RESIDENTIAL REAL ESTATE & HOUSING MARKET UPDATE FOR DALLAS-FORT WORTH

The median price of homes in Dallas-Fort Worth was $415,000 in the month of August, up 15 percent year over year from August of last year. With that, we are beginning to see the price appreciation slow down, which is what we need for the consumer, the buyer – and the seller even — to be able to have an opportunity to buy a home at a reasonable price.

Price appreciation has gone down from around 30 percent to now at 15 percent, and I really believe it needs to move another 10 to 12 percent to get to a more normalized price appreciation, where you get that 3 to 5 percent year over year appreciation.

And I think that’s what we are going to have to see before we see the market move again in a strong way.

The good news is that inventory is rising, and prices are coming down.

Looking at our local market here, at the price drops, we have been averaging in our area about 30 price drops per day and today, in the last 24 hours, it was 101 price reductions on homes. That’s good news for the buyer and even for the seller. Sellers might not want to lower their price but if you’re planning on making a move, you will make it up on the buy side because you will realize that lower priced as well.

We have to get the prices down in order to offset that new 6.2 percent interest rate on the average mortgage right now. Prices have to come down in order for us to get the market moving and to see more buying activity.

We expect we’re peaking out on interest rates between this 5.5 to 6.25 percent range. We’ll probably just see things fluctuate back and forth within that range in the coming months. The federal reserve has plans to raise interest rates again, but typically the market has already built in what those rates are going to be. If anything, I think we will see lowering of interest rates as inflation comes down.

But speaking of inflation, we are starting to see more inventory across the board – in car lots, houses, everywhere you go. For instance, inventory of homes is up 68 percent in the Dallas-Fort Worth Metroplex. Homes sales have dropped, car sales have dropped, people are being offered more incentives on financing. It’s all moving in the right direction. The same for homes sales. Home sales have dropped 10 percent year over year. And in fact, home sales in Collin County have dropped a whopping 20 percent year over year.

Rents right now are higher as well. Rent prices are 14 percent higher year over year. So those are also beginning to moderate. Whereas before it was 20 to 25 percent price appreciation, now it’s down to 14 percent. We manage a lot of properties in our property management division of M&D Real Estate, and we are even making some price adjustments on rentals. However, there is still high demand.

Because fundamentally, the DFW Metroplex is just going to keep moving up and forward. The reality is that our metroplex will continue to appreciate over time, barring any geopolitical catastrophe in the market of course.

So, we are seeing rents moderate, home price appreciation come down and inventory go up. This is all good and going in the right direction. Because truthfully, things were out of control regarding the price appreciation the past two years, so interest rate increases are doing exactly what they were supposed to do, which is slowing things down. Being in real estate, I don’t like that for business purposes, but I do know it’s better and healthier over the long-term for the housing market.

Now let’s look at a county by county breakdown of the numbers.