It’s been COLD in Collin County.
And I’m not talking about the weather.
I’m talking about the real estate market.
31% of the single family homes in Collin County failed to sell last month.
621 to be exact. Came off the market — no sale.
Not exactly the ‘hot’ real estate market we all hear about.
914 homes went under contract.
461 remained available as 926 new properties came on the market, and 621 homes came off the market without a buyer.
The real estate cold front is something new for Collin County, but it has not happened suddenly. The gradual slowing of the real estate wildfire of Collin County began in June of 2017 and continued into the third and fourth quarters.
At 621, December of 2017 was the
biggest month of failure over the last five years.
Previous years saw the following numbers:
- December 2016: 428
- December 2015: 381
- December 2014: 318
- December 2013: 343
We saw something like this almost ten years ago; the height of the previous real estate blizzard hit in December of 2009, when only 508 homes went under contract across Collin County.
Why did this shift happen?
The real estate market in Plano, Frisco, Allen, McKinney and Collin County has been in a strong growth pattern for eight years. We have seen multi-dimensional growth in terms of units sold, sale prices, price per square foot, and of course as a product of the previous factors, higher volumes sold.
The National Association of REALTORS® and most economists observe a supply of six months as a ‘balanced’ market.
Typically, markets with less than six months of inventory continue to experience growth in units closed and sale price appreciation up to a point of six months of inventory, at which point the scales of the balance tip toward a buyer’s market.
At the close of December 2017, housing supply in Collin County was at a level of 2.5 months and growing at a rate of 25%.
At that rate of growth, supply levels would reach six months in four to five years.
However, real estate expert and brokerage pioneer, Gary Keller is known for stating that ‘markets shift slowly, then suddenly.’
Another factor in the long-term view is the lifespan of the current ‘heat wave’ / growth cycle of the Collin County market. Real estate and economic markets typically move in cycles of seven to ten years.
The current boom began in 2010, so Collin County and the North Texas market is ripe for a correction.
However, five years into the seven year process, the region received a shot to the arm from the relocation of Toyota North America, which was followed by moves from Liberty Mutual and JP Morgan Chase.
Absent of these corporate moves, the cooling effect in North Texas would have most likely happened sooner.
McKinney was the coldest of all Collin County cities with higher days on market versus other cities in the County.
Other niches that suffered an imbalanced decline were homes without pools and homes with lot sizes smaller than 0.2 acres.
The details on the distribution of the failed home listings were:
- $250,000 or less: 40 Units
- $250,000-375,000: 200
- $375,000- 500,000: 203
- $500,000-750,000: 119
- $750,000-1,000,000: 35
- $1,000,000 or more: 34
- No Pool: 467
- With Pool: 155
- Plano: 33
- Frisco: 26
- Allen: 15
- McKinney: 50
- Prosper: 17
- Dallas (Collin County): 17
For relevant, daily market stats and information,
check out the Inman News Daily Report
So, what does this mean?
For buyers, it means there could be more opportunity to avoid stiff competition from other buyers, along with possibly more inventory of homes to choose from and possibly more negotiation room.
For sellers, it means there is a need to ‘winterize’ the home sale process by getting the advice of an experienced professional. Ask your REALTOR® the tough questions. Get comfortable being uncomfortable and base the approach on facts.
To get an outlook on the 2018 Texas economy,
click HERE to access a great report from
The Real Estate Center at Texas A&M
Ask your REALTOR® for honest opinions in the areas of Quality, Marketing, and Price. With the right advice, you can succeed at a very high level and enjoy a sunny day in the home sale process while others are frozen in their tracks.