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June Newsletter

Summer is here! The summer equinox has occurred. June 21st was the longest day of the year, well it was still 24 hours, but it is the day with the most sunlight. This day was also special to us personally as we had a son marry his bride on this special day! The wedding was beautiful and they were able to capture some beautiful sunset pics. We appreciate our clients who were accommodating, understanding and sent us well wishes while we were out of the office a few days for the wedding.

So what is going on in our markets? Buyers are gaining a little more leverage in North Texas. Home prices are still rising but at a slower pace. We have been reporting this for the past few months. What is becoming apparent is that homes are staying on the market longer and the supply is increasing. Mortgage rates continue to decline. Check out the stats and interactive charts we have in the monthly market updates below.

Freddie Mac Mortgage Rates
Current Mortgage Rates Per Freddie Mac http://www.freddiemac.com/pmms/

We also wanted to share some exciting things going on in our area.

Monthly Market Updates

Median Sales Prices

MAY 2019
 

Denton County
$313,050 | +3.3%

Collin County
$335,000 | +3.1%

Dallas County
$241,500 | +2.8%

Tarrant County
$235,000 | +5.1%
The price appreciation has increased between 2.8% and 5.1% for all four counties.  

Median Price Per Square Foot

MAY 2019
 

Denton County
$138 | +3.0%

Collin County
$137 | +2.2%

Dallas County
$134 | +3.9%

Tarrant County
$121 | +6.1%
The price per square foot data is similar to the median sales price showing slight price appreciation in all four counties. 

Months Supply of Inventory

MAY 2019
 

Denton County
3.1 | +29.2%

Collin County
3.5 | +25.0%

Dallas County
3.0 | +25.0%

Tarrant County
2.3 | +15.0% 
As homes stay on the market longer, buyers gain a little more leverage in their ability to obtain more affordable housing. 

Median Days on Market

MAY 2019
 

Denton County
26 | +44.4%

Collin County
30 | +50.0%

Dallas County
19 | +35.7%

Tarrant County
16 | +23.1%
The number of days on the market has increased by double digits in all four counties. 

Volume

MAY 2019
 

Denton County
1,616 | +2.6%

Collin County
1,804 | +2.8%

Dallas County
2,600 | +3.4%

Tarrant County
2,792 | +1.6%
The number of sales has only increased nominally when compared to last year. 
 
 

Great Cycle Challenge

Great Cycle Challenge

Last month we shared that we are participating in the Great Cycle Challenge. We are finishing up this month but there is still time to be a part. We were honored to be featured on the Great Cycle Challenge page. The Great Cycle Challenge has 80,270 riders this year and so far we have raised $7,741,337 to go to cancer research. If you would like to help this worthy cause see below:

I want to learn about the Great Cycle Challenge

We wish you a great start of your summer and look forwarding to reporting back to you in July. If you are in need of a residential or commercial appraisal service please contact us at www.dwslaterco.com

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May Newsletter- from Sports Car to Tractor

As we are now at the end of May, school is out and we are entering into summer. We hope that you had a meaningful and enjoyable Memorial Day weekend. The DFW markets are hot but flat. The spring and summer seasons are typically the hottest selling seasons compared to fall and winter. 2019 is no exception, however when comparing year over year numbers the markets are definitely slowing down. Prices were appreciating at sports car speed and now they are moving at “tractor pace”. When you live in the more rural parts of North Texas sometimes you get behind a tractor. You can’t pass and you wonder if you are moving at all. You can see the slowing pace of the YoY change in the median sales price for the month of April below.

Mortgage rates peaked in November and have been on the decline which has increased the number of refinances. Even with the lower rates, affordability becomes an issue as many buyers are becoming priced out of the market. Homes are staying on the market longer. The seller’s market is weakening and buyers are beginning to gain more leverage.

Freddie Mac Chart

Median Sales Price

APRIL 2019
Denton County
$315,000 | +0.6%

Collin County
$339,000 | +3.4%

Dallas County
$250,000 | +2.8%

Tarrant County
$240,000 | +2.1%
The median sales prices are just up slightly YoY- hence the “tractor pace”. 
 

Median Price Per Square Foot

APRIL 2019
 

Denton County
$140 | +1.4%

Collin County
$139 | +0.7%

Dallas County
$140 | +5.3%

Tarrant County
$124 | +4.2%
The price per square feet metrics are also showing nominal increases YoY. 

Days on Market

 
 
APRIL 2019
 

Denton County
51 | +18.6%

Collin County
59 | +25.5%

Dallas County
42 | +31.3%

Tarrant County
38 | +15.2%
The average number of days on the market has increased YoY, forcing sellers to lower their prices in order to sell. 

Months Supply of Inventory

APRIL 2019
 

Denton County
3.1 | +29.2%

Collin County
3.5 | +29.6%

Dallas County
3.1 | +29.2%

Tarrant County
2.1 | +10.5%
 
The supply is increasing moving us to a more balanced market.   Supply is between 2 and 3.5 months. 

