In this article, our focus will be on the current state of the Dallas real estate market and how it can affect the investors and home buyers. The demand and sales have been climbing at a feverish pace for more than two years now. The market started cooling off in the last quarter of 2019 and remains cold as of now. Dallas home prices have risen by only 2% in the past year.
The DFW metro area has experienced smaller price gains as compared to Dallas. 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.
Whether you’re buying your first income property or just adding another one to the portfolio, Dallas housing market is a great place to do so as it doesn’t get any more “location” than this. The Dallas housing market has always to offer some great profit-generating opportunities to all types of real estate investors.
Dallas has a strong economy and a constant population growth and will make your pockets bigger. As rents goes up smart investors should invest in Dallas real estate. Purchasing an investment property in the Dallas real estate market, whether it a single family home or a multifamily apartment is an investment that can pay out some huge benefits in the event that you have some experience and education in real estate investing.
You have to know the best places to put your money in real estate so you must do some extensive research to find out the best neighborhoods in Dallas real estate market. There are a number of reasons to consider investing in the Dallas real estate. Is Dallas going to be one of the hottest real estate markets for investors in 2020? To answer this question, let’s take a look at the latest Dallas housing market trends and find out the prospects of investing in the Dallas real estate in 2020.
Why Invest In Dallas Real Estate? |
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The home prices are expected to flatten nationwide, increasing by just 0.8%, according to Realtor.com. Dallas properties have a track record of being one of the best long term real estate investments in the U.S. The real estate appreciation rate in Dallas in the latest quarter was around 2.1% which equates to an annual appreciation rate of roughly between 8% to 9%. This can trigger a massive interest in the Dallas real estate investment.
Even small changes in the appreciation rate can change the long-term value of buying considerably. For sellers, a nice profit is on the horizon. Let’s learn more about the factors that make Dallas a good place to invest if you’re considering real estate investment. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control.
Please note that there are many variables that can potentially impact the value of a home in Dallas (or any other market) and some of these variables are impossible to predict in advance. This article has been updated to reflect recent changes in the Dallas housing market.
Dallas Real Estate Market Forecast 2020 – 2021
Dallas Real Estate is one of the most affordable in the state of Texas. It is also one of the hottest real estate markets for rental homes in the nation. What are the Dallas real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home prices in Dallas have appreciated by roughly 57.2% from $143,000 to $224,772, according to Zillow’s index.
At the start of 2019, the median home price in Dallas was around $201,000 and it was a gain of more than 13% from a year earlier, according to data collected by Zillow. The Dallas housing market predictions for 2020 are pointing to a 3% rise in the home values. The home prices are expected to flatten nationwide, increasing by just 0.8%, according to Realtor.com. The Dallas real estate market is expected to outperform the nation in 2020, in terms of annual home value appreciation.
In the last twelve months, the Dallas real estate has appreciated by 2.3%. The latest Dallas real estate market forecast is that the home prices will continue to increase by 3% – in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Dallas is $224,772.
Dallas is currently a buyer’s real estate market. This means you can probably buy a home for less than list price, and the seller might be willing to pay some or all of your closing costs. Zillow reports that 18.8% of the listings in Dallas had a price cut in Jan 2020. When there are more homes available for sale than buyers to purchase them, those buyers are enjoying a cold market.
Here is the Dallas, TX real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 3% till Feb 2021.
Dallas Housing Market Forecast 2021
Here is a short and crisp Dallas housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Dallas is 76% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Dallas is 76% during this period. If this price forecast is correct, the Dallas home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Dallas Housing Market Forecast.
Dallas Housing Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Dallas area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Dallas is a minimally walkable city in Dallas County with a population of approximately 1,197,970 people. In the past ten years, the annual real estate appreciation rate has amounted to 5.53% in Dallas, according to NeighborhoodScout.com. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. Currently, the inventory remains high in Dallas. There are more homes for sale than there are buyers and home owners are becoming more and more eager to sell their property.
On average, homes in Dallas, TX sell after 77 days on the market. The trend for median days on market in Dallas, TX has gone down since last month, and slightly up since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Dallas market can tip to favor sellers if the supply decreases to less than six months of inventory. However, looking at the current trends, we don’t see things stopping moving in that direction. The supply will outpace the demand in Dallas to give buyers an upper hand in price negotiations.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, one and two bedroom large apartment complexes are the most common housing units in Dallas. Other types of housing that are prevalent in Dallas include single-family detached homes, duplexes, row houses and homes converted to apartments. The median house price in Dallas is $190,931, which indicates that home prices in Dallas are near the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Dallas.
Dallas Real Estate Inventory And Sales Data
Dallas has a mixture of owner-occupied and renter-occupied housing units. 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 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.
