High demand for homes creates difficult market in Frisco

This year’s single-family housing permits in Frisco already rival total 2020 numbers, according to city data. Some local builders are working at breakneck speeds chasing demand with limited and increasingly costly supplies. (Matt Payne/Community Impact Newspaper)
This year’s single-family housing permits in Frisco already rival total 2020 numbers, according to city data. Some local builders are working at breakneck speeds chasing demand with limited and increasingly costly supplies. (Matt Payne/Community Impact Newspaper)

This year’s single-family housing permits in Frisco already rival total 2020 numbers, according to city data. Some local builders are working at breakneck speeds chasing demand with limited and increasingly costly supplies. (Matt Payne/Community Impact Newspaper)

Image description
Image description
This year’s single-family housing permits in Frisco already rival total 2020 numbers, according to city data. Some local builders are working at breakneck speeds chasing demand with limited and increasingly costly supplies.

Local real estate experts say it could be another year before the real estate scene stabilizes and have cited historically low interest rates as another driver of market conditions.

“It’s interesting,” said Phil Crone, executive director at the Dallas Builders Association. “With price increases and supply chain issues ... I’ve been doing this for 15 years, and I’ve never seen anything like it.”

The Collin County Association of Realtors reported that county homes in May remained on the market for 67.9% less time than last year and sold for 105.7% of their original list price on average. The median sales price of $437,650 is 26.9% more than the year prior.

“Demand for Collin County homes is high and supply remains short, which means prices go up,” said CCAR President Ron Leach in the report. “It’s an extremely rewarding market for sellers, and it is a really hard market for buyers.”


Frisco is located in both Collin and Denton counties. For Collin County, CCAR reported 0.9 months supply of homes for sale. For Denton County, the Greater Lewisville Association of Realtors tracks the data and reported 0.8 months supply for May. A market is considered balanced when there is a 6-month supply of homes for sale.

Mayor Jeff Cheney, who owns the Cheney Group real estate firm, said he believes the imbalance will begin to stabilize in the months to come.

“I do think we’re past that first, initial, big increase in pricing, and things will start leveling off moving forward,” Cheney said. “[But] I do expect there to be limited supply for at least the next 12 months.”

Cheney said he has never seen a market dynamic like this in his nearly 20 years as a real estate agent. Clients, he said, may be waiting weeks—if not months—before property is available to tour. Oftentimes, Cheney said homebuyers are forced to make decisions on the spot.

Many homebuilders in Frisco are behind schedule substantially on their initial projections, he said. Cheney added that many builders are queuing would-be buyers on waitlists that span longer than a year.

Constraints on homebuilding supplies such as lumber and metal are to blame for the delays, alongside a labor shortage. Both of these factors Cheney attributed to the pandemic. In addition, the growing prevalence of working from home is influencing families to seek homes in Frisco they otherwise would have avoided due to commute times.

Cheney’s prediction about the eventual rebalancing of the market is due to COVID-19 restrictions waning and builders catching up. As mayor of Frisco, Cheney said he also believes big businesses that seek to move to Frisco, such as the PGA of America, share his belief that the market imbalance is temporary. Cheney said corporate entities seeking to move to Frisco aren’t discouraged by the housing shortage.

“It’s not going to last forever,” Cheney said. “Eventually, we’re going to see the cycle change, and things settle down, hopefully sooner than later.”

Emboldened buyers

John Porizek, land development manager with M/I Homes of DFW, believes a more even split of supply and demand depends on the 30-year mortgage rate rising above its current historic low.

M/I Homes builds out lots in the north Frisco Hollyhock community southeast of US 380 and FM 423. Porizek said his team is forced to cap monthly sales due to overwhelming demand and limit spending on marked-up building materials.

“Interest rates would have to continue to go up to slow the pace down,” Porizek said. “With the interest rate still being very attractive, it allows first-time homebuyers that opportunity to acquire a loan.”

Predating the pandemic, the plummeted mortgage rate has been the most significant factor to heightened demand, according to Dallas-based research firm Residential Strategies Inc.

The rate in Texas is 2.98%, the first-quarter report from RSI reads, down considerably from just under 5% in 2019.

A pandemic made already eager families even more set on buying homes, according to Porizek.

“A lot of people were working from home,” Porizek said. “It was more desirable for people to get into a home and do upgrades to a home because they were spending more time there.”

A misaligned market

Crone with the DBA seeks to advocate, educate and communicate on behalf of the builders, remodelers and Realtors who comprise his organization.

Crone said the current market is defined by lost business for both homebuilders and buyers.

Tight supply chain issues and corresponding housing supply problems will persist through the summer and well into the fall, he said. The director thinks real estate in the Dallas-Fort Worth region is heading in the right direction as peak buying season passes and COVID-19 vaccination rates that boost the homebuilding workforce continue to rise. Many families, however, are left on the sidelines as average home prices have gone through the roof.