Volume – Number of Sales

APRIL 2019
 

Denton County
1,367 | +6.8%

Collin County
1,503 | +4.9%

Dallas County
2,311 | +4.5%

Tarrant County
2,476 | +5.2%
The number of sales for April is still strong and increasing in all four counties. 

How to Prepare Your Home as You Age in Place

Check out our most recent blog post which is a guest post from Patrick Young. Do you know someone who is aging and might need some accommodations to their home? This post gives great tips on preparing your home as you age. If you would like to write a guest post for us, please email us at shannon@dwslaterco.com.

Great Cycle Challenge

This is our fourth year to participate in the Great Cycle Challenge for the month of June. We will ride 200 miles and are raising funds to help fight cancer. This year we are riding for our friend Mike who is in a very tough battle with esophageal cancer. We hate cancer and want to do what we can to help fight this disease. You can read more about our story and support our cause at with taxable donations to https://greatcyclechallenge.com/Riders/ShannonSlater

If you have questions or need appraisal services please contact us at www.dwslaterco.com.

Please note that the data above is from the NTREIS MLS database and Freddie Mac. Information is deemed reliable but not guaranteed. For appraisal services please contact us at www.dwslaterco.com.
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How to Prepare Your Home for Aging in Place

Enjoying Life at Any Age

This post is written by Patrick Young who has been a regular contributor to our blog.  Patrick is an advocate for those with disabilities and writes important information pertaining to those with disabilities. This article focuses on preparing your home as you age. This speaks personally to me as we have been helping my grandmother through some transitions as she ages.

How to Prepare Your Home for Aging in Place

Image courtesy of Unsplash

For many older adults, aging in place is a priority. In fact, some statistics indicate that 90 percent of seniors hope to stay in their homes as they grow older. If you’re considering changes to make your home more age-friendly, there are a couple of key strategies you should keep in mind. Read on for information to help you create an environment that will support you and keep you safe throughout your golden years.

Steer Clear of Falls

Stability is something we take for granted in our younger years. However, along with age can come serious risk for falls. In fact, HomeAdvisor notes that more than a third of adults over the age of 65 fall every year, so modifying your home with fall prevention in mind is important.

In order to make appropriate changes, it’s helpful to understand why seniors fall. Waning eyesight can be a major contributing factor since older eyes don’t adjust to changes in brightness as well as they used to. Aim for even, bright lighting throughout the home, adding task lighting as needed where you work. Pay special attention to dim areas where no natural light is available, such as hallways and staircases. If lights are already installed in those areas but navigation remains challenging, use brighter light bulbs. In addition to added lights, you can use paint to brighten a space and boost contrast, such as making a dark staircase easier to see.

You should also think about your home’s general structure. In the event that you should require an assistive device such as a cane, walker, or wheelchair, an uncluttered floor plan with wider-than-average hallways and doorways can be a boon. Also, think about where your most-used rooms are located. Having your bedroom, kitchen, bath, and laundry on the main floor is helpful when aging joints aren’t able to traverse stairs as well.

Beware of the Bath

As far as most dangerous spaces, bathrooms usually top the list for seniors. The combination of slick surfaces, water, and changes of position can lead to getting off-balance and not being able to recover. You can address those concerns with a little tweaking, making an otherwise tough-to-navigate space easier as you age. Consider adding non-slip strips to the tub and shower area, a bathmat outside the tub, and a comfort-height toilet. Grab bars should also be installed in three places: in the tub and shower area, near towel racks, and next to the toilet. Many people are concerned that grab bars will look institutional, but some newer grab bar designs blend seamlessly with decor, adding a spa-like feel.

Out and About

Your home’s exterior deserves some special considerations. Senior Health Memos notes that low-maintenance landscaping choices, such as evergreen shrubs and raised beds, make upkeep easier for older adults. Similarly, easy-care siding and some added hardscaping can keep you enjoying the great outdoors throughout your golden years. While you’re making upgrades to your home’s exterior, consider incorporating a ramp into the design. Ramps allow easier navigation to and from your home regardless of weather, and even when carrying bags or using a cane. Make sure that you can remain active into the evening hours by adding appropriate outdoor lighting on paths and porches.

Lastly, don’t overlook the garage. Being able to park your vehicle indoors helps you avoid getting outside in inclement weather. If your garage primarily serves as a storage room instead of parking space, do some decluttering and make accommodations for your car. Ensure you can come and go freely, with ample lighting and no tripping or slipping hazards.

Making a home into a safe haven for your senior years is a smart decision. Ensure it’s easy to tend and supports your changing needs. With a handful of well-chosen changes, you can comfortably look forward to aging in place.

