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A recently updated forecast for the Dallas, Texas housing market in 2021 suggested that home prices in the DFW area will continue to climb at a steady pace through 2021 and into early 2022.
That’s not surprising, given the lopsided supply-and-demand situation within the Dallas-Fort Worth area real estate market.
There are many buyers actively seeking a home right now, partly due to low mortgage rates and significant population growth. But there aren’t enough homes on the market within the DFW area to meet that demand.
In other words, current housing market conditions tend to favor sellers over buyers — and that’s putting upward pressure on home values.
Here are the latest trends and predictions for the Dallas-Fort Worth real estate market through 2021 and into the first part of 2022.
Dallas-Fort Worth Housing Forecast for 2021 – 2022
According to the real estate information company Zillow, the median home value for the Dallas-Fort Worth metro area rose to around $271,000 as of February 2021. That was an increase of 7.4% from the same month a year earlier, by their estimation.
The company’s forecast for the Dallas real estate market predicts that prices will continue to climb over the coming months, perhaps through 2021 and into 2022.
The chart below, created by Zillow, shows the median home value for the Dallas-Fort Worth-Arlington metro area over the past ten years or so. As you can see, house prices have followed a mostly upward trajectory during that time.
While home prices in the Dallas area are still relatively affordable by national standards, this housing market has gotten pricier in recent years. Average wages and earnings, on the other hand, have not kept up with home-value appreciation. As a result, affordability has dropped overall — something that will probably continue through 2021 and into 2022.
Looking forward: Zillow’s long-range housing forecast for the Dallas-Fort Worth-Arlington metro area predicts that prices will rise steadily for the foreseeable future.
In February 2021, the company’s research team stated that home values in the area “have gone up 7.4% over the past year and Zillow predicts they will rise 6.3% in the next year.”
Granted, that’s just one prediction for the DFW housing market, extending into early 2022. It’s the equivalent of an educated guess. So we shouldn’t get too wrapped up in the exact numbers being forecast here.
But other forecasters have made similar assessments, predicting that Dallas-area home prices will continue climbing in 2021. That seems to be the general consensus. And it’s only logical, when you consider the current imbalance between supply and demand.
Speaking of supply, let’s talk about the inventory situation within the Dallas-area real estate market. It plays a big role in all of this.
Tight Inventory Affecting Dallas Real Estate Scene
Residential real estate inventory remains low in many major cities across the nation, and the DFW area is no exception to that.
According to a February 2021 report from the housing analysts at Realtor.com, the total number of active listings (i.e., homes for sale) in the Dallas-Fort Worth-Arlington metro area fell by -54.8% from January 2020 to January 2021.
That bears repeating: In just one year’s time, the total number of homes on the market dropped by more than half. This increases competition among buyers and puts even more upward pressure on prices.
This January, the DFW area housing market had less than a two-month supply of homes listed for sale. That’s much lower than what is considered to be a balanced market. In most parts of the Dallas metro area, the current real estate scene tends to favor sellers over buyers.
This is true for much of the United States, as of February 2021. According to the Realtor.com report mentioned earlier:
“If January provides any insight into what to expect this spring, home shoppers are in for another fiercely competitive home-buying season with record low inventory pushing prices higher and homes selling more quickly.”
So from an inventory standpoint, at least, the Dallas-Fort-Worth housing market still favors sellers over buyers. But that’s a metro-wide assessment. Conditions can vary quite a bit from one neighborhood or area to the next. Supply levels vary as well.
Strong Population Growth Is Boosting Demand
The positive forecasts and predictions for the Dallas real estate market are also being driven by population growth. In fact, this metro area currently leads the nation in terms of population growth. And that’s boosting demand within the local housing market.
In January 2021, Freddie Mac’s research team published a report about population growth trends in major U.S. cities, and how they’re affecting local housing markets.
To quote that population study:
“Over the last decade, population in absolute numbers increased the most in multiple MSAs within Texas and Florida. Specifically, population in three MSAs in Texas grew by a combined total of 2.8 million: Dallas (1.2 million), Houston (1.1 million), and Austin (0.5 million).”
As you can see in the chart below, provided by Freddie Mac, the Dallas-Fort Worth-Arlington metro area led the nation in population growth in both the short and long term.
Within the city of Dallas itself, the population grew by more than 12% from 2010 to 2019. That’s based on the latest figures from the U.S. Census Bureau. That was nearly double the national population growth rate during that same nine-year period.
Dallas’s population has been growing steadily for years. What’s different today, in 2021, is the housing market inventory situation. There is less supply available for home buyers, at a time when the number of buyers continue to climb. It’s Econ 101. Plenty of demand — not enough supply.
The Bottom Line to All of This
We’ve covered a lot in this report. Here are five key takeaways:
- Forecasts for the Dallas-Fort Worth real estate market in 2021 predict that home prices will keep rising throughout this year and into next. And that seems likely, given the current conditions.
- Home-buying demand remains strong in this market, despite the ongoing coronavirus pandemic and economic downturn.
- Inventory, meanwhile, is hovering at historically low levels. There aren’t enough homes listed for sale to satisfy the overall demand from buyers.
- The DFW population continues to grow steadily, outpacing nearly every other metro area in the U.S.
- Anyone planning to buy a home in the Dallas area during 2021 should be prepared for stiff competition.
Disclaimer: This article includes third-party predictions for the Dallas-area real estate market extending through 2021 and into early 2022. Those forecasts were compiled and presented here as an educational service to our readers. They are the equivalent of an educated guess. MetroDepth makes no claims or assertions regarding future housing conditions.