Dallas Real Estate Market: Prices | Trends | Forecast 2021-2022

The Dallas housing market is doing great after recovering from the blows of the pandemic since July of last year. Demand for single-family homes has risen and supply has lagged since the second half of last year. According to Texas REALTORS, in the second quarter of 2021, the inventory of homes (active listings) declined by 47.7% when compared to the same quarter last year. The monthly supply of homes was just 1.1 months in the Dallas-Fort Worth-Arlington MSA. The median price rose by 22.4 percent to $349,381. The total closed sales recorded in 2021 Q2 were 30,745, up 16.2% from 2020 Q2. The average days on market (DOM) fell by 25 days, confirming that demand for housing is still robust.

Dallas-Fort Worth-Arlington Housing Report for July 2021

Home prices in North Texas and throughout the country have increased significantly in recent months as demand for housing has increased. Dallas's real estate market is also following this trend. The Dallas-Fort Worth area has landed on a list of the country’s most overvalued housing markets. According to the study conducted by Florida Atlantic University, the DFW area ranked 19th for overheated housing, with homes selling for an average of 31.57 percent more than they were worth.

Home prices in North Texas are currently at an all-time high, with a median price of approximately $350,000. According to data from local real estate agents, the cost of a previously owned single-family home has increased by more than 50% in the last five years. The median price of a home in the DFW housing market has risen to $362,500. The DFW housing market has cooled slightly in recent months from an absolutely insane seller's market, but it remains extremely hot. The Texas Real Estate Research Center provides monthly statistics on the DFW housing market for single-family homes. The Texas REALTORS® provided the data for this report.

Housing Demand

• Sales volume for single-family homes decreased 18.39% YoY from 12,122 to 9,893 transactions.
• Year-to-date sales reached a total of 58,502 closed listings.
• Dollar volume rose from $4.45 billion to $4.4 billion.

Housing Prices

• The average sales price rose 21.19% YoY from $366,864 to $444,606.
• The average price per square foot subsequently rose from $146.26 to $180.56.
• Median price rose 20.83% YoY from $300,000 to $362,500.
• The median price per square foot also rose from $137.73 to $170.88.

Housing Supply

• New Listings increased by 4.07% YoY.
• Months inventory for single-unit residential housing declined from 2.1 to 1.3 months supply.
• Days to sell declined from 78 to 52.

Economy

• When an economy begins to slow, it has the potential to have an impact on its housing markets.
• Housing markets are affected by economic slowdowns, which in turn have an impact on the economy because housing-related activities decline and slow overall economic activity.
• The state of Texas is experiencing a boom in its economy as businesses are pouring money into the Lone Star State at an unprecedented rate.
• The Dollar Volume of all single-unit residential housing sales in July 2021 was $4,666,210,475, up 0.33% YoY.
• The Texas Workforce Commission reported that July MSA jobs increased from 3,629,100 to 3,793,700.
• This represents a 4.54 percent year-on-year increase, or 164,600 new jobs.
• Over the last five years, the job growth rate has averaged 1.75 percent.
• As more Texans jumped back into the job market, the unemployment rate fell to 5.30 percent in July from 7.50 percent in 2020.

Dallas County Housing Market Trends 2021 (Describes July)

At the end of July 2021, a dwindling supply of active listings has pulled Dallas' months of inventory (MOI) down to 1.5 months, according to the latest data released by MetroTex, the largest REALTOR® association in North Texas. The local agents are doing their best looking for the supply solutions necessary to keep this market healthy. The 1.5-month inventory figure is 1.2 months less than July of last year. The new construction in the last 10 years has not been anywhere near enough to handle the population growth in Dallas.

Sales Price: The Dallas median home price jumped by nearly 15.9% year-over-year to $324,400 in July 2021. The growth was flat as negative as the previous month, which shows some signs of cooling. Heightened competition for homes on the market and low mortgage rates have placed consistent pressure on home prices for months now.

