What is the average home owner equity in DFW?

Average home owner equity in DFW- Hello, Mike and Shana Acquisto here, real estate brokers with Acquisto Real estate in Frisco, Texas, just north of Dallas, and we’re speaking on average homeowner equity in DFW. OK, so what we’re doing is we’re looking at this concept and seeing how much equity most people have. And it’s our unscientific kind of research on it.

So we want to make sure we’re doing that. We don’t have like we didn’t do in-depth research. We just are using our 20 years of experience as being real estate brokers here and discussing this whole topic in depth for you. So we’re going to talk about the average time that somebody has owned a home. Want to talk about recent interest rates, the fact that people have been refinancing and what that could possibly mean and the average price appreciation that we’ve seen in the area. And then we’ll hit a topic called CLTV.

Ok, so we’ll get all those in for you. So let’s start at the top. Let’s talk about our unscientific view. Tell me what you just kind of think when I ask you that question. You’ve been doing this for a long time. You’ve sold a lot of homes. Tell me where you think people are at currently.

I think there’s a lot of people that have quite a bit of equity in their homes because over the last few years we’ve seen, you know, we’ve seen people while we’ve seen the values get pushed out because of the demand, but we’ve also seen people put a large amount of money into the home and down payment.

I think that’s a great place to start. So let’s talk about in your estimation, if you looked over the last several years, right.

Average home owner equity in DFW

How much have people been putting down on average?  Well, if they’re not paying cash, which we’ve had a large amount of people doing that, yes, they’re putting at least 20 percent down.

Ok, so that’s really good. So now we have this time frame where I have no idea. I think two years ago and I believe it was like almost 40 percent of all the homes that we sold his whole company were cash where people were paying like just enfold like, bam, no loan.

Don’t worry about it. Just done in price point of. Yeah. Like real spreads. And you know, it wasn’t like they were buying an investment home for, you know, whatever and leasing it out. It was their primary residence and it was, it was that amount. So if you think about that whole time frame, we’re roughly 40 percent of all the homes were paid in full.

That’s a really good situation to be in here. OK, so we’re kind of looking at this. I do agree with you that most people are putting down 20 percent now to get to that right number. And so by most, I would say more than 50 percent are putting that number down and there’s a small percentage that are not OK. And then we need to talk about the average time for home ownership because things start to tick off if we’re looking at these numbers right when we’re coming up with some estimates here.

Yeah, it used to be, you know, the average was like, I don’t know, seven to 10 years. And then we start to kind of creep into like five to seven years. And now it’s what I would say to three years.

And, you know, there’s some people that stay longer, right? Of course. So five years might be a more comfortable number around here in our northern areas where people are staying kind of in the same property. We just see a lot of churn.

And, you know, what’s amazing to me is that people have, you know, within a year, hey, I’m moving. I’ve got a job opportunity somewhere else. There’s a lot in one year they lost their home and sell it. And I don’t think we’ve seen anybody that, at least at the bare minimum, hasn’t broke even. I mean, that happens from time to time.

But, you know, if we’re just talking in general, we’re saying that in the last five years is kind of the average time frame. I just talked about one year in particular, that we had people that were like had a zero loan or a hundred percent equity in their property. Right. Yeah. So and then as we look past in the recent past, we’ve had most people starting to put 20 percent down. Right. So then if we looked at it like that brings the number down quite a bit with the average loan that would be on the property. And then homes also have went up in value over a period of time.

So as we kind of like uncover all of these numbers and the fact that these old homes kind of fall off and when they resell and they  kind of start over again, it leads me to kind of be at this situation between price appreciation, between how long people own homes, interest rates and what’s all going on, and just nonscientific. I’m thinking that we’re at just below.

If you looked at the average average home, that we’re under 50 percent loan to value on an average property. And I’m going to guess if I had to, like, pinpoint a number, I’d be at 42 percent. This is my  personal number.

And, you know, I’m kind of really reach out to some lender friends to say, well, it’s taken the whole market in general.

It’s, you know what I mean? And see what they feel. Yeah. But for all the refineries that have been going on, I think it’d be interesting to to get with them and understand that.

Well, there’s reifies there’s people that paid it off. There’s people that are going to for a long time, like I’m trying to take every single thing into account. And I think the average loan on a property is forty two percent.

Assuming there’s a lot and there’s a lot of people there’s a lot of people haven’t paid off. OK, so that’s that’s my estimation here. And the reason I kind of go over that is because that goes into, like, what happens if because you hear all these economists talking about different things?

Well, the market’s going to improve. It’s going to do this. It’s going to do that. Right. And it’s important to know what’s going on with your local housing market so that when one of these things happen, you realize, well, what’s the effect to me as a homeowner, as a realtor within our local market? Mm hmm. OK, and so should I be nervous? Should I not be like is a really money around here?

DFW

What’s going on in the answer is I believe there’s long term money here in DFW with a lot of equity, and that really helps us out quite a bit. Mm hmm. So, yeah, that’s right. And I hit on a topic, a term called CLTV. And what that is, is C stands for for combined an L loan to value, combined loan to value.

And the reason for that is sometimes people have two loans. So you might take out a first and you might have an 80 percent LTV on the first and then you may take out a second loan that might be 10 percent as a second. So your first would be 80 and then your second would be 10. You need to add them up together in your CLTV combined loan to value ratio would be at 90 percent when you take all that into account. OK. Mm hmm. Very good. So we are kind of all done and conclude.

I think it’s a good point that you brought up, as is the effect, you know, because we hear it like on the surface of interest rates are going to go up. What’s it going to do? But you have to kind of dig in and see what you know, if people have equity and all those things, how it really affects our area. And I think it keeps us in a balanced and safe market.

So chat it now and tell me what you personally think. Let’s be a little bit interactive and you can tell me if you think I’m aggressive, right. Or if you think that  I’m pretty correct. You, as agents have been seeing each of these different things. Right. You see people selling homes and you see how much equity they’re extracting and moving on to the next one. And you kind of see the closing today.

Yeah, well, that yeah. Because you’ll see the closing statement, you’ll see the equity that they’re kind of taking out. So I’m believing that they have over 50 percent equity. And in fact I said that it was at 43 percent. Did I say forty two to forty to forty two percent loan. So that would mean that they have a fifty eight percent equity stance in the property.

Yeah, that’s my personal guess, just chat in and let us know what you kind of think in the comments are right down here below the description you can slide on by and hit the like button if you think that’s a topic that’s helping you out. Right, anything else on it or you feel like, no, I can’t afford it.

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