Frisco and Little Elm Real Estate Market Trends

by Jeff Wimpy

In short, the current real estate market for these two key cities... PRICE INCREASES!

Frisco and Little Elm are two of the fastest growing cities in the Dallas metro area. Other articles on this website outline the reasons for the growth, however, with growth comes appreciation of prices and values. This is to be expected. However, these price increases we are seeing may be a little abnormal, compared to typical growth patterns.

Over the past 6 months, prices have been climbing rapidly. During a recent visit with one of my favorite new homebuilder representatives, she told me they have had a total of $21,000 worth of increases since January 2006. They exepect several more throughout the year. As I visit new home communities, as well as preowned homes, I am continually amazed at the rate of increases. So what's the deal? Why the spike in prices?

There are two main reasons for the price increases. First, the basic principles of supply and demand. Frisco is just HOT PROPERTY. The population growth has been in the double digits for some time now. The same applies to Little Elm. With this type of demand, naturally the prices are going to rise. This is true for the average homebuyer as well as developers looking for raw land to establish new communities.

The second reason is the cost of materials. With the increase of oil and gas prices, as well as the priority to get materials to areas in Louisiana, Mississippi, and other locations affected by Hurricane Katrina, the cost of lumber and other supplies are skyrocketing. Talk to any homebuilder rep, and they'll bring this up in the first 5 minutes of the conversation.

So, how does this affect the average consumer?

1. Buyer's who are looking for homes under $250,000 in Frisco are going to have LIMITED choices. This is one of the biggest changes in the market over the past year.

Consequently, Little Elm is going to start attracting more of these buyers. One new builder in a prominent subdivision in Little Elm just introduced a new line of homes specifically targeting this price range. A year ago, I would have thought they were crazy. Today, I will be taking many of my clients to this location first.

2. Frisco home sellers who can afford to sell their homes under $250,000 will be able to sell their homes relatively quickly. With mortgage interest rates on the rise and the lack of availability, this is going to be a HOT price point.

3. There is a short window of opportunity to get a luxury home under $300,000 in Frisco. Again, with the cost of land in Frisco, homebuilders are having a difficult time making money selling homes in the low $200's. There are still communities that sell in the low $200's, but the amenities offered in the homes just aren't what one would expect. As a Realtor, it's my job to know where to find the best homes. I know where they are and they are selling FAST!

4. Little Elm is positioned well, because of the prices. Last year, our clients who had homes valued over $200k in Little Elm were struggling to even attract lookers. This year, more people will be willing to drive a few more miles and look in Little Elm. After all, Little Elm is situated nicely. They are expanding FM 423, Eldorado Parkway, Building the bridge across the lake, and of course, the LAKE. In Little Elm you can still get really nice homes under $180k. For the same luxury home in Frisco, you can find a few of them in Little Elm for $30,000 less.