According to Redfin, in May 2022, homes in the Dallas housing market were up 21% from last year. The market is competitive, even though it’s expected to slow with the Fed’s latest interest rate rise. Housing prices are at all-time highs, but there is a lack of inventory, making it a seller’s market. Because demand is so high, there is a lot of competition for houses across the metro. Redfin report that the average home sells for about 5% above list price, going pending in as little as 14 days.
A Hidden Gem
The National Association of Realtors called the DFW metro a “hidden gem” in the real estate market in their year-end 2021 report. Home prices have soared over the past few months, so the market may no longer be the hidden gem it was. Despite soaring prices, there are builders that have kept prices affordable and have available inventory in the Dallas – Fort Worth area.
Median Home Prices in DFW
Dallas has 122 neighborhoods. The median home listing is $539K. Preston Hollow is the most expensive neighborhood, with a median listing price of $2M. Pleasant Grow is the most affordable. The median listing home price is $225K. On the other side of the metro, Fort Worth has about 234 neighborhoods. Monticello is the most expensive neighborhood at a median listing price of $650K, while South Hills is the most affordable at $230K. Many other towns in the metro have home prices in the same ranges. During the first quarter of 2022, one-third of home sales were concentrated in the $300K to $399K price range.
Rentals Are In Demand in DFW
Rental housing is in demand in the metroplex. Over 50% of households in the DFW metro area are renters instead of homeowners. Because mortgage rates have increased, renting in the DFW area can be cheaper than buying. Many young people have moved into the area with the growth of jobs, and they aren’t ready to make the investment in real estate themselves. Investors who can put their financial resources into single-family or multi-family housing can expect a good ROI depending on the location.
Trends in New Home Construction in DFW
Dallas has had a shortage of homes that began many years ago. The Lonestar state has been attractive to large companies, mainly due to its low taxes, low cost of living, and business-friendly climate. This has brought many workers to the community. Last year, according to Realtor.com, the DFW metro area was number 1 in new home construction across the nation. WFAA, an ABC affiliate, reports that new home sales in the DFW market continued to increase over a 3-month period. Pending new home sales in May were 1,663, up from the 1,566 in April. The sale prices of new homes are also increasing 17% from last year in May.
According to one report, builders are finding it difficult to make a profit on new homes under $300K. It’s not just supply chain issues that are making it a challenge to build new homes. The pandemic made these problems even worse. More higher-end homes are being built, which significantly impacts the median price of homes.
DFW Economy Outlook
According to the Texas Real Estate Research Center, Texas is experiencing stable employment growth, even though the unemployment rate of 4.4% is higher than the national average of 3.6%. According to the U.S Bureau of Labor, the DFW area has a 3.3% unemployment rate as of May 2022. This is a good sign that the economy in the metroplex will remain strong. The job growth rate in the metro has averaged $3 over the past five years, another indicator of a strong economy. The community has a strong mix of industries that provide jobs, including healthcare, telecommunications, transport, energy, aerospace and technology. The strong tourist market and sports and entertainment industry in the area also support job growth and a growing housing market.
Could There Be a Housing Bubble in DFW?
There are some who believe that the housing market in the DFW area is overvalued. The Real Deal reports that one economist believes that the housing market is at the peak (or very close to) of the housing cycle. This could decrease home values as the market balances itself. GoBanking.com projects that home values in Texas will grow by 15.29% over the next year. There is some indication that sellers may be feeling more pressure, as property listings with a price reduction rose by 9.4% in May 2022. Last year, price reductions were almost nil. Do you want to know about jozdata.com
The DFW market is one to watch.