Housing in the Dallas-Fort Worth Metroplex remains tight as new construction home builders are rushing to get new home communities underway.
At the end of the 3rd quarter this year, analysts estimate less than 3,000 unsold homes sitting on inventory in DFW. Although new home builders have been careful to ramp up new home construction after the crash in 2008, they are now putting the petal to the metal. New home construction is up 26% from a year ago. This is supported by DFW’s strong job growth and fundamentals. DFW creates roughly 100,000 net jobs a year. This creates migration to Texas for employment, which in turn helps the real estate market. Add in the fact that mortgage rates still sit at below 5% along with limited supply, and you have the making of a very hot real state seller’s market.
Double digit gains in DFW are out of the ordinary, some are seeing the market cool down soon. We are beginning to see this with sky rocketing price increases along with mortgage rates trickling up and tighter lending requirements and costs. It will take a while for buyers to adjust to this new environment. Some markets have had price increases of up to 30% in the last 18 to 24 months. Typically DFW doesn’t see these types of large price swings up or down. Overall, a slow and steady increase would be ideal and not artificially inflated by investment buyers taking advantage of low housing costs with all cash purchases. But taking into account DFW’s strong job market and economy, we welcome the rise in home prices.
by DAN CAMPANELLA, Broker/Owner @ R.E.INVEST Brokerage, LLC. on October 8th, 2013.