This is a guest post from Patrick Young. Patrick created AbleUSA to offer resources to people with disabilities and offer advice about navigating various aspects of life. For more information and resources, you can contact Patrick at AbleUSA.

We do not sell real estate but appraise it.  If you would like to provide a guest post please contact us at www.dwslaterco.com.  It is our desire to provide you with relevant information in regards to real estate appraising and those who use appraisal services. 

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What is a Barndominium?

red barndominium

Do you watch Fixer Upper? Did you see the episode of the Barndominium? I truly believe the term “barndominium” was influenced by this episode of Fixer Upper. This alternative style of home is becoming more and more popular in the past few years. Basically, a barndominium is a style of home which is typically made of metal construction similar to barns. Sometimes they are attached to barns or workshops similar to the photo above or they could stand alone. These are unique homes and offer a certain lifestyle for those that love living in the country and the country lifestyle. We have seen them as barns that have been converted into living space or built designed as living space. Most of the time they are attached to barns and stall spaces.

Although the exterior of many barndominiums look like barns the interior are typically well designed, insulated and can have average to very high grade custom finishes. Here is the interior of a finished out interior barndominium:

Finished out interior of a barndominium

This style of home has actually been around a while but we have seen a recent increase in the number of barndominiums as well as an increase in prices. I agree with this article in realtor.com that this is a good term used to describe them. We used to call them “metal constructed homes” or “barnstyle homes”. Our local MLS (multi-listing service) added the term “barndominium” as a style of home in 2016 so it is now easier to search for this style of home. Prior to 2016, it was more difficult to track them as they were listed in the MLS as various types of alternative construction. You can see this chart how within the past 2 and 1/2 years in our markets barndominiums are appreciating:

Barndominiums are a Lifestyle Choice

We have seen a rise in the number of barndominiums we have appraised as well as sales in our North Texas markets. We believe that this is a great choice for those that prefer a more country lifestyle. When the living space is attached to your barn stalls, wash rooms, and tack rooms, it is convenient to go and tend to your animals within your space. Once, David, was appraising a barndominium and the new owners had just arrived from out of town. As they were in the kitchen and David was observing the interior, they had forgotten to shut on the doors and this beautiful horse strolled in and joined them all in the kitchen. They calmly led the horse back out the door into his stall but it illustrates the lifestyle of a barndominium. I liken it to those that enjoy the sights, smells, and sounds of the city may prefer living in a high rise, those that prefer the sights, smells and sounds of the country may prefer living in a barndominium.

Sometimes the barndominium is a converted space in the barn and used as a living area until the future main house is built. Sometimes the barndominium is designed as guest quarters or for ranch hands and other times they are the main living area and designed as such from the beginning.

Appraising Barndominiums

Appraising barndominiums can be tricky as they are a more unique style of home. As more barndos (how many shorten the term), become available on the market, they become a bit less complex. Some of the things that appraisers will look for:

Main Space or Extra Space– We have appraised some properties where the barndominium is a guest house or perhaps living quarters for a ranch hand. If the living space is not a part of the main living area, it will not be included in the main living area but as an additional feature. You can read more about living area here: What Counts as Living Area in an Appraisal?

Quality– The quality of construction will be considered in the appraisal as not all barndominiums are of the same quality. Just as some custom homes have higher grade finishes and features, the same can be found in barndominiums. It is important to compare barndominiums with similar quality of construction if possible.

Lot Size– Barndominiums are typically on acreage and the size of the acreage will have an impact on the appraisal. Ideally, if an appraiser is appraising a 2,500 sq ft barndominium on 10 acres, they would love to find comparables of similar sized sq ft on as close 10 acres as possible.

Location– as always in real estate, location is the biggest factor influencing value. A barndominium located next to a river will have a much different value than a barndominium located next to a cement plant. In our markets, there are entire subdivisions of barndominiums on 5-10 acre lots. These subdivisions are designed for an equestrian lifestyle and are located in areas where the soil is of sandy loam and most suitable horses. The locations with sandy soil have many more equine properties as well as equine hospitals, supply stores and services available. Barndominiums in these locations sell for higher prices than those located outside the more suitable soil.

Additional Buildings & Features– Appraisers will also take into consideration additional improvements to a property such as workshops, mulitple barns, arenas, fencing, etc. All of the features are to be taken into consideration for contributory values.

Barndominium converted from original barn

What do you think of Barndominiums? Have I left anything out? Would this be a style of home for you?

If you have any questions about appraising barndominiums or other real estate feel free to reach out to us at www.dwslaterco.com

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April Newsletter

a picture of bluebonnets in North Texas
North Texas Bluebonnets

April showers bring May flowers- or so we’ve heard. This year it appears that our wet winter has brought beautiful April wildflowers to North Texas. The picture above is was taken in Pilot Point. The blooming of the bluebonnets in our area has been spectacular. If you are not from Texas you may not know that bluebonnets are the official state flower or the annual tradition of bluebonnet pictures. It seems that everyone seeks out the best fields of bluebonnets to take pics of the family or kids or pets and this year even the police got in on the tradition.

