How did the Dallas real estate market become the market to watch next year, but not make the top of a list of rising home values? We take a look at recent reports in this week’s real estate market news roundup.
NEW REPORT TAPS DALLAS AS MARKET TO WATCH IN 2019
After falling to number five last year, the Dallas market is once again number one for overall real estate prospects in 2019, PricewaterhouseCoopers and the Urban Land Institute’s Emerging Trends in Real Estate revealed.
The Dallas market topped 78 other cities, and regained its top spot largely because of its young workforce and high business startup activity, the report said.
“Dallas is no stranger to being in the top ten rankings, and this year it returns to the number-one spot in the 2019 survey,” the report said. “As a business friendly market, the area has capitalized on the emerging trends of the last decade by focusing on disciplined development, investing in modern infrastructure, and creating spaces where people love to live, work and play.”
Other cities in the top 10 were Brooklyn, New York (2); Raleigh-Durham, North Carolina (3); Orlando (4); Nashville (5); Austin (6); Boston (7); Denver (8); Charlotte, North Carolina (9); and Tampa (10). San Antonio made the top 20.
The report uses data compiled from a survey of 2,400 corporate executives and personal interviews.
DALLAS SHOWS HOME VALUES SLOWING IN NEW REPORT
Although the southern region shows healthy markets, Dallas is showing definite signs of home value growth slowing in the next year, Veros Real Estate Solution’s VeroFORECAST for the third quarter of 2018 revealed.
The forecast predicts how property values in Metropolitan Statistical Areas across the nation will behave between Sept. 1, 2018, and Sept. 1, 2019. The report said while Midland and Odessa are showing definite strengthening, Dallas and College Station show a slowdown since the second quarter report.
“Our latest VeroFORECAST indicates that on average, for the top 100 most populated metro areas, we expect 4.5 percent appreciation over the next 12 months,” said Eric Fox, VP of Statistical and Economic Modeling at Veros. “This is the 25th quarter in a row where this index has forecast overall appreciation. We are forecasting that the overwhelming number of metros across the nation, approximately 97 percent, will appreciate, with just three percent depreciating during this period. The fact that these averages are identical to those of last quarter’s update indicates that we are seeing consistency in nearly every metro market.”
The western region held the top 10 spots in the VeroFORECAST, with seven of the MSA’s in Washington and Nevada.
“This is a very strong showing, with the average appreciation of the Top 10 markets forecast to be a half-percentage point higher than in our last report,” Fox said. He added that, from an overall perspective, the latest report signals “more of the same” for property values in these markets. Furthermore, for many of the markets for which data was analyzed, interest rates appear to be softening this quarter’s forecasts by one to two percent over what they would have been had the flat interest rate environment of the past several years continued.
“Housing supply is a key discriminator between the forecasted top- and bottom-performing markets,” Fox continued. “Where the housing supply is very low, as in our top markets, prices are expected to increase significantly.”
TEXAS HOUSING MARKET STRONG, WITH INCREASES IN SALES, PRICES
Texas home sales and home prices increased in the third quarter of 2019, the Texas Association of REALTORS® quarterly housing report revealed.
The Dallas-Fort Worth-Arlington MSA experienced a 3.9 percent median price increase to $265,034, and active listings were up 14.5 percent. Months of inventory increased to three months, up from 2.6 months this time last year.
Statewide, there were 95,225 homes sold in 3Q 2018, a 4.4 percent increase YOY. The median price also increased 4.4 percent to $235,000.
“The record-breaking home-sales activity this summer in Texas is an example of the strong economy, job growth and quality of life in our great state that keeps driving demand for home ownership,” said Kaki Lybbert, chairman of the Texas Association of REALTORS®. “At the current rate that home sales and active listings are increasing, we are trending towards another record-breaking year in Texas real estate.”
“Our market remains extremely strong but is still slowly moving toward normalization,” said Jim Gaines, chief economist with the Real Estate Center at Texas A&M University. “Median home prices and home sales are up, but the rate of increase statewide is beginning to slow compared to prior years. With inventory levels for homes priced under $150,000 remaining low, we’re seeing a concerted effort from homebuilders to build lower-cost housing to fit the entry-level homebuyers’ market.”