This month we’re back with a recent interview with our friend Mark Wolfe. Mark is a native Dallasite and has been a player in the real estate industry for the last 48 years. Mark and his wife founded RE/MAX DFW Associates in 1982 and today, it is one of the largest brokerages in the country. During our interview we discuss the state of Dallas real estate and Mark answers the question we’ve all been wondering: is the market going to crash?
Q: Can you give a brief overview of the role of a broker?
Mark: A broker is not only the owner of a real estate company but is also someone who mentors and guides the agents that work for the brokerage. In my brokerage, I currently have 320 agents and I am liable for these agents as well. A broker owner carries a lot of responsibility, but I love watching my agents grow and mature and find success in the real estate business.
Q: How would you describe the current state of the market?
Mark: The current market varies across the country but overall is somewhat stagnant. With all that has happened with interest rates rising, many people are not wanting to move because they currently have low interest rates on their home. However, we are still in a healthy market and still seeing slight home price increases. The Dallas market is also leading the country with new home permits in the area.
Q: Has 2023 gone the way you thought it would?
Mark: For the first half of the year, I’d say yes. Recently however, a lot of factors have caused a significant (but temporary) slow down that I wasn’t expecting to see in July and August. However, heat does affect the market. With as hot as it’s been, people do not want to go looking for homes. The states that are leading in the market right now are the northern midwest states where the weather is much cooler than what the rest of the country is experiencing.
Q: Are we heading toward a market crash?
Mark: No. The American economy is still doing pretty good. The real estate market is as strong as it has ever been and I don’t see a crash happening.
Q: Will interest rates fall?
Mark: I do believe we will see interest rates fall below what they are now. 82% of homeowners have an interest rate of below four percent. 68% of homeowners are below three percent. We’ve never had that before. Fanny Mae’s prediction is that interest rates will be around 6.3% by the end of this year and 5.6% by the end of next year. If we get down to 5.6% the market is going to really take off and people will be wanting to sell their homes.
Q: Are we due for a recession? How would that affect the Dallas housing market?
Mark: I have real doubts that we will have a recession now. We are more stagnant than when going through a recession. Even if we do go through a recession, Dallas will fare well because of how Dallas has diversified in all sectors and because people’s mortgages are low and generally have record levels of equity in their homes. In past recessions when foreclosures became extremely common, it was because people did not have equity in their homes. Even if we had a drop in home values, we would still not see the same foreclosure rate because of the equity people have in their homes.
Q: How will the recent changes in local laws regarding short term rentals impact real estate?
Mark: Each town has addressed this issue differently. The city of Dallas just passed laws banning all short term rentals in residential single family neighborhoods. However, you can have short term rentals in multi-family or commercial neighborhoods. It’s reported that Dallas has about 1,800 short term rentals in the city, however, air bnb shows 6,000 short term rentals in Dallas.
The short term impact for the real estate market is that there could be more homes coming on the market, because these current short term rentals may not want to move to a long term rental. If these short term rentals become primary residences, this could also increase the value of the homes in the neighborhood.
Q: What do buyers operating in today's market need to know?
Mark: Home prices are getting ready to increase again. So, buy now and refinance in a year or more if rates have dropped enough. Get the home value where it is now before the home keeps appreciating. And if the rates continue to go up, then you’ve locked in a good rate.
Q: What do Sellers operating in today's market need to know?
Mark: Unless you need to move, stay.
Q: Any last thoughts?
Mark: It’s going to be an interesting few years. Real estate can become very political during election years, so it’ll be interesting to see what happens. But even still, we will continue to sell homes and help families find homes to meet their needs.
You can listen to the complete interview with Mark in the podcast linked above. For more real estate news, economic predictions, and local housing market updates, subscribe to our bi-monthly email list at dallashaven.com/insiders. We love keeping you up to date!
Until next time,
Brianna and Keelie