For the past few years, Southlake-area home buyers have relished in record-low mortgage rates consistently hovering around 3% for a 30-year fixed rate. Now, the pendulum appears to be swinging back.
In April of this year, 30-year mortgage rates surpassed 5% for the first time since 2011, according to FreddieMac. Since this article was published, rates have more than doubled from those historic lows of last year. And it looks like it’s just the beginning. With interest rates rising and inventories reaching record lows, many are left wondering exactly how to prepare to buy or sell their homes.
To help shed light on the question at the forefront of our collective minds, we’ve brought together some of the area’s top housing experts who have a combined 80-plus years of working in the Southlake real estate market. With over $201.7 million in sales last year according to 2021 brokerage-provided sales data, these local professionals will show you how to buy and sell in Southlake.
On our panel: Neal Calhoun, a partner at SCH Homes with nearly two decades of luxury home-building experience; Susan Mathews, a 12-year real estate professional and a 2021 Top Producing Agent with Allie Beth Allman & Associates; Randy White, a 40-year real estate veteran and owner of his namesake, award-winning real estate team; Roxann Taylor, owner of Engel & Völkers Dallas Southlake, where she has been named a Top 10 International Realtor three times.
Q: HOW WOULD YOU DESCRIBE THE CURRENT REAL ESTATE MARKET IN TARRANT COUNTY?
Roxann Taylor: Our local real estate market is very robust in the element of high demand and low inventory, so prices are rising. It’s a great time to be a seller.
Susan Mathews: We currently have an inventory shortage in Tarrant County. In addition to local buyers, we have many out-of-state buyers looking and not enough properties. Homes often go under contract within a weekend in multiple offers and usually go for more than 20% over the listing price.
Randy White: I have never seen such a high demand for homes in our market. I’ve never seen so many buyers contacting us to help them from so many other states, nor have I ever seen the inventory of homes so depleted. What I have seen is that it’s been a really great time to buy, despite the healthy appreciation we’ve had, because the rates have been historically so low. It’s also been one of the best times to sell because of the way properties have appreciated.
Neal Calhoun: Right now, there’s not enough inventory of new homes and new custom homes, especially in Southlake. They’re just being bought as soon as they get listed because there are so many people who want to move into this area and don’t have time to build one. We can’t build them fast enough.
Q: HOW DOES THIS COMPARE TO LAST YEAR?
Roxann: A year ago, there was definitely more available inventory, but it was still a tight market. Since I’ve been in business, I have seen three major recessions, with the most recent one lasting much longer than anyone ever imagined. Coming out of the recession, buyers did not want so much to take care of anymore, and the thrust of the economy was more of the right sizing for your lifestyle.
Q: HOW HAVE INCREASING INTEREST RATES AFFECTED THE OVERALL HOUSING MARKET IN SOUTHLAKE?
Randy: Interest rates are the No. 1 factor in home affordability. They were at a low of 2.8%. Now they’re almost at 6%. That’s going to really affect the velocity of sales and slow down the frequency of the market. Sellers are already noticing that bidding wars are calming down, there’s not as much competition and they’re getting record-pricing for their houses. They know the market is big. Only time will tell how much the market really starts to slow down from here.
Q: HOW DO HISTORICALLY LOW INVENTORIES ADD TO THE COMPLEXITIES OF THIS MARKET?
Susan: Buyers are under tremendous pressure in this market. They are having to move quickly, become liquid and prepare to pay above asking [price], regardless of current comparables. Sellers have the upper hand and are selling their homes for top dollar.
Randy: From the buyers’ standpoint, I would tell them to be prepared to grant 5-10% in liquid cash above what they’re listed at, and be prepared to make a decision and jump on something quick. Don’t consider your purchase your long-term home — consider it a place to serve your immediate needs until things settle down.
Q: WHERE ARE MOST HOME BUYERS COMING FROM?
Susan: A large majority of buyers are coming from out of state. Personally, I have a high percentage of clients from California, with others coming from Arkansas, Illinois and the East Coast.
Roxann: California, Florida — all over, really. Our global firm has shops in 34 countries around the world, and we see many people moving around a lot buying multiple properties.
Q: WHAT DO NEW BUYERS MOST LOOK FOR IN A TEXAS HOME?
Randy: Buyers here are no different from buyers anywhere else. Interiors that sell the fastest are more edgy and contemporary — very California, updated with open light and space and with work-from-home ease. Walkability is also a feature that cannot be talked about enough. If a home has a high walkability rating, it’s going to be extremely covered by buyers. The schools are still towards the top of the list for today’s buyers, and our proximity to DFW Airport and reasonable working commutes are another plus.