Due to a large gap between supply and demand, the market is expected to continue to favour sellers in the second half of 2021, according to forecasts. Homebuyers across the country are expressing an increased interest in suburban neighbourhoods. Home prices in suburban areas are expected to rise faster in 2021 as a result of an increase in demand combined with a decrease in the number of available properties on the market.

Listing Prices: Realtor.com's data shows that in July 2021, the median list price of homes in Dallas County, TX was $348,000, trending up 6.9% year-over-year. The median listing price per square foot was $182. Dallas is the seller's real estate market, which means that more people are looking to buy than there are homes available.

• The median sales price increased by 15.9% YoY to $324,400.
• Closed sales decreased by 13.2 percent year-over-year.
• Total active listings declined by 38.3 percent year-over-year.
• The total days on market equaled 55 — 20 days less than June 2020.
• A six-month supply of houses for sale is generally considered to be a ‘healthy’ real estate market.
• By the end of July, the available housing supply in Dallas County had decreased to 1.5, down from 2.7 in June 2020.
• From this perspective, the Dallas real estate market in 2021 will be a seller's market.

Dallas Real Estate Market Forecast 2021-2022 (Latest Projections)

As a result, what do you think the Dallas real estate market will look like in 2021 and 2022? Among the most affordable real estate markets in the state of Texas, Dallas is one of the most affordable. It is also one of the most active real estate markets in the country for renting out properties. Predictably, the Dallas real estate market was expected to outperform its national counterpart in terms of annual home value appreciation in 2020 before the Covid-19 pandemic struck the United States. Single-family home starts in the Dallas-Fort Worth area increased by more than 30% in 2020, resulting in the highest volume of construction in more than a decade in the region.

According to the Q4 2020 Zillow Home Price Expectations Survey, Dallas will be the nation's 6th hottest housing market in 2021. According to the survey, 54 percent of real-estate experts predict that the DFW housing market (at #6) will outperform the national home-value-growth average. Austin is expected to outperform the national market by the largest margin. A Realtor.com report for the nation's hottest metros also forecasts that DFW could see combined sales and price growth of 15.7 percent in 2021.

Before this ongoing pandemic, Dallas was a balanced real estate market and it was doing pretty well. But in May 2020, residential sales in Dallas County had fallen 35 percent from their level in May 2019 and the median sales price was down 4 percent. The double-digit decline in April and May led to an overall decline year-to-date compared to 2019. The recovery of sales began from July onwards when sales rose by 20% year over year. The median price of homes sold in Dallas-Fort Worth-Arlington MSA rose by 6.4% to $291,000.

Months of inventory at the end of the year was 1.1. Total sales were up 8.7% while active listings were down 25.1% year-over-year, according to the statistics released by Texas Realtors. The highest price gain was in the segment of $200,000 – $299,999, for which the median price increased by 36.8%. That's because the housing supply is tightest at the lower end of the pricing spectrum. There are more house hunters and buyers on the more affordable end as compared to the higher end. 40,382 new construction homes were sold in 2020 in the Dallas-Fort Worth-Arlington MSA.

S&P CoreLogic Case-Shiller Dallas Home Price NSA Index June 2021

The S&P CoreLogic Case-Shiller Dallas Home Price NSA Index measures the average change in value of residential real estate in Dallas given a constant level of quality. The index survey does not include condominiums and townhouses and only covers pre-owned properties.

• May 2011 = 114.28
• June 2021 = 240.15
• Percent Return = 110.14%
• Annualized Return = 7.71%
• May 2021 = 233.10
• 1 Month Percent Return = 3.03%

Let us look at the price trends recorded by Zillow over the past few years. Since Sep 2011, the Dallas County home values have appreciated by nearly 117.7% — Zillow Home Value Index. For your information, ZHVI is a seasonally adjusted measure of the typical home value and market changes across a given region and housing type. It reflects the typical value for homes in the 35th to 65th percentile range.

ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Dallas County is currently 265,627. It indicates that 50 percent of all housing stock in the area is worth more than 265,627 and 50 percent is worth less (adjusting for seasonal fluctuations). In July 2020, the typical value of homes in Dallas was around $229,000.

Dallas home values have gone up 16.4% over the last twelve months. The larger DFW metro area has seen a similar price appreciation as home values have gone up 19.4% over the last twelve months. Here's Zillow’s housing market forecast for Dallas and Dallas MSA. The Zillow Home Value Forecast (ZHVF) is the one-year forecast of the Zillow Home Values Index (ZHVI). It is created using all homes, mid-tier cut of ZHVI and is available both raw and smoothed and seasonally adjusted.

Housing inventory remains low in many major cities across the nation, and Dallas is no exception to that. The supply and demand dynamics will likely push prices north again over the next 12 months. With low inventory and strong price growth, the DFW housing market will continue to be characterised by strong demand and low inventories for the remainder of 2021.

Inventory of homes priced less than $300,000 will be particularly low, which will have a negative impact on sales in that price range. Because listing activity appears to have reached a trough and is increasing, inventories should improve in the coming months, alleviating some of the price pressures. Because of the dramatic increase in home prices over the course of the year, it is likely that some families were priced out of the market altogether.

• Dallas-Fort Worth-Arlington Metro home values have gone up 19.4% over the past year and the latest forecast is that they will rise 14.5% over the next twelve months.
• Dallas County home values have gone up 16.4% over the past year and the latest trends show that prices will continue to rise at a slower rate over the next twelve months.
• The typical home value of homes in Fort Worth is $260,859, up 20.8% over the past year.
• Over the next twelve months, Fort Worth home prices will continue to rise, but at a slower rate.
• The typical home value of homes in Arlington is $270,421, up 20.5% over the past year.
• Over the next twelve months, Arlington home prices will continue to rise, but at a slower rate.
• Texas (Statewide) home values have gone up 16.6% over the past year and will continue to rise in 2021.

The graph below, created by Zillow, shows the growth of Dallas home values since 2011 and their forecast until July 2022.

The historical change in home prices for Dallas-Plano-Irving, TX is shown below for the three-time period. The Dallas Home Price Index has increased for the last 26 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Dallas Real Estate Market was 24% in the twelve months ended with the 3rd Quarter of 1978.

The worst annual change in home values in the Dallas Market was -8% in the twelve months ended with the 4th Quarter of 1987. The highest growth in home values in the Dallas Real Estate Market over a three-year period was 35% in the three years ended with the 3rd Quarter of 2017. The worst performance over a three-year period in the Dallas Market was -14% in the three years ended with the 2nd Quarter of 1989. For the upcoming updates, you can visit LittleBigHomes.com.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers took their homes off the market. The decrease in the number of active listings over the past couple of months indicated that new sellers were still not willing to put their homes on the market until the pandemic or its threat is completely over. Dallas and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term.

In a balanced real estate market, it would take about five to six months for the housing supply to dwindle to zero. In terms of months of supply, Dallas can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Dallas real estate market remains strong and skewed to sellers, due to a persistent imbalance in supply and demand. As of now, the month of supply is 1.5 for Dallas County.

For sellers in Dallas, it is a great time to sell. Motivated buyers are looking for houses for sale, and you are not competing with as many property owners. Many sellers have chosen to back out amid this pandemic.

For buyers in Dallas, mortgage rates are at their lowest. For those who qualify for mortgages, low rates help counteract rising home prices and boost purchasing power. So they should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars.

DFW Housing Market: Annual Report For 2020

How did the DFW housing market perform in 2020? Let’s do a quick recap. Dallas is one of the nation’s largest metropolitan areas. With a population of more than 7 million in the Dallas-Fort Worth CMSA, there has been a tremendous amount of real estate development activity to support this growth over the past 65 years. Dallas-Fort Worth homebuilders started 33,891 houses in 2017, an increase of 4,488 houses or 15.3 percent above 2016 home starts of 29,403, according to a report from the housing analysis firm of Residential Strategies.

