In early January, a story in the Dallas Morning News disclosed that the North Texas real estate market was on fire in 2015! Despite concerns about the slow recovery from 2008’s Great Recession and sinking oil prices, home sales all over the Lone Star State were booming, but especially in the Dallas-Fort Worth area.
The newspaper’s contributor, Steve Brown cited “soaring job gains and rocketing real estate values” as the driving forces behind these solid gains. Brown acknowledges that Texas towns saw their fair share of post-recession hardship with plenty of foreclosures and real estate development plans that were forced to go on hold. Thankfully, those tough times are quickly fading into the sunset.
In the bustling North Texas area, findings show that by the close of 2015, the construction of nearly 9 million square feet of office space was on the books. That’s around 40 percent more than during the extremely high pre-2007 time frame. It’s not all about commercial space either. Construction starts in the Dallas-Fort Worth metro included 38,000 apartment units. This skyrocketing increase is 80 percent better than the pre-recession rate!
With a strong economy and exploding job growth, the North Texas market is in the process of completing more than 15 million square feet of warehouse and industrial space. In his article Brown observes that this marks, “one of the top industrial building volumes in the country and enough to push warehouse development past the previous cycle peak.” The retail construction sector has been slower than the others in recent months. However, now it too, is making major strides and is nearly on par to where it was in the healthier months of 2007.
It seems that the most impressive activity is taking place in the single-family housing market. Existing home sales broke records during 2015 in North Texas, with over 90,000 homes sold! One more very positive piece of news is that median home sales prices for the Dallas-Fort Worth metro area are ringing up at $200,000 – their highest level yet! In fact, that price is 20 percent above the peak seen in 2007.
Brown mentioned that the only sector of the North Texas real estate market that is a little sluggish is new construction. Housing is definitely in demand; however, housing starts are slow because of a skilled labor shortage. High prices for building lots and construction materials are also casing a bit of a lag. Before 2008, the North Texas housing market was averaging 50,000 new homes annually. Of course the flooded distressed home market took up a lot of slack. However, as 2016 gets underway, North Texas builders only have around 28,000 proposed new residential building projects.
Trulia issued its early January overview of the Dallas housing market for the first few days of the New Year. It is definitely at the higher end of the spectrum, with the average list price coming in at $636,303. This price reflects a w-o-w increase of 7.7 percent or $45,544. Some of the more popular neighborhoods in the Dallas metro area are even pricier. Trulia notes that hot spots include, “Preston Hollow and Oak Lawn, with average listing prices of $876,015 and $822,774.”
As we trudge ahead through the winter months, it will certainly be interesting to see if the North Texas housing can do as well as it did in 2015.