Why Sellers Can't Sell In Dallas Right Now

Dallas home sellers are getting desperate. Sellers who would have had multiple offers a few years ago are now staring at weeks of silence and price cuts. But whether you're a seller or a buyer, that's actually not the most important thing happening right now. The most important thing is why this is happening. In many cities, when mortgage rates started going up, everybody felt it. In Dallas, it's more complicated. Dallas got squeezed from two directions at once. I mean, the first one is obvious, right? Mortgage rates. The second one is unique to Dallas, and it has completely changed the way buyers compare homes. I mean, most sellers still think they're competing against the house down the street. Okay, they're not. And that's building a desperation you can see without reading a single housing report. I mean, open Zillow. Pick almost any Dallas suburb. What you'll notice is a pattern. A house comes on the market. A week later, the price gets reduced. Couple weeks later, the price gets reduced again. Then you start seeing seller concessions appear in the description. Next thing you know, you're reading that the seller is motivated and to bring all offers. A few years ago, these sellers wouldn't have needed to do any of that. They would have put the home on the market on Thursday, scheduled showings Friday, and spent the weekend reviewing offers. The buyers were rushing from one showing to another because they knew if they waited too long, somebody else would buy the house first. I mean, the pressure was intense because buyers weren't competing against homes. They were competing against other buyers. Today, the feeling is completely different. A seller gets the house ready, hires a photographer and puts the listing online. Then they wait. The first weekend goes by, no offer. The second weekend goes by, still no offer. The numbers show just how dramatically things have shifted. Back in April of 2022, there were about 15,700 homes for sale across DFW. Today, there are nearly 46,800. That's almost three times as many homes competing for the attention of buyers. So imagine walking into a restaurant with three items on the menu, right? You make a decision pretty quickly. Now imagine walking into a restaurant with 50 items on the menu. You spend more time looking, you compare more options, you become much more selective. Well, that's exactly what's happened to buyers. The change becomes even easier to see when you look at individual suburbs. In April of 2022, Celina had only 137 homes for sale. Today, it has 932. Frisco went from 243 homes to 971. Those buyers aren't opening their search app and looking at a handful of choices anymore. They're opening their search app and seeing page after page of homes. I mean, every new listing that hits the market gives them one more reason to slow down and ask themselves if something better might show up next week. In April of 2022, the typical home across DFW sold in about seven days. In Celina, it took four days. In Frisco, it took five. Today, the typical home across DFW takes about 33 days to sell. In Celina, it's 68 days. In Frisco, it's 20 days. So the difference between four days and 68 days, that's not just a statistic, all right? It's 64 extra days of wondering why nobody has written an offer. The longer a home sits, the more pressure starts building. Every weekend that passes without an offer feels different from the one before it. Sellers start questioning the price or the photos or the condition. What began as confidence slowly turns into urgency. There's one more number that might explain the shift better than anything else. In April of 2022, the average listing in Frisco received about 21 showings. All right, so that's 21 different groups walking through the house, 21 chances to get an offer. Think about what that looked like. Cars pulling into the driveway all weekend, showing notifications constantly hitting the seller's phone, buyers waiting their turn to walk through the front door. Well, today, that number in Frisco is five, just five showings. Across DFW, it's fallen from 10 to four. In Salina, they've dropped from 10 to three. I mean, the house may not be any worse than it was a few years ago. The difference is that buyers have so many more options that they don't have to rush. And that's really the question we need to answer. Why are sellers suddenly having such a hard time attracting buyers? You know, most people immediately point to mortgage rates, and mortgage rates are absolutely part of the story. But in Dallas, they're only half the story. And the other half is what has completely changed the rules of the game, and most sellers still haven't adjusted to it. Picture buyers sitting at the kitchen table with a mortgage calculator open. They're looking at their budget, asking if they can actually afford the payment for the next five or 10 years. If they can't make the numbers work, they're out. If they're on the fence, they're just gonna wait to see if a better house pops up next week. I mean, that is a huge shift. But mortgage rates are only half the story. If rates were the entire explanation, Dallas would look a lot like so many other housing markets in America. Sellers would be dealing with higher payments that meant fewer buyers, but everyone would still be competing under roughly the same set of rules. Well, that's not what happened here because Dallas got hit by a second force at exactly the same time. While mortgage rates were rising, builders kept building. New phases kept launching. New homes kept hitting the market. A buyer can drive through Prosper, Salina, and McKinney and see builder signs everywhere. Model homes are open. New options keep showing up. When buyers open their search app, they're seeing 10, 15, 20 homes stacked side by side so they can take their time. They can compare neighborhoods, incentives, and monthly payments. Every new listing that hits the market gives them one more reason to wait and see if something better shows up next week. But builders didn't just create more inventory. They changed the terms of the competition itself. I mean, most homeowners think they're competing on price. They assume that if their house is priced below a builder's house, they should have an advantage. The problem is many buyers aren't making decisions based on price anymore. They are making decisions based on monthly payment. You know, builders figured this out a long time ago. Instead of cutting the price by 40 or $50,000, they buy down the buyer's interest rate. They pay closing costs and they package those incentives together in a way that lowers the buyer's monthly payment, especially during the first couple of years of ownership. When a buyer sits down at that kitchen table comparing options, that's what gets their attention. Imagine two homes sitting a few minutes apart. One is a resale home listed by a homeowner. The other is a new construction home being sold by a builder. The resale home might even have a lower asking price, but the builder's offering a rate buy-down and several thousand of dollars towards closing costs. Suddenly the buyer is looking at a monthly payment that is hundreds of dollars lower. Okay, that's extra money left in their checking account every month. Here's