Highlights from this report:
- Dallas housing market forecasts for 2020 predict continued price growth
- Home prices are expected to continue rising for the foreseeable future.
- But the Dallas real estate market has cooled over the past two years.
- Properties listed for sale are taking longer to sell, these days.
Dallas Housing Forecast for 2020 Mostly Positive
Home prices in Dallas, Texas have risen steadily over the past year. And they are expected to continue climbing through the end of 2019 and into 2020. That’s the latest housing market forecast for Dallas, issued by the real estate research team at Zillow.
In October, the company stated:
“Dallas home values have gone up 8.1% over the past year and Zillow predicts they will rise 4.5% within the next year.”
The median home value within the city itself was up to around $213,000 as of October 2019. The median price for the broader Dallas-Fort Worth-Arlington metro area was around $244,000 during that same month.
The DFW metro area has experienced smaller price gains, when compared to the city of Dallas. The median home value for the DFW metropolitan area rose by 4.4% over the past year or so, according to Zillow.
Regarding the broader metropolitan area, the company stated:
“Dallas-Fort Worth-Arlington Metro home values have gone up 4.4% over the past year and Zillow predicts they will rise 2.6% within the next year.”
For both the city of Dallas and the surrounding area, the company has issued a more modest forecast stretching into fall of 2020. They expect to see smaller price gains for this housing market over the next year, compared to the gains recorded during 2018 and 2019.
This outlook mirrors the real estate market forecasts being issued for the nation as a whole. The general consensus among many economists and housing analysts is that home prices in most U.S. cities will rise more slowly in 2020 than the past couple of years.
‘Increase in Housing Inventory’ Could Benefit Some Buyers
From an inventory standpoint, the Dallas real estate market is in better shape than many other major cities across the U.S. In fact, recent data show that Dallas currently has more available supply (homes for sale) than most other big cities.
According to an October 2019 report from Texas REALTORS®, the local housing market has experienced an increase in inventory. That report also quoted Jim Gaines, chief economist with the Real Estate Center at Texas A&M University, who said:
“In addition, new home construction will continue to pick up in markets such as Houston and Dallas, leading to an increase in housing inventory availability.”
This is a positive trend for home buyers across the DFW area, particularly those who plan to buy in 2020. Increased supply means that buyers have a better chance of finding a suitable property within their price range. It also eases competition among those seeking a home.
A Cooling Trend Over the Past Few Years
The Dallas real estate market is an active one, and forecasts suggest that will continue into 2020 as well. But we have also seen a bit of a cooling trend for this area.
The median number of “days on market” has increased over the past few years. This indicates that it’s taking longer for Dallas-area homes to sell today compared to in the past.
In September 2019, properties listed for sale in Dallas, Texas spent a median of 49 days on the market before going under contract. In September 2018, the median was 38 days. And in September 2017, it was 34 days. This is based on data reported by the national real estate brokerage Redfin.
So, while home prices continue to climb in the DFW area, the market appears to be cooling in terms of the length of time it takes to sell.
This too could work to a home buyer’s advantage in 2020. Given the current trends within the Dallas real estate market, buyers might have more negotiating leverage in 2020 compared to those who purchased in 2017 or 2018.
Starter Homes in Short Supply
While the overall housing supply situation in Dallas has improved, certain types of properties are still in short supply. According to George Ratiu, a senior economist with Realtor.com, the DFW real estate market is currently experiencing a shortage of lower-priced “starter homes.”
In October, Ratiu told the MetroTex Association of Realtors:
“Inventory on Realtor.com under $200,000 has been the steepest declining segment of inventory on the market.”
First-time buyers (who lack the proceeds from a previous home sale) tend to shop within this lower price range. So they might want to give themselves some additional house-hunting time to find a suitable property.
We anticipate that limited inventory will be one of the biggest challenges first-time buyers face in 2020, all across the U.S.
Population Growth Fueling Demand in Dallas Housing Market
Population growth has a lot to do with the positive housing market forecasts for the Dallas-Fort Worth metroplex. This part of the state continues to attract new residents from elsewhere in the country, and that bolsters home prices.
According to a 2018 report from the U.S. Census Bureau, the DFW area experienced more population growth in 2017 than any other metro in the United States. The Dallas-Fort Worth-Arlington metropolitan area gained 146,000 new residents in that one year alone, putting it head-and-shoulders above most other metros.
According to Molly Cromwell, a demographer at the Census Bureau:
“Historically, the Dallas metro area attracts large numbers from both international and domestic migration. Many of the other largest metro areas in the country rely mostly on international migration and natural increase for growth.”
Within the city of Dallas, the population grew by more than 12.3% from 2010 to 2018. That was more than double the national growth rate for that same eight-year period.
Population growth increases demand for housing units — among renters and buyers alike — and that puts upward pressure on rental and home prices. This is yet another factor contributing to the positive real estate market outlook for Dallas, Texas.
A Strong Job Market, Going Into 2020
Texas has long been a business-friendly state. The state’s favorable tax structure and relatively low housing costs attract companies and jobs. The DFW metro area currently leads the state, in terms of job growth.
Banking giant JPMorgan Chase, for example, plans to shift thousands of jobs from New York City to Plano, Texas. That’s just one example of how the state’s tax incentives accelerate growth and support the regional job market.
The unemployment rate for the city of Dallas was 3.3% over the summer of 2019. That was slightly lower than the national average for the same period, and down sharply from the 8.7% peak reached during the last recession.
A strong job market supports the Dallas-Fort Worth real estate market in two ways. It attracts new residents into the area, which increases demand for housing. It also gives local home buyers the financial ability to make a purchase and to keep up with their monthly payments.
Disclaimer: This article includes third-party forecasts for the Dallas, Texas housing market extending into 2020. Such predictions are the equivalent of an educated guess and should be treated as such. HBI makes no claims or assertions about future real estate conditions.