Today we have the honor of picking the brain of our broker, Mark Wolfe, a native Dallas-ite and a player in the real estate industry for 47 years! He and his wife founded Remax DFW Associates in 1983 and today, Remax DFW Associates has five offices with over 300 agents in the Dallas area and is the 10th largest Remax company in the United States. He has received honors including: Remax International Broker, Owner of the Year, and the Remax of Texas Broker Owner of the Year. Mark is our go to resource for news on what may be changing in real estate, both for agents and consumers. We are so grateful every day for the value he brings. We can think of no one better to interview about today's market, where we're headed and what that means for buyers and sellers today. So buckle up, because today will be jam packed with great information!
Brokers in Texas Differ from Other States
Texas is unique in the liability brokers carry, they are liable for negligent or other inappropriate activities of their agents. That means everything an agent says or does, even if it’s a simple comment made at a party, it impacts the broker in some way or another! Wolfe feels as though it is his responsibility to nurture and encourage agents as well as build a system to support their success. In Wolfe’s words, “I see no other role in my operation than to be there for my agents.”
Today’s Real Estate Market vs the Past
There is no comparison to the past. Texas is used to seeing an annual appreciation rate of about 3-4% every year and the Dallas Fort Worth market has always been a growth market. This market that we're in today is a nationwide phenomena and we've ever had a nationwide market like this where home prices are going up everywhere. There’s been talk about being in a real estate bubble, but Wolfe has an entirely different opinion about that. Most buyers are putting down a tremendous amount of money and we've never seen that in the Dallas market before. To put that in perspective, 30% of our home sales last month were cash and even if people are opting for a mortgage they’re still putting down 20% or more, greater than the appraisal value. That’s a huge investment and people didn’t have that kind of equity in their homes in past recessions.
Pros and Cons of the Current Housing Market
As we all know, this is a great market for sellers! Our market in May was up 26% over May a year ago and that's unprecedented as well as unsustainable; regardless it’s phenomenal for sellers. The downside is that although people are getting more from their homes than ever, Texas leans heavily on property taxes vs income tax. We’ve always prided ourselves on being one of seven states without income tax, but in their market we’re going to see a sizable increase in property sales. It is a market where the millennials are having a very hard time, despite an increased desire to own a home. Now backyards are valued more than walkability! Due to Covid more people are working from home and are seeing tremendous value in being a part of a close neighborhood community.
The Texas Housing Boom
Wolfe is doubtful Texas will see the 3-4% annual appreciation rate of years past, instead something closer to 7-9%. Word around town is Dallas Fort Worth is the new Southern California, as the boom they experienced years prior is being transferred to Texas. Current stats show that ⅕ home buyers now are either from California, New York, or Chicago. People are willing to trade the high costs and proximity to things for a better home environment, friendlier neighborhoods, and factors that have become more important since Covid. The value for what you get here in Texas is dramatically different from those states and cities, so they’re shocked at what they can get for a million dollars here vs there. It’s easy to see where price increases are coming from in that regard, according to Wolfe.
Don’t Bank On Housing Prices Going Down or More Inventory
Some buyers are holding out for more inventory to come on the market or for prices to drop, however according to Wolfe the waiting game will not pay off as prices will at best become stagnant and stop rising. In regards to Texas specifically, the housing market continues to accelerate and that is seen even out in the boonies as developers are putting up thousands of homes. We continue seeing an increase of homes come on the market, but they’re selling so fast! The limited inventory is unprecedented in Dallas and it’s unlikely to change in the short term.
Recommendations for Home Buyers in the Current Market
There’s a lot of panic buying happening, this is evident in a recent report that says the majority of millennials are unhappy with the home they purchased. In fact, the majority of buyers didn’t even physically look at the home before making an offer and only checked it out during the option period. In conjunction with that a lot of paperwork nowadays is being done over DocuSign and buyers aren’t reading what they’re signing. This leaves them and their money vulnerable as some people are getting taken advantage of and losing out on what they’re putting down. He strongly recommends getting a hard copy of every contract and going through it line by line with your agent, so when it comes time to sign you’ll know what it is exactly you’re signing. This is all to say, Wolfe strongly recommends home buyers SLOW DOWN. Take an extra pause and love what you buy.
Big Thanks to Mark Wolfe
What an absolute pleasure it was to spend time talking with Mark Wolfe! He is incredibly knowledgeable and we hope you enjoyed learning from a seasoned real estate veteran today! Hopefully this gave you some food for thought on how to navigate this unprecedented market. You can continue the conversation over in our Facebook group or head over to WhereWeLivePodcast.com to connect with us. For more real estate news, economic predictions, and local housing market stats, subscribe to our twice monthly email list at DallasHaven.com.
Until next time,
Brianna and Keelie