Are Dallas Home Prices Headed For a Drop?
That's what analysts at CoreLogic are predicting for Dallas and most U.S. metro areas.
Home prices around the country and in North Texas are facing declines in the coming year because of the COVID-19 pandemic. That’s what economists at CoreLogic are predicting in a just-released report. Nationwide home prices are forecasted to fall by almost 7% by next May. And Dallas-Fort Worth home costs are likely to be 5.89% lower by next spring, according to CoreLogic’s latest estimates.
“Pending sales and home-purchase loan applications are higher than in June of last year and reflect the buying activity of millennials,” Frank Nothaft, chief economist at CoreLogic, said in the report. “By the end of summer, buying will slacken, and we expect home prices will show declines in metro areas that have been especially hard hit by the recession.”
While home buying activity to date indicates the housing market will eventually bounce back, the forecasted home price declines will be caused by higher unemployment rates. The recent spike in COVID-19 infections in many states will add to the problem, Nothaft said in the report.
Some of the biggest home price drops are expected in Las Vegas (-20.1%), Boston (-11.7%) and Denver (-9%), according to CoreLogic. Houston-area prices are expected to decline by 7.4% by next May.
The researchers said that 125 of the U.S. metro areas it looked at — including the D-FW area — had a 75% chance of lower home costs a year from now. The new forecast is just the latest outlook that calls for weakening home prices because of the pandemic and resulting national recession. North Texas has lost more than 200,000 jobs since the coronavirus infections hit. And home sales were down significantly in April and May compared with a year ago.
So far there have only been negligible declines in North Texas home costs. In May, median prices of preowned single-family homes sold by property agents were 1% lower than a year earlier, according to data local real estate listing services. But median home sales prices last month were up 3% year-over-year. CoreLogic estimates that Dallas-area home prices had the smallest gain of any major Texas metro area. Nationwide home prices were up 4.8% year-over-year in May, according to CoreLogic.
“Home-purchase activity, bolstered by record-low interest rates, continues to exceed expectations despite the severe recession,” said Frank Martell, president and CEO of CoreLogic. “Pent-up buyer demand was delayed from spring to summer and is reflected in the latest price data. But with elevated unemployment, purchase activity and home prices could fall off after summer...”
