DFW Prices, Sales Down Only Slightly in May
North Texas buyers who are hoping for dramatic relief on prices may be out of luck.
Even with higher mortgage rates than a year ago and not much relief on home prices, buyers still clearly have an appetite for North Texas properties with sales activity only slightly behind where it was last spring.
May single-family home sales in Dallas-Fort Worth declined just 2% from a year before with 8,805 transactions, according to a new report from the Texas Real Estate Research Center at Texas A&M University and North Texas Real Estate Information Systems.
The median price of a single-family home last month was $412,500, down 5% from a year ago but up 2.5% from April.
The report includes existing and new home sales sold through the listing service used by local real estate agents and does not include sales of homes directly through homebuilders.
The number of months of available home supply grew from just over one month last May to just over two months this May. It is still far behind the about six months of available inventory economists say would indicate a balanced market between buyers and sellers.
New listings were down 13% from a year ago. Many homeowners stayed in their properties, not willing to give up the low mortgage rate they received in previous years. Homes had been on the market for an average of 45 days in May, more than twice as long as they were sitting last year.
Bucking the regional and national trend, Collin County’s home sales were up 4%, while its median price was down 9% to $539,000.
Dallas-Fort Worth home construction peaked in the second quarter of 2022, according to Dallas housing research firm Residential Strategies. Single-family building permits in the area hit a record high in March 2022, according to the Texas Real Estate Research Center. That gave buyers plenty of options to choose from when those homes wrapped up construction this spring.
“You have all these units coming on the market to absorb the demand that we’re seeing this spring in housing,” Orphe Divounguy, a senior economist for Zillow, said in an interview with The News at the recent annual National Association of Real Estate Editors meeting in Las Vegas. “That’s a positive for homebuyers.”
In other parts of the country, buyers are similarly coming back to the market, but those areas simply don’t have the inventory to support the demand, Divounguy said.
“We’re not seeing a crash, we’re seeing a moderation of the housing market; that soft landing, so to speak, that everybody’s been talking about,” he said. “So Dallas is very encouraging, and it would be nice to see more of that around the country.”
Rick Sharga, founder and CEO of housing research firm CJ Patrick Co., said Dallas-Fort Worth’s continued population and job growth sets the foundation for a strong housing market, and that the area is still a relative bargain for people coming from higher-priced states.
“I think the gating factor right now is mortgage rates, and I believe if mortgage rates come down even a little bit, you’ll probably see more demand, which will drive prices back up,” Sharga said. “Even if prices are down marginally year over year or year to date, I wouldn’t be surprised at all to see Dallas prices end the year up on a year-over-year basis. I’d be kind of surprised if they didn’t.”
Source: Dallas Morning News