Dallas is also one of the hottest real estate markets in the nation. In the past ten years, Dallas real estate appreciated 74.33% over the last ten years, which is an average annual home appreciation rate of 5.71%, according to NeighborhoodScout.com. This puts Dallas in the top 10% nationally for real estate appreciation. If we go back to historical data, the median sale price for a house in Dallas-Fort Worth rose 6.31 percent from $236,100 in November 2016 to $251,000 in November 2017, according to the data from the Texas A&M Real Estate Center.

At the start of 2019, the median home value for Dallas, Texas was around $201,000. The median for the broader DFW metro area was a bit higher. That was a gain of more than 13% from a year earlier, according to data collected by Zillow. Predictions were pointing to a home-price growth of 7% and 10%. However, that did not happen and the prices grew by roughly 3% between Jan 2019 to Dec 2019 (Zillow). There was a cooling trend taking place but the pandemic heated the market. In the latest quarter, house appreciation rates in Dallas were at 1.12%, which equates to an annual appreciation rate of 4.55%.

Impact of COVID-19 Pandemic

Home sales paused the past couple of months as well, as the metro area struggled with a sharp rise in coronavirus cases. Covid-19 pandemic impacted home sales in April, May, and June but home prices continued to strengthen despite the low sales. The real estate sales showed signs of recovery in July. The number of homes sold within Dallas County has shown a double-digit increase of 20.7% as compared to last year. The median price also increased by 15.3% to $282,500.

There was about a 2.7-months supply of homes for sale in Dallas County, which was well below what’s considered to be a balanced real estate market. The DFW houisng market also faced a shortage of available homes with just 2.5 months of supply. Since then the inventory has been declining and has reached 1.1 months.

There were 112,545 homes sold in Dallas-Fort Worth-Arlington MSA in 2020, an 8.7% year-over-year increase. The same period saw active listings decline 25% and housing inventory drop to 1.1 months, according to a report released by Texas REALTORS®. The report compares key housing metrics of Dallas-Fort Worth-Arlington MSA from 2020 to 2019. A very low inventory keeps this region hot and strongly skewed to property sellers.

The median sales price was up by 6.4% to $291,000.

For the homes priced in the range of $0 – $99,999, the median price rose by 2.4%.

For the homes priced in the range of $100,000 – $199,999, the median price rose by 22.8%.

For the homes priced in the range of $200,000 – $299,999, the median price rose by 31.4%.

For the homes priced in the range of $300,000 – $399,999, the median price rose by 16.2%.

For the homes priced in the range of $400,000 – $499,999, the median price rose by 9.6%.

For the homes priced in the range of $500,000 – $749,999, the median price rose by 9.5%.

For the homes priced in the range of $750,000 – $999,999, the median price rose by 3.2%.

For the homes priced in the range of $1,000,000+, the median price rose by 4.9%.

Active listings are down by 25.1% to 18,696.

Closed sales are up by 8.7% to 112,545.

Total days on market = 45, 5 days less than 2019.

Months of inventory = 1.1, compared to 2.3 in 2019.

Is Dallas a Good Place For Real Estate Investment? Many real estate investors have questioned whether or not purchasing a property in Dallas is a wise financial decision. If you want to know what the real estate market will be like for real estate investors and buyers in 2021, you need to dig deeper into the local trends. The Dallas housing market is an excellent place to invest in income properties, whether you're purchasing your first or simply adding another to your portfolio. It doesn't get much more “location” than this when it comes to real estate.

The Dallas housing market offers excellent profit-generating opportunities for all types of real estate investors, from first-time buyers to seasoned professionals. In Dallas, large apartment buildings and single-family homes account for the vast majority of the city's housing stock, with small apartment buildings accounting for the majority of the remaining properties. Renter-occupied and owner-occupied housing are found in equal amounts in Dallas.

