Forecasters See Big D-FW Home Price Hikes Ahead
Hopes for a slowdown in North Texas home price increases may be just wishful thinking. After recent jumps in Dallas-Fort Worth home costs, analysts expected the rate of residential appreciation to slow as the impact of the pandemic eases and more properties come on the market. But the latest indicators point toward a continuation of torrid home price gains for D-FW. For the first two months of 2021, the median price of single-family homes in the area rose by 12%.
Expect more of the same for the rest of this year, researchers at Zillow predict. “Our forecast for Dallas, in particular, projects home values to grow 12.6% over this next year, higher than any other major Texas metro and the U.S. overall,” Zillow economist Alexandra Lee said. “The crush of demand for homes over the course of the pandemic intensified existing trends in the for-sale housing market. Austin was one of the most affected metros, with inventory dropping double digits throughout 2020 and home values skyrocketing to nearly 15% since the pandemic took hold in the U.S.”
Texas metro markets are expected to see big home price hikes in 2021. “All these metros are seeing home values rise at similar month-over-month rates — just over 1%,” Lee said.
Home prices in the D-FW area and nationwide are at record levels. Median home listing prices across the U.S. hit a record high of $370,000 in March, according to Realtor.com. And in the D-FW area, asking prices for homes were even higher — up 12% from 2020 levels to a median of $383,000. Since most of the homes being listed for sale are more expensive properties, that tilts median prices higher.
A huge decline in homes on the market is what’s mainly driving the price moves. “In many areas of the country, there are half as many available homes for sale than a year ago — and in some markets that number increases to less than one-third,” Realtor.com chief economist Danielle Hale said in a new report. For a buyer, that means if they had 10 homes in their price range to choose from last year, they have less than five, perhaps as few as three, available to them today. As a result, home prices have skyrocketed, shattering previous records.”
In the D-FW area, the number of homes listed for sale with real estate agents in March was almost 70% less than a year earlier, according to Realtor.com. Hale said she still hopes recent increases in mortgage rates and an increase in inventory will slow the pace of home price growth. “We expect to see more sellers emerge in the weeks ahead, which should give buyers more options,” she said. “Homes will likely continue to sell fast, but increasing interest rates and monthly costs could slow the pace of price gains, unless we see a boost in demand from equity-rich repeat buyers...”