Speaking of traditions, it is springtime which is traditionally the strong selling season for our real estate markets. This year is no exception as the markets have heated up since last month. That said, when looking at the charts from the same time last year, we have definitely slowed down the pace. With the large population growth we’ve had (we’ve gained over 1 million in less than a decade) the large demand and limited supply caused prices to increase rapidly. That rapid pace has begun to slow as affordability has now become an issue for buyers. Mortgage interest rates which had dropped are now increasing again.

According to the Texas Housing Insights,
Texas housing sales increased 5.2 percent from January amid lower mortgage rates and decreased price pressure. Supply indicators were mixed with single-family construction permits and total housing starts stabilizing after a shaky end to 2018, but single-family private construction values continued to slide. On the demand side, the typical Texas home continued to average just 60 days on the market and sold above 95 percent of the original list price. Lower mortgage rates provided incentives for prospective purchasers, but housing affordability remained a challenge across the state. Overall, the healthy labor market, population growth, and the economic expansion supported strong housing demand.

Here are our numbers for this month. Remember to hover over the chart to see the numbers and trends:

Market Data

MARCH 2019
 
Denton County
$315,000 | -1.3%
Collin County
$335,875 | +0.1%
Dallas County
$245,000 | 0.0%
Tarrant County
$239,000 | +4.8%
Overall YoY trends are slightly down for Denton County, flat for Collin and Dallas County and slightly up for Tarrant County. 
 
 
 
MARCH 2019
 
Denton County
$138 | +1.5%
Collin County
$137 | +0.7%
Dallas County
$134 | +1.5%
Tarrant County
$122 | +4.3%
The price per square foot trends are also showing less of an increase YoY than previous years. 
 
 
MARCH 2019
 
Denton County
1,289 | +3.6%
Collin County
1,322 | -11.0%
Dallas County
2,075 | -4.5%
Tarrant County
2,356 | +3.2%
The number of sales is down for Collin and Denton Counties and just slightly up in Denton and Tarrant Counties.   Slower volume is a trend for a slower market. 
 
 
MARCH 2019
 
Denton County
2.8 | +27.3%
Collin County
3.3 | +32.0%
Dallas County
2.9 | +31.8%
Tarrant County
2.0 | +17.6%

The months supply of inventory is up from the same time last year in all four counties. It is noted that this is still an under supply as a more balanced market has 4-6 months of supply. This appears to be a trend to a more balanced market.

MARCH 2019
 
Denton County
30 | +87.5%
Collin County
37 | +94.7%
Dallas County
22 | +69.2%
Tarrant County
19 | +46.2%
The YoY trends are definitely up for all four counties for the number of days on the market.   It is noted that the median number of Days on the Market (DOM) is around one month and they are down from last month.  This is typically one of the months when properties move the fastest. 
 


Commercial Corner

Industrial or Retail? As we have seen the effects of online retail impact the brick and mortar stores, the demand for industrial space for online retailers continues to grow. This was an interesting read –Self-Storage: A Little Bit Industrial, A Little Bit Retail.

If you need an appraisal for industrial property, this is a service we provide. Contact us for more information.

In summary, our markets are still appreciating just at a slower pace. With demand still strong as a result of population growth and a strong economy the housing market is still strong. As interest rates begin to rise again and affordability prices some out of the market, the slowing has occurred.

We hope that you are enjoying your spring and we look forward to sharing you more real estate news and trends next month.

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March Newsletter

Image by The_Smell_of_Roses from Pixabay

March, when days are getting long,
Let thy growing hours be strong
To set right some wintry wrong.
~Caroline May, 1887

The signs of seasonal change are here. Many of the trees have buds or flowers appearing. Our local Tulip Farm is open as some of the tulips have emerged. If you are in North Texas we highly recommend taking a trip to see the tulips. If you enjoy nature you will be thrilled as the bluebonnets are to be spectacular this year because of our rainy winter. Here is a list of great placed to see bluebonnets: 5 Great Places to See Beautiful Bonnets in Texas.

What about our real estate markets? Well as we have been reporting the DFW markets are slowing down. The median sales prices have moved up slightly or are flat. Prices have been appreciating at such a fast rate that the market is starting to become more balanced. There are more listings and they are staying on the market longer. This is good news for buyers.

Affordability has been declining since 2012, thus a slow down will help some who have been getting priced out of the market. We do not think that we are headed for a crash just a slow down as the rapid price appreciation we’ve seen in the last five years was unstainable. What goes up must eventually come down. Mortgage interest rates, which had climbed in November, then dropped are starting to trend back up.

