Dallas-Fort Worth is the tightest major housing market in Texas, seizing the number one spot from Austin and solidifying its status as one of the top real estate markets in the country.
The North Texas housing market outperformed other major Texas metros in 2022, despite a more than 10% decrease in home sales from the year before, according to a report by Texas Realtors.
The Year in Review Report tracked and analyzed the state’s home sales, listing prices, supply inventory, apartment rentals and vacancies, and new home construction trends in 2022.
“The economic conditions throughout the state resulted in another year of high demand,” although “the report data indicates that market dynamics have largely leveled out after the 2020 pandemic,” Marcus Phipps, chairman of Texas Realtors, said in a recent news release.
Dallas’ median home price in 2022 was $400,000, up 15.6% from the recorded $346,000 a year earlier, per the report. In addition, the median home cost per square foot from 2021 jumped 18.4% to nearly $200 a year later.
“We’re still seeing median home prices climb, but other factors, such as higher mortgage rates, caused a slight decrease in the number of home sales last year,” Phipps said in the statement. “We’re also seeing accepted offers come much more in line with listing prices rather than the bidding wars that had been common in many Texas markets.”
During this year, a little more than 97,000 homes were sold in the Dallas market, per the report. This represents a 12.7% decrease from 2021 when Texas experienced a flood of housing demand due to the shifting work dynamic caused by the COVID-19 virus and the pandemic lockdowns.
Following the post-pandemic surge in real estate demand, Dallas began experiencing decelerating price growth, according to The Case-Shiller National Home Price (NSA) Index. Decelerating home prices in 2022 were facilitated in part by the Federal Reserve’s record pace of interest rate hikes and the flood of inventory that made its way into the market over the year.
From 2021 to 2022, the Dallas metro added 1.4 months of housing inventory to the local market, closing out the year with 2.2 months of inventory, according to the report. Not only did the number of months of inventory increase, but so did the median price per square foot.
In 2021, Austin’s housing market was statistically the tightest metro in Texas. The capital had 0.6 months of available inventory compared to Dallas’ supply of 0.8 months, a comparison of the two metros shows.
“The Texas economy is strong, but with higher construction and mortgage lending rates, we expect sales to revert to normal levels,” said James Gaines, a research economist with the Texas Real Estate Research Center at Texas A&M University, per the news release. “Supply will still be limited as indicated by low months of inventory.”
“Additionally, work-from-home arrangements seem to be locked in, minimizing one of the reasons people choose to move,” Gaines added. “We may see this factor begin to reduce the rate of housing transactions across Texas.”