November 2023 Dallas Fort Worth Housing Market (1)

MARKET UPDATE: Housing Prices, Interest Rates & the Current Dallas-Fort Worth Real Estate Market

THE LATEST IN THE DALLAS-FORT WORTH HOUSING MARKET

There is a lot to talk about in this residential market update, so let’s dive in! 

First of all, let’s look at the Dallas-Fort Worth market as a whole. D-FW sales were down 8% from October of last year, and average prices fell below $400,000 for the first time since the first part of the year. 

So, we’re continuing to see the market soften from a perspective of pricing. It teeters between flat one month to down as much as 20% year over year the next month in certain areas. 

And, one of the things that I want to point out to you is all the numbers I’m giving you are going to be from October of last year, which was a time when transactions and price appreciation had already come to a halt.

Home Prices in Dallas County Fort Worth Housing Market
Play Video about Dallas Fort Worth Real Estate Market Update November 2023

So, transactions were falling into a deep recession at this time last year. They fell by 20 to 30% from the previous year. Then, prices started flattening out and were beginning to correct into the low single digits already. 

So, the numbers I give you from now going forward, it’s important to know that these are not coming off a “normal” market. We were already correcting this time last year.

Before we break down the numbers, let’s talk interest rates. 

We have had some good news this week. Inflation is moderating, and the CPI came in today at 4%, which was lower than what we had expected and what the analysts had predicted.

So, that’s why if you’re looking at your 401K today, it’s probably up because markets are rallying. 

What that means is that this interest rate hike environment is coming to a stopping point. 

The Fed recently said they’re just pausing and waiting for data. And well, this is the kind of data they were looking for to be able to not have to raise interest rates anymore and be able to possibly even go into next year and start lowering interest rates. That’s a possibility, depending on the economic environment.

So, all of that is very good news for home buyers looking to get a mortgage. 

You just saw a half a point drop on your mortgage rate. And, rates were as high as 8% just four weeks ago. The most recent read was that they fallen to 7.4%. And, you may be able to secure a rate even lower than that.

So, that’s the general outlook of what’s happening in the market and Dallas-Fort Worth right now. 

As for where we’re going from here, I’m super excited from a real estate perspective to see this interest rate hike environment slow down so that we can begin to enter a new normal. 

That isn’t to say we’re going backward to low, low interest rates again, barring any catastrophe in our world of course. But it is to say, the interest rates may come down some now and start to stabilize instead of increasing – and people will begin to get more used to the new, new.

So now, I want to give you a county-by-county breakdown of the most recent key housing statistics — what we’re seeing on the average sales price, what we’re seeing from a transaction and sales standpoint year over year, the days on market, etc. So, let’s dig in…

COUNTY-BY-COUNTY BREAKDOWN OF THE NUMBERS

HOME SALES PRICE

Prices last month were anywhere from flat to about a 2 to 3% increase year over year in some areas. 

This month, Rockwall saw a 4% increase month over month, and Dallas County saw a 3% increase. Kaufman County was flat year over year. And again, that’s compared to last year, during a time that prices had already stopped increasing. In fact, we haven’t seen really large prices increase since 2021 from a year over year read. 

However, the average sales price in Rockwall has actually increased year over year this month. Prices are up by 4.1% in Rockwall county, up 2% in Kaufman County, up 6.6% in Dallas County since this time last year, and Collin County is up 1% year over year.

DAYS ON MARKET

And then we move on to, how long is your home staying on the market right now? 

In Rockwall County, the number of days home are sitting on the market when they go up for sale is actually up 33%. Kaufman County is up 40% to 63 days on average. In Dallas County, days on market is up 14% to 33 days, and in Collin County, it’s up 14% as well. 

So, homes are sitting longer in the metroplex. And again, I have to keep going back to last year. Because this time last year in 2022, homes already had started sitting longer. So, they’re sitting on the market even longer now than they were last year. 