Freddie Mac
Current Mortgage Interest Rate Trends per Freddie Mac

Market Updates- Denton, Collin, Dallas & Tarrant Counties

** Make sure you hover over the charts to see all of the data**

FEBRUARY 2019 (YoY Trends)
 

Denton County
$304,990 | +1.7%

Collin County
$325,000 | +1.6%
Dallas County
$235,000 | -3.1%
Tarrant County
$230,886 | +4.9%

The median sales price for single-family residences are almost flat in Denton and Collin Counties, they have decreased in Dallas County and had on a modest increase from the same time last year in Tarrant County.

FEBRUARY 2019 (YoY Trends)
 

Denton County
$137 | +1.5%

Collin County
$135 | +0.7%
Dallas County
$130 | 0.0%
Tarrant County
$121 | +6.1%

The price per square foot metrics are also trending the same. They are flat in Dallas County, slight in Denton and Collin County and up 6.1% in Tarrant County. All of these trends are compared to the same time last year. There are slight increases from last month which is typical as prices begin to pick up as we head into the spring selling season.

FEBRUARY 2019 (YoY Trends)
 

Denton County
2.8 | +40.0%

Collin County
3.1 | +34.8%
Dallas County
2.8 | +33.3%
Tarrant County
2.0 | +25.0%

A definite indicator of a market slow down is an increase in supply. The increase has been double-digit percentages in all four counties. The supply is still three months or less- which is an undersupply. A four to six month supply is a more balanced market. The market is trending to a more balanced market as the supply increases. New construction has helped with the increase in supply.

FEBRUARY 2019 (YoY Trends)
 

Denton County
894 | -7.9%

Collin County
993 | -12.8%
Dallas County
1,573 | -4.0%
Tarrant County
1,789 | -2.6%

Volume in down in all four counties. It is typical for sale volume to be down in the winter months, however, these are down compared to last year.

Rolling Stone article about the real estate appraiser of the world's most gruesome murder sites

Did you know that real estate appraisers are Rock Stars? Well at least this one is. Check out this fascinating read about appraising stigmatized properties in Rolling Stone Magazine.

2019 Happiest Cities in America per Wallet Hub

Congratulations to the city of Plano, TX in Collin County. They were selected as the #1 Happiest City in America per Wallet Hub. Have you been to Plano lately? We certainly are happy when we visit Plano.

Commercial Corner

Since we also provide commercial appraisals as well as residential, we thought we would add a section to cover a little bit of commercial real estate news.

  • CRE Nationally – Growth in U.S. commercial property prices slowed to the weakest annual pace in eight years in January, reported Real Capital Analytics, New York. Industrial properties were strong keeping it from slowing more. Just as we are seeing slowing in residential markets, the same holds true for CRE. Read more here.
  • CRE Texas -The overall strong performance in the Texas economy translates into a positive outlook for the commercial real estate sector. The outlook for 2019 appears to be positive for commercial real estate due to the strength of the U.S. and Texas economies. According to Texas Real Estate Center Overall, the dollar volume of mortgage originations in the office sector has stabilized since 2015. While industrial borrowing showed little movement from the first half of 2017, dollar volume of mortgage originations increased sharply from 2016 to 2017. Over the long term, retail borrowing has declined in dollar value of mortgage originations; new loans on retail properties measured 70 percent lower than 2007. You can read the full report here.
  • Industrial Strength– E-Commerce has supercharged the industrial sector. This was just one of the four takeaways From Marcus & Millichap’s 2019 Office and Industrial Forecast

We hope that you enjoyed this new format for the newsletter. Please let us know what you think! Also while you are here check out our latest posts:

  • The Problems with the Price Per Square Foot Method– Do you use this method when determining the price or value of a home? Read this to find out how this method can lead you astray.
  • A Market Advantage- Tips for Selling a Home in Winter– This is a guest post from contributor Patrick Young who is an advocate for people with disabilities. If you would like to submit a guest post just contact us at www.dwslaterco.com and let us know what you would like to write about and if it is relevant to our readers we will consider it.

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A Market Advantage: Tips for Selling a House in Winter

This article is written by Patrick Young who has been a regular contributor to our blog.  Patrick is an advocate for those with disabilities and writes important information pertaining to those with disabilities. This article focuses on selling your home in the winter.

 

 

A Market Advantage: Tips for Selling a House in Winter

Real estate tradition holds that spring and summer are the traditional home-buying seasons. After all, the weather’s more accommodating, and it’s easier to make a house look appealing if the trees aren’t bare and snow isn’t blowing. But for prospective buyers who don’t find the right house at the right price during the warmer-weather months, winter may the time they need to get a deal done.

If you’re a seller, buyers who weren’t able to find a deal in the warmer seasons are well-motivated, which can be a real windfall for a seller who needs to get top price for their property. Bear in mind that you needn’t price your house lower than you otherwise would simply because you’re selling in winter.

