Whether Existing or New Construction, Home Prices in North Texas Are So Hot They’re Boiling Over

Prices are up and inventory is down, which is not news to anyone in the North Texas real estate industry. However, the price of a new home in the Dallas-Fort Worth region continues to skyrocket, too.

New numbers from Texas Realtors and Dallas-based HomesUSA.com show the median sales price of an existing home in the Dallas-Fort Worth-Arlington MSA is up 21.5 percent from the previous quarter, clocking in at $376,500. The average price of a new home in the region is up 15.2 percent between February and March at $461,413.

“As I’ve said before, we can’t have a market that only Californians can afford,” Phil Crone, executive officer of the Dallas Builders Association, said on social media. “Restrictive zoning and supply chain problems continue to encumber our ability to meet demand.”

The statistics show a worrying trend of increases with no relief. Active listings of existing homes are down 24.5 percent from last quarter and active listings of new homes are down 26 percent between February and March of this year at 1,249. However, compare that to the number of available new builds a year ago: 4,935.

“Texas’ new homes market shows signs of strengthening despite inventory challenges,” said Ben Caballero, CEO of HomesUSA.com. “Sales have been increasing statewide each month since last October as builders are responding aggressively to meet continuing demand.”

Builders are listing more new homes in the MLS, Caballero noted, which he said is the most reliable and timely source of all residential sales activity. New homes have been selling so fast that builders have not been listing all their inventory in the MLS, yet that continues to improve.

As far as existing housing, any Realtor with buyer clients knows how brutal the market is.

“We have tight levels of housing inventory but continued relocation activity to Texas — as well as plenty of existing Texans who want to change their housing situation for a variety of reasons,” said Russell Berry, chairman of Texas Realtors. “So, we continue to see home prices rise across the state and home sales that are stronger than ever.” 

During the first quarter this year, 88,700 homes were sold in Texas, a 5.6% increase compared to the first quarter of 2021. Nearly half of the homes sold in Texas were in the $200,000-$399,000 price range. 

“Homebuyers and sellers in Texas have had a decade of high expectations, and that excitement isn’t going away, but it may be approaching a peak,” said Jim Gaines, Ph.D., a research economist with the Texas Real Estate Research Center at Texas A&M University. “Mortgage interest rates are going to continue to rise through the rest of the year and this, combined with the lack of good supply, may make the pace and rate of home sales look a little more modest. Although home sales statistics in the first quarter of 2022 don’t appear as positive compared to the same quarter last year, the Texas real estate market is still very strong.” 

Homes spent an average of 37 days on the market before going under contract, 10 days less than the first quarter of 2021. Housing supply in Texas decreased 0.2 months in the first quarter of 2022 to 1.1 months of inventory. 

“This year is already shaping up as another highly active time for Texas real estate,” Berry said. “With record demand, increasing interest rates, and low inventory, it can be a complex market for buyers and sellers.”