Neal: [Clients] really are shifting towards this mindset that they don’t have to have a huge amount of square footage. They just want to make sure they have the spaces they want and that the design intent and quality are going to be met exactly how they want. We love to get into the art and craftsmanship of luxury design and living spaces.
Q: WHAT ARE THE BENEFITS OF BUILDING YOUR OWN CUSTOM HOME INSTEAD OF BUYING?
Neal: There’s a lot more sense of pride with it being your own than when you buy a home that’s already built. When you get to the end and see that the project is done, you can stand back and think about what happened to bring that to fruition.
Q: WHAT ARE SOME OF THE BIGGEST MISTAKES PEOPLE CAN MAKE WHEN SELLING THEIR HOME?
Susan: Overpricing your home, even in this market, can be dangerous. A seller that decides to overprice their home risks their property becoming stale and encourages buyers to assume that the seller will take a lower offer. Instead, sellers should price their home in accordance with the market and get a higher price because of multiple competitive offers.
Roxann: Not picking a seasoned professional to do the job for one thing, but also when they’re not doing the things the professional suggests, it can affect the outcome of a sale. It matters who you hire, and you get what you pay for.
Q: WHAT SHOULD HOME SELLERS DO NOW TO OPTIMIZE THEIR SALE IN THE FUTURE?
Roxann: Taking better care of your home on a daily basis and always taking care of the little things before they become big things help add value to it in the long run. Remember that your home is just like the human body — there is always room for nips and tucks along the way.
Neal: One thing that we do in any renovation is get an interior designer involved. Part of the reason we do that is because there are so many decisions that need to be made… [and] to make sure that you’re not just going after something that’s current today from a style standpoint. A really good interior designer will do things that are timeless and can not only work for your family and your needs but will work for somebody else as well.
Susan: I always advise my clients to do a project in their home every year. When the time comes to put their home on the market, they already have an updated home ready to sell.
Q: WHAT RENOVATIONS HELP ADD VALUE TO A PROPERTY?
Neal: The thing we always hear from not only realtors but also clients when we talk about a remodel is always the kitchen. The kitchen is No. 1, and then usually the master bath and master bedroom. Beyond that, I would say a really nice office space at your home and maybe even two separate office spaces… and an exercise or a health and wellness space. It’s so great to have something that’s brand new, even if it’s just your kitchen or your master bath.
Q: WHAT ELSE SELLERS CAN DO TO GENERATE BUYER INTEREST?
Susan: I always advise sellers to invest in staging. Staging homes help buyers see the full potential of a given space or property. Staging makes it easier for buyers to visualize the property as a future home for their families.
Randy: Definitely. You always want to make sure the positives are accentuated to your potential buyers.
Q: WHAT FINANCIAL STEPS CAN SELLERS TAKE TO PREPARE THEMSELVES TO SELL THEIR HOME?
Randy: I would begin any sale by having the family discuss potential capital gains and tax ramifications with their certified public accountant. I also advise working with a top-level bank to get fully approved, provide any necessary proof of funds and bring in a top-level agent to execute the family’s plan.
Q: WHAT MISCONCEPTIONS DO YOU THINK BUYERS AND SELLERS HAVE ABOUT THE HOME SALE PROCESS?
Roxann: That it does not matter who they work with. Because all homes are in Zillow, they assume that the home value is correct and they do not need a realtor to walk them through the process, negotiate, handle inspections and all of the steps in between. Not all mortgage companies have the same products. Working with knowledgeable, seasoned realtors and area experts that know the off-market properties that are available make for a much better purchase experience.
Susan: Some sellers feel that with the market being so demanding that they do not have to prepare their home for sale. I strongly encourage all my sellers, even in this strong market, to declutter, make any repairs, paint if needed and present the home at its best as this will encourage stronger offers. With everyone's lives being so busy, buyers want a home that they can enjoy as soon as they move in.
Q: WHERE DO YOU PREDICT THE REAL ESTATE MARKET WILL GO FROM HERE?
Randy: DFW has undergone a reset due to being so undervalued for so long. We’re now being discovered nationwide. We have great schools, a nearly non-existent crime rate, low taxes, great proximity and a commerce-friendly environment. The floor on the market will continue to increase from here.
Roxann: I learned a long time ago that I do not have a crystal ball, and I cannot foretell the future. I always tell everyone that you deal with the market you have today when making decisions. Hiring a professional, seasoned realtor with intimate knowledge of the area and the process with great negotiation skills gets you the best results for your transaction.