While Fort Worth’s economy is booming with employment gains outpacing national trends, the rise in home prices is creating concern that the area’s traditional variety of housing options is disappearing.
In May, the median price for new homes hit a record high of $367,000, up 24.4% from $295,000 a year earlier. That is worrying to many area leaders, who see the increasing prices placing affordable and attainable housing farther out of reach.
Fort Worth is part of a trend in fast-growing Texas. Austin, Dallas, San Antonio and Houston are facing the same issues, said Jeff Ostrowski, an analyst at Bankrate.com, an online financial data site.
Ostrowski recently ranked 50 different metropolitan areas on their affordability for first-time buyers. The Dallas-Fort Worth area ranked No. 36. That’s fairly good for affordability, but Texas and the area are showing signs of being increasingly difficult for first-time buyers, he said.
“The Sun Belt cities that are seeing this rapid growth are losing a little bit of that affordability that used to be a selling point,” he said.
However, Ostrowski noted that for buyers coming from higher-cost areas such as California or New York, Texas still looks fairly cheap.
“It can really be a matter of perspective as to what is a high-cost for a home,” he said.
Elizabeth McCoy, market area manager for Williams Trew Real Estate, said the volatile market has been particularly difficult for buyers in the middle market price ranges, $350,000 and under. Those buyers range from people buying their first home to people with incomes around the area median, she said.
“Especially if they’re getting a loan and cash buyers are coming in, it makes it difficult for those buyers getting a conventional VA or FHA (veteran home loans or federal home loans) loan to compete,” she said. “Some of these cash buyers and institutional investors are waiving the appraisal, and they don’t have an option period. It’s tough to compete.”
The market is showing some signs of a slowdown, McCoy said. She hopes that will temper the explosive price increases in the market that have frustrated many potential buyers.
McCoy and her Realtors have seen the intense competition for homes reach unprecedented levels over the past six months with homes sometimes sold before they hit the market and multiple offers for homes that do hit the market.
“In the past month or so, we have started to see some changes,” she said. “I think that has been, in part, due to interest rates that are going up.”
But if the red-hot market continues, many area officials worry the homebuilders and developers will naturally tilt toward building higher-priced homes.
“I think this council’s ready to have that serious conversation of how do we encourage the housing stock that we need,” said Michael Crain, council member for District 3 and a partner at Northern Crain Real Estate. “I don’t think we have all the solutions, but I think that generally we can all come to the table with an open mind of what the solution looks like.”
Ann Zadeh, executive director of Community Design Fort Worth, a nonprofit with a mission to improve communities, and former representative for District 9 on the Fort Worth City Council, said not having enough affordable and attainable housing can be particularly difficult for a family just purchasing their first home.
“You’re not necessarily going to be able to afford a large house if your community only has single-family detached houses in subdivisions,” she said.
To offer some affordable and attainable options, cities need to offer a variety of housing types, she said.
“It’s not cookie-cutter for everyone,” Zadeh said, noting some people want to live in an urban walkable environment and others want something with more acreage.
Now, she said, the market seems to be saying that starter homes are about $300,000.
“That is unattainable for a lot of people,” Zadeh said.
Zadeh believes that there need to be zoning categories that allow for that missing middle type of housing, she said. In many cases, for someone to build that type of housing, they have to go through a public hearing process, which can be contentious in some neighborhoods.
Crain agrees, saying the council has been pushing for a wider variety of options in developments like the Walsh Ranch project on the city’s west side.
“That’s something we can encourage, too, these planned developments that have different levels of housing in it,” he said.
Being able to offer affordable and attainable housing is important to economic development as well, Crain said. When companies relocate here, they need to know their employees will have places to live. With a booming market, that can be difficult, he said.
“It’s key, and there are ways we can encourage that and I believe this council is willing to take a hard look at that,” he said.
Mary-Margaret Lemons, president of Fort Worth Housing Solutions, an agency that provides affordable housing in various areas of the city, said providing options is key for economic development.
Lemons said FWHS works with economic development officials to create not just housing opportunities, but work opportunities as well.
Crain said Fort Worth needs to change some of the thinking it had in the past.
“I’ve said this many times, we’re a large city with sometimes ideas that may not fit a big city,” he said. “We need to think about what that looks like.”
If You Go
Housing Crisis: “How do we keep alive the American dream of home ownership in Fort Worth?“
Join the Fort Worth Report and community leaders in a discussion on home ownership and the housing crisis in Fort Worth. This is a free community event with free parking. Complimentary breakfast will be served at 7:30 a.m., and the program will begin promptly at 8 a.m. Come be part of the conversation!
Thursday, June 23, 2022
7:30-8 a.m. – Breakfast and Networking
8-9 a.m. – Program
Texas Wesleyan University
Nick and Lou Martin University Center (2nd Floor)
3165 E. Rosedale Street
Fort Worth, TX 76105