We’ve known for a very long time what a wonderful place the Dallas-Ft. Worth area is to live, work and play. Now it seems that the word is out! Considering the growing job market, great schools and affordable cost of living, it is no small wonder that this area is attracting new residents by leaps and bounds!
In the year-over-year analysis during the fourth quarter of 2015, the Texas Quarterly Housing Report revealed that home prices in Dallas-Fort Worth rose by 9.5 percent. Leslie Rouda Smith, who heads the Texas Association of Realtors, noted that another banner year is expected for the Lone Star State’s exploding housing market. Smith explained, “Texas has enjoyed four straight years of booming real estate growth and record housing demand.”
An article in early February in the Dallas Morning News confirmed that throughout 2015, the Dallas-Ft. Worth market experienced brisk sales and noteworthy gains in home prices. The Real Estate Center at Texas A&M concurred that in the greater Dallas area, Cedar Hill, Kaufman and Ellis counties, “The demand for affordable housing led the big price gains in residential districts.” Within those same markets, each quarter’s stats showed that sales for existing homes rose by 12 to 20 percent.
One component that drove sales last year was apparently the soaring appreciation rate. In the Dallas Morning news article, CEO Jim Fite, who operates three branches of Century-21 Judge Fite Realtors, explained that intense demand from investors are causing home prices to escalate, especially in Cedar Hill, Lancaster, Garland and Mesquite. According to Fite, “The investor business is still going crazy. Some of them are paying too much money for these homes-more than rents justify and are betting on appreciation and that’s a bit frightening.”
It may be frightening, however those investors may be on to something! Just consider that in 2015, these markets made significant y-o-y gains in regard to median home prices: Southeast Dallas and Oak Cliff were up by 24 percent, The Colony and Southern Dallas rose by 22 percent and median home prices in Euless were up by 19 percent. Another area real estate professional, Ted Wilson of the Dallas-based Residential Strategies, real estate analytics firm, made an additional point.
It is no secret that following the housing crisis and Great Recession post 2008, that mortgage lenders across the country tightened their lending guidelines. For the past several years it has been much more difficult for prospective borrowers to be granted financing for home loans. Wilson reflected that although much of the home sales in the Dallas-Ft. Worth area have indeed been driven by investors, now, would be homebuyers are having an easier time gaining approval for mortgages. Wilson explained that, “I think there are still hurdles for a lot of households in these markets, but I also think the improving economy and housing conditions are starting to bring more buyers back.”
In reviewing the inventory of available properties in some of the Dallas-Ft. Worth area’s hottest neighborhoods it was revealed that there is currently less than one month’s supply in The Colony, Bedford and Richardson. It was also reported that, “Mesquite, Carrollton-Farmers Branch, Garland, Plano, Grand Prairie, Grapevine, Sachse-Rowlett, Wylie and McKinney all had less than a 1.5 month inventory of houses on the market with real estate agents last year.”
Please note that in real estate circles a 6-month supply is what’s considered a “normal market.”
Housing industry analyst David Brown with Metrostudy, Inc. also weighed in on the Dallas Morning News article. Brown believes that the choices for home buyers are very limited, plus prices are being driven up by strong investor demand. Housing market analysts predict that this metro area is bound to see a decline in home sales unless more properties come on the market. Whether those properties will be new construction or existing homes, the need is there!
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