Like most major cities across the United States, the Dallas real estate market has experienced a chronic shortage of homes for sale. But a new report offered some good news for frustrated home buyers.
As it turns out, the Dallas-Fort Worth metropolitan area has experienced some significant inventory growth in recent months. This could make it easier for DFW buyers to find and purchase a property in 2022 or 2023.
A Brief History of a ‘Tight’ Real Estate Market
The Dallas-area housing market has experienced type supply conditions for quite some time now. But the situation got progressively worse over the past couple of years.
During the second half of 2020, and throughout 2021, inventory levels plummeted within the DFW real estate market. That’s largely due to a pandemic-fueled surge in home-buying activity nationwide.
As of May 2022, the Dallas-Fort Worth housing market had about a one-month supply of homes for sale. That’s well below historical averages and explains why house values have risen so much over the past year.
Tight supply conditions within the Dallas area real estate market have challenged home buyers, especially those with limited budgets. But there might be a light at the end of the tunnel. A recent report showed a significant increase in the number of property listings within the DFW area.
Good News: Dallas Housing Market Gains Inventory
On June 2, Realtor.com’s research team published a real estate market report that covered 50 of the nation’s largest metro areas. This report brought some good news for home buyers across the U.S., in the form of much-needed inventory growth.
As it turns out, the total number of property listings on the Realtor.com website has increased steadily over the past year.
“New data suggests the U.S. housing market hit a turning point in its supply struggle in May, as active inventory recorded the first year-over-year increase since June 2019…”
The Dallas real estate market, in particular, experienced a significant increase in the number of property listings. According to the June 2022 report, total active listings within the Dallas-Fort Worth-Arlington metropolitan area rose by 34.4% from May 2021 to May 2022.
There was also a measurable increase in the number of “new listings,” or homes that have come onto the market more recently. According to Realtor.com, new home listings within the Dallas-area housing market rose by 18% over the past year or so.
Buyers who are planning to buy a house in the DFW area later this year can take comfort from these data points. In short, they show that more and more homes are becoming available.
But to be clear, this real estate market has a long way to go before it reaches anything resembling “normal” or balanced. It’s still very much a seller’s market in the Dallas area, due to the ongoing supply shortage. Even so, these recent trends should make things a bit easier for buyers going forward.
More and More Sellers Are Reducing Their Prices
The above-mentioned report also showed that a higher percentage of DFW sellers have been reducing their asking prices lately. During the month of May 2022, the percentage of property listings with a price reduction rose to 9.4%.
A year ago, price reductions were practically nonexistent. This suggests that sellers might be feeling a little more pressure these days, in response to a gradual increase in inventory.
Forecast and Outlook: What Does the Future Hold?
While no one can predict future real estate trends with complete accuracy, we can offer some “easy” predictions based on current trends.
Many economists and housing analysts expect home-price growth to slow down over the coming months. In fact, we are starting to see evidence of this already in many major metro areas.
According to Zillow, the median home value for the Dallas-Fort Worth area rose by a whopping 30% in the past 12 months alone. But that kind of growth is unsustainable over the long term.
As more and more buyers get priced out of the market, demand will begin to take off. Additionally, the inventory growth trend mentioned above could have a cooling effect on the Dallas real estate market.
We also expect to see longer listing periods, due to a less “frenzied” pace within the real estate market. The typical time on market for home listings will likely increase as we enter the second half of 2022 and approach 2023.
Despite a potential slowdown in the market, home prices within the Dallas real estate market will almost certainly continue to climb over the coming months. They might not rise as quickly as they did during 2021, but they’ll likely keep moving north.
The bottom line for buyers: The Dallas-Fort Worth housing market seems to be shifting in a more buyer-friendly direction. But housing costs will probably continue to climb. So while it might get easier to find and purchase a house in the Dallas area, a sense of urgency might still be warranted.
Disclaimer: Housing predictions and forecasts are the equivalent of an informed opinion and should be treated as such. The Home Buying Institute makes no claims about future real estate or economic conditions.