The Dallas-Fort Worth Housing Market is still proving resilient, compared to other national reports indicating that home sales have slowed to their lowest point since November 2010 throughout the country.
In the eastern Dallas Metroplex, equity continues to rise as the average home prices rose an additional 5.75% year over year, according to the most recent NTREIS data. In fact, homeowners are getting, on average, 94% of list price as of January 2023, up from the 92% sellers were getting in December 2022.
New home construction has continued to decline, though, with Residential Strategies reporting 8,000 new home starts in the last quarter of 2022, down 38% from the previous year. The last time the area saw such a big drop-off in home starts was in 2009, when starts fell by 50%, according to Residential Strategies and the Dallas Morning News.
New construction home sales also showed a significant decrease of 42% between December 2022 and January 2023, from 483 homes sold in December to 281 new-construction homes sold in January of this year (NTREIS) in the eastern Dallas Metroplex.
All home sales decreased between December 2022 and January 2023, with closed sales down an average of 31% in Rockwall, Kaufman, Dallas and Hunt Counties.
However, we are still in a seller’s market in Dallas-Fort Worth, despite strong projections the area would become a serious buyer’s market in 2023 by the Knock Buyer-Seller Market Index.
The largest indicator of the kind of market an area is in is available months of inventory. A buyer’s market is typically six months+ of inventory, while a seller’s market is occurs when there are less than three months of inventory. A balanced or neutral market is when there are between three to six months of inventory.
Currently, our region has about 2.8 months of inventory, an increase of 135% over this same time last year – and still indicative of a seller’s market.
In January 2023, there were 2,685 new home listed in Rockwall, Kaufman, Hunt and Dallas Counties. A big jump up from the 1,857 new listings that went live in December 2022.
Days on Market has also jumped up in the area, from 21.5 days on average in July 2022 to more than double that now with homes sitting an average of 57 days on the market.
The big news, however, are pending sales.
Pending sales are a leading indicator of closed sales for the coming month. While closed sales were still down across the board by about 30% year over year in January 2023 (just as they have been down every month for the past 11 months), pending sales in January were up.
Pending sales increased 23.9% in Rockwall County, were up 1% in Kaufman County, up 2.7% in Hunt County but still down 18% in Dallas County. These numbers show activity has started to rebound with the start of 2023. In fact, between December 2022 and January 2023, pending sales increased by 95%.
According to Realtor.com’s Monthly Housing Trends Report, “In January, the U.S. housing market offered homebuyers greater bargaining power, as mortgage rates fell to their lowest level in months, inventory rose, and the growth in the typical asking price continued to slow…”
February started with the lowest mortgage rates buyers have seen in recent months. However, rates have risen again over the course of the past few weeks and are now at about 6.9%. Just last week, rates were at 6.77%. One month ago, rates averaged 6.45%.
But as we predicted in our January 2023 forecast, we expect rates to continue to do this with a bounce up and down between 6 to 7% throughout the remainder of 2023.
The good news for home buyers? Prices are coming down. In May 2022, the average price for a home in Rockwall, Kaufman, Hunt & Dallas Counties peaked at about $460,410. Last month, that average sat at $390,741, a 15% decrease from peak prices last summer. So, what does that mean for you? During peak prices, mortgage rates hovered around 5.5%. Today, that same 30-year-mortgage rate is about 6.9%.
However, if you take into account the decrease in price, the difference in monthly payment is $2,614 in May 2022 compared to $2,573 payment today on the same house – so, you would actually be paying less for the same house than you would have paid 8 months ago when interest rates were lower but prices were much higher.
The good news for sellers? Last month, the amount sellers were getting of their list price increased by 2% and here in this region, we are still in a seller’s market despite recent projections that D-FW would become a serious buyer’s market in 2023. That is yet to materialize. With the population growth and high demand in the D-FW region, your home continues to increase in value and demand remains high when homes are priced correctly for the market.
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