The Princeton Texas Housing Market Has a BIG Problem

Princeton has been one of the fastest growing housing markets in all of North Texas. But home values are down nearly 10% in just the last year. Now normally a drop in prices is more or less because the sales in the area have slowed. But people haven't stopped buying homes in Princeton. In fact, recent sales have actually been higher than they were a year ago. So if more people are buying homes, then why are values down so much? If you already own a home in Princeton or thinking about buying one, you're going to want to watch this whole video. It may completely change the way you look at the market and whether it might actually be a bad time to buy or sell in Princeton. I'm Emily Herenda, Dallas-Fort Worth area realtor, and my husband Tim and I have been helping people just like you buy and sell homes here in the North Dallas area since 2015. Feel free to subscribe to our channel, and if you'd like us to help you make a move here, give us a call, text, or email. So here's the difficult news if you own a home in Princeton, and if you're thinking about buying one, you're going to want to know this before you buy. There may not be another major North Dallas suburb where builders control as much of the housing market as they do in Princeton. There is no shortage of home buyers here, but fewer and fewer of these buyers are choosing pre-owned homes. In fact, over the past five years, new home sales have more than tripled, but we've seen about a 30% drop in the number of pre-owned sales. And over that same period of time, we've seen a 77% increase in the number of homes being listed. So a lot more people want So that is a red flag. Before you buy a home in Princeton, ask yourself, is it really a good idea buying a home in this market where sellers are having such a difficult time? I know that there's nuance to this, and in the long run, it could actually work out really good for you. But there's got to be some caution here, because this problem is likely going to get worse before it gets better. The hard truth is that so far this year, about 80% of all home sales have been new construction. That makes Princeton the number one builder-dominated market in North Dallas. Now, the problem is we're taking a market that's already been dominated by new home sales and flooding that with new homeowners who will also be entering the market themselves So, this brings us to home values, because no matter which numbers you're looking at, Princeton has clearly gone through a pretty substantial correction. The exact amount depends on how you measure it. In my MLS data, the median sale price has gone from about $297,000 last year to around $285,000 this year. That's a decline of about 4%, but other measures show a larger drop. Price per square foot is down somewhere around 7 to 9% depending on the source and broader estimates of what the typical Princeton home is actually worth have fallen closer to 10%. Keep in mind, because 80% of those sales are new builds, the median sales price is more of a byproduct of what's being built right now. Now let's make this real for a second. I've had a number of conversations over the past year with people who've bought new builds and needed to sell faster than expected. Every single time they tell me I'm okay if I just break even and in this market that is just not going to happen. Breaking even on a sale means that your home has appreciated enough to cover the closing costs needed on the sale. So if you bought a new home here in this period where values are declining the chances that your home have appreciated are slim to none. So this is where things get really interesting. If you're thinking about buying here, you and I need to have a little moment here. Listen carefully. Princeton has something to offer that you can't get anywhere else in Dallas. But it's a carrot that a lot of people are taking right now that they shouldn't. And I'm going to give you the real data here that no one else is really talking about. Right now in Princeton, you can find brand new homes advertised in the low $200,000s. Lennar has options in communities like Tillage Farms and Daybreak around that range. Trophy Signature has homes in the mid-200s. Meritage has homes starting in the 200s. So let's say you may be a first-time homebuyer and you thought that owning your first home would cost you between $350,000 or $400,000. And then you drive out to Princeton and someone shows you a brand new home for $250,000. They may help you with closing costs, buy down your interest rate. Everything is new and you get a warranty. Seems too good to be true. But let's look at some of the real data about what could happen. Okay, stick with me here. Demographically, the median age in Princeton is around 32 or 33 years old. That's a good six to seven years younger than the national average. The National Association of Realtors reports that for younger millennials, which is exactly where the median age of Princeton residents sits, the median time of owning their home before selling it in 2026 was five years. Now, why is that? Well, what do a lot of people this age do? They get married, they start having kids. Now, if that's not you and that's not your plan, that's really not the point of this discussion. The point is that based on the median age of the population, Princeton is actively filling with people that are demographically more likely to want or need to sell their brand new home way sooner than the 10 to 12 years that most people typically hold onto their homes for. So whether or not this is you, it does show you that Princeton's market is going to be flooded with new sellers a few years from now. And if you're a millennial, the data shows that there's a pretty good chance that you're at least going to want to sell in the next five years. So here's the concern. You can't offer the next buyer a brand new house. You may not have $10,000 in equity to give them towards closing costs, and you definitely can't give them a competitive interest rate. And if the builders have lowered their prices since you've bought or offering more incentives, you could find yourself competing against a brand new version of your house that costs the buyer less than yours. Now, let me give you the other side to this, because there really is one big argument in Princeton's favor. A lot of people are still moving here. About 10 years ago, Princeton had somewhere around 9,000 residents. The latest census estimate puts that number at more than 43,000. So roughly in a decade, Princeton's population has grown five times over. So this is really important when we're talking about falling home values, because this isn't This isn't a community that people stop wanting. In fact, Princeton has had so many people moving here that for a period of time the city put a moratorium on new residential development. This is because the infrastructure was struggling to keep up with all the growth. But the moratorium did not stop the projects that had already been approved. And Princeton still has a lot of housing in the pipeline. You have developments like White Wing Trails, Cross Mill, Arbor Lakes, Princeton Estates 2, and several others with new homes or additional phases still coming. So Princeton isn't anywhere close to being built out. There are still thousands of additional homes that are planned, approved and working their way through the developmental pipeline. So it's actually possible that what we're seeing right now is the ugly middle part of Princeton becoming a much larger city. Builders saw enormous demand and bought the land. Eventually, the supply of new homes got ahead of demand. Builders started competing aggressively on price. Resale sellers got caught in the middle and values came down. But what happens if Princeton keeps adding thousands of people every year? Eventually, some of that supply gets absorbed, and then the market looks very different five to ten years from now. So are there any signs that this is actually getting better? For most of this year, the median price had hovered around $300,000. So it feels like prices are trying to find the floor rather than fall off a cliff. There are some signs of improvement in the resale market. Last year, only 347 pre-owned homes sold in Princeton. Through the first 10 months of this year, we're ahead of that pace. Now that's good news, but homes are still taking longer to sell. Sellers are still making price reductions and there is a lot of inventory. So is it actually a bad time to buy a home in Princeton? The only real way to answer that depends on how long you end up owning the home. If you buy a brand new home for $250, $275 with a great interest rate, and you're planning on living there for the next 10 years, I can make a pretty compelling argument for that. This is a price that's harder and harder to find in North Dallas. And if you're staying there long enough, you give Princeton time to become more established. But if you come into this market knowing that you may want to sell in the next three to four years, Then it could be a huge mistake. The builder may discount the house $20,000 to get you to buy it, which is great for you today, but that really just tells you more about what the value of the home is. Now on the other side of this, if you are already a homeowner in Princeton, I don't think the takeaway is that you have to be stuck here. Homes are selling, but this is not a market where you can price your home based on how much money you need to walk away with. You have to know exactly what the builders around you are charging, what incentives they're offering, and what that does for the monthly payment for the buyer. If you find yourself in either of these situations and you'd like to have a real honest conversation about what it would look like to buy or sell a home here, give us a call, text, or email. We'll see you next time.