dallas housing prices

Could rising housing prices in Dallas-Fort Worth indicate another bubble?

There’s no doubt that Dallas-Fort Worth is one of the hottest real estate markets in the U.S.

dallas housing prices

Aaron Terrazas, senior economist at Zillow. Photo: Zillow

Zillow recently named it No. 3 in the country, noting a 4 percent unemployment rate and solid income growth. Additionally, the Zillow Home Value Forecast predicts the Dallas-Fort Worth median home value will go up by 5.6 percent in 2016.

But some housing analysts and mortgage insurance companies fret over the 6 percent increase in North Texas home prices over the past six years. They wonder, could this be another bubble?

Probably not, according to Zillow senior economist Aaron Terrazas.

“Dallas looks pretty good compared to so many other parts of the country,” Terrazas told the Dallas Morning News‘ Steve Brown. “We don’t have anything artificial right now inflating the housing market—the lending standards remain fairly tight.”

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employment growth

In Texas, it’s all about jobs, jobs, jobs.

A new report from the Real Estate Center at Texas A&M University says that the Texas economy gained 276,400 nonagricultural jobs from June 2014 to June 2015, an annual growth rate of 2.4 percent, compared with 2.1 percent for the United States. Many of the major metropolitan areas in the state saw much bigger gains, like North Texas.

The Dallas-Plano-Irving metro area ranked No. 2 in job creation in the state (Midland was No. 1), followed by Odessa, Beaumont-Port Arthur, Austin-Round Rock, and San Antonio-New Braunfels. Fort Worth-Arlington ranked No. 7, with 2.7 percent job growth.

“The North Texas economy is more dependent on the U.S. economy, so it’s not energy-based, compared to the Houston or Midland-Odessa economy, where energy has a bigger weight,” said Real Estate Center research economist Luis Torres. “Because the U.S. economy is growing and doing better, you’re seeing that reflected in the Dallas economy.”

In fact, every single Texas metro areas except Wichita Falls had more jobs in June 2015 than a year ago.

Big sectors for job growth were:

  1. Leisure and Hospitality: 5.05 percent growth
  2. Education and health services: 3.87 percent growth
  3. Professional and business services: 3.54 percent growth
  4. Transportation, warehousing and utilities: 3.52 percent growth
  5. Construction: 3.34 percent growth

“The correlation between the Dallas economy and the U.S. economy is very high, and the main reason is because Dallas is a transportation hub and all the goods and services that pass in the state use Dallas transportation systems,” said Real Estate Center research economist Ali Anari.

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