2017 Recap + What's Ahead
Over the past decade, the real estate market in Texas has fluctuated from bursting its bubble and bottoming out in 2009 to making a tough climb back up to stability. In 2017, the market actually performed better than expected, with the total value of all residential home sales in North Texas increasing 12.3% over 2016. Realtors still enjoyed an increase of 9% in the median home sale price, despite the increased interest rates in 2017 that were expected to deter some buyers. The luxury market in the DFW Metroplex also saw tremendous growth, with the purchase of homes valued over $1M increasing by 21%.
It’s not all good news, though. Inventory in Dallas, Collin and Denton counties increased over 2016 slightly to 2.2, 2.7, and 2.1 months, respectively - something to keep an eye on in 2018. The other concern is with affordability, as many apartment renters want to buy homes but can’t afford it. To even consider buying a home in DFW, the buyer’s household income would need to be at least $59,500/year - slightly higher than the national average, but significantly lower than in cities like New York, San Francisco, and San Jose, CA. Regular folks are also getting priced out of the market within high-demand areas in the DFW Metroplex as well - for example, a buyer can’t find a home in Plano for less than $275k. The bright side of this dilemma is that these dynamics don’t create bubbles or an overheated market.
Our outlook for 2018 is good overall. For most of the U.S., the market is stable. Interest rates are increasing, and prices of homes continue to trend upward, but these conditions will clear out people who are aren’t serious buyers. Researchers anticipate steady overall economic growth at 3%. They also predict that the Dallas real estate market will start heating up with a sales increase of 4-6%, and that low inventory will place upward pressure on home prices.
So what does all of this mean? Well, if trends continue in this direction, we should expect to see two to three more good years, but that doesn’t mean we can become complacent. Now is the time to work smart and keep our eyes open for opportunities and growth. Here’s to prosperity and success in 2018!