Curb appeal

Come wintertime, antsy buyers start feeling the heat, with end-of-year tax benefits at issue and the need to move out of a home they’ve put up for sale or a lease that’s terminating. You can capitalize on a situation that’s to your advantage by maximizing your property’s curb appeal. When the flowers are blooming and the sun’s shining, prettying up a home’s exterior and front landscape is a comparatively easy undertaking. But with bare trees and snow cover, getting that “wow factor” isn’t so easy, and some home owners come up short as a result.

Make sure to rake up all those leaves or hire a lawn service to do the job for you. Keep the lawn well-cropped and edged, and keep all walkways and sidewalks swept and cleared of leaves, snow, twigs, and acorns. The gutters often go overlooked by people selling in colder months, so make sure to do a thorough cleaning of yours to give the impression that yours is a well-kept and cared-for property, worth every cent of what you’re asking for it. There are many gutter-cleaning services that can do the job for you reasonably if physical restrictions or age prevent you from getting up on the roof.

Promote your property

Photos are an important way to promote your property on your realtor’s website and via social media, but unfortunately, winter exterior shots don’t make the kind of impression that photos taken in the summer do. Accentuate any photos taken earlier in the year or, if necessary, arrange for a professionally staged exterior shot once your lawn and the front of your house have been cleaned, raked, and well-groomed for the occasion.

Stage, stage, stage

If you’re selling in winter, your best bet may be to accentuate what your house has to offer on the inside, so stage each room carefully. Sometimes, knowing who you’re dealing with may suggest a staging strategy that makes the difference. Prospective buyers whose kids have moved out, for example, may be looking for an in-home work space, so carefully staging a third bedroom or finished basement may give them an idea that seals the deal. Similarly, a young couple may be looking for a room that would make a good nursery, so remove any extraneous furniture and clutter from an extra bedroom to help them envision themselves caring for a newborn in that space. In general, decluttering as much as possible is best. You can do it yourself or even hire professionals to complete the job. Check reviews and price quotes online before hiring a packing service.

If you’re pressed for time, there are simple and quick ways to help get your home ready for potential buyers. Load the dishwasher, brighten the house by turning on all the lights and opening the curtains, and get rid of bad odors by taking out the trash and spraying Febreze in the affected rooms.

Repairs, renovations

Make a careful survey of your house, and take care of any fixes or upgrades that might help prevent damage resulting from harsh winter weather. Pay special attention to the roof and exterior walls, and have your HVAC unit serviced if necessary.

Selling a house in the winter can give you a valuable market advantage, particularly with fewer houses on the market and plenty of buyers needing to find the right house and finalize a deal. Pay careful attention to your property’s external appearance, and stage each room with great care, making sure to show off the space and flow inherent in your space.

 

photo courtesy of Pixabay

This is a guest post from Patrick Young. Patrick created AbleUSA to offer resources to people with disabilities and officer advice about navigating various aspects of life. For more information and resources, you can contact Patrick at AbleUSA.

 

We do not sell real estate but appraise it.  If you would like to provide a guest post please contact us at www.dwslaterco.com.  It is our desire to provide you with relevant information in regards to real estate appraising and those who use appraisal services.   

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The Problems with the Price Per Square Foot Method

Do you know the price per square foot method for determining the value of a property? Do you use it? This is a topic that has been written and discussed much and for good reason. Real estate agents, buyers, seller’s, lenders, or investors all like an easy way to determine the value of a home. Many will use the price per square foot method.

Example: You know that a property which is 2,500 sq ft in size sold for $350,000. You take the price of the home, divide it by 2,500 and ………..(drum roll)………- the price per square foot is $140! Now, your house is 3,500 sq ft, so using the price per square foot method, you multiply 3,500 x 140 and………..(another drum roll)…… your house is $490,000! Wow! Wasn’t that easy? Well, it might be easy but there are many problems that can occur using this method for determining value. It is my desire to share some of the reasons why this might not be the best method for many, many properties.

Many Factors Contribute to Value

One of the problems with using the price per square foot method is that it does not consider any of the other factors that contribute to the value of a home. When you use the price per square foot method, you are only considering the size of the home and nothing else. You could over price or under price a home looking at only the square footage. Here are some of the other factors that contribute to the value of a property and should be considered when determining value:

