A new report by Zillow shows entry level home prices are climbing at a fierce rate in Texas, providing big gains for sellers and making it tough for new buyers to enter the market.
At an open house in an established neighborhood in Duncanville, broker Nora Parks said the listed starter home won't last long.
“In this market right now in Texas it is just on fire," said Parks.
Right now, it's a fierce buyer's market in Texas. A report released from Zillow Friday shows that while entry level home prices have climbed 45 percent over the last five years nationwide, they've spiked nearly 90 percent during that same time period in Dallas-Fort Worth.
Still, the little inventory that's there doesn't last long.
“As far as the homebuyers are concerned, they’re being a little less choosy. They’re willing to accept things that they probably wouldn’t otherwise go for, and they’re willing to make those contracts very aggressive," said Parks.
Those factors have made the market tough to enter for young, first time buyers like Troi Cluse.
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“These homes get picked up so quickly and for cash, and I get out-beaten by cash which makes it so difficult and heartbreaking for me,” said Cluse.
Parks said she's telling clients like Cluse to be patient.
“What I tell them is be prepared to submit at least 10 contracts before you get one that’s accepted or we have an opportunity to negotiate," said Parks.
When they get the chance to make an offer, she says many buyers are making contracts competitive by paying for the title and surveys, a practice that's not usually the norm. When it comes to homes under $150,000, a truly scarce market, those without cash stand little chance.
“It’s soul crushing. It’s devastating because when you really start realizing what it entails, you kind of have to sit back re-evaluate things," said Cluse.
One month into her search, Cluse is now talking with builders before giving up hope that now's the time to buy.
Meanwhile those trying to sell aren't having to play by the usual rules to see a return on their investment.
“I just contracted one recently and the sellers bought it in May and they’re going to walk away with 28,000 dollars," said Parks.
And while it's tough to predict how long trends like this one will last, Parks says it won't last forever.
“I’ve been in this business for 20 years, so I’ve seen a lot and this is just another example of a seller’s market," said Parks.
The report shows homes on the higher end of the price point scale are gaining equity at a much slower rate.
