2024 Dallas Housing Market Update: Key Insights and Predictions

Understanding the intricacies of the Dallas housing market is essential for making informed buying or selling decisions. In this midyear 2024 update, we delve into key factors shaping the market and discuss what lies ahead for the remainder of 2024 and into 2025.

Median Sales Price Trends

The median sales price is a crucial indicator of market health, reflecting the midpoint price of homes sold in a given period. In 2024, the Dallas market saw a modest 3.4% price appreciation from January to March, a slower pace than in previous years. The peak buying season, usually ending in June, marked the weakest performance since 2013, with median prices slightly decreasing from $390,000 in June 2023 to $385,000 in July 2024. This trend suggests a stabilization period as the market seeks direction, with potential moderate price growth in high-demand areas like Frisco, Prosper, and Plano.

Inventory Levels and Month’s Supply

Inventory levels, measured by the month's supply, indicate the balance between supply and demand. A supply of less than six months suggests a seller's market, while more than six months points to a buyer's market. In July 2024, inventory reached 4.5 months, the highest in over 20 years, signaling increased supply. This rise could provide buyers with more negotiating power, although prices have remained relatively stable over the past three years.

Days on Market

Days on market (DOM) is another vital metric, reflecting how quickly homes sell. In June 2024, the average DOM was 27 days, the highest low in a decade for this month. This indicates a softer market, with sellers likely needing to make concessions as the number of active buyers dwindles. Buyers may benefit from increased negotiating power, especially if economic uncertainty persists.

Interest Rates and Their Impact

Interest rates play a significant role in housing affordability. As of August 1st, 2024, the rate for a 30-year fixed mortgage was 6.73%, still high compared to pandemic lows. These rates have contributed to a supply shortage, as many potential sellers remain locked into their homes with lower-rate mortgages. A drop in rates could improve affordability and increase market activity.

Sale to List Price Ratio

The sale-to-list price ratio measures the final sale price relative to the initial listing price. A ratio above 100% indicates a competitive market, while below 100% suggests more buyer leverage. As of 2024, the Dallas market stands at 97.1%, indicating buyers have more negotiating power as homes sell below the asking price.

Price per Square Foot

Price per square foot provides a standardized comparison of home values. In 2024, the median price per square foot in the DFW metroplex was $193. While less indicative than other metrics, this measure reflects rising home values in high-demand areas.

Local Economic Factors

Economic indicators such as employment rates, wage growth, and GDP influence housing demand. In July 2024, DFW's unemployment rate was 4.3%, matching the national average. Wage growth has stagnated, potentially affecting affordability and housing demand. A strong local economy supports higher demand and prices, while a weak economy poses challenges for both buyers and sellers.

New Construction Trends

New construction is poised to impact the market significantly. Initially, it accounted for up to 30% of home sales, though recent data shows a slowdown due to high interest rates and inventory build-up. This may benefit buyers of existing homes as new supply was expected to relieve pricing pressure.

Foreclosure Rates

Foreclosure rates in Dallas remain below pre-recession levels, indicating a stable market. Low foreclosure rates suggest fewer distressed sales, supporting home values and market stability.

Migration Patterns

Migration into Texas, particularly from California, continues to drive demand in the DFW area. Positive net migration suggests ongoing supply challenges as new residents seek housing in a market already experiencing shortages.

Conclusion: Looking Ahead to 2025

The Dallas housing market in 2024 presents a mix of stability and uncertainty. Key takeaways include:

• Median sales prices are slightly down from 2023, reflecting a market in transition.

• Inventory levels are rising, potentially shifting towards a buyer's market.

• Days on market indicate a softer market, with increased buyer negotiating power.

• Interest rates remain a crucial factor, with potential rate cuts influencing future market dynamics.

• Sale-to-list price ratios suggest more buyer leverage as the market softens.

Looking forward to 2025, several forecasts and factors will shape the Dallas housing market:

• Potential Federal Reserve rate cuts could enhance affordability and boost buyer activity.

• Continued migration and local economic growth could sustain demand in high-demand areas like Frisco and Southlake.

• Political and economic uncertainties, including potential changes in real estate commission structures, could impact market dynamics.

As the Dallas market evolves, staying informed and adaptable is essential for making the best real estate decisions. For more insights and updates, reach out with any questions or visit our website for comprehensive resources.