Last year’s housing market in Dallas-Fort Worth was a bit subdued to put it mildly.
The lock-in effect was in full swing and effect due to higher interest rates and the higher home prices that have really just shot up astronomically in the past five years.
These factors combined locked most buyers out of the market, while those hoping to sell decided to sit still mostly because the thought of switching from an interest rate below 4% to one closer to 7 or 8% just didn’t make any sense quite frankly.
But, the wheels of the market have gotten some grease in the form of acceptance of the “new,new” interest rate environment, along with stabilizing interest rates, and more inventory. The wheels are still screeching a bit and turning slowly, but they’re turning – and no longer frozen the way they were last year.
Let me explain how that’s all exactly coming together and then end with some advice if you’re looking to make a move in 2025.
Over the past year and a half, since mid-2023, people were saying “Absolutely not!” for the most part to the higher interest rates.
But now, people are getting more accustomed to this “new, new” and are accepting that this truly is the new normal for the foreseeable future. And, they’re really just ready to move. There’s pent up demand now, people that have been itching to make a move for a while are finally gaining the confidence and desire to do so.
In addition to that, the Fed has been cutting rates as inflation has eased. Interestingly enough, though, I’d be remiss if I didn’t tell you that mortgage rates have stubbornly refused to come down and have even shifted upwards recently, marking their highest point since July of 2024.
Even still, rates are stabilizing and expected to come down to closer to 6% by mid-2025 – at least we’re out of that 8% territory. Even though we may see some pockets of volatility here and there, the larger consensus is that mortgage rates will stabilize between 6 to 7%.
So, people getting used to the new normal and rates stabilizing are making more people open to putting their house on the market and taking the plunge to buy elsewhere. And, it’s making buyers come out of the woodworks as well.
With more homeowners and all the pent-up demand from the last 18 months coming unleashed, inventory has jumped up dramatically.
The number of new listings coming on the market did lull bit the past couple of months (due to the looming election and holiday season). But here at M&D, we’re actually seeing our agents coming in with more listings at a higher volume than what we’ve ever seen this time of year. January is typically a much slower month.
So, that’s one indicator of the market easing up right there.
Inventory and number of homes for sale are up around 30% compared to this time last year. So, what happens when the market sees all this inventory coming online?
Well, for one, buyers get more options and some homes start sitting longer on the market – especially if they’re not priced right.
In fact, in certain parts of the metroplex like Collin County, the number of homes for sale is up 51% compared to this same time last year.
Average days on market is now up around 20% on average across the metroplex. In some places like Denton County, it’s just 7% while in other areas like Dallas County, days on market is up 32% year over year.
More inventory and homes sitting longer has meant more price reductions as well.
While we aren’t seeing major price corrections across the board right now, we have seen some periods where price appreciation was quite a bit down or at least flat across the metroplex over the course of 2024.
As of right now, we’re up about 3% over where we were last year on median home prices. So, you can see, at a minimum, price appreciation has resumed a more normal pace than what we saw previously—when price appreciation was hitting 20% within a year’s time.
What we’re expecting to see in 2025 is basically this: more sellers, more inventory, and more buyers.
All in all, we expect activity to pick up.
We’re in a pretty balanced market now, and people are ready to make their moves, so we do expect to see more activity than what we saw during the market freeze last year.
To prove that point, as of December 2024, closed sales were up in Dallas County 10% year over year. Pending sales were actually down, an indicator of January’s closed sales, which could be partially attributed to time of year and seasonality. Time will tell.
The important part now, what’s our advice to you guys looking to make a move?
First, sellers, it’s not a bad time at all to make a move right now. There is fundamentally strong demand in DFW which is why we are still seeing price appreciation where many people expected to see more price corrections.
Get a good agent, with a standout marketing plan, and strong negotiation skills. You’ll get a good price for your property with all that equity you’ve built up the past few years. On average, homes are getting about 95 to 96% of their asking price right now across the metro area.
And, even while days on market are up, it’s still only a couple of months on average which is actually more normal than not.
Then, when you get to the buy side — and this is also for all you buyers out there — you’ll also be in a good position.
You’ll have more inventory and options to choose from for buying, with sellers often willing to offer more concessions now than they were before to get their homes sold faster. And like we said, you’ll see more stable interest rates, too.
Also, if you’re looking at new construction homes, in some places like in Collin County where there’s a lot of building going on, you can get a new construction home for $35,000 less on average than you can buy a resale home for.
But, whatever your decision, whether it’s resale home or new construction, get a good agent in your corner to be your advocate and get you the best deal.
If you have any lingering questions, or specific questions on the market or about your own home and move you’re thinking of making, please reach out.
Ultimately, we’re here for you – our mission is to help you understand the current market, give you great advice, great service, and then of course, to get you the best price we can when it comes to your home sale or purchase.
Thanks for reading, and happy 2025!
As we approach 2025, the Dallas-Fort Worth (DFW) commercial real estate market is poised for a robust recovery, blending cautious optimism with tangible opportunities.
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