DFW Housing Market Not Seeing a Bubble Burst, or Even Much Lower Home Prices

The local median existing-home price has only fallen 1% from a year ago.

Home prices in Dallas-Fort Worth stood in place from June to July following five months of consecutive gains, and they haven’t changed much from a year ago despite interest-rate hikes.

The local median single-family home price remained flat at $415,000 from June to July, according to a new report from North Texas Real Estate Information Systems and the Texas Real Estate Research Center at Texas A&M University.

Area prices were about $20,000 behind last summer’s peak of $435,000 and 1% lower than last July, but they were still about 47% higher than they were in March 2020 before the pandemic’s boom in home prices.

“Contrary to investors’ fears, the ‘housing bubble’ did not burst,” Texas A&M researchers said in a separate statewide report this month. “Instead, a harmonious decline in both supply and demand has struck a balance, resulting in a boost to the housing median price.”

Mortgage rates have more than doubled over the past two years spurred by actions of the Federal Reserve. “You’d have thought the home prices were to fall 10% to 15%,” with the higher rates, said Jim Gaines, a longtime housing economist for Texas A&M. “They didn’t come anywhere close to doing that.”

The local report largely includes data from existing-home sales but also some new-home sales through real estate agents. Sales made directly by builders aren’t included, but market analyst Residential Strategies found North Texas builders sold a record-breaking number of homes from April to June.

Some parts of the country have seen more significant price declines, but others are seeing greater year-over-year increases. Gaines said Dallas-Fort Worth’s population growth and high employment are keeping prices afloat.

The July report found 7,632 single-family home transactions in D-FW, down 6% from a year ago. On average, homes sold after 39 days on the market and at 97.3% of the list price.

“Statistically, we’re showing a little bit down in the volume of sales, but it’s not the bottom falling out,” Gaines said. “I mean, it’s not a 20%, 30% decline.”

Dallas-Fort Worth had just 2.6 months of available inventory in July, far behind the roughly six months of supply economists would call balanced between buyers and sellers. “It’s still an incredibly tight market,” Gaines said.

Of the four major North Texas counties, Collin County homes were the most expensive with a median price of $530,000. Ellis, Kaufman and Tarrant had year-over-year percentage sales declines in the double digits.

Angelia Ekholm, a real estate agent for The Agency, which recently opened an office in Dallas, said some homes are still receiving multiple offers and that she expects prices to level out the rest of the year until a seasonal rush in December.

Ekholm said she just listed a home in The Colony for $700,000 this week that already has multiple offers. Another listing of hers in Denton took 45 days to sell but it was around $450,000, a price range where buyers may be more sensitive to mortgage rates, she said.

“A lot of buyers have pulled out, so it gives [other buyers] an opportunity,” she said. “I think it’s a matter of setting expectations.”

Source: Dallas Morning News