The Dallas/Fort Worth real estate market is setting up for a steady year in 2016. While prices and sales are expected to increase as usual, they are expected to do slow more steadily. With a housing market as hot as ours has been, one can’t expect it to continue forever. While the market is predicted to level out a bit, it’s highly unlikely that it will slow down.
“If the job formation in D-FW continues at the same relative level, there is no reason to expect the housing market to slow down very much, “ said James Gaines, chief economist with the Real Estate Center at Texas A&M University, in a recent interview with the Dallas Morning News. “The state is just beginning to feel on the economic level the results of the oil price declines,” Gaines said. “Dallas-Fort Worth and Austin are so far doing just fine.”
Gaines went on to say that home prices should level off if the demand for housing slows, increasing by only three to four percent in 2016, less than half of the almost 10 percent gain in 2015. This is good news for potential homeowners in the DFW area, as the median sales price hit $195,000 in January 2016. This is 8.3% more than the same time last year.
DFW area sellers were encouraged as sellers on average received 95.9% of their asking price this January. Inventory of homes for sale dropped 7.1% to 20,839 homes on the market in January 2016, which held down sales a bit. Still, closed sales rose 8.1% to 5,597 homes sold. Days on market dropped a staggering 23% to just 51 days on market.
The Texas A&M Real Estate Center cites six months as a balanced market, and we currently sit at 2.4 months. This is down 11.1% from January 2015. The Dallas Morning News reports that homebuilders started about 28,000 houses in the DFW area, which is the highest volume since the recession.
If the market balances out as expected, it will be a welcome change to the DFW citizens on the fence about whether or not it’s worth it to buy a house. Home affordability is becoming an issue in the DFW area, given that home price increases have been outpacing wage gains in the area. A slow down in home prices, coupled with impending mortgage interest rate increases might be just enough to convince them that now is the time to buy.