North Texas Home Prices Surge to Unheard-Of Levels
North Texas home prices rose at the fastest clip in more than a decade in March.
The median price of a single-family house sold by area real estate agents jumped by 16% to $312,000 last month. That’s the highest price ever for property sales in North Texas.
The price per square foot of homes sold rose even faster—up 19% from March 2020, according to a new report from the Texas Real Estate Research Center and North Texas Real Estate Information Systems.
The surge in home prices in North Texas comes as the shortage of homes for sale worsens.
Only 6,085 single-family homes were listed for sale with local real estate agents in March—less than a one-month supply at current sales rates. There were 71% fewer houses on the market in North Texas than a year ago.
There are fewer homes for sale in North Texas than at any time in more than two decades.
“With the acute shortage of listing inventory, house prices are headed higher,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. “The real challenge is that there are not enough new listings coming to the market to meet the demand.
“This presents a challenging situation for the Realtors,” he said. “While most had a terrific 2020 and sold most of their listings, they are now facing a severe imbalance—plenty of buyers but not much to sell.”
March sales were up only 5% from a year earlier. Last month’s percentage year-over-year home sales increases was the smallest in a year and followed several months of double-digit sales gains.
The lack of preowned homes on the market is holding down purchases, Wilson said.
“While the sales pace can continue to increase as inventory that is left is sold, eventually sales will plateau or even subside,” he said. “Stories persist in the market of multiple offers on a single house that comes up for sale—many at above asking price.
“The lack of housing options also presents some hesitancy about would-be move-up buyers: I can sell my house, but where will I move?”
It only took 36 days on average to sell a house in the more than two dozen counties included in the North Texas home data. Average home sales times are down by more than a third from March 2020.
With last month’s activity, real estate agents sold 23,452 single-family homes in the first quarter. Sales were up only 1% from the same period last year, due in part to a slowdown of purchase activity during February’s ice and snow storms.
“The lack of inventory affected DFW housing sales,” said Dr. Luis Torres, economist with the Texas Real Estate Research Center. “The other three major Texas metro areas registered a bigger bounce back from the winter storm than the DFW region.”
Median home sales prices in North Texas rose 13% in the first quarter from the same period in 2020.
Home sales in the Dallas-Fort Worth area and around the country have surged in the last year because of near-record-low mortgage rates and higher demand.
The homebuying spree has been one of the bright spots in the U.S. economy during the COVID-19 pandemic.
The DFW homebuying binge is also being fueled by moves to the area by thousands of people coming from California, New York, Illinois and other states.
“I cannot get over all the out-of-state license plates I see on the road,” said Paige Shipp, a housing researcher with CDCG Asset Management. “And not just the typical ‘high-priced’ states like California and New York.
“I have seen dozens of cars from Missouri, Ohio, Minnesota and Kansas.”
Those out-of-state buyers are pushing median prices higher, and there are more properties selling for $400,000 and more, Shipp said.
Sales of North Texas homes priced at $400,000 and more are up 45% so far in 2021. And sales of million-dollar properties are 97% higher than in the first three months of 2020.
“As the economy improves and in-migration continues, I expect prices will continue to rise.,” she said. “At what point are prices so high that buyers cannot afford to purchase? That’s the real question.”
Source: Dallas Morning News