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Will more homes for sale make D-FW’s real estate market more affordable?

July 24, 2018
By: Bob

“This is not my beautiful house!” Everybody, their mom and their Toyota-employed dog wants to buy a house in the Dallas area. But for the last several quarters, the local housing market has been supply-starved and getting pricier.

New indicators show, finally, that more houses are available for sale, and more new homes are being built. Will it make a spot of difference?

More homes for sale

The Dallas-Plano-Irving market had a 32 percent year-over-year inventory gain in the second quarter. Other than a healthy third quarter last year, it’s the biggest increase in several years. In addition, Q2 saw more new builds in D-FW than in more than a decade.

Price pressure is partly alleviated but continues

Affordability measures the percentage of income needed to purchase a median home with 20 percent down and a 30-year fixed rate mortgage. Home prices are still appreciating but not at the same pace as in previous quarters.

“There’s a lack of supply, especially in the price cohorts below $300,000. But that’s where the majority of the sales are, and there’s where you having problems finding a home to buy.” 
Luis Bernardo Torres, research economist, The Real Estate Center at Texas A&M University

Inventory increases are in higher price brackets

Months of inventory saw the biggest increase in the $500,000-plus price bucket. Inventory increases in other cost ranges were quickly absorbed by demand.

“Overall, inventory is still pretty tight. Six months’ supply is considered a balanced market, and when you’re under that you get upward price pressure. Even with inventories picking up, we are well below equilibrium.” 
Laila Assanie, senior business economist, Federal Reserve Bank of Dallas.

Slipping sales

Single-family home sales in D-FW dipped year-over-year for the first time in almost two years.

“This is a blip on the radar, but it could mean diversion from a well-worn path if these trends continue. Developers know that there’s pent-up demand below $300,000, but if they can’t build at that price point, the dearth of affordable housing will keep the market lopsided.” 
Arren Kimbel-Sannit, staff writer, The Dallas Morning News

 

 

 

SOURCES: Trulia; Residential Strategies; Real Estate Center at Texas A&M University

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