Dallas rebounds from pre-pandemic market conditions, HomeLight experts say

7149 Pasadena Ave.

A market rebalancing is underway, with more home inventory and manageable prices, experts say.

About 54% of agents nationwide said the market would start to resemble the pre-pandemic era within the next year, said Caroline Feeney of the HomeLight real estate research team.

Caroline Feney

Only 51% of agents surveyed for HomeLight’s Fall 2022 Agent Insights Report said it was a seller’s market in their area, down from 95% in the previous quarter.

“For more than two years, we’ve seen a nationwide seller’s market,” Feeney said. “It’s interesting to compare this stat to 2019, when around 55% of agents at the time said it was a seller’s market. We’re starting to see parallels to the kind of real estate market pre- pandemic, where there is a certain balance between buyers and sellers.”

It’s still hard to afford a home due to high construction costs, inflation and a 7% mortgage rate, so some potential buyers have held back for a while. This creates more inventory — and it signals that prices could eventually drop, Feeney explained.

7149 Pasadena Ave.

“Homes stay on the market longer, and when supply and demand start to balance out, prices become a little more manageable,” she said. “Price reductions have become more common. All signs point to this shift happening.

“Smart pricing is essential in this market.”

Kelly Boulton

Close to the house

Prices are definitely becoming more manageable in Dallas-Fort Worth, local realtor Kelly Boulton said.

Kelly Boulton

“I see more inventory,” Boulton said. “Compared to January 2022, which had two weeks of inventory supply in North Texas, we are now over two months of supply. I see price drops and fewer buyers. However, I see several offers on homes under $400,000 in certain areas of the market.

When it comes to pre-pandemic normal, what goes up must come down, according to the HomeLight report. More than half of agents polled nationally said markets that have warmed the fastest, such as Austin, will likely cool first and experience the biggest declines during a market correction.

2606 Kimsey Drive
2606 Kimsey Drive

“D-FW’s population grew by more than 21% between 2010 and 2020, which far exceeded housing growth, creating an accurate seller’s market,” Boulton said. “However, buyers had more choice. Falling prices have made homes more affordable. Many buyers looked for homes within a reasonable commute of work, bringing competition closer to downtown Dallas.

And after

People from other states are still moving to Dallas, Boulton said.

4506 Catina Lane

“The D-FW job market continues to grow, driving demand for housing,” she said. “Texas now owns nearly 50% of the nation’s Fortune 500 companies, with D-FW owning about 25-50% of them. I believe the D-FW housing market is steadily moving towards normalization rather than a downturn. We will still see yearly appreciation in values, but more likely in the single digits rather than the double digit gains of the past two years. Interest rates are also normalizing. A recession, if it occurs, is less likely to affect the housing market compared to other industries.

Housing needs after the pandemic

The #1 wishlist item for homebuyers these days is a home office, according to HomeLight research.

“The pandemic was not a blot on the map,” Feeney said. “It was an important moment to fundamentally change what people need from their living spaces. Remote work is booming. Federal data shows the number of Americans working remotely has nearly tripled since 2019. When it comes to real estate, everyone wants home office space.

Because so many people spend the majority of their time at home, they also want outdoor amenities.

Backyard decks are now worth 65% more than before, adding more than $7,000 in resale value, Feeney said. Over 60% of buyers want a porch, and outdoor kitchens and fireplaces have also grown in popularity.

“Buyers are looking for additional bedrooms or additional office space,” Boulton said. “As a result, having more bedrooms than homes that have offices is now highly valued. People are more likely to find these larger homes further out of town.”

The good news for Dallas, Boulton added, is that buyers have more choice, which creates market stability.

“Balance equals longevity,” she said. “Smart pricing is essential in this market.”

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