Low inventory, supply chain hiccups play role in creating ultra-competitive seller's market

Construction of new homes is ongoing in Gean Estates, a residential development in Keller. A slowdown in new home construction nationwide is one of several factors that have contributed to a supply shortage within the residential real estate market. (Steven Ryzewski/Community Impact Newspaper)
Construction of new homes is ongoing in Gean Estates, a residential development in Keller. A slowdown in new home construction nationwide is one of several factors that have contributed to a supply shortage within the residential real estate market. (Steven Ryzewski/Community Impact Newspaper)

Construction of new homes is ongoing in Gean Estates, a residential development in Keller. A slowdown in new home construction nationwide is one of several factors that have contributed to a supply shortage within the residential real estate market. (Steven Ryzewski/Community Impact Newspaper)

Image description
Image description
One of the ways Rodney Eiland, a Realtor working in Keller and surrounding areas, likes to describe the current real estate market is by talking about the people who would like to move but have not.

“I have [clients] that have just decided to stay,” Eiland said. “We couldn’t find anything that worked for them and what they were willing to pay. Or, we put offers on houses and got outbid. So, they’ve decided to stay now. One of them, I know, has completely remodeled their house ... another one is just saying, ‘We’ll wait till next year.’”

According to data from the Greater Fort Worth Association of Realtors, there were 71% fewer homes on the market in May 2021 than in May 2020 within the four ZIP codes—76248 in Keller, 76262 in Roanoke, and 76177 and 76244 in Northeast Fort Worth—that make up the coverage area for this edition of Community Impact Newspaper.

Within those ZIP codes, GFWAR data reflects a sharp decline in the average amount of time homes are staying on the market—as few as seven days in Keller, for instance, down from 35 days a year ago.

The Texas Real Estate Research Center tracks months of inventory, with drops in supply favoring sellers. In May of 2018, for instance, there were 3.2 months of inventory in Keller and 2.4 months in Roanoke. Within the past calendar year, the metric has dipped below one month throughout the market.


Taken together, the high demand and low inventory are having a profound impact on the local market. In some ways, it also has become a cyclical dynamic. Darin Davis is a Realtor residing in Roanoke, and said the shortage has been affected by would-be sellers who are wary of becoming buyers.

“If they don’t have a second home, or maybe a rental home ... that they’re willing to move into, they’re just hitting the pause button,” Davis said. “Folks are just saying to themselves, ‘If we sell, that’s great. We’re going to walk away with a healthy profit—but we’re going to have to go spend all that and then some to move.’”

Leveling off

Soaring prices remind many of the mid-2000s before the Great Recession—but Jim Gaines, an economist for the Texas Real Estate Research Center, points out a key distinction.

“The factor that was going on there ... was the exuberance of lenders—just making loans available and defying what would be called sound lending principles,” Gaines said. “That was a bubble. We don’t think that’s what’s happening today. ... As a matter of fact, the statistics ... indicate that lenders are actually being even more restrictive—they’re requiring a higher [credit] score, a lower debt-to-income ratio.”

Because of this, Gaines said many in his profession do not think the market is in the midst of a housing bubble or at risk of a sudden downturn. In fact, though he anticipates an eventual leveling off, Gaines said when that will happen is hard to pinpoint.

“No one expects the rate of increases that we’ve seen the past year to sustain for much longer,” he said. “Now, I don’t know how long ‘much longer’ is. It’s more than a couple of months and less than three years—how’s that?”

One reason Gaines doesn’t think a leveling off is imminent is due to the challenges facing homebuilders.

According to the National Association of Home Builders, 2020 saw a 12% year-over-year increase in aggregate residential construction materials costs. These complications have slowed construction of new housing, which could help alleviate pressure in the region. The challenges have extended beyond lumber, too, and according to Gaines there is also a skilled labor shortage.

“It’s not just that you can hire anybody to go around the house,” he said. “It’s helpful that they are either a carpenter, an electrician, a plumber.”

A desired market

Both Eiland and Davis note that many buyers, despite the challenges of the market, still want to be in Keller-Roanoke-Northeast Fort Worth—an area where space for new homes is becoming more limited.

