Status of the Dallas Real Estate Market in 2017
Dallas currently ranks as one of the healthiest real estate markets in the nation. A recent report by the National Housing Forecast listed it as the second hottest market in the country, behind Las Vegas. According to the S&P Case-Shiller Home Price Index, home prices are up a whopping 7.1 percent from a year ago, far higher than the 6.2% national average. Analysts credit the low inventory and hot sales activity with the high home values, which further benefit from the robust local economy and high rate of employment. Overall, home prices are up an excellent 60% from recession-era prices, and impressively, the prices are on average 50% higher than they were before the recession hit in 2008.
Demographics in Dallas
Despite huge employment prospects, with the area being home to a large number of companies like AT&T, Southwest Airlines and more, millennial home ownership is currently ranked low in a recent study by Abodo, a rental service. Their report says only 28.7% of the areas millennials own homes, with more renting in order to save money for the large down-payments, or simply choosing to live at home until they can afford to buy. However, as more jobs are added, and this demographic segment comes into their own, with many of them starting families, the trend should reverse.
Average prices of housing in the Dallas Real Estate Market
According to Zillow, the median listing price for a home in Dallas is listed at $380,000, while the average price of rent is $1600.
Reasons for growth and outlook for 2018
Despite the increasing home prices and tight inventory, the market is expected to begin a gradual shift into a buyers market in 2018. High home prices will contribute to this trend, with more potential buyers, particularly millennials, continuing to rent. As such, Zillow predicts the home price gains will be lower next year, averaging 5.2%. Notably, inventory is expected to increase, with the highest rate of housing starts in over a decade. Many assumed building in North Texas would be affected by the damaged caused by Hurricane Harvey in Houston, a report by the Dallas Business Journal says this isn’t so, and that the interruptions to the construction process have been minimal.
Home start rates are up 9.8% year-to-year. Reflecting the growing trend of millennials entering the marketplace, construction has shifted away from $500,000 plus luxury homes, and towards more affordable ones, priced between $200,000-500,000. Anything below that price point is not focused on by builders now, with the land costs making this number unfeasible. While housing starts should provide some relief to the first time buyer, existing home prices are not expected to diminish, and should consistently grow, if at a slightly reduced rate. To reach market equilibrium, a Residential Strategies report cited by the Business Journal states a six-month supply of inventory would be needed. Currently, the inventory is only 2.66 months; meaning homeowners should expect their property values to flourish.