Dallas is one of the cities in the United States where renting is more cost-effective than buying. A large part of the reason why Dallas has grown over the years has been the influx of young people who have settled in the city and are continuing to do so. They have preferred to start with rental properties rather than purchasing their own homes. In Dallas, the demand for rental units has increased by 14 percent in the last year, making now an excellent time to make a financial investment in the city's housing market.

Single-family homes make up approximately 43.51 percent of the total housing units in the city of Dallas. In January and February, Dallas-Fort Worth was the most active market in the country in terms of single-family construction starts. With 11,636 residential projects permitted, it ranked first in the nation for the combined number of single and multiple family units being constructed, according to the U.S. Census Bureau's Building Permits Survey.

Dallas has a thriving economy and is experiencing steady population growth, which will help you put more money in your pocket. As rents rise, savvy investors should consider investing in Dallas commercial real estate. A single-family home or a multifamily apartment as an investment in the Dallas real estate market, regardless of whether it is a single-family home or a multifamily apartment, is an investment that can reap significant rewards if you have some experience and education in real estate investing. When it comes to investing in real estate, you need to know where to put your money, which means conducting extensive research to determine the best neighborhoods in the Dallas real estate market.

Top Reasons To Invest In The Dallas Real Estate Market

Population Expected to Double in Next 15 Years Dallas is one of the leaders in the U.S. for employment and population growth. 52.9% of Dallas rents vs. 33% nationally. The demand for rental accommodation is increasing year-over-year. Low entry prices for Dallas investment properties. Newly remodeled REOs (2004 or newer). Properties 5% – 15% below market value. Cap rates above 6 percent. It is a good time to buy a house in Dallas due to favorable supply and demand conditions.

Let’s take a look at the number of positive things going on in the Dallas real estate market which can help investors who are keen to buy an investment property in this city.

Dallas is a Growing Real Estate Market

One of the largest metropolitan areas in the USA, Dallas is currently the beating heart of the Texas housing market. Dallas's population has grown at twice the national rate for years now and this pushes the prices of Dallas investment properties higher due to builders not being able to keep up. Dallas home prices have been on the rise in the last 10 years. In fact, over the last 6 years, 3 bedroom homes in Dallas have appreciated by 45%. During the same period, 3 bedroom home prices in Dallas appreciated by 41% nationwide.

Dallas's housing prices have increased 29% over the last three years, even with these increases in home prices, they are still competitive for investment properties and you can expect further increases over the years. This shows us that home prices in Dallas are rising more quickly than in most other cities across the nation. If you want to buy an investment property in Dallas, don't wait around, go ahead and do it.

In January, Zillow published a forecast that included what they felt would be the ten “hottest U.S. housing markets for 2019.” Dallas was ranked at number seven on that list. They looked for metro areas with strong income growth, growing populations, and low unemployment, and several other factors. San Jose was ranked number one in the hottest markets forecast.

A strong economy has buoyed home prices in Dallas beyond their fundamental levels for a sustained period, according to a report by Florida Atlantic University associate dean Ken Johnson. Home prices in Dallas are still appreciating but at a decreasing rate, suggesting that the current upward pattern in property appreciation is nearing an end. A bubble is not likely but a significant slowdown in-home price increases are most likely, according to James Gaines, chief economist with the Real Estate Center at Texas A&M University.

He said that things may slow down in Dallas, but it would take a major economic event to do that. The university study isn't the first to warn of a home price correction in the Dallas area. But other reports by CoreLogic and Fitch Ratings have said North Texas home prices are overheated. And with the outbreak of the COVID-19 pandemic, things have really slowed down, at least for the short period. In May, there was a decline of 3% in the median home price in Dallas County. In July, the median price has shown a double-digit appreciation of 15% to $282K.

No State Capital Gains Tax

Texas has no state income tax, and many property owners are attracted to the state because no state capital gains tax on income from sales of property (Landowners still have to pay federal taxes on their gains under certain situations). This makes investing in Texas more lucrative for investors. Dallas house prices are also much lower than in other major cities.

