HOUSING METRICS IN NORTH TEXAS – NO SURPRISES HERE
Just when you think housing prices in North Texas can’t get any higher or break any more records, another article comes out in the Dallas Morning News indicating just the opposite. Specifically, the article in question pointed out that, for April 2017, home prices continued to climb ($246,100, a 12% increase year over year), setting another record1.
The graph above shows the boost in home sales prices from March 2015-March 2017.
Additionally, real estate agents sold 9,180 homes – which is a record for April. Overall, North Texas home sales are running 3% ahead of where they were in the first four months of 2016. Added to that, the months of home inventory available continues hovering around 2.5 months, well below what is considered “equilibrium” for housing supply and demand.
However, there were also more houses listed for sale. At 18,652, this was “one of the first meaningful increases in houses on the market North Texas has seen in recent years,” the DMN article noted. According to the most recent figures we could obtain from the North Texas Real Estate Information Systems (NTREIS) listed below, the quantity of houses coming to the markt has been increasing. Still, “the overall supply remains very tight,” according to Ted Wilson with Dallas-based Residential Strategies2.
Jobs, Jobs, Jobs
The main reason for the continued increase in price and low inventory boils down to continued job growth. The North Texas economy added 129,700 jobs from March 2016-March 2017, with the highest growth seen in the Leisure & Hospitality (5.9% growth), Professional & Business Services (5.0% growth) and Mining, Logging & Construction (4.0% growth)3.
With more announced corporate relocations, housing demand will continue very strong. In some North Texas neighborhoods, in fact, people are knocking on doors, making offers to homeowners who aren’t in the market, noted Evan Fetter, a real estate broker who heads up Dallas-based Lower My Texas Property Taxes LLC. “With all the corporations that are moving in, that’ll likely continue for a while,” he added.
It isn’t only the Toyota relocation to West Plano, TX, along with the State Farm and Liberty Mutual Insurance companies’ consolidations in the Dallas suburbs that have been driving the additional job growth. Michael Weiss, Pia Orrenius and Laila Assanie with the Federal Reserve Bank of Dallas point out that a diversified industrial base has also gone a long way toward increasing jobs in the region4. “Since the energy bust, Dallas Employment expansion has been broad based,” with every major sector outpacing the nation and state of Texas from December 2014-December 2016. And, the reason why that employment expansion continues taking place is due to the DFW area’s highly educated workforce5.
What it All Means
The good news is that, nothing has changed in North Texas, when it comes to housing, except finding affordable housing remains a challenge. Demand is still robust and, while more inventory is coming onto the market, builders and permitting continue playing catch-up. Barring some unforeseen economic shock, this state of affairs will likely continue through much of 2017, and into next year.