Dallas-Fort Worth home prices declined slightly from July to August after a rally in the first half of the year that pushed prices close to pandemic-era highs.
The median single-family home price in the metro area declined 2% from July to just over $406,000 in August, according to a new report from North Texas Real Estate Information Systems and the Texas Real Estate Research Center at Texas A&M University. The report tracks existing and new home sales listed through real estate agents.
While still down from last summer’s peak in August, the median was still up 44% from March 2020.
From the start of 2020 to May 2022, the median price of a D-FW home climbed 61% from about $270,000 to $435,000 with significant month-over-month gains on a frequent basis.
Prices then declined throughout the second half of last year as higher mortgage rates pushed many buyers and sellers to the sidelines. They then rose for five straight months after the holidays ended and as the traditional spring selling season picked up.
“I really don’t see it going down much more,” said Belinda Epps, president of the MetroTex Association of Realtors and broker and owner of Epps Realty in Mesquite and Royse City. “We don’t have enough houses yet. Even though inventory is picking up, it’s still not where it needs to be in order to balance out this market. It’s just not there yet.”
The number of new listings jumped slightly from July to August but was down 4% from a year before at 10,444. The number of active listings, which also includes homes that have been sitting on the market for a while, is up 5% to 19,527.
The local market has 2.7 months of available inventory, significantly more than it had early last year but still far from the six months of inventory economists suggest represents a balanced market between buyers and sellers.
Epps, who also manages single-family rental homes, said she’s seeing many investors choose to sell, and that their homes are selling fast as they’re priced under $300,000. “The taxes and insurance just are not making sense for them to keep them in their portfolios,” she said.
Home sales in August were up about 5% month to month to 8,009 transactions but were down 8% from a year ago. Some buyers who have held out are tired of waiting, Epps said.
“They’re not probably going to get what they wanted, but they’re ready to go,” she said.
Lawrence Yun, chief economist for the National Association of Realtors, made projections about the national housing market in a statement Monday based off two potential scenarios.
The first: The economy and inflation calm, so mortgage rates ease and more buyers come to the market. Yun said in that scenario, price growth would depend on whether homebuilders can bring enough supply to the market.
The second scenario: An economic recession happens where employers cut jobs. In that case, Yun said, people may be forced to sell their homes and those uncertain about their jobs won’t buy. But he said in this case, interest rates would fall and people with steady jobs would want to take advantage of that and buy. In that scenario, he said prices could rise faster if some wealthy people decide to reallocate investments from the stock market to real estate.
“We will not have a repeat of the 2008 to 2012 housing market crash,” Yun said. “There are no risky subprime mortgages that could implode nor the combination of a massive oversupply and overproduction of homes.”