Dallas-Fort Worth 2017 forecast:
Dallas-Fort Worth has been one of the hottest real estate markets in the United States, in part, because of its affordable homes, but the region is falling out of the ranks of being an affordable growth market in the country, says one housing economist.
The years of escalating home prices — which have skyrocketed 43.3 percent in the past five years— is also one reason why North Texas wasn’t ranked in the top 10 list of U.S. metros to watch in Realtor.com’s 2017 Housing Forecast.
Instead, the region ranked at No. 48 out of the top 100 U.S. metros in the report with home prices expected to increase 4.13 percent, with a sales growth of 5.09 percent.
“In the last couple of years, Dallas was one of the hottest markets, but our price forecast for Dallas is moderating right in line with the overall United States,” Jonathan Smoke, chief economist for California-based Realtor.com, told the Dallas Business Journal.
“The Dallas market is finally seeing inventory, especially on the new construction side, that will alleviate some of that pricing pressure,” he added.
That pressure has been significant. In North Texas, buyers are paying about a third more than the rest of the country for a single-family home, Smoke said.
“Dallas is falling out of the ranks of being an affordable growth market,” said Smoke, who added this could impact the region’s ability to recruit companies and jobs to North Texas.
Even with Dallas-Fort Worth adding nearly 100,000 new jobs in the past 12 months with continued relocation activity, Smoke said home prices in North Texas need to moderate to remain competitive.
The median price for a new home In North Texas was up 13.2 percent year-over-year to $336,381, according to data from Residential Strategies Inc., which analyzes the North Texas housing market. And developers have to work hard to deliver homes below $200,000.
In the United States, home prices are expected to increase 3.9 percent next year.
Meanwhile, the top 10 U.S. metros in the 2017 Housing Forecast are expected to see average price gains of 5.8 percent next year, with a sales growth of 6.3 percent.
Some of the metros topping the 2017 Housing Forecast rankings include major metros, such as Phoenix, Los Angeles, Boston and Sacramento based on average price gains and sales growth of single-family homes.
Candace Carlisle covers real estate for the Dallas Business Journal.
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