Monthly Market Insight – February 2019
“The Sky Is Falling!”
Listen closely and you will hear some pundits exclaim, “the sky is falling, the sky is falling” as they describe the shift in the Dallas-Fort Worth real estate market that began in the fourth quarter of 2018.
There is a cooling off of the market here, and prices and interest rates are expected to continue to rise in 2019, and that is a change in the wind, however, let’s not succumb just yet to the mood associated with the Hee-Haw sketch “Gloom, Despair & Agony On Me”!
There is Still Some Good News…
Dallas-Fort Worth’s housing market just earned the # 7 spot on Zillow’s new ranking of the country’s 10 hottest real estate markets in 2019. Dallas-Fort Worth is the only major Texas metro area to show up on Zillow’s list.
Dallas-Fort Worth’s housing affordability is still attractive to Millennials and businesses due to an expected 8.4 percent increase in home values and low 2.9 increase in rents.
Predictions from housing analysts point to continued Dallas-Fort Worth area home-price growth throughout 2019. In fact, the Dallas-Fort Worth real estate market is expected to outperform the nation this year, in terms of annual home-value appreciation.
Given the current rate of appreciation, it would surprise us to see the median house price in Dallas-Fort Worth rise somewhere between 7% and 10% over the next year.
Inventory is key…
Inventory is another key factor that could shape the Dallas-Fort Worth area housing market in 2019. This year, Buyers could have more properties to choose from when shopping for their dream home.
The Dallas-Fort Worth real estate market had more than a 4-month supply of homes for sale at the end of 2018. That was a higher level of inventory than most metro areas across the U.S. and was also higher than the national average during that same time period.
One important takeaway here is that housing inventory in the Dallas-Fort Worth area, which means the number of homes listed for sale, increased in the fourth quarter of 2018. As a result, Buyers who enter the Dallas-Fort Worth real estate market this year should have more options when it comes to choosing a property, and not find nearly as many multiple offer situations as were prominent in the first half of 2018.
Seller’s Market or Buyer’s Market?
As we said, the Dallas real estate market is shifting right now from a strong Seller’s market to more of a Buyer’s market. Home prices in the Dallas-Fort Worth area continue to rise faster than the national average, however, there is clearly a change taking place.
Dallas leads the nation in new-home construction, according to multiple sources. There were almost 35,000 housing starts in the Dallas-Fort Worth area during the third quarter of 2018, more than any other metro area in the U.S.
Home Sales are Dropping…
This week the National Association of Realtors said existing home sales in the U.S. were down 10.3 percent compared to the same time a year ago. NAR’s chief economist, Lawrence Yun, blamed the rise in mortgage rates. “The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
Dallas-Fort Worth leads all U.S. metropolitan areas as the largest net gainer with 246 people arriving daily, according to Bloomberg. Dallas-Fort Worth is also the greatest beneficiary of domestic movers, and business relocations to North Texas have been steady since the Great Recession. In recent weeks, Fortune 500 companies McKesson and Core-Mark announced moves to the area from California.
The Sky Is Not Falling!
“The sky is not falling” on Dallas-Fort Worth’s housing market, insists Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University. “You’re just getting back to normal.” Gaines is forecasting a flat to slightly lower home sales volume in North Texas. And he’s expects year-over-year home price increases to moderate to mid-single-digits.
Most national forecasts call for Dallas-Fort Worth’s home prices to rise 4 percent to 5 percent in 2019. That is about the long-term norm for North Texas housing value growth. But after several years of runaway home price gains, that could seem like a downer to Sellers looking to cash in on their properties.
If you are thinking about buying or selling real estate in the Dallas-Fort Worth area you will want to have the latest insights on the local markets and what has been happening from an active listings and property sold perspective in your neighborhood before you act.
We would be honored to answer your real estate questions, and to assist you in maximizing your real estate return-on-investment from your real estate transactions in 2019. Give us a call at 469-262-5411 or just complete the GET IN TOUCH form on this page and we will follow up with you as soon as possible.
The Latest Local Housing Market Statistics…
For your information, we have provided below the latest housing statistics for Collin County, Dallas, County, Denton County, Rockwall County, and Tarrant County, courtesy of Republic Title and NTREIS.