WITH POLL | Experts: Texarkana first-time home buyer market ‘frustrating’

The Texas land rush of 2021 has produced an unforeseen result: a low inventory of overpriced homes available for those looking for their first house. (Gazette file photo by Christena Dowsett)
The Texas land rush of 2021 has produced an unforeseen result: a low inventory of overpriced homes available for those looking for their first house. (Gazette file photo by Christena Dowsett)

TEXARKANA, Texas -- A lack of inventory in the Texarkana housing market is making it difficult for first-time home buyers to find good deals, experts say.

After an unprecedented year of land sales in Texas, and specifically Northeast Texas, the effects from the 2021 land rush have included a low inventory of overpriced homes.

"For first-time home buyers, it's very frustrating right now," said Jared Horton, owner/broker at Century 21 in Texarkana, Texas. "Because they think they're going to have the time to go and find the house they love and be able to buy it. But they're not expecting to pay $10,000 over and compete against five other people; or there's just nothing on the market right now, and they don't understand that there's nothing out there that they're looking for."

 

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In what is now a seller's market, local real estate agents say those looking to move on from their property are seeing great dividends, but the problem is finding an affordable replacement after selling.

"When everybody's house is expensive, nobody's house is expensive," Horton said. "There's no more good deals. There for a while, you could sell your house, make a lot of money, move up and get a larger house. But now, you really can't. You lose all the equity because you're trying to buy the next house."

Mike Brower, Bowie County chief appraiser, said in an earlier Gazette interview that the cost to build a new home and the price of existing homes on the market increased dramatically in late 2021 and continues to rise. With low inventory and rising home prices, potential buyers are sweeping homes off the market within a matter of days in some cases, as opportunities to purchase homes at a reasonable cost are becoming more and more scarce.

According to the Texas A&M University Real Estate Research Center, there were a record-breaking 9,055 Texas land sales in 2021. In the Northeast Texas region alone, there were 2,709. The numbers peaked in the first and second quarters of 2021, with more than 1,700 Northeast Texas land sales.

While those lofty numbers have yet to be matched, local statistics show that home sales are still in the black.

Century 21's quarterly home sales in the first quarter of 2022 show 269 listings and a total dollar volume of $57,796,100, compared to 222 listings and $43,210,937 in the first quarter of 2021. Their best quarter in 2021 was Q3, where they saw 328 listings and $71,962,675.

"It's still a good market. It's just not an unheard of market," Horton said.

RE/MAX broker Jason Thomson told the Gazette in a March interview that RE/MAX's sales in Texarkana have continued to stay strong.

"Sales have held up," Thomson said. "I haven't run a full analysis to see how we compared to the first few months in 2021, but it certainly feels like it's maybe just as strong so far. I don't think it will hold up as big as it did last year."

There also has been concern about higher mortgage interest rates negatively affecting low-income, first-time home buyers.

The A&M University Real Estate Research Center released a study in March reporting higher mortgage interest rates are the potential byproduct of an announcement by the Federal Reserve that it's raising the federal funds rate, which previously was near 0 percent, by a quarter point.

Horton said lately he's seen rates between 3% and 5%.

Tracy Spradlin, a real estate agent with Impact Realty Group, said she expects the rates to keep going up.

"From the mortgage people I've talked to, they've said the rates are going to increase some," she said. "There were people at about a 2 (last year), and now it's at about a 5."

Thomson said he doesn't think the federal funds rate increase will have an immediate impact on home sales in Texarkana.

"The rates are still historically low," he said. "Say you're at a 30-year, 4% interest rate. That's still historically very low. But I don't know how high it has to go before you start seeing a slowdown. Any increase makes it more expensive, but I haven't noticed a slowdown. The biggest holdback is just the inventory being low."