The Dallas housing market has been of particular interest to would-be sellers, buyers and investors since oil prices began their slide. How would falling oil and gas revenues impact the statewide economy?
Generally, the slowing of the Texas economy has been partly due to falling oil prices but also because of the stronger U.S. dollar and a weaker global economy. But overall, Dallas housing demand continues to improve while new construction has been inhibited by a lack of skilled labor and developed lots.
So specifically, what’s been happening in the Dallas housing market and what’s the outlook going forward?
DFW is one of the fastest-growing big cities in America due to a flood of investment from all over the world. Because of the increase of available jobs, there’s a powerful demand for housing in all markets.
Useful Dallas housing statistics
In terms of the number of property sales, the Dallas housing market continued to show a strong demand driving prices up. This factor, coupled with lower than average stock available; around 3.7 months’ worth of inventory, means existing homes are moving fast. Unsurprisingly, Texas residential sales increased by 7.2 % with Austin, DFW, and San Antonio leading the charge.
As single-family housing construction permits increased statewide by 6% in March, DFW building permits leveled off, although the number of new houses started, indicated positive growth. Due to significant increases in construction and land costs for new homes, the price per square foot (of a new home) is almost 20 percent more than for an existing home.
The tight Dallas housing market means first-time homebuyers are often crowded out, as the number of starter homes available, countrywide, has declined by nearly 50% since 2012. Likewise, the increase of property investors trying to make a return on whatever capital they can has seen the low end of the housing market almost disappear.
If there’s a housing crisis, it’s all about supply. Even with rapid price rises, purchasing a home in DFW is still comparatively affordable compared to the rest of the U.S. But growth of personal and household income is lagging behind the the increase in home prices, and this is where this will impact is future purchasing ability.
Changing pace of the property market
The leaps and bounds of the Dallas housing market has had its own crop of complications. With a robust seller’s market, there are some buyers in such a hurry to get a house under contract, they offer first then decide they’ve made the wrong deal.
A lot of properties are generating multiple offers as soon as they hit the market. And with so much competition, many people realize they need a rapid, solid offer when they find something they like. This is why more contracts are terminating in the option period.
While buyers can find the frantic Dallas housing market frustrating, spare a though for the agents and sellers. They have to work out how likely it will be for an offer to stick.