  • Location – the location of a property can have either a positive or negative impact on the value of a home. A property located with a beautiful view of a lake will have more value than a property located with a view of the local trash dump. A property located in a gated private community with access to a community pool, clubhouse, tennis courts, and a private lake will have more value than one that is not located in such a development. Would you love drinking your coffee and listening to the birds with the view below or next to the noisy highway that drowns out the sounds of the birds each morning?
This back porch view would contribute to overall the value of the property.
  • Amenities- There are so many additional features or amenities that also contribute to the overall value of a property. Some common amenities in our markets are swimming pools, pool houses, workshops, guest houses, barns, or party rooms. For lake homes, boat docks, lifts, and boathouses give added value. When you look at only the price per square foot, you are not considering any of these amenities.
  • Condition-One very important factor that impacts value is the condition of a home. If your neighbor’s house sold for $225,000 and it is the same size, same age and located next door then your house should be worth $225,000 right? Well, it would except that before their house sold, it had a new roof, all of the flooring replaced, the kitchens and bathrooms updated with new fixtures, and the interior and exterior was repainted. Your house still has the 1970’s avocado green appliances, shag carpet, popcorn ceilings, and original roof. The conditions of the two homes are not equal. Using the price per square foot method does not consider the condition of a home.
  • Quality of Construction– Similar to the condition of a home, the quality of the construction is also a factor when determining the value of a home. Understandably, a home with a much superior quality of construction will sell for more than one that is less. Real estate appraisers look for the quality of the construction in such things as the flooring, custom cabinets, high grade or commercial grade appliances, built-ins, custom trim, and finishes. Price per square foot does not consider the quality of construction.
  • Age-Related to the condition of a home is the age. It is best to compare homes that are of similar age. One of the things that appraisers determine in the appraisal process is the economic life of a property. At some point, a property will reach the end of its economic life, most of the contributory value of a property will be in the land alone. At this time, the highest and best use will be for it to be demolished. That is not to say that all older homes have reached the end of their economic life. We see many that are remodeled, preserved and well maintained. The point is that when finding homes that are comparable, having homes of similar age is important. Price per square foot does not consider the age of a home.

Law of Diminishing Returns

Another reason that price per square foot will give you inaccurate and false results has to do with the “Law of Diminishing Returns”. The law of diminishing returns is defined as” the premise that additional expenditures beyond a certain point ( the point of decreasing returns) will not yield a return commensurate with the additional investment.”- The Dictionary of Real Estate Appraisal 4th Edition.

Let’s go with the example I began with and that the house that sold for $350,000 is located right next door to my house. Both are in the same location, have the same view, are the same age, are in the same condition, have the same quality of construction and amenities. All is the same except for the size, so the price per square foot method should be great, right? Well, unfortunately since my house is 3,500 sq ft and the house next door is 2,500 square feet. That is a very large difference in size. The law of diminishing returns would factor in here and my larger house is going to sell for a smaller price per square foot than my neighbor’s house.

Do you ever shop at Sam’s Club, Costco? The price per unit goes down the more that you buy in bulk. Back when we had all of our 7 kids at home, it was so beneficial for us to buy in bulk as the price per ounce or price per pound was less. I mean we went through a gallon of milk and a loaf of bread each day! One of the best analogies that many of you can relate to is from appraiser Ryan Lundquist as he used the analogy for Starbucks and the price per square foot–the price per ounce differences in the Tall, Venti and Grande at Starbucks diminish as the size increases. Same principle.

Price Per Square Foot and Trends

One of the reasons, I decided to write this post is because I had a reader ask me about the price per square foot trends that we publish in our monthly newsletter. Our company publishes a monthly newsletter with market updates and trends. One of the metrics that we look at is the price per square foot trend. (if you are interested in our monthly newsletter you can sign up at our website or on the sidebar of this blog) Someone wrote to me to ask about if his property had a horse barn and was on five acres would the price per square foot trends we reported apply? The answer, of course, was no.

The trends are a broad look at larger market areas and not his specific smaller market area. Plus of course, it didn’t consider his larger lot size and amenities. The trends are really just a metric to look at to see what the overall market is doing. It is one of the many things that we look at. The next time you read a headline about prices up 25% or homes selling at $125, please do not use those numbers for your own home. Each property is unique and will require an expert in valuation to help you in knowing what your home is worth.

Here is a trends chart from our newsletter-(Hover over it and you can see the numbers for each month)

So, I hope you find this helpful. Know that using the price per square foot method can get you inaccurate results. I have only shared some of the problems that would change the result of the price per square foot method. Unless a home is similar in every way, chances are there are factors that will skew the result of price per square foot. What did I leave out? Do you use this method? If you have any questions about this, appraising or real estate appraisals please contact us at www.dwslaterco.com

Helpful Resources:

Starbucks and the price per square foot – Ryan Lundquist, Appraiser from the Sacramento Appraisal Blog

Why price per square foot can be an agent’s worst enemy when pricing a home- Tom Horn, Appraiser from the Birmingham Appraisal Blog

Price Per Square Foot is a Poor Value Indicator– Bill Gassett , Realtor from the Maximum Real Estate Exposure Blog

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February Newsletter


“Groundhog found fog. New snows and blue toes. Fine and dandy for Valentine candy. Snow spittin’; if you’re not mitten-smitten, you’ll be frostbitten! By jing-y feels spring-y.” ― The Old Farmer’s Almanac 

