Dallas-Fort Worth’s soaring housing market projected to keep flying high in 2022
By Bill Hethcock – Senior Reporter, Dallas Business Journal
Photo by Tierra Mallorca on Unsplash
The year 2021 was a wild and record-setting one for residential real estate in Dallas-Fort Worth, and most forecasts call for a cooler but still robust resale and new home market in 2022.
North Texas’ residential market is at record levels, and single-family home sales and prices are projected to stay high in 2022, but the consensus is that the pace of growth will slow.
Dallas-area home prices were up by 25% year-over-year in October in the latest S&P CoreLogic Case-Shiller Home Price Index. That marked the second month in a row that Dallas-area homes hit their highest price gains in the history of the closely watched index.
The Dallas area had the fifth-highest increase in the country, topped only by Phoenix, at 32.3%, Tampa at 28.1%, Miami at 25.7%, and Los Angeles at 25.5%.
But while single-family home prices maintained their upward run in October, the nationwide rate of growth continued to decelerate, according to the index.
Nationwide, prices rose by 19.1% in October from a year earlier. That was down from 19.7% the prior month.
A 2022 Housing Market Forecast by Realtor.com anticipates that home price growth nationwide will slow further in the year ahead but continue to go up, according to Danielle Hale, chief economist with the company.
“As housing costs eat up a larger share of home purchasers’ paychecks, buyers will get creative,” Hale said. “Many will take advantage of ongoing workplace flexibility to move to the suburbs, where despite home price gains, many can still find a lower price per square foot than nearby cities.”
That exact scenario is playing out in North Texas, local real estate agents, homebuilders and market participants and observers say.
Texas home listing prices to rise by only 4% next year, which is far lower than the recent record gains but slightly above the 2.9% increase in nationwide listing prices predicted for next year.
The days of "exuberant" home price growth in Texas are numbered, one of the state's top housing economists said.
The pandemic-fueled Texas house-buying “frenzy” is being replaced by more long-run, sustainable rates of growth, said Luis Torres, research economist for the Texas Real Estate Research Center at Texas A&M University.
Housing sales growth and price growth peaked around October and are slowing, Torres said, In addition, months of inventory, listings and days on market have bottomed and are beginning to rise.
“Texas housing sales accelerated after the pandemic shut down the economy in March and April of 2020,” Torres said. "This caused the already depleted inventory of homes for sale to reach historic low levels and led to exuberant home price growth.”
Texas Real Estate Research Center forecasts for 2022 include expectations for strong demand, improving inventories, moderate price growth and slowly rising mortgage rates.
Home sales outlook
The number of home sales are expected to increase by more than 8% in DFW next year, driven by continued high buyer demand and more sellers entering the market, Realtor.com predicts.
Real estate agents had sold more than 107,000 single-family homes through multiple listing services through November of this year, according to the latest data from North Texas Real Estate Information Systems. Some 9,743 of the sales closed in November, which was 4% more sales than in November 2020.
Median home prices in North Texas continued their climb in November to $348,500 — about 18% higher than in November 2020, according to NTREIS.
The Dallas-Fort Worth market will continue to be one of the most thriving markets in the country into 2022 for a number of reasons, said Sharon Brown, general manager for DFW for Opendoor.
While prices and competition have been on the rise in 2021 compared to years past, DFW remains one of the more affordable and family-friendly real estate markets in Texas and the nation, Brown said.
She pointed to three especially hot North Texas submarkets.
“Neighborhoods in Plano, Wylie and Saginaw will continue to bring folks from all over the Lone State as well as from out of state,” Brown said.
View the full article at The Dallas Business Journal.