• November 28, 2014

Existing-home sales outpace new-home sales in Killeen area

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Posted: Sunday, June 1, 2014 4:30 am

After nine years of living in a 1,500-square-foot home on Brookway Drive in Killeen, James Young and his family decided to move.

“We talked about selling the home in the last part of March (2013),” Young said. “It wasn’t too long after that, sometime in May, that we listed it.”

Since the house, built in 1987, was his first to sell, Young had some concerns, including how long it would take.

“I was anxious,” he said. “I wanted it sold right way.”

Young’s real estate agent, Grace Sanchez, a Coldwell Banker United Realtor, helped him understand the Killeen housing market and guided him through the process of selling, he said.

“She kept telling me to slow down,” Young said. “It will come. It will come.”

For the past five years, construction of new homes in Killeen declined. But home sales in the Killeen-Fort Hood area stayed consistent, except for a large drop in 2011.

“You are seeing a mix of new homes versus existing homes (being sold),” said Rodney Shine of the Shine Team. “I think builders have secured their niche, but there is a mix in the market.”

The Shine Team had 34 homebuyers under contract last week. About 14 of them, or 40 percent, were purchasing new homes, Shine said.

But when you look at the Multiple Listing Service area, the percentage of new-home buyers is even smaller.

From Jan. 1 to May 28, the service area shows 246 new-home sales and 822 existing-home resales, Shine said. That is 24.3 percent new homes.

The percentage of new-home to existing-home sales stayed close to 25 percent between 2009 and 2014, except for 2012, when new home sales equaled about 35 percent.

A decline in new-home construction and securing a Realtor he trusted were just two reasons Young said his home sold in three months.

“I feel lucky that my home sold in three months,” he said. “(Sanchez) never put a time limit on it. She said you could sell in a day or a year. ... You need someone like Grace who is going to fight for what you want.”

Lots of growth

Area builders respond to the real estate market, which continues to grow, said Jose Segarra, Fort Hood Area Association of Realtors spokesman and Exit Realty broker.

“I think we are doing a very good job of not building too many (new homes),” said Tom DeAngio, Carothers Homes managing broker. “Our inventory of homes continue to have contracts on them.”

Carothers Homes — a Harker Heights-based builder — has about 68 homes on the market in Killeen and Harker Heights, 19 of which are move-in ready, DeAngio said. Three of them sold over the past weekend.

Availability of move-in-ready homes decreased as the housing market declined, but it’s starting to grow again, DeAngio said.

Building move-in-ready new homes is important in the Killeen area, DeAngio said. Because of the military, people move here with very little notice and they can’t wait three to four months for a home to be built.

“We normally don’t have a completed home on the market more than 60 days,” DeAngio said.

New vs. existing

The difference between selling an existing home and a new home comes down to buyers’ preferences.

“There are people who are just adamant about buying a home that is a resale,” Shine said. “‘I absolutely want an established yard with trees,’ said a client to me this week.”

Existing homes often have gardens and flower beds, he said. Plus, the initial homeowners likely already fixed any issues that went unnoticed during construction or completed upgrades.

New homes traditionally give people more options on flooring, wall textures and colors, DeAngio said. Depending on the year an existing home was built, a new home could offer more modern trends in floor plans, such as larger kitchens and bathrooms. New homes also have a full 10-year warranty, DeAngio said.

Pricing

The largest factors affecting the housing market are pricing and household incomes, Segarra said.

“What drives real estate is income levels,” he said. “I can show all our buyers a $400,000 home and they would all love it, but how many of them can afford it?”

To complete sales in a timely fashion in this market, the seller has to be fair, Segarra said.

“Homes that are priced right, in good condition and offering terms that benefit the buyer are selling fast,” Shine said.

Young’s home met the criteria. During nine years of ownership, he put in new flooring, a new roof and new appliances, which were included in the sale, he said.

Timing also determines whether an owner makes money on the home, Segarra said. Today, people have to stay in a home four to five years to not lose equity.

In most markets, people stay in a home between eight and nine years, but Killeen-area residents generally stay three or four years, Segarra said.

According to the Fort Hood Area Association of Realtors, the average home inventory is seven months, meaning it will take about that long for all available homes to sell if no additional residences are listed.

The Texas A&M Real Estate Center shows a slightly smaller figure for average inventory: 6.7 months, said James Gaines, a research economist at the center.

A balanced market is about 6.5 months, he said.

“(Killeen-Fort Hood) is down from the previous year, which was over 7.5, so the market is beginning to catch up with itself,” Gaines said. “The supply and demand is balanced, which is kind of where you want it to be.”

Killeen-Fort Hood leans slightly to a buyer’s market, Segarra said, meaning buyers benefit more than sellers.

“We are not by any means at an under-supply situation in this market,” Shine said. “We have plenty of inventory to sell. ... If you are a buyer, you are likely to see a lot of inventory. If you are a seller, you don’t like to see that inventory.”

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