Forecasters Are Taking a Wait-and-See Approach to Home Prices
Are Dallas-area home prices headed lower with the pandemic? In the first quarter, only a few area residential districts had lower home sales prices than a year ago. Overall, single-family home prices for North Texas were up about 6% from first quarter 2019. But analysts warn that those numbers mostly reflect where the housing market was before the COVID-19 pandemic hit.
It’s probably too early to say whether Dallas-area home values and prices nationwide will head lower in the months ahead. “The next three months are going to be a state of confusion,” said Dr. James Gaines, chief economist for the Real Estate Center at Texas A&M University. “I would expect to see prices stay more or less flat.”
Gaines and other economists say the health of the housing market will depend on how quickly jobs come back and how fast the economy recovers from the effects of the pandemic. “We see prices holding up if the early states that are softening shelter-in-place orders over the coming weeks prove a gradual reopening can be done safely and effectively,” said Ali Wolf, chief economist for housing analyst Meyers Research. Wolf said that if early post-pandemic restarts in states including Georgia and Texas “prove unsuccessful and an economic rebound looks far off, the likelihood of lower prices increases significantly.”
Before the pandemic, home price gains in North Texas were already slowing from the big percentage annual increases the area saw a couple of years ago. Overall, prices are about 80% higher than they were at the worst of the Great Recession.
Dallas-area home price gains in February were a scant 2.5% higher than a year earlier in the closely watched S&P/Case–Shiller U.S. National Home Price Index. Out of the 50 areas The Dallas Morning News tracks, only seven Dallas-area residential districts saw lower first-quarter home prices compared with a year ago. The largest year-over-year median price declines were in Celina (-5%), Northeast Dallas (-3%) and Richardson (-3%)...
