Recent forecasts for the Dallas, Texas real estate market suggest that home prices could continue rising well into 2018. In fact, home values in Dallas could outpace the national average over the next year, and possibly beyond. Here is a roundup of the latest forecasts and predictions for the Dallas housing market in 2017 and 2018.
Big Home-Price Gains in the Big ‘D’
House values in the Dallas metro area have risen steadily and sharply over the last couple of years. In fact, it has outpaced most other metro areas in the country in terms of annual appreciation.
The latest update to the Case-Shiller Home Price Index, published on June 27, ranked Dallas, Texas in the top three cities for annual home-price growth. According to that report, house values in the city rose by 8.4% in April 2017, compared to a year earlier.
To quote the report:
“Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In April, Seattle led the way with a 12.9% year-over-year price increase, followed by Portland with 9.3%, and Dallas with an 8.4% increase.”
The real estate information company Zillow reported an even bigger year-over-year increase for Dallas home prices. By their estimation, values had risen by more than 14% over the last year, as of June 2017. That’s well above the historical average for annual price appreciation.
Forecast for Dallas Housing Market Into 2018
Zillow recently updated its 12-month forecast for the Dallas housing market, which extends into the summer of 2018. The company’s real estate research team anticipates that home prices in the Texas city could rise by around 5.4% over the next year.
According to the national real estate brokerage Redfin, the median sales price for homes sold in Dallas climbed to $345,000 last month.
So while house values in the city could rise more slowly over the next year than they have in the past, they will probably continue to outpace the national average.
Slower price growth would actually be a good thing, from an economic standpoint. Double-digit gains in house values are generally not sustainable over the long term, because they tend to outpace wage and income growth. When this happens, housing affordability drops. So it’s good to see a bit of a market “correction” happening within the Dallas real estate scene.
Tight Inventory Is Driving Competition Among Buyers
Low inventory is a primary factor contributing to the strong housing market forecasts for Dallas. The tight inventory we are seeing today will continue to put upward pressure on home prices well into 2018.
A “balanced” real estate market is one that has about six months worth of supply, according to economists. But Dallas is currently well below that level. A recent report by Redfin showed that the city had around two months worth of supply.
By contrast, five years ago the Dallas real estate market had around seven months worth of supply. So it’s clearly still a sellers’ market.
Home buyers who plan to search for a house during the second half of 2017, or early 2018, should be prepared for stiff competition.
Here are some tips for buying a home in a hot real estate market like Dallas:
- Have your financing lined up ahead of time. Cash buyers should have money in the bank with statements to prove it. All other buyers can benefit from getting pre-approved for a mortgage loan, before entering the market. Sellers will expect these things.
- Know your budget and stick to it. Having a budget on paper early on will save you time later, when you reach the house hunting stage. It allows you to shop within a realistic price range, and to avoid wasting time looking at houses that are too expensive.
- Don’t quibble with the seller over “nickels and dimes.” In a sellers’ market, homeowners can be pretty sure they’ll receive additional offers after yours. This means they have most of the negotiating leverage. As a result, home buyers should keep their eye on the big picture and avoid playing hardball.
Disclaimer: This article contains housing market predictions and forecasts for Dallas in 2018. It also includes data relating to current home prices and other real estate trends. That information was provided by third parties not associated with our company. We have compiled and presented it here as an educational service to our readers.