A recently updated forecast for the Dallas, Texas housing market in 2019 – 2020 suggests that home prices will continue to rise at a pretty steady. At least for the foreseeable future. But housing experts also expect home-price appreciation in the DFW area to slow over the coming months.
Our own forecast: In Dallas, the current supply-and-demand situation will continue to put upward pressure on house values through 2019 and into 2020. That’s a fairly safe assumption. But we also expect to see smaller gains over the coming months, as affordability issues creep into the mix.
Here are the latest trends and predictions for the Dallas-Fort Worth real estate market through 2019 and into 2020.
Dallas-Fort Worth Metroplex Housing Forecast
According to the real estate information company Zillow, the median home value for the Dallas-Fort Worth metro area rose to around $242,000 as of July 2019. That was an increase of 6.3% from the same month a year earlier, by their estimation.
The chart below, created by Zillow, shows the median home value for the DFW area over the past year or so. As you can see, prices began to climb steadily in 2014 and followed that trajectory for several years. The company’s forecast for Dallas home prices is shown in the green shaded area.
The annual home-price gains for the DFW area over the past year were slightly higher than the national average. So we’re talking about a real estate market where house values are climbing at a pretty good pace.
Zillow’s long-range housing forecast for the Dallas-Forth Worth-Arlington metro area predicts that home prices will rise by around 2.5% over the next 12 months. That forecast was issued in July 2019, so it stretches into mid-summer 2020.
That’s for the broader DFW metro area. For the city of Dallas, the economists at Zillow predicted a gain of 4.8% through summer of 2020.
These predictions mirror those being issued for many cities and metro areas across the country. In a lot of real estate markets, home prices have been rising at an unusually fast pace for the past few years. In most cases, that was the result of strong demand for housing combined with limited supply.
This is true for the Dallas-area real estate market as well. Housing inventory remains low across the metro area, relative to the number of buyers who are seeking a property.
Tight Inventory in Dallas Real Estate Market
Residential real estate inventory remains low in many major cities across the nation, and Dallas is no exception to that.
According to the national real estate brokerage Redfin, the DFW metro-area housing market had about a 2.6-month supply of homes for sale as of May 2019. That was below the 6-month level that economists consider to be a balanced market, and slightly below the national average for the same month.
So from an inventory standpoint, at least, the Dallas-Forth-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.
Zooming into the city of Dallas, inventory was a bit more plentiful in May 2019. But supply levels remain low from a historical standpoint. In this real estate market, there simply aren’t enough properties listed for sale to meet the demand coming from buyers. That kind of imbalance tends to put upward pressure on home prices.
Competition Is Highest for ‘Starter’ Homes
According to recent housing market reports for Dallas, supply is tightest at the lower end of the price spectrum. That’s something first-time home buyers should be aware of, since many of them shop within that range.
According to a 2019 report published by Harvard University’s Joint Center for Housing Studies (JCHS), construction of moderately priced “starter homes” has lagged over the past few years.
To quote that report:
“…construction of modest-sized single-family homes has been particularly weak. Despite increases in 2017, small homes under 1,800 square feet represented just 22 percent of single- family completions [in 2018], down from 32 percent on average in 1999 – 2011.”
Land prices are one reason for the construction lag in lower-priced homes. According to Ted Wilson of Dallas-based Residential Strategies, “developers cannot get cheap enough land and lots to get the house price down enough.”
Not the Fastest Market, But Still Competitive
As of May 2019, homes listed for sale in the Dallas area spent a median of 40 days on the market, before going under contract. That was close to the national median for the same period. This means homes in the DFW housing market are selling at a more-or-less average pace in 2019, despite those tight inventory conditions mentioned above.
Clearly, Dallas is not one of the fastest moving real estate markets in the nation. The fastest markets (when measured by the median number of days from listing to contract) are mostly located in the Pacific Northwest and in California, as of summer 2019.
Still, low inventory and steady demand will keep the Dallas housing market competitive for the foreseeable future. That seems to be the consensus forecast and outlook among several analysts.
Strong Local Economy Empowering Home Buyers
Local real estate markets and economies tend to go hand-in-hand. A strong economy (with a high rate of employment) gives home buyers the confidence and financial means they need to make a purchase.
And in the Dallas-Fort Worth-Arlington metro area, there’s some good news here as well.
According to data from the U.S. Bureau of Labor and Statistics, the DFW metro area had an unemployment rate of 2.7% in May 2019. The nation as a whole had an unemployment rate of 3.6% in May. So Dallas is currently outperforming the national average, as far as jobs go.
The bottom line here is that the real estate market in Dallas-Fort Worth is getting a nice boost from the strong local economy. This could help keep home prices rising through 2019 and into 2020.
Disclaimer: This article includes third-party predictions for the Dallas-area real estate market extending into the summer of 2020. 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.