Here in North Texas, February is typically a mix of cold weather with a few “spring-like” days.  It is a shorter month and it just seems to go by very quickly.  We all enjoy some love for Valentines Day and some get an extra day off for President’s Day.  We hope that you were able to enjoy both.  As far as real estate markets, the word is slow. Not crashing, not breaking but definitely slowing the pace it has been at. The numbers we are giving you are from January as we wait each month until all of the data comes in.   Sale prices are just slightly up or even flat from the same time last year and down from last month.  Marketing times are lengthening and supplies are beginning to increase- moving to a more balanced market.  It is typically slower in the winter months as prices and volume pick up in the spring.  Spring looks to be slower than what we have had in the last 3-5 years.  The market has just let off of the accelerator in DFW.  Here’s a look at the current numbers as well as recent some snapshots of the market. 
MAKE SURE TO HOVER OVER THE GRAPHS AS THEY ARE INTERACTIVE

The median sales price for single family homes for all four counties is down from last month but slightly up when compared to the same time last year.  Here are the YoY stats:


JANUARY 2019
Denton County
$299,990 | +2.0%
Collin County
$314,990 | +1.6%
Dallas County
$215,000 | 0.0%
Tarrant County
$220,000 | +3.3%

The median price per square foot for single family homes in all four counties is up from the same time last year.  Collin, Dallas & Tarrant counties are down from last month and Denton is flat month to month.   Here are the YoY stats: 

JANUARY 2019
Denton County
$136 | +2.3%
Collin County
$135 | +1.5%
Dallas County
$126 | +4.1%
Tarrant County
$119 | +7.2%

The supply of inventory for all four counties is increasing.  All but Collin county increased month to month.  There has been an increase in construction which has helped with the inventory.  The official numbers for building permits is not yet available due to the delays in the government shutdown.  We will share those next month if they are available.  Here are the YoY stats for supply in all four counties: 

JANUARY 2019
Denton County
2.8 | +47.4%
Collin County
3.0 | +36.4%
Dallas County
2.7 | +35.0%
Tarrant County
2.0 | +25.0%

The volume is slowing down.  In all four counties, the number of closed sales was down from the month before and all four counties are posting double-digit declines from the same time last year.  Here are the YoY stats: 

JANUARY 2019
Denton County
686 | -14.7%
Collin County
773 | -12.1%
Dallas County
1,270 | -14.0%
Tarrant County
1,393 | -12.8%

 
Current Market Activity –  We thought we would share a little insight into what is currently occurring in the markets.  This is a 24-hour snapshot of each county.  You can see that all of them have just as many price decreases as listings with Collin and Denton counties showing more decreases than the number of new listings.  This may be even more telling of a slower spring selling season ahead.  


DALLAS COUNTY
TARRANT COUNTY
COLLIN COUNTY
DENTON COUNTY
We hope that you found this helpful. A reminder that these are general market trends and metrics.  These may not apply to your specific property as there are so many different factors that impact the value of individual properties.  
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Lake Kiowa Market Update

Lake Kiowa is a private gated community located on the southeastern section of Cooke County. It has a private lake, 18 hole golf course, a community center, parks, tennis courts, and trails. The area is served by the Callisburg Independent School District. It is located 11 miles southeast of Gainesville, the county seat of Cooke County. It is 70 miles northwest of Dallas and 72 miles northeast of Fort Worth where international and national amenities can be found. The community was constructed in 1968. There are a large variety of homes of various sizes, ages and designs. We appraise in this community often. As a part of the appraisal process, we analyze the market. Here is a recent analysis of the Lake Kiowa community.– Make sure to scroll across the graphs as they are interactive!

Lake Kiowa and Cooke County Data

The current median sales price for Lake Kiowa is$343,750 which is up +20.6% YoY. The current median sales price for Cooke County is $215,000 which is up +10.5% YoY. You can see that Lake Kiowa median sales price is appreciating , particulary within the past 2 years.

The current median price per sq. ft. is $145 which is up +18.9% YoY. The current median price per sq. ft. is $117 which is up +13.6% YoY. The price per sq. ft. also shows the appreciation seen in Lake Kiowa within the past 2 years.

Lake Kiowa currently shows a 5.3 month supply which is an increase +35.9% YoY. Cooke County currently has a 4.6 month supply which is -8.0% YoY. You can see that as the supply decreased, the median sale prices increased. There are many recent newly constructed homes in Lake Kiowa, as a result, the supply is now increasing. As the supply increases, the rate of price appreciation will most likely decrease since these are typically inversely related to each other.

The number of days on the market for both Lake Kiowa and Cooke County have both decreased with Lake Kiowa at 28 days (  -22.2% YoY) and Cooke County at 30 days ( -18.9% YoY)

Overall Lake Kiowa community is showing strong growth with new construction increasing and very limited foreclosure rates. We hope that you found this market analysis helpful. Please remember that these are general trends and should not be applied to your specific property. If you need assistance for a specific property in Lake Kiowa please feel to contact us at www.dwslaterco.com

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