Are Dallas Home Prices Headed Lower?
Dallas-area home prices are expected to decline for the first time since the Great Recession. Prices are forecast to drop about 2% in the Dallas area and 1.3% nationwide by April of next year because of the COVID-19 pandemic, CoreLogic researchers predict.
The anticipated decline in home values follows almost a decade of price gains. “The very low inventory of homes for sale, coupled with homebuyers’ spur of record-low mortgage rates, will likely continue to support home price growth during the spring,” Frank Nothaft, chief economist at CoreLogic, said in the report. “If unemployment remains elevated in early 2021, then we can expect home prices to soften. Our forecast has home prices down in 12 months across 41 states.”
CoreLogic is forecasting that some of the most significant home price declines over the next year in major metro areas will be in Las Vegas (-7.2%), Miami (-4.4%) and Houston (-4.3%). Cities that are hardest hit by job loss downturns in tourism and oil and gas will experience the largest home price declines, analysts say.
So far home prices in most major markets have held up despite the impact of the pandemic. Nationwide median home prices were up 5.4% in April from a year ago, according to CoreLogic. Dallas-area prices rose 3.19% year-over-year in the same period. Dallas had the smallest annual price increase among Texas’ major metro areas. Austin saw the largest year-over-year price rise of 7.24%. Prices were up 5.27% in the Fort Worth area.
While home values in the Dallas-Fort Worth area have held up so far, sales in North Texas were down 17% in April compared with the same month in 2019. The April sales decline reflected the first full month of the pandemic shelter-in-place order, which stifled home buying.
With more than 40 million Americans losing their jobs due to the pandemic, economists say it’s too early to fully gauge the impact on the U.S. home market. “The next 12 to 18 months are going to be very tough times for the broader economy,” said Frank Martell, president and CEO of CoreLogic. “As employment and economic activity begin to pick up, as it will surely do, we expect housing to be a driver in a national recovery.”
North Texas home prices are still at a record level. Home costs in the D-FW area have risen by more than 70% since the worst of the Great Recession...
