Your McKinney Buyer/Seller Guide - High-interest rates, buyer discounts and some sellers still winning!
Everything has changed in real estate over the past 3 months. So how have the rising interest rates affected McKinney, Texas?
The GREEN LINE is the number of sales in each price range. Most sales are happening at the 400k to 600k range. That makes sense, as the majority of 'move-in ready' 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. The homes in the 400-600k price range had to wait around 35 days to find buyers.
Let's break down what's happening in McKinney price ranges.
The 20 or so sales took over 45 days to sell (on average). This is more about the condition of the 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. Plenty of buyer demand here from investors and regular folks alike. It's a Buyer's price range. Sellers often get greedy and ask for 10-20k MORE than they should when choosing their list price. After all, most listing agents are showing them sold comparables from over 6 months ago (when overhyped values from low-interest rates were still in effect).
@ Sellers - When you price unrealistically, buyers know this... And by the time you reduce to a fair price, it's too late. Buyers very rarely pay your list price when they see the weakness of your 20+ days on market.
60 sales as the previous price range that sold in around 32 days. This is where the cheapest move-in ready homes can be found in the marketplace and the hottest price range (just barely). Higher interest rates have caused this to be as good as it gets for sellers since this price range has the highest number of buyers actively shopping for a home. If selling for more than 400k, you will have to hire an amazing real estate guide to avoid losing money. : ) It's an "Almost Healthy" price range that leans toward being a buyer's market.
Almost 150 homes sold in around 36 days on market (average). Do you want to know what happens to homes after 2 weeks on the market? They realize that they have to 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 your interest rate? 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.
About 110 homes sold in around 34 days on market (on average). Buyers have leverage, but not on all homes. The nicest homes for sale in this market are still being sold within a week or so of them hitting the market as they know their value and are willing to wait for a full-price offer. The homes that need upgrades and updating to make them move-in ready are pushing the days on market past the 30 day mark. It's a Buyer's Market on the homes NOT in the top 5% of listings (based on bountiful amenities). Maybe an easier way to say that is that 95% of the homes for sale will have to be discounted/reduced in price to find a willing buyer.
Almost 110 homes sold in about 38 days on market. Just like the $500-600k price range, the prettiest, most amenity-rich homes are still selling relatively quickly, at honest prices. And there are plenty of homes selling at a discount due to needing updates and renovations. These are the diamonds in the rough that will prove to be the biggest wins in the McKinney market. Buyers Win this price range.
@ Buyers - Did you know banks will include upgrades and renovations into your home purchase loan? Use the market discount to your advantage and use these dollars to get upgrades you usually only find in new homes. We help you find, design and transform these properties so they fit HOW you do life. It's worth a conversation! Schedule a quick call with me to get the know-how on the least expensive way to live in a custom home.
Almost 40 homes sold in around 32 days. On paper, this is considered almost healthy. The average home in this price range was built in 2009 and around 3,500 square feet. In reviewing these homes inside & out, most of them were beautiful. This is why the days on market average is so low. While all of them sold at a discount, the truly amazing homes sold in as little as a week. The best homes will always be mostly immune from large swings in value due to high-interest rates and crazy markets. In a red-hot market (earlier this year), they sold for list price plus 5-15%... So at least buyers NOW have a chance to own these dream homes for an honest price. It's a BUYER'S Market on these large, estate homes.
Advice for Sellers:
All of this is temporary. Right now there are more homes for sale than there are buyers. If you are a seller above 400k, count on selling at a 5% discount or more unless you have a truly exemplary home. 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 (by little or a lot). 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. This is the 400k to 700k 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 discounts, interest rate reductions, upgrades and much more than they would otherwise. 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 McKinney, 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 McKinney home values. Published in August, it shows the roller coaster that each of these price ranges have been through.