2023 Dallas Fort Worth Housing Market Recap and Forecast for 2024

2023 Recap & 2024 Outlook on the Dallas-Fort Worth
Housing Market:
D-FW Real Estate Market Update

D-FW HOUSING MARKET HIGHLIGHTS | DECEMBER 2023

Can you believe it’s already the last market updated of 2023?  

What a wild year it’s been in real estate and trying to understand this dynamic market we’ve been in that most of us have never seen the likes of in our lifetimes. 

This is all new ground and territory, even whenever we compare it to the Great Recession in 2009.

Play Video about Dallas Fort Worth Real Estate Market Update November 2023

Home Value & Prices in D-FW

I know as a consumer, you are concerned about the prices and what home prices are like since this time last year. Well, prices are slightly down but basically flat year over year. And so, I would say we are at a plateau right now.

Last year, we saw prices drop. 

So, we have gone from the “heyday of price appreciation” that we experienced because of COVID, the stimulus, and all of the people moving to the Dallas-Fort Worth metroplex to what we are seeing now… 

From experiencing 30% price appreciation to where we were this time last year, when we first began to first see prices decreasing, then to now, being flat.

We are still seeing a little bit of a decrease from the peaks. But an interesting, fun fact is that in the last 10 years, if you have owned your home that long, you have seen your home value increase by 175% on average. That’s just… Wow… 

Housing Market Update - Prices Increased in DFW Drastically in 10 Years

TRANSACTION RECESSION IN REAL ESTATE

Another thing that has been plain astounding is what has happened in the D-FW market from a transactional standpoint. 

And this is because we are still in a standoff between sellers and buyers where the buyer cannot afford to purchase because interest rates have gone up so much, and then the seller is still priced too high, still looking for that 20 to 30% appreciation.

Another intriguing fact is that price reductions are happening at a record pace lately. 

And that’s mostly due to sellers listing their homes at a 20 to 30% price appreciation point, thinking they can still capture what was happening a year and a half ago.

NEW CONSTRUCTION TAKES HOUSING MARKET SHARE IN D-FW

And, I have said this before about new homes and new builds… 

But typically, their market share of all the homes being sold is about 8 to 10% of the transactions taking place or number of people purchasing homes. 

The rest, the other 90%, is usually all resale of existing homes. 

Well, new construction homes have taken as much as 30% of the D-FW housing market share right now.

One reason for that is affordability. 

Builders are offering huge interest rate incentives right now and are also reducing their prices. 

So, if we look year over year at new home construction, prices are down as much 20% on new construction homes! They are adjusting because they are a business.

Meanwhile, it is much different for personal homes and regular homeowners. Builders are not moving somewhere else like you are once you sell your home, where you are going to be paying a higher interest rate than you are now just to get into that new home…

INTEREST RATES FINALLY COMING BACK DOWN

Interest Rates in DFW are down to 7 percent

So, let’s talk about interest rates. The good news on interest rates is that the talk right now is that we’re on our way down. Interest rates have come down a full point nearly, from when they blew through 8% just six weeks ago.

Now, we are beginning to see closer to 7% interest rates. So, that’s relief! But what we’re going to see next year is is potentially some relief even further from that with the Fed reducing interest rates. But, it’s not going to be back down to the 3% or 4% rates we were seeing before. I don’t know that we’ll see that for many years unless we have a catastrophe in the markets.

But with any luck, we might get back down to 6%. If we see 5%, that would be even better. But the reality is, we’re going to be bouncing between that 6% and 7% level all year next year most likely. Still, that’s a relief.  Good news on the buy side!

Prices will still have to adjust for transactions to begin to pick back up. All indicators point to us seeing more activity in real estate transactions next year finally and beginning to work towards normal. I still don’t think we’re going to see truly normal Dallas-Fort Worth activity, though – and that’s because of inventory levels.

COUNTY BY COUNTY BREAKDOWN OF THE NUMBERS

Let’s dig in now to what’s happening on a county-by-county basis.

AVERAGE HOME PRICES IN D-FW HOUSING MARKET

First, let’s look at prices.

Average sales prices for last month, November 2023, were up about 6% in Rockwall County. 

Kaufman County was down 5%, Dallas County was up 7%, and Collin County was down 4%. So, it’s just all over the place. 

D-FW is looking basically flat for year over year price appreciation in 2023. 

And, that’s from prices that were already down then from the previous year.

DFW Flat in Price Appreciation for 2023

HOW LONG HOMES ARE SITTING ON THE MARKET

Next, let’s look at the average days on the market for home sellers right now. 

It is pretty flat as well! It’s up 12% in Rockwall, flat in Kaufman County, up 9% in Dallas County, and then down in Collin County.

Homes are sitting on the market around 45 days to 60 days right now. They are sitting longer, but not that much longer.

NUMBER OF HOMES ON FOR SALE IN THe D-FW market

Regarding the number of homes for sale, this is the big culprit (always here lately). We just do not have enough homes for sale in D-FW. We have more people moving here than we ever have, and we are down from this time last year. And last year was already anemic.

The number of homes for sale is down 6.6% in Rockwall County, down 4% in Kaufman County, up 4% in Dallas County, and down 11% in Collin County.

Inventory, inventory, inventory. That is all you are going to hear from me. That is going to be the main issue until the resale market comes back and sellers start putting their homes on the market.

Inventory is low in Dallas Fort Worth Housing Market

PENDING HOME SALES FOR NOVEMBER 2023 IN DALLAS-FORT WORTH

Pending sales are up next, which is an indicator of December’s closed sales.

We are looking at sales being up 8% in Rockwall County, up 3.5% in Kaufman County, down 7% in Dallas County, and up 4% in Collin County.

So, we’re moderately up year over year on the number of sales expected to happen this December. But again, that’s compared to when we were down nearly 30% already this time last year.

NUMBER OF HOMES SOLD IN D-FW LAST MONTH

Let’s look at closed sales for last month now. 

The number of homes sold in D-FW in November were down year over year by 4.5% in Rockwall County, a whopping 19% in Kaufman County, Dallas County was down 9%, and Collin County was up 8%. 

So, closed sales are mostly down in each county for last month, except for Collin

Again, that’s coming off of a year when it was already down 20% from the previous year!

FINAL THOUGHTS

Outlook for 2024 DFW Housing Market

Anemic sales continue in D-FW as far as transactions go, but prices are holding up. That’s the good news for you, the homeowner. 

Prices are probably going to come down more still. Barring some market catastrophe, that’s what’s going to have to happen for the market to return to normal.

But, I still do not think there is going to be some huge correction in prices.

And, what we expect to see by midyear 2024 is for transactions to finally begin to normalize in the real estate market here in D-FW!

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