What is happening in the DFW Real Estate Market
If a move is in your future, either to another neighborhood or another city, then you may be looking for information on the Dallas real estate market, how to sell or market your home, or perhaps you need to know what to expect when you list with a Realtor®. The following will provide a quick overview of DFW’s housing market. How to sell or market your home, what to expect when you list with a Realtor® and other topics are covered in a different blog.
Overview of DFW’s housing market
Sales of existing homes dropped nationally in January according to a report released late last month by the National Association of Realtors® while prices continued to rise.[i] This is consistent with the law of supply and demand. When there is low supply and high demand, prices tend to increase.
Nationally the available supply of existing homes decreased 5.1% and prices rose 10.2%. The same is true here with even greater disparity.
Locally in the DFW Metroplex the supply of available properties is down 25% from 2013 and prices on average in the Metroplex have increased more than 12%, far outpacing the national average.
The following chart depicts just 4 counties in the area and their respective changes from Feb 2013 to Feb 2014.
|Percent Change 2013 – 2014|
Table 1 MLS Data derived Feb 2014
Factors driving the inventory shortage
There are several factors associated with the low supply of housing:
- Increased population
- Decreased construction workforce
- Mortgage interest rates
Population in the Metroplex has grown over the past few years as companies have relocated to the business-friendly environment of Texas. With those companies have come workers who need housing. According to the North Texas Commission’s Facts & Figures page, in 2012 the Dallas/Ft Worth (DFW) Metroplex gained 131,000[ii] new residents making it the 4th largest in the nation. Data for 2013 has not been released at the Dallas Fed but numerous sources project an increase. These new Texans are seeking housing as are current residents.
Construction Worker Shortage
Construction of new homes has lagged due to several factors according to sources in the industry, the primary being a shortage of workers. Additionally, the bad weather in December had many builders revising their project schedules a full 30 days to the right.
Factor in Mortgage Rates
Low interest rates for home mortgages over the past few years resulted in many people either purchasing homes or refinancing with rates that are oftentimes less than 4%. Should these homeowners choose to move now they would face higher rates, making it more difficult to purchase a similar or better home. Therefore, they opt to stay in their current homes with low interest rates.
Supply & Demand
Each of these factors squeeze the supply of housing but this year we have all three affecting the market, putting an even greater squeeze on the available supply. With the influx of new Texans, labor shortage in the construction industry, and low interest rates for mortgages the DFW real estate market is expected to be ‘hot’ again this year.
Although the current inventory of homes nationally is about 4.5 months[i], in the Metroplex it’s only about 8 weeks. This number decreases to 5 weeks for Collin County[ii]. Normal inventory levels would be 6 months, which means in a normal environment there were be enough houses available for sale that it would take six months to sell them all.
The bottom line is that DFW is in a Seller’s Market this year; homes that are priced right and in good condition sell very quickly, sometimes with multiple offers. As a Seller this is good news. As a Buyer, it can be a difficult experience finding that dream house here in the DFW Metroplex. Last week a Buyer lost their opportunity on 4 houses that were all in multiple-bid situations.
Having a Realtor represent you is your best advantage in buying or selling a home as they have resources to understand what’s available in your chosen neighborhood as well as market pricing.
Stay tuned to my blog for weekly updates or register for my mailing list.
Brenda Patton is a Realtor® at E
 Existing-Home Sales Drop in January While Prices Continue to Grow retrieved from Web 11 March 2014
 North Texas Commission Facts & Figures retrieved from Web 11 March 2014
 Economic Research Federal Reserve Bank of St Louis retrieved from Web 11 March 2014
 . MLS data North Texas retrieved 11 March 2014