“Builders want to build every home that’s being demanded out there, and the more these prices go up, the fewer people have that opportunity,” Crone said. “The more [builders are] constrained by the amount of homes they can build by the supplies that they’re getting, the fewer families they can put in homes. And that’s not good business.”

He said the DBA hopes to see action on a federal level to even out supply and demand for homes in North Texas. For instance, Crone said a lawmaker summit on lumber would strengthen the market, one that would perhaps widen options for where lumber is harvested in the U.S.

In the meantime, the DBA advocates for builders to discover ways to build houses with less lumber needed.

“Homes are one of the few things that are actually built and fabricated out in the field, not in a factory or closed environment,” Crone said. “So finding efficiencies there where the job site may not always be conducive for it I think is a challenge, but there’s also an obvious benefit there.”

Crone shares the belief that an already prime housing market in the Frisco area was made even more appealing by a perspective change from the pandemic. Commuting has become less of a concern due to increased work-from-home options and that, combined with “a lot of pent-up demand” among millennials, has caused the floodgates to open, he said.

“Home became more essential than ever,” Crone said. “Everybody realized that, like it or not, they’re going to be spending a lot more time there.”
By Matt Payne
Matt Payne reports on Frisco City Hall and its committees, Collin County Commissioners and McKinney business. His experience includes serving as online content editor at Fort Worth Magazine and city editor at the Killeen Daily Herald. He is a 2017 graduate of the Frank W. and Sue Mayborn School of Journalism at the University of North Texas in Denton.


MOST RECENT

student writing on paper
Texas Legislature allows parents to opt for students to repeat grade levels or courses

Senate Bill 1697 is effective for the 2021-22 school year.

Candida auris causes invasive infections and can be transmitted in health care settings, a news release from Collin County Health Care Services said. (Courtesy Adobe Stock)
Collin County health officials say yeast infection that killed 4 not public threat 

The county gave no indication that generally healthy individuals should fear infection.

Frisco has seen 21 West Nile virus-positive mosquito pools this season. (Courtesy Adobe Stock)
Frisco sees 21 West Nile-positive mosquito pools this season, will spray again

No human cases of West Nile have been reported, according to the city.

woman throwing axe
Stumpy's Hatchet House sets opening date to bring axe throwing to Frisco

The recreational axe-throwing facility is set to open in Frisco on Aug. 6.

Oni Ramen plans to open a location in Richardson's CityLine development later this year. (Courtesy Adobe Stock)
Oni Ramen coming to Richardson; American-Italian restaurant Sfereco set to open in Lewisville and more DFW-area news

Read the latest business and community news from the Dallas-Fort Worth area, including a new bakery coming to McKinney.

Frisco Economic Development Corp. President Jason Ford (Courtesy Frisco EDC)
Q&A: New Frisco EDC President Jason Ford shares vision on city’s entrepreneurial future

Ford described Frisco as a tech-driven hotspot for venture capital, sharing his vision for the city’s future and how the EDC plays into that end.

Mad for Chicken opened July 23 at 216 W. Virginia St., Ste. 102, in downtown McKinney. (Courtesy Mad for Chicken)
Mad for Chicken opens; work on container homes community begins and more top news from DFW

Read the most popular business and community news from the past week from the Dallas-Fort Worth area.

The number of people vaccinated in Frisco’s four main ZIP codes has increased since vaccines were made available to those age 12 and older in May. (Community Impact staff)
Tracking COVID-19: More than half the eligible residents in Collin, Denton counties fully vaccinated

The 75035 ZIP code has the most vaccinated residents, per data from the Texas Department of State Health Services.

School supplies will be exempt from the 8.25% sales tax Aug. 6-8. (Courtesy Adobe Stock)
What to know before the statewide tax-free weekend Aug. 6-8

Customers will not have to pay the standard 8.25% sales tax on select clothing, footwear, school supplies and backpacks under $100.

building
Connections Wellness Group expansion includes office in Frisco

Connections Wellness Group offers individual counseling as well as group therapy for mental health, trauma and other needs.

building facade
Breakers Korean BBQ in Frisco closes for renovations

The Frisco steakhouse and sushi bar does not have an expected reopening date.

Dutch Bros Coffee opened a new drive-thru location July 26 in Plano. (Courtesy Dutch Bros Coffee)
Dutch Bros Coffee comes to Plano; meat market, butcher shop opens in Richardson and more DFW-area news

Read the latest business and community news from the Dallas-Fort Worth area, including a meat market and butcher shop that offers authentic Middle Eastern-style grilled meats that are halal and locally sourced.