But ultimately, that is what we needed to happen to get back to a more normal market and more normal transaction activity.

NUMBER OF HOMES FOR SALE

This is the big culprit. Always. Right now, 70% of America has a 4% or lower interest rate on their current mortgage. So, inventory is a huge problem. On top of the fact that in D-FW we have so many people moving here, and not enough housing here, the amount of inventory is an issue because people are staying put instead of selling. And, that is what is going to keep prices up in D-FW.

We might see some corrections like we have moderately in the past year, but it’s not going to be anything significant because we have too much demand. In Rockwall County, Homes for Sale is down 7%, and Kaufman County is actually up 7%. Dallas County is up 4%. Collin County is down 9%. Basically, it’s all over the place. And reading that, it’s a signal to me that the number of homes for sale is basically flat year over year.

We need a huge jump in inventory, and it’s not going to happen if can’t build enough new houses. 

We will still continue for, who knows, probably the next ten years having an inventory problem.

Inventory in Dallas County Fort Worth Housing Market (1)

MONTHS SUPPLY OF INVENTORY

What kind of market are we in right now? Months supply is the leading indicator of whether we’re in a seller’s market, buyer’s market or a balanced market. 

Rockwall County is currently sitting at 3.6 months inventory. Kaufman County is at 4.6 months. Dallas County is at 2.8 months, and Collin County is at 2.6 months inventory. 

Basically, those numbers mean we are still technically in a seller’s market. We’re bouncing between a seller’s and balanced market lately. But yes, sellers, you are still in a seller’s market. 

The problem, though, is that pricing still must come down in order for it to be affordable for buyers to buy in this higher interest rate environment. And, that’s why your home may still be sitting longer.

NEW LISTINGS

How many new listings do we have coming on to the market? That’s the other big problem. 

Rockwall County is down 1%, Kaufman County is up 12.7%, Dallas County is up 7%, and Collin County is up 11%. As you can see, we are definitely seeing bigger jumps in Kaufman County where they are building more houses right now.

But in general, I would say inventory and new listings are coming up from last year. 

But last year is not a good metric because last year, new listings at this time went to what felt like zero. We just hit a wall. The seller said, “I’m not putting my house on the market to get a 7% interest rate.”

Now, we’re beginning to see those sellers get tired and say, “Hey, I want a new home or I want to downsize and it’s worth the effort.”

PENDING SALES & CLOSED SALES

This is an indicator into November. For Pending Sales, Rockwall County was down 12% in October, Kaufman County was down 14%, Dallas County was down 4%, and Collin County was down 7%.

Closed sales are also down by 15% for October in Rockwall County, down 6% in Dallas County,  25% in Kaufman County, and down 5% in Collin County.

The thing about these closed sales is that those numbers were already down, and so they’re really far down last month. 

Again, the key thing for you to understand is that sales were down a year ago already, which means the number of people buying, selling, moving and number of transactions taking place is really just at historical lows.

When we look at D-FW sales from even just a few years ago, you’ll see we are actually down a whopping 36% from 2020 sales. We haven’t seen this low of a closed sales number in years. And so, the real estate market is still in recession from a transactional standpoint and will continue to be for quite some time.

Home Sales in Dallas County Fort Worth Housing Market (2)

MOVEMENT & FUTURE OF THE D-FW REAL ESTATE MARKET

We expect to start to see the market get moderately better next year. It’s probably going to take a couple of years, though, before people are going to want to get rid of their 4% interest rate. 

So, it’s really made a huge shift in the real estate industry as a whole. 

You’re seeing title companies, mortgage companies, banks with lending arms all laying off people, as well as companies like CBRE, and other commercial real estate firms because transactions have just shut down.

However, it needed to happen. We’re just kind of vetting things in many ways. There were too many real estate agents in the market. Prices were just out of control. So, affordability needs to come back. And it’s beginning to… slowly but surely.