After the great recession of 2008, renting a home has increased exponentially across the nation. There are currently over 136.57 million housing units in the U.S. In 2018, the total number of homeowner households hit an all-time high of 76.2 million. 36.6% of households rent their homes and 64.4% buy their homes (2018 U.S. Census Bureau).
Dallas is among those US cities where renting is more reasonable than buying. One of the many reasons Dallas has been growing over the years is because young people have moved there and continue to do so, and the preferred starting out with rental properties before buying their own home.
The demand for rental units has increased 14% over the last year, so it’s the perfect opportunity to invest in Dallas real estate. The Metro area is growing and its expected that at least 20000 new homes in this area and in Dallas a total of 50000 new single family homes and 50000 apartments.
In the past month, 932 homes have been sold in Dallas, TX on Redfin.com, a national real estate brokerage. Additionally, there were also 1172 condos, 277 townhouses, and 175 multi-family units for sale in Dallas last month. The median listing price is around $390,000. The average sale price of a home in Dallas was $311K last month, up 6.8% since last year. The average sale price per square foot in Dallas is $175, up 3.6% since last year.
According their statistics, the Dallas housing market is moderately competitive. Homes sell for about 3% below list price and go pending in around 64 days. A hot listing in the market can sell for around list price and go pending in around 26 days.
Trulia has currently 4411 resale and new homes for sale in Dallas, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
Currently, there are 2436 homes for sale in Dallas on Zillow, an online real estate database company. Additionally, there are 540 homes for rent. Under potential listings, there are about 19 Foreclosed and 154 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Dallas is $202, which is higher than the Dallas-Fort Worth-Arlington Metro average of $140.
- The median price of current listings is $365,000.
- Th median price sale price is $314,400.
- The median rent price in Dallas is $1,700, which is the same as the Dallas-Fort Worth-Arlington Metro median of $1,700.
There are currently 5125 homes for sale and 2528 homes for rent in Dallas, Texas on Realtor.com, a real estate listings website. According to their statistics, in February 2020, the Dallas housing market was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market.
Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Dallas have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 97.87% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
- In February 2020, the median list price of homes in Dallas was $376,900, trending down -2.1% year-over-year.
- The median listing price per square foot was $200.
- The median rent price was $1,900.
The asking price of single family homes in Dallas can start from $30,000 and can go up to $18.5M for a luxury property located in White Rock neighborhood. There are currently 571 new construction houses available for sale in Dallas. Preston Hollow has a median listing price of $1.3M, making it the most expensive neighborhood in the city of Dallas. Riverway Estates-Bruton Terrace is the most affordable neighborhood, with a median listing price of $154,500.
| Homes For Sale | 5125 |
| Homes For Rent | 2528 |
| Median Listing Price | $376,900 |
| Median Sale Price | – |
| Sale to Asking Price Ratio | 97.87% |
| Median Rent | $1,900 |
| New Listings | 298 |
| New Construction Houses | 571 |
| Median List Price/Sq Ft | $200 |
| Home Price Range | $7K to $18.5M |
| Most Expensive Neighborhood | Preston Hollow |
| Most Affordable Neighborhood | Riverway Estates-Bruton Terrace |
Dallas, TX Foreclosures And Bank Owned Homes Statistics
Looking for foreclosure homes in Dallas? As per the Dallas foreclosure data by Zillow, in Dallas 0.2 homes are foreclosed (per 10,000). This is lower than the Dallas-Fort Worth-Arlington Metro value of 0.3 and also lower than the national value of 1.2. The percent of delinquent mortgages in Dallas is 1.3%, which is higher than the national value of 1.1%. The percent of Dallas homeowners underwater on their mortgage is 5.7%, which is higher than Dallas-Fort Worth-Arlington Metro at 4.4%.
There are currently 446 properties in Dallas, TX that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 3,426. In February 2020, the number of properties that received a foreclosure filing in Dallas, TX was 13% higher than the previous month and 35% lower than the same time last year.
| No. of Foreclosures in Dallas | 446 (RealtyTrac) |
| Homes for Sale in Dallas | 3426 |
| Recently Sold | 8860 |
| Median List Price | $305,000 (3% drop vs Jan 2019) |
In Dallas, the zip code with the highest foreclosure rate is 75247, where 1 in every 224 housing units is foreclosed. 75232 zip code has the lowest foreclosure rate, where 1 in every 1648 housing units becomes delinquent.
Dallas Home Prices Trends
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. This shows us that home prices in Dallas are rising more quickly than the most other cities across the nation.
| 7.4% | 11.2% | 15.0% | 18.7% |
| Next 24 Months | Next 36 Months | Next 48 Months | Next 60 Months |
The above Dallas Home Prices Trend is from Metropolitan Statistical Area.
