 homes sold in around 39 days on market (average). After a new listing has been on the market for 30 days, sellers realize that they will have to drastically drop their price to attract a buyer. That is what is happening here. Buyers have the leverage and sellers are willing to sweeten the deal in many ways beyond a discount. Did you know that sellers are allowed to pay money towards reducing the interest rate on your mortgage? This and MORE are on the table for negotiation to get you to buy their home. I would love to talk with you more about how to make these negotiations work for you. This price range? It's a BUYER'S Market, but wait another 3-4 weeks for more discounts. The desperate sellers who have decided to keep their homes on the market for December will set NEW LOWS as they further reduce their list prices to find buyers.
Almost 100 homes sold in about 37 days on market. These buyers took advantage of the opportunity to own a home in Frisco without having to overpay/compete with other buyers. This is the healthiest price range due to all of the OVER $600k homes that reduced their prices to find buyers in the $500-600k range. For instance, homes (with lovely amenities) that sold for $630,000 several months ago are now only $590,000. It's refreshing to be a buyer now in Frisco, wielding your buying power to not only be able to purchase a home BUT actually get a good deal! The past seller's market has shaped how we currently see these discounts. It's a Super Buyer's Market in one of the most sought-after cities in DFW!
About 164 homes sold, but it took them almost 40 days to find buyers (on average). The only homes sold WITHOUT HUGE DISCOUNTS in this price range are the beautiful properties that win the beauty contest among available homes on the market. Truly amazing homes are mostly immune from high-interest rates and crazy markets, because they are RARE. In a red-hot market, they sell for list price plus 5-15% so at least buyers now have a chance to own these dream homes for an honest price. For the REST of the homes out there, it's a battle to capture a buyer. It's a SUPER BUYER'S Market.
Advice for Sellers:
All of this is temporary. Right now there are more homes for sale than there are buyers, but the balance isn't so bad that it would cause anything to tip over. If you are a seller above 600k, count on selling at a 5-10% discount or more unless you have a truly exemplary home to sell. It only takes three buyers to establish real estate values in a neighborhood. So look around at the homes being sold around you. These are your greatest indicators as to whether your values will stay steady or lose value incrementally. The problem is that most sellers are in scramble mode to find a buyer, so they betray others' homes values to quickly cash out. If you must sell, let's talk about options to convert the home to a rental until interest rates lower. There is a wise decision to be made here, so let's review all of your options to avoid having regrets. IF you have to sell, there are some hidden strategies for attracting buyers to your home that most other sellers (or their agents) have no clue about (hint: it's what attracts people to buy a new home).
Advice for Buyers:
Temporarily, you have the leverage. It may not last quite as long as most reporters of "doom and gloom" are reporting (about a recession in 2023). While I may not know the immediate economic future, I do know that the Texas economy and our real estate values are surprisingly strong in the middle of the market, where most buyers/sellers meet to do business. For Frisco, this is the 400k to 600k range. For the moment, the number of buyers in the market has reduced so much that there are too many homes available. This means that buyers are getting steep discounts, interest rate reductions, upgrades and much more than they would otherwise. At higher price ranges, it's a good idea to wait another 3-4 weeks for pricing to recede further before buying. As your real estate guide, I would love to answer your toughest questions about how to proceed and give you a customized, step-by-step plan to finally have the home of your dreams.
In as little as 15 minutes, you can get answers to your real questions...
Thank you for taking the time to read through this real estate guide for homes in the city of Frisco, Texas. Use this info to get a general idea of what's going on over the past 90 days, and reach out to me at timothy@timothyhenley to start talking specifics related to you buying or selling a home. Great info is more valuable than gold or silver, and will free you up to see the next steps towards living your new life. Whatever that looks like!
Your Real Estate Guide for Life,
PS... Here is a link to my PREVIOUS report on Frisco home values. Published in August, it shows the roller coaster that each of these price ranges have been through.