Ben Caballero has always been one step ahead of the game. He began his career as a home builder at the age of 18, became a real estate broker at 21, and then a three-time Guinness World Record holder for most home sales in 2016, 2018, and 2020.
Caballero is also the first real estate agent to have closed more than $1 billion in residential sales in a single year, a distinction he first reached in 2015 and has repeated every year since then.
So what does the world’s most successful real estate agent say about the Texas housing market?
“I don’t see anything but explosive growth from here on,” says Caballero. “We’re just very fortunate to be right in the middle of the best market in the entire country.”
If you’re a seller, Caballero’s optimism is encouraging; however, things may be different if you’re a buyer, since many people — particularly first-time homebuyers — struggle to locate an affordable property.
In April, the median sales price for homes in Dallas was $440,000, up 13.1% from the previous year, according to Redfin.
Houses are selling nine days faster and 4% over last year’s asking price. If they can find a property to buy, it is challenging for potential homeowners to come up with a down payment.
Caballero estimates there is a shortfall of at least 5.5 million homes in the U.S. He attributes the staggering figure to a lack of homes developed between 2007 and 2020 after the housing market bubble burst in 2007, triggered by the collapse of the sub-prime mortgage industry.
COVID-19 is another factor driving new housing demand, as many homeowners found during lockdown that their current homes no longer suited their needs, and they began seeking alternatives.
According to Caballero, millennials coming of age to buy homes, the population living longer, and institutional investors entering the market in force all contributed to the shortfall.
While Caballero sympathizes with property buyers, he believes the builders are suffering the most.
“The market, materials, and labor all conspire against the builders,” Caballero told The Dallas Express. “They’re doing the best they can.”
“We have a remarkable industry with homebuilders; they produce a great product under a lot of restrictive municipality laws and environmentalists,” he added. “Probably between 30 and 35% of the total cost of a home is directly related to environmentalist city codes and laws. Regardless of that, they create a fantastic product.”
The real estate agent also cites the time it takes to warrant a new home and delays caused by permitting snags, supply chain issues, and weather as other thorns in the sides of builders.
Caballero made the lives of his production builder clients easier and advanced the industry in 2007 by creating HomesUSA.com’s one-of-a-kind SaaS (Software as a Service) listings management and marketing platform.
Builders can use the technology to post their newly constructed homes on the MLS (Multiple Listing Services) without having to manage the listing.
“The primary skill of a builder is to construct houses. A realtor’s primary expertise is marketing and selling homes to consumers — 85% of them are sold through MLS builders; however, their core expertise is not MLS and MLS management. In order to list their new build, they will outsource someone to handle the mechanics of listing the home to be sold,” Caballero explained.
Ironically, many real estate agents aren’t used to marketing new homes. They primarily work with existing residences. Caballero and his crew fill this gap by acting as a go-between for builders, real estate agents, and buyers.
There are four significant differences between purchasing a new home and an existing one that Caballero stresses to buyers and real estate agents alike.
“First, builders can’t tell you exactly when [homes] will be complete because they don’t know about deliveries, weather, or labor delays. The closer you get to the completion, they will be able to narrow it down.
“Second is, the question of buyers is, ‘Why do we have to use your title company?’ The reason is that title companies are responsible for a lot of information that they have to guarantee, ensure, and title. There are a lot of corporate resolutions and legalities at play. Builders are responsible for getting all the legal stuff set up with the title company, so having 10 different companies to deal with is not feasible.
“The third is financing. Buyers question, ‘Why does the builder want to use their lender?’ Builders will typically give the buyer an allowance of several thousand dollars if you do, but they want to use their lender because they have experience with that lender. Once the home is complete, builders want to close and close fast, so they don’t lose money, so having a confident team is vital,” said Caballero.
The fourth and final difference between working with a new home builder and a realtor is that “most builders require the use of their sales contract instead of contracts promulgated by the Texas Real Estate Commission,” Caballero explained.
“They must deal with building codes, municipal laws, and regulations. They are also subject to things beyond their control like labor, material availability, deliveries, building inspections, vandalism, OSHA, corporate law, insurance company conditions, labor laws, and even the SEC,” he added.
Of course, with Caballero at the forefront of the housing industry, the obvious question is how long he thinks the housing shortage will last.
Caballero says that if builders nationwide can raise production by 10% each year, that would close the gap by 2028. The gap could close even faster in Texas.
“Fortunately, we have a lot of land,” says Caballero. “We’re not restricted by mountains, lakes, oceans, or anything. That’s good for the consumers because, as expensive as homes are here [in Texas], they’re more expensive elsewhere. As long as we continue in the direction that we’ve been going, as far as politically, we’ll be able to [have growth] if they’ll just let builders build.”
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