The result is an attractive rental property market for domestic and international investors alike. According to the Texas Association of Realtors, around one-third of international investors come from Latin America, just ahead of those from Asia. European buyers make up around one in 10 buyers, while Indian buyers are also a notable presence in the Texas real estate market.

Dallas' Strong Economy

You should think of investing in Dallas real estate because it has a very diverse economy so there is a niche for people of every income level. It is estimated that 340 people move to Dallas-Fort Worth every day. Dallas has the lowest homeownership rate in the country, with renting more affordable than buying.

Dallas is a job hub. In the past decade, new jobs have created a land rush that has made North Texas one of the fastest-growing areas in the country. In 2018, 102,500 jobs were created here, and about 130,000 people moved to town. It is home to a large number of corporate headquarters, the city is a significant financial hub in the South of the USA.

Dallas's local economy is a mix of aerospace, computer chips, telecommunications, transport, energy, and healthcare sectors and the Finance and Business Services. These sectors are all providers of good wages which allows for a strong market for Dallas investment properties.

Additionally, since 2014, 15 major tech companies have moved to Dallas, Texas bringing advancement and job growth in industrial and professional areas. These factors contribute to the immense growth of the Dallas real estate market. Tourism is on the rise in Dallas, Texas which promotes job growth to towns and neighborhoods within the area.

Some of the common points of attraction are the AT&T Stadium, Reunion Tower, and Book Depository. Dallas is becoming a hub for start-ups and IT companies, leading to an increase in investment in the Dallas real estate market.

Strong Dallas Rental Market

Texas has some of the best colleges in the country. And with the instrumental position held by the University of Texas, Dallas, and Northwestern State University, all students and eventual graduates are going to be in the rental market at some point. According to RentCafe, the average rent for an apartment in Dallas is $1,250, a 4% increase compared to the previous year. 216,192 or 42% of the households in Dallas, TX are renter-occupied while 289,624 or 57% are owner-occupied.

More than 80% of the apartments can be rented for less than $1500. If you buy an investment property in Dallas, there are statistics that there is no shortage of people looking for a place to live here, which means there is no dearth of prospective tenants for your Dallas investment property. The annual vacancy rate of rental properties in Dallas is very low as compared to other cities which is another good reason for investing in the Dallas real estate market.

According to RentCafe, Dallas’s average rent reached $1,270 in April, after a 1.5% increase since last year. Dallas apartment prices are below the national average of $1,417. The average rent for an apartment in Dallas rose slower than in other surrounding cities, such as Arlington ($1,093), where prices went up by 3.9%. Meanwhile, apartment rates in Fort Worth increased by 5%, reaching a $1,196 average.

Flower Mound is the priciest city for renters in the Dallas–Fort Worth area, with apartments renting for $1,599 per month. Frisco and its $1,497 average price are the second most expensive, while Farmers Branch comes in third, with a $1,459 rate. For renters in search of budget-friendly apartments, Greenville's $891 average rent is the cheapest in the Dallas area, followed by Balch Springs's $934 rate. Lancaster rentals are the third least pricey on the list, with a $1,031 average rent as of April.

The Zumper Dallas Metro Area Report analyzed active listings in July 2021 across 13 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Texas one-bedroom median rent was $1,019 last month. Richardson ranked as the most expensive city with one-bedrooms priced at $1,420 while Denton was the most affordable city with one-bedrooms priced at $920.

The best place to buy rental property is about finding growing markets. Cities like Richardson, Plano & Garland are good for investors looking to get started with rental property ownership at an affordable price. These trends provide a macro look at the growing rental demand. Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present their own opportunities for investors.

These cities look good for rental property investment this year as rents are growing over there.

The Fastest Growing Cities For Rents (Year-Over-Year)

• Garland rent was the fastest-growing, up 22% since this time last year.
• Richardson saw rent climb 19.3%, making it second.
• Irving was third with rent increasing 14.6%.

