Most Dallas-area neighborhoods are seeing fewer home sales but no relief from rising prices

Written by MLHA Team

November 20, 2021

To hear the economists tell it, North Texas’ hot housing market is starting to chill out.

And most analysts are forecasting a moderation in Dallas-Fort Worth home sales and smaller home price increases in the coming months.

“Prices will be up about 8% or 9% or 10%” next year, said James Gaines, the longtime economist for the Texas Real Estate Research Center at A&M University. “It will be a significant price increase but not the 20% we’ve recently seen.”

Patrick Kruger has just begun shopping for a home in Dallas’ northern suburbs.

“It’s definitely not easier,” he said. “We just started looking in the last week, concentrating on new homes.”

He’s found few available properties to choose from and prices rising at a huge clip. “I think builders and homeowners are taking advantage of the bubble to make outsized profits,” Kruger said.

Real estate agents say competition for Dallas-area houses is still fierce.

“The market doesn’t feel like it’s slowing down to me at all,” said Scott Schueler of Keller-Williams. “There is limited inventory, and multiple offers are still commonplace.”

Home sales prices are up this year by double-digit percentages in almost every Dallas-area neighborhood.

And in the first nine months of 2021, median single-family home costs are 20% higher or more in about half of the Dallas-area residential districts tracked by The Dallas Morning News.

Some of the greatest year-over-year gains are in Collin County cities including Fairview (32%), Celina (27%) and Frisco (26%), according to data from the Texas Real Estate Research Center and North Texas Real Estate Information Systems.

But while home costs have soared this year, the pace of sales has dipped.

Purchases of homes are down through September in more than half of the Dallas-area residential districts surveyed. The biggest declines from 2020 were in Wilmer-Hutchins (-33%), Celina (-25%) and DeSoto (-24%) — all sales numbers that are still high by long-term standards.

Housing analysts blame the drop in Dallas-area home sales on the chronic shortage of inventory and years of price increases that have put homeownership out of reach of many potential buyers.

“I’m seeing more buyer fatigue than market cooling,” real estate agent Jamie Marancenbaum said.

Many sellers were getting a dozen or more bids on their houses last spring and may get fewer offers now. Still, most Dallas-area homes are still selling above asking prices.

“It is cooling slightly but not in ways the average consumer would notice,” agent Dave Gallman said. “Instead of 12 offers on a home and 10% over list price, it is now more like eight offers and 5% to 7% over.”

Some buyers say they are finding opportunities.

Justin Heath, who just contracted to buy a house in Grapevine, said he haggled over the price. He had been shopping the market for about three months.

“I was able to negotiate with the seller,” Heath said. “I think it’s cooling down.

“They had lowered the price significantly and came down even more from the asking price.”

Dallas-area home inventory levels have inched up by a hair in recent months, but more than three-quarters of the residential districts The News tracks had less than a month’s supply of home listings this year.

And the number of homes listed for sale with area real estate agents is lower than it was at this time in 2020.

“There is currently a one-month of inventory of homes in North Texas,” said Bill Head with the MetroTex Association of Realtors. “Not sure cooling down would be the term I would choose.”

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