The Dallas residential real estate market grew by leaps and bounds in 2015, with home prices rising by double digits across the metro area. Economists have forecast additional gains in 2016, through they might only be in the single-digit range. Here’s the latest forecast for the Dallas-Forth Worth real estate market in 2016.
Dallas Real Estate Market Red Hot, Says Realtor.com
Every month, the housing analysts at Realtor.com create a ranking of the “hottest” real estate markets in the U.S. (particularly among major metros). The rankings are based on supply and demand indicators and other factors that relate to the local housing market.
In December, Dallas showed up in the #4 spot on Realtor.com’s list of hottest real estate markets. It moved up one spot from November, when it was ranked at #5. In the latest report, Dallas was outranked by only three other U.S. cities (all of them in California) — San Francisco, San Jose and Vallejo.
Houses tend to sell more quickly in these hot markets, compared to other cities across the country.
According to the company: “homes [within the top-ranked cities] move off market 29 to 51 days more quickly than the rest of the U.S., and they have also seen days on market drop by a combined average of 15% year over year.”
Forecast for 2016: Much Smaller Gains?
Looking forward, most forecasts for the Dallas real estate market in 2016 suggest that home-price appreciation might slow down, as supply and demand strike a better balance.
The economists at Zillow are among those who expect a cool-down within the Dallas housing market. According to their proprietary “Zestimate” model for measuring property values, home prices in Dallas rose by 16% over the last 12 months. Looking ahead, they have forecast a gain of only 6.1% over the next 12 months (as of January 11, 2015). That’s still a significant gain — but nothing like last year.
It’s also worth noting that home prices within the Dallas real estate market rose to all-time highs at the end of last year. That means local house values have never been higher than they are right now, not even during the housing bubble. And they’re expected to rise even higher through the end of 2016.
There are several reasons for the unprecedented price growth in Dallas, Texas:
- Like many Texas cities, Dallas was largely shielded from the devastation of the housing market collapse. Prices were never really over-inflated to begin with, so they didn’t have far to fall when the national real estate market crashed.
- Dallas has a strong local economy with an employment rate higher than the national average. This attracts job seekers from other areas and puts more people in a position to buy a house. It also boosts consumer confidence.
- Housing inventory is still tight in this market. In short, there aren’t enough homes listed for sale to meet the current level of demand.
These and other trends are putting upward pressure on local home prices. That’s why most forecasts for the Dallas real estate market in 2016 are calling for additional gains.
Disclaimer: This story contains forward-looking statements regarding local housing conditions. Such statements were made by third parties not associated with the Home Buying Institute. Real estate forecasts are the equivalent of an educated guess and should not be viewed as facts. We make no claims or guarantees about future house values or other housing-related trends.