The Fastest Growing Cities For Rents (Month-Over-Month)

• Richardson had the largest monthly rental growth rate, up 5.2%.
• Plano & Dallas were second with rents both jumping 4.8%.
• Garland ranked as third with rent growing 4.7% last month.

Texas Real Estate Market: Investment Opportunities For 2021

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Dallas.

Consult with one of the investment counselors who can help build you a custom portfolio of Dallas turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Dallas.

Not just limited to Dallas or Texas but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Dallas turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

For a majority of investors, buying or selling real estate is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

Texas is a great market for real estate investing. If you have decided to invest in Dallas, you can either buy a fixer-upper or you may want to buy a Dallas investment property. This market offers a wide range of turnkey investment properties; you just have to find your tenants to rent out the property.

Good cash flow from Dallas investment property means the investment is, needless to say, profitable. On the other hand, a bad cash flow means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Dallas in a growing neighborhood would be key to your success.

When looking for real estate investment opportunities in Dallas or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum of 1% profit on your investment. An example would be: at $120,000 mortgage or investment cost, $1200 per month rental. That would be the ideal equation for example. Even with rent increases, buying a $500,000 investment property in Dallas is not going to get you $5000 per month on rent.

The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Dallas investment property and you should be able to get a good return on your investment over the long term.

The neighborhoods in Dallas must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Dallas might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio.

It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there. There are 111 neighborhoods in Dallas. Preston Hollow has a median listing price of $1.4M (on Realtor.com), making it the most expensive neighborhood. Pleasant Grove is the most affordable neighborhood, with a median listing price of $159K.

Apart from Dallas, you can also invest in the housing market of Houston. Houston has a track record of being one of the best long-term real estate investments in the U.S. The Houston Real Estate Market forecast is good, and current housing prices are relatively low. The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.

The next one is the San Antonio real estate market. For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of the outsized military presence. Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis, and Camp Stanley are located in the immediate vicinity. This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment.

San Antonio has a dearth of affordable housing because demand is so much greater than the supply. This has created a large number of renters who need to pay quite a bit to rent apartments or single-family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two-month inventory.

The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates, and high population of young households were pivotal in the ranking process. The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.

The Central, Cielo Vista, and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.

The Austin housing market is one hot place to invest in Texas. It isn’t the largest in the state of Texas, but there are several reasons to consider buying real estate in this city. The Austin real estate market has gained a lot of steam, with home values almost doubling since 2010. The Austin real estate market isn’t as big as Dallas, San Antonio, or Houston. One of the long-term strengths of Austin is its diverse economy. The Austin real estate market dipped after the layoffs of the Dot-Com boom. They decided to solve the problem by encouraging medical and biotech employers to relocate to the area, too. As of this writing, there are 85 biotech and pharmaceutical companies in Austin.

Let us know which real estate markets in the United States you consider best for real estate investing! 

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Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

REFERENCES

Market Prices, Trends & Forecasts
https://www.texasrealestate.com/market-research
https://www.mymetrotex.com/market-reports
https://www.zillow.com/dallas-tx/home-values
https://www.neighborhoodscout.com/tx/dallas/real-estate
https://www.realtor.com/realestateandhomes-search/Dallas_TX/overview
http://www.homebuyinginstitute.com/news/dallas-forecast-one-of-the-hottest
https://www.zillow.com/research/zillow-hottest-markets-2021-28667/
https://www.zumper.com/blog/dallas-metro-report/
https://www.zumper.com/rent-research/dallas-tx
https://www.rentcafe.com/apartments-for-rent/us/tx/dallas/#rent-report

Foreclosures
https://www.realtytrac.com/statsandtrends/foreclosuretrends/tx/dallas-county/dallas/

Dallas Investment Opportunities
https://www.mashvisor.com/blog/dallas-investment-properties
https://rentberry.com/blog/dallas-investment-opportunities