Much is being said and written today about the softening of the real estate market across the nation and in the Dallas/Fort Worth Metroplex. The Wall Street Journal even had a recent article “U.S. Housing Boom Coming is to an End – Starting with Dallas.” Any local real estate agent will tell you that the days of multiple offers and severe lack of inventory are behind us… at least for now. High interest rates and 5 years of rising home values have finally converged, and buyers are hitting the breaks. But, how bad is it? In a previous blog, we looked at market differentiation by location and price ranges. A quick measure of the strength of a market is the hotness factor – a simple ratio of the houses which are under contract to the total listing inventory (including the pending sales). What percentage of the signs in the yard already have contracts? We have been keeping track of the hotness factor for almost 20 years now and I thought it would be interesting to get an historical perspective. In the chart below, we see that not until the 2Q of 2012 did the hotness factor for the $300K-$399K price point in Plano break the 30% barrier and, with the exception of a couple of first or fourth quarter periods, it was consistently in the $20% – 30% range. The peak periods were the 2Q of 2016 (66%) and 2Q of 2017 (67%) – not a good time to be a buyer!! We have steadily been dropping since the all-time high and now, as of the 4Q 2018 we sit at 28% – not bad for a 4th quarter number when you look back. We shall see what the spring of 2019 brings. And speaking of spring and real estate – your 2019 tax value will be in the mail before you know it – April 15 for most of us. There is only a 30-day window to protest. Why not take this off your plate now and sign up for a reminder to file your protest. You’ll see the sign-up link in the right margin.