Dallas home prices are up just over 5 percent in a latest survey. 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 in 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 is most likely, according to James Gaines, chief economist with the Real Estate Center at Texas A&M University. He said that the 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.
As the home prices in Dallas continue to rise faster than the national average, however, there is clearly a cooling trend taking place. But if the inventory continues to grow in the Dallas real estate market, it will likely lead to smaller home price gains in Dallas in the future. And that’s probably a good thing. When home prices rise at a much faster pace than local wages and income, it can create affordability problems. So a cooling trend could actually be beneficial at this point.
Is Dallas A Good Place For Real Estate Investment?
Now that you know where Dallas is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Dallas a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Dallas is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Dallas real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, a turnkey property in Dallas that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider.
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.
1. Best Place To Live
Why should you invest in Dallas real estate is a question that most of the real estate investors need an answer for. You should invest in Dallas real estate because Zillow.com ranked Dallas at number 12 in the list of the best places to live in the country in 2017.
2. Diverse 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 home ownership rate in the country, with renting more affordable than buying.
3. Huge Tenant Pool To Invest in Traditional or Airbnb Rentals
If you buy an investment property in Dallas, there are the 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.
4. Low Annual Vacancy Rates
The annual vacancy rate of rental properties in Dallas is very low as compared to other cities which is another good reason of investing in Dallas real estate market.
5. Flourishing Tourism Sector
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 which has led to an increase in investing in Dallas real estate market.
6. Suitable Climate
Climate of Dallas is characteristic of a southern plains state, with many great areas to locate the investment property you are looking for.
7. Strong Job Market Drives People into Dallas
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.
8. Base of Many High Tech Companies
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 Dallas real estate market, especially for investment properties.
9. Big Student Market For Owning Rental Properties
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. The rental market increased by 8% in 2017, and the expectation is for a subsequent increase of another 4% for 2018. Now is the best time to buy a Dallas investment property before the housing market caps.
10. High Population Growth Propels Real Estate
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’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. If you want to buy an investment property in Dallas, don’t wait around, go ahead and do it.
Investing in Dallas Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Dallas but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. 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.
Hiring a local property management company can help in finding tenants for your investment property in Dallas. If it is your first time to invest in Dallas real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
You should also join real estate investment clubs in Dallas, Texas and try to make connections with fellow investors. To be effective in the real estate industry, a concrete marketing design is vital. The real-estate market is constantly changing in their methods on how to look for that right property. A good cash flow from Dallas rental property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Dallas real estate investment opportunity would be a key to your success. If you invest wisely in Dallas real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. The less expensive the Dallas investment property is, the lower your ongoing expenses will be.
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 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 example. Even with rent increases, buying a $500,000 investment property in Dallas is not going to get you $5000 per month on rent.
When looking for the best real estate investments in Dallas, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Dallas, TX.
Let Us Help You In Buying Your First Investment Property in Dallas
Buying or selling real estate, for a majority of investors, 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 area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Consult with one of investment counselors who can help build you a custom portfolio of turnkey cash flow rental properties in the various growth markets across 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 top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Other Best Places in Texas For Real Estate Investment
Apart from the Dallas real estate market, you can also invest in the housing market of Houston, TX. If you are a home buyer or real estate investor, 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, so if you want to get on board the Houston real estate investing then now would be a great time to do so.
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 median home value in Houston is $189,900. Houston home values have gone up 4.6% over the past year and Houston real estate market prediction is that they will rise by 2.9% within the next year.
The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked at 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 household 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 next one is the San Antonio real estate market. The median home value in San Antonio is $167,600. San Antonio home values have gone up 8.0% over the past year and Zillow predicts they will rise 2.5% within the next year.
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 Austin housing market is one hot place to invest in Texas. It isn’t the largest in the state of Texas, but there are a number of 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 the 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.
Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Dallas real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. 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, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
- About Dallas
https://en.wikipedia.org - Dallas Investment Opportunities
https://www.mashvisor.com/blog/dallas-investment-properties
https://rentberry.com/blog/dallas-investment-opportunities - Updated Market Prices, Trends & Forecasts
https://www.zillow.com/dallas-tx/home-values
http://www.metrodepth.com/dallas-forecast-return-to-normalcy
https://www.redfin.com/city/30794/TX/Dallas/housing-market
https://www.realtor.com/realestateandhomes-search/Dallas_TX/overview
https://www.realwealthnetwork.com/markets/dallas-texas
http://www.homebuyinginstitute.com/news/dallas-forecast-one-of-the-hottest
https://www.dallasnews.com/business/real-estate/2018/12/04/new-report-warns-dallas-home-price-bubble
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