The Dallas real estate market has been in the news for the last few years as a number of large companies, headlined by Toyota, moved their headquarters to the area. The housing market has seen dramatic price increases, and now the question for many in the DFW area is whether things will be slowing down anytime soon.
2018 vs. 2017
Taking a snapshot from August 15, 2018 and 2017 shows that things have changed, but we wouldn’t exactly call it a slowdown:
- Sales are up 22.17% in 2018 versus the same three-month period in 2017. The good news is that more homes are available.
- While Active Listings are up 9.91%, Months of Remaining Inventory has fallen to 4.47% due to the increased selling activity.
- One more piece of good news: Sale Price to List Price Ratio has fallen, perhaps signaling a slowdown in multiple offer scenarios driving up price. Fewer corporate relocations to the area from 2017 to 2018 could be the reason.
Looking at only Dallas County, the upward pressure becomes more evident:
Using the “best-fit” numbers, price on a per-square-foot measure has increased 8.74% in the past year.
Looking at overall home prices, there has been a 10.12% increase over the same time frame, and a 29.22% increase in 4 years (Q3 2014 – Q3 2018).
Months of Remaining Inventory (MRI) is a data point often analyzed by Home Value Forecast. MRI is defined as the current number of active listings divided by the monthly sales rate. It combines both supply and demand into one number, giving a more holistic view of the state of the market. Traditionally, a balanced market would have an MRI of around 6 months. Today, the Dallas-Plano-Irving, Texas, CBSA has an MRI of 4.47 – a seller’s market.
Looking at MRI by Sold Price in Dallas County shows how the inventory shortage is most dire for homes selling for less than $400,000, where MRI is 2.04 months. Inventory between $400,000 and $499,000 is not much better, coming in at 2.88 MRI.
Looking at MRI by number of bedrooms shows the same thing, with homes with four or fewer bedrooms having MRIs of 3.0 or below.
The good news? If you are looking for a home with seven bedrooms you should be able to find a deal!
Another piece of good news is that housing starts have dramatically increased over the past several years, specially for multi-family dwellings:
This should help with the lack of inventory at the lower-end of the market.
About Home Value Forecast
Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.
HVF is built using numerous housing and economic data sources. The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a corporate subscription to the service.
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- Tom O’Grady, Chief Executive Officer, Pro Teck Valuation Services
- Michael Sklarz, Ph.D., President, Collateral Analytics
- Thomas Hoff, VP, Marketing & Communications, Pro Teck Valuation Services
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