The Dallas, Texas real estate market was spared the worst of the housing crisis. In the years leading up to the crash, Dallas home prices avoided the speculation-fueled inflation seen in many other metropolitan areas. As a result, prices in this metro area didn’t have very far to fall when the market crumbled. No bubble, no bust.
The stability we are seeing today within the Dallas real estate market is a direct result of this economic “insulation.” Here are the latest pricing trends being reported by Zillow and Case-Shiller.
Zillow: Dallas Median Sale Price up by 34%
According to the housing economists and data crunchers at Zillow (some of the best in the business), the median sale price in Dallas rose 34% over the last year.
That’s within the city itself. Annual gains for the broader metro area are more varied, though all areas have experienced some level of appreciation in the last 12 months.
Case-Shiller: Home Values Up by 6.8%, Year Over Year
According to the latest release of the Case-Shiller Home Price Index, published earlier today, the average home price across the Dallas-Fort Worth metro area rose 6.8% from March 2012 to March 2013.
The price gains within Dallas’s real estate market are lower than the national average. But that’s not necessarily a bad thing. It’s a result of the market stability we spoke of earlier. Home prices in other metro areas may be rising faster right now. But that’s only because they fell further during the bust.
Phoenix and San Francisco are two good examples. These metro areas are currently experiencing much larger price gains than the Dallas housing market. But that’s only because they suffered worse during the crash.
David Blitzer, chairman of the committee that produces the Case-Shiller index, recently said as much:
“I know everybody wants to be first, but you guys [in the Dallas area] have been first in a better way,” he said. “In the last 10 years, when most of the country was going berserk with housing, you guys managed to keep your heads on your shoulders.”
Real Estate Listings Down 21%, According to Realtor.com
Local home prices are also benefiting from a significant reduction in inventory. This is a trend we are seeing across the country right now.
Almost every housing market in the country has contracted over the last year, in terms of the number of homes for sale. Of the 146 metropolitan areas tracked by Realtor.com, 135 markets have experienced some level of inventory reduction over the last 12 months.
In Dallas, Texas, the total number of homes listed for sale has dropped by more than 21% over the past 12 months. At the same time, we have seen an uptick in housing demand as a result of continued improvements in the job sector and the broader economy. More buyers are competing for fewer properties. That’s why we are seeing price appreciation in this market.
Homes Selling Faster in Dallas
Homes appear to be selling faster in the Dallas area, as well. Realtor.com tracks the median age of inventory for major metro areas in the United States. This metric gives us a general idea of how quickly homes are selling, especially when compared to historical trends.
Over the last year, the median inventory age for this metro area has declined by nearly 23%. When measured in April, the median age was 47 days, which is below the national average. This trend indicates a higher level of demand within the Dallas housing market.
Mortgage rates have also contributed to the rise in housing demand. While the benchmark 30-year mortgage rate has risen for the last three weeks in a row, it is still near an all-time record low. According to Freddie Mac, the average rate for a 30-year fixed loan was 3.59% last week. Rates will likely remain below 4% over the coming months as a result of the Federal Reserve’s quantitative easing program.
The combination of rising home prices and mortgage rates has created a sense of urgency among home buyers. Buyers in the Dallas real estate market are starting to realize that the best days may be behind them. Delaying a purchase until later this year, or early next, could result in significantly higher monthly payments.
As a result of strong demand and declining inventory, we expect to see additional price gains within the Dallas real estate market, at least through the end of 2013.
Disclaimer: This story contains various predictions relating to mortgage rates, home prices and other economic conditions. These statements were based on data that changes constantly. As a result, they should not be construed as financial advice.