Key highlights from this report:
- A recent forecast ranked Dallas one of the hottest housing markets in 2022.
- The DFW metro area could see double-digit home price growth this year.
- An ongoing supply shortage has made this market highly competitive.
According to a recent report from the National Association of REALTORS®, the Dallas-Fort Worth metro area could be one of the hottest housing markets of 2022.
The Dallas real estate market was included in a top-ten list of “hidden gems,” meaning it could outperform other cities in 2022 for home-price growth and possibly sales activity.
And that’s not surprising, when you consider the imbalanced supply-and-demand situation within the Dallas housing market.
Forecast: Dallas a Hot Housing Market in 2022
Back in December, the National Association of REALTORS (NAR) published a report based on a “survey of more than 20 top U.S. economic and housing experts.”
Among other things, this report offered a list of ten “hidden gems” within the U.S. real estate market. These metro areas are expected to see more home-price appreciation in 2022, compared to other U.S. cities and metros.
The Dallas area housing market appeared at the top of their list.
Knoxville, Tennessee; San Antonio, Texas; and Tucson, Arizona also earned a spot within the top ten. These real estate markets are expected to outperform the national average in 2022, in terms of home-price growth and overall activity.
To quote the December 2021 NAR report:
“Dallas-Fort Worth, Knoxville, San Antonio, Spartanburg and Tucson join five other metropolitan areas among NAR’s top 10 housing market ‘hidden gems’ in 2022.”
According to Lawrence Yun, NAR’s chief economist and senior vice president of research, these and other U.S. metro areas have all the ingredients needed for strong price growth and sales activity in 2022.
As Yun expressed it:
“Several markets did reasonably well in 2021, but not as strong as the underlying fundamentals suggested. Therefore, in 2022, these ‘hidden gem’ markets have more room for growth.”
Here are the ten metro areas singled out as “hidden gems” in the NAR forecast:
- Dallas-Fort Worth, Texas
- Daphne-Fairhope-Farley, Alabama
- Fayetteville-Springdale-Rogers, Arkansas-Missouri
- Huntsville, Alabama
- Knoxville, Tennessee
- Palm Bay-Melbourne-Titusville, Florida
- Pensacola-Ferry Pass-Brent, Florida
- San Antonio-New Braunfels, Texas
- Spartanburg, South Carolina
- Tucson, Arizona
As you can see, another Texas metro appeared on the list as well. The San Antonio housing market is also expected to shine in 2022, with regard to home-value appreciation.
Home Prices Rising Steadily in DFW Area
If you look at last year’s home-price gains for the Dallas metro area, it’s easy to see why NAR would issue such a bold forecast for the DFW real estate market in 2022.
According to the latest data from Zillow, the median home value for the Dallas-Fort Worth-Arlington metropolitan area rose by nearly 25% over the past year alone. (This was reported in mid-January 2022.)
Looking forward, the company expects double-digit price growth to continue over the next year as well. They predicted that house prices in the DFW area “will rise 18.9% in the next year.”
Supply Crunch Has Sellers in the Driver’s Seat
As usual, supply and demand have influenced many of these trends. Like most major cities and metro areas across the U.S., the Dallas real estate market currently suffers from a shortage of homes for sale.
As of December 2021, the DFW metro area had about a one-month supply of homes for sale. That’s well below the national average for inventory, and quite a bit lower than a “balanced” real estate market.
Meanwhile, population growth and other factors continue to bring more home buyers into the Dallas-Fort Worth housing market. This has created a supply-and-demand imbalance in the area, which in turn puts upward pressure on house values — conditions that will likely persist throughout 2022.
The lopsided supply-and-demand situation has also increased competition among buyers. It should come as no surprise that homes are selling quickly in the DFW housing market, and often above the list price.
Last month, roughly half of all homes sold in the Dallas metro area were off the market within two two weeks. Likewise, approximately half of all houses sold ended up selling for more than the original list price. This indicates a highly competitive real estate market where buyers often have to outbid one another.
Another Year of Stiff Competition for Buyers
Will 2022 be a good year to buy a home in the Dallas-Fort Worth area? From an investment standpoint, it sure looks that way. With home prices expected to continue climbing steadily, 2022 could be a good year to buy a house in the DFW area.
But the ongoing inventory shortage could frustrate some buyers, especially those seeking a lower-priced starter home.
First-time home buyers within the Dallas real estate market might be shocked by the shortage of lower-priced homes. While inventory remains tight across the board, it’s especially tight among the more affordable houses.
This is partly due to construction trends over the past few decades. From the 1980s through the present, the overall share of smaller and more affordable “starter homes” has declined sharply. This is true for Texas, as well as most other states across the country.
Disclaimer: This report includes forecasts and predictions for the Dallas-area real estate market in 2022. Those views were provided by third parties not associated with the publisher. The Home Buying Institute makes no claims about future housing or economic conditions.