Market Watch - 20 May 2022

Since last week, New Listings, AOC and Closed Properties increased while Pending Properties decreased. This is the first time the market sustained an aligned distribution for more than one week since 23 Oct. 2020.

An aligned market should have more houses listed than any other tracked category. Then, there should be more Pending and Closed properties followed by Active Option Contract because each of these functions has an intrinsic time allotment within a week’s window.

Pending Properties typically wait on conditions to be met to close the property. This process fills most of the time between the end of an Option Period to the Closing Date – about 23 days depending on a loan’s status, repairs, move out and any title issues resulting in a higher number each week. When this number is comparably low, it indicates more cash buyers are likely.

Closed Properties are a simple sum during a single week of 7 days. When this number is higher than other numbers, it indicates a depletion of the total market.

Active Option Contract are transactions with the option to terminate during a negotiated time – typically 3 to 7 days. Consequently, these properties can – and often do - enter and exit this status between our Market Watch collections on Friday mornings. When this number is low, it indicates shorter Option Periods were probably negotiated.

The lease market increased New Listings and Closed Properties while Pending decreased. The lease market inverted again after a reduction of Closed Properties last week. Pending properties are significantly lower than a typical lease market would tolerate.

This indicates that tenants aren’t able to secure a vacant property 60 days in advance. Instead, they must secure a lease for a currently occupied property or wait to pounce on an available property during the final 15-to-30-day window.

While many lease contracts require a 60-day notice to vacate, landlords don’t want a lease property to sit without a tenant – not even a day if possible. Current tenants often have the option to pay an additional month’s rent to avoid showings during their final 30 days in a property, but most tenants don’t pay for this option. Instead, they hope the property leases quickly to stop the showings.

As we head into the busy summer months, tenants and tenant agents should expect the lease market shortage to intensify and become more difficult to afford and meet qualifications. Increased lease prices are mainly a result of supply and demand. It’s also partially a result of increased property taxes and insurance increases. These expenses are indirectly passed on to the tenants through higher rents.

I’ve Got Your Six!

Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212
DFWmark.com

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