2023 HOME EDITION
NEGOTIATING THE ASKING PRICE Local real estate experts said asking prices in 2021 and 2022 were either met at full price or exceeded, but sellers are starting to accept o ers lower than their asking price.
is not yet balanced. Listings on the market and the average number of days to close keep growing, but local markets are still favoring sellers, keeping prices up, they said. According to the Texas A&M Real Estate Research Center, six to 6 1/2 months of inventory in a market is considered a balanced market. San Marcos, Buda, Kyle and Hays County are hovering around three to four months of inventory as of May. Ryan said she believes the median price is still up because there is enough pent-up demand in the area, and sellers are trying di erent meth- ods of negotiating prices rather than starting at a lower asking price. One trend that might illustrate this best is the ratio of the closing price to the original price, Ryan said. Two years ago, data from the Realty asso- ciation showed sellers in each market receiving more than the original ask- ing price. Now that ratio is down to 93%-94% in each market, indicating concessions are being made. “You’ll see people talking a little bit with us in terms of paying for some of the buyers’ closing costs or buying down their interest rate, maybe even for just a couple of years because they think [interest rates] are going to go back down again, or they do a permanent buy-down so the sell- ers [are in a] more competitive price range,” Ryan said. Creating alternatives Sellers and homebuilders are try- ing various methods of getting peo- ple in homes, including concessions, Kerr said. Seller concessions involve the seller giving the buyer money to use toward fees—or closing costs on a real estate transaction—and that can be part of the negotiation upfront
2018
2019
2020
2021
2022
2023
97.5%
96.6%
98.4%
101.3%
101.2%
93.3%
San Marcos Buda Kyle
96.6%
97%
97.8%
104.7%
98%
93.8%
97.7%
98.6%
99.1%
104.6%
98.8%
94.4%
SOURCE: FOUR RIVERS ASSOCIATION OF REALTORS COMMUNITY IMPACT
WHO IS BUYING HOMES?
on the contract and used in di erent ways to bring down monthly pay- ments, he said. One way to do this is through the seller buying down closing costs if the buyer needs to hang onto some cash because there is agreed-upon remod- eling work needed on the property, he said. Another is through permanent or temporary buy-down of the inter- est rate by the seller. “Utilizing that money to buy down the rate saves you long term because your payments lower, obviously. And that’s the pinch point for people is the higher monthly payment,” Kerr said. But even with wiggle room on that front, many potential buyers are still priced out of the market, said Linda Jalu a, a Realtor with the Damron Group in San Marcos. “Even though there’s people moving in in droves, a whole lot of them can- not a ord a mortgage,” Jalu a said. Homebuilders have the ability to work with their lenders, a title com- pany, and insurance and construction companies to subsidize prices. “And the resales cannot compete and have di culties competing with that,” Jalu a said. “We’re seeing build- ers o ering 4.9%-4.5% in the market, which is a good 2% to 3% lower than what they would qualify for without those subsidies. That changes your
Through the end of 2022, baby boomers were still the largest segment of the population buying homes. The following information comes from a 2022 Texas Realtors market report.
First-time homebuyers (8 percentage points down from last year)
Purchased detached single-family homes
24%
88%
Purchased a home for a multigenerational family; top reasons were aging parents or children over 18 moving back
Purchased a newly constructed property
15%
13%
56 YEARS OLD
was the median age of Texas homebuyers in 2022.
Expect to own the home for at least 10 years
54%
SOURCE: TEXAS REALTORS COMMUNITY IMPACT
pricing in that section of the market.” Another area is an increase in sin- gle-family homes that are either con- verted to rental properties or built out to be entire rental subdivisions, real estate experts said. Chittenden said there is a trend of large private equity companies buying single-family homes to turn around and rent them. In 2022, a report from the National Association of Realtors revealed 28% of homes purchased in Texas the pre- vious year were from institutional investors, the highest in the nation. “The percentage of homes that
were sold that were bought by these private equity rms over the last cou- ple of years was surprisingly high,” Chittenden said. “I think for some folks, particularly over the last couple of years, that’s added to the pressure of them being kind of pushed out of the market. That [pressure has] com- bined with higher interest rates and these private equity rms buying up those properties.”
For more information, visit communityimpact.com .
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SAN MARCOS BUDA KYLE EDITION • JULY 2023
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