what makes this so difficult for resale sellers. A builder can advertise a rate buy-down, closing costs and incentives right out front and buyers think it's a great deal. I mean, they kind of expect it. Now, a homeowner, they try the exact same thing and right off the bat, buyers are like, what's wrong with this house? Why are they offering money already? So the same financial tool lands completely differently depending on who's offering it. That is an advantage builders have that sellers just don't. I mean, that's the system that's changed and put home sellers at such a disadvantage. Builders aren't trying to win by having the best house. They're using lender relationships, rate buy-downs, closing costs, credits and incentives to create a lower monthly payment than a homeowner can match. The seller is focused on the asking price while the buyer is focused on what leaves their bank account every month. Most resale sellers have no answer for that because they don't even realize that's the question being asked. They think they're competing against the house down the street when they're actually competing against builder incentives, builder financing and builder created monthly payments that completely changed the math for the buyer. Now it's not just that buyers are no longer competing for homes and that builders have completely changed the sales game. There's one more thing happening that makes all of this even worse for sellers. I mean, sellers have another big strike against them that comes from days on market. The clock creates perception problems that are very hard to fix. I mean, you could think of it this way, days on market equals psychological leverage. I mean, most sellers think the asking price is their biggest hurdle, but there's a different number on the listing that's actually doing far more damage to their bottom line. I mean, how long has the home been sitting on the market? Because today that number is often doing more damage than the asking price itself. I mean, picture a buyer scrolling through Zillow. They see a house they like. Then they notice it's been sitting for 63 days. Their thoughts move from, oh my goodness, I love this kitchen to why hasn't someone bought it yet? Nothing may be wrong with the home at all. I mean, the kitchen may be beautiful. The roof may be brand new. The seller may have done everything right, but buyers don't know that. All they know is dozens of other buyers looked at the same listing and passed. And the longer the clock runs, the louder that question becomes. That's why the first few weeks matter so much. A fresh listing feels desirable. A listing that's been sitting for two months feels negotiable. Buyers know the seller's been waiting. They know there have probably been difficult conversations about price. They know the seller's more motivated today than they were six weeks ago. Now, whether that's true or not almost doesn't matter. The perception is what matters. If you're a buyer in Dallas right now, everything we just walked through is working in your favor, but only if you understand the system well enough to use it. So I wanna give you some insight on this. The first thing a smart buyer does is use days on market as a negotiating clock. A home at 35 days with one price cut is a completely different conversation than a home that listed last week. By day 35, the sellers had uncomfortable conversations with their agent. Okay, they just want it done. So closing cost credits, repair allowances, price reductions on a $500,000 home, the difference between a day seven negotiation and a day 45 negotiation can easily be like 15 to 25,000. I mean, most buyers never pay attention to how long a home has been sitting. The ones who do use it as one of the most useful tools available to them right now. The second thing is comparing builder and resale options the right way. And this is where a lot of buyers make a costly mistake. Most buyers compare monthly payment and stop there. Okay, you can't do that. You have to compare monthly payment and purchase price together. A builder sometimes raise the price of a home specifically to fund the incentive package they're advertising. So a home listed at 550,000 with a $25,000 incentive package may actually only be worth 525 without it, which means you are financing $25,000 more than the home is worth in order to get the lower payment. So a smart buyer runs both numbers. What's the monthly payment with the incentive? What's the purchase price without it? If the price is inflated to cover the incentive, that needs to be part of the negotiation. The third thing smart buyers do is separate expensive problems from cosmetic problems. Imagine you walk into a house with ugly paint and worn carpet. Many buyers immediately lose interest. A smarter buyer keeps looking. What if that same house has a brand new roof, HVAC system, and water heater, right? Paint and carpet are going to be cheaper to fix. Replacing an air conditioner in the middle of a Texas summer isn't. Instead of walking away, a smart buyer uses those cosmetic issues as a negotiating tool and asks for a credit. They're buying a home with the expensive stuff already replaced while negotiating on things that are much cheaper to fix. The fourth thing smart buyers do is focus on problems they can fix and avoid problems they can't. You can repaint a kitchen. You can replace flooring. What you can't do is move the house closer to work. You can't move it into a better school district. You can't change what's around it. Okay, so imagine two homes. One has an outdated kitchen, but it's in a location you love. The other has beautiful finishes, but it's farther from work, farther from the places you go every week, and in an area you're less excited about. All right, five years from now, you're probably not going to care about the older countertops. You will still care about the extra time you're spending in the car on your commute. Smart buyers negotiate hard on things they can fix. They don't let cosmetic issues scare them away from a great location, and they don't let pretty finishes distract them from problems they'll have to live with forever. Now, our agents run this full analysis before a buyer ever puts an offer on a home. Days on market, price reduction trends, what builders in your target area are offering, and whether their prices reflect the incentives they're advertising, and how to read the difference between a seller who's stuck and one who's flexible. All right, that's what puts you in the group that walks away with real money, rather than the group that figures out what they missed after they've already signed. If you want that analysis applied to the home you're targeting, we'd love to help. The Let's Find Home questionnaire gets us started, and you can find that in the description section. Buyers who skip this step are the ones who find out after closing what they could have negotiated. Now, we've talked a lot here about desperate sellers and how that can be an opportunity for buyers, but there are some homes you should never buy no matter how great of a deal it seems to be. I walk through several of those in this video, which you may want to watch next. In the meantime, this is Wendy Pinnell, your Dallas realtor and broker, and I'll see you there.