Kelly Carlson, a senior planner for the city of Roanoke, reports the city is nearing total build-out on single-family homes. There is one development of 11 houses proposed and some potential multifamily projects in the works, Carlson said. Corresponding with dwindling land available, the volume of residential building permits in Roanoke has decreased from 174 in 2015 to 56 in 2020.

In Keller, 81.6% of land zoned for traditional residential uses—such as single-family and patio homes—has been developed, according to Rachel Reynolds, a city spokesperson. Similar to Roanoke, permits for single-family new builds have dropped in Keller from 227 in 2015 to 82 in 2020.

According to Jane Mathews, a planner for the city of Fort Worth, land left in ZIP codes 76177 and 76244 that is both vacant and zoned for residential uses accounts for just 2% of the total land in each respective ZIP code—translating to 234 acres available in 76177 and 227 acres in 76244.

According to Eiland and Davis, even within the competitive landscape of the metroplex, this market continues to stand out for many families.

“Quality of life, quality of schools ... safety and parks,” Davis said. “It’s just tough to beat the Keller, Roanoke and far north Fort Worth area.”
By Steven Ryzewski
Steven Ryzewski is the editor for Community Impact Newspaper's Grapevine-Colleyville-Southlake and Keller-Roanoke-Northeast Fort Worth editions. Before joining Community Impact in 2021, he worked in hyperlocal journalism for nine years in Central Florida as an editor, sports editor and correspondent.


MOST RECENT

commissioners meeting
Commissioners plan for Denton County redistricting with approval to come in November

District lines are redrawn every 10 years based on updated census information.

Keller-Smithfield water tower
Keller residents may see service disruptions due to antenna upgrades

Keller residents around the Keller-Smithfield Road water tower may experience service disruptions as Verizon Wireless upgrades an antenna.

school board chambers
Keller ISD board approves district improvement plan to address 2019 accountability rating

Keller ISD trustees approved a continued targeted improvement plan at their Oct. 25 meeting to address student academic growth after two elementary schools were found in need of improvement by the Texas Education Agency in spring 2019.

Fast Furious Japanese Grill Fort Worth inside
Fast Furious Japanese Grill brings ‘furiously fast’ cuisine to Fort Worth

A Fast Furious Japanese Grill opened at 9617 N. Freeway in Fort Worth in late September.

Here is the latest data regarding COVID-19 in Denton County. (Community Impact Newspaper staff)
COVID-19 cases, hospitalization rates continue to decrease in Denton County

New COVID-19 cases in Denton County continue to trend downward as vaccinations and herd immunity rise, said Dr. Matt Richardson, Denton County director of public health.

"The Dude" is the signature burger at Lebowski's Grill. (Olivia Aldridge/Community Impact Newspaper)
CI NATION ROUNDUP: Lebowski's Grill upends expectations in Austin; first Houston-area Costco Business Center opens in Stafford and more top news

Take a look at the top five trending stories across all of Community Impact Newspaper’s coverage areas as of Oct. 26.

calendar
Keller ISD trustees review 2022-23 instructional calendar

The Keller ISD board of trustees reviewed a draft of the 2022-23 instructional calendar and will take action at its next meeting.

New statewide maps will go into effect Jan. 18, 2022. (Community Impact Newspaper Staff)
Gov. Abbott approves new voting maps for state legislature, Congress, school districts for next decade

The maps will go into effect Jan. 18, 2022, after the state legislature passed them during a 30-day special session.

The statewide job fair will connect veterans to employers as well as other resource providers. (Sandra Sadek/Community Impact Newspaper)
Statewide job fair aims to connect Texas veterans and their families to employers

The job fair is coming to local Texas Workforce Solutions offices, some of which are having early admission for veterans and their families.

Teso Life currently has a location in Carrollton near another 99 Ranch Market and other Asian businesses and restaurants. (Matt Payne/Community Impact Newspaper)
CI NATION ROUNDUP: Japanese department store Teso Life coming to Frisco; New Braunfels’ Gruene Hall set as backdrop for Scotty McCreery music video and more top news

Take a look at the top five trending stories across all of Community Impact Newspaper’s coverage areas as of Oct. 25.

A vote here sign in front of Southlake Town Hall
Tarrant County early voting numbers show more voter turnout at Southlake Town Hall

Over 4,000 people cast their ballot at Southlake Town Hall during the first week of early voting.