Dallas Housing Market Continues to Do Well
- Courtney Lynch
- Real Estate Business
According to NBC 5 Dallas-Fort Worth, the Dallas housing market is showing signs of improvement, though it may not seem like it from first glance. The number of repossessed homes are increasing throughout the country and the metro area.
In Texas alone, repossessions went up 300 percent compared to last year and that number was even higher in Dallas. However, the number of foreclosures is continuing to fall. NBC explained a foreclosed home is one at the beginning of the foreclosure process, but a repossessed one is a home at the end of the process—when a person actually loses the house. More repossessions could be the aftershock of the housing market crash that damaged the industry several years ago.
Nationwide, there are more than 900,000 homes in some state of foreclosure, according to RealtyTrac. That equates to one in every 1,269. As a state, Texas is doing better than the national average, with one in every 1,806 homes going through the foreclosure process.
People Continue to Buy
Mirroring this trend of continued improvement, 2015 was a year of rising home prices and a large volume of home sales. According to the Home Buying Institute, many real estate experts agree prices will continue to rise, but not as quickly as they once were. While prices rose by 16 percent in 2015, some predict the growth in 2016 will only amount to 5.8 percent.
However, that doesn't mean there will be a shortage of supply any time soon. Realtor.com reported an inventory increase of 2.9 percent in the Dallas metro area compared to this time last year - much better than the country's decrease of 2.4 percent of overall inventory. The age of the inventory in Dallas is younger than that of the U.S. - another sign the area is doing well. Properties on the market for fewer days mean real estate is moving quickly.
This increased housing inventory is good news for the many people looking to relocate to Dallas. Realtor.com named it as the fourth-hottest U.S. housing market in December, following San Francisco, San Jose and Vallejo, California. According to NuWire Investor, Dallas' population has grown 2.1 percent from last year. Compared to the national average of 0.7 percent, Texas is prospering.
Though Dallas' housing market is continuing to improve, it may have some challenges in the coming months. Realtor.com predicts Dallas could have lower sales volumes to go along with slower price growth in 2016. Additionally, the Federal Reserve's recent decision to raise the interest rate range could turn away buyers who fear increased mortgage rates, Home Buying Institute explained.
The Street echoed this concern. While the national housing market will remain fairly unchanged by the rate hike, some localized areas could see negative side effects.
"There are parts of the country — certainly, California, New York, Washington, D.C., and other markets such as Dallas and Denver — where house prices have moved up very high and we have some concerns about those markets," David Berson, Nationwide's chief economist, explained.
The current market remains in favor of buyers. The federal funds rate rose only slightly, from a maximum of 0.25 percent to a maximum of 0.5 percent. However, mortgage rates are still historically low for the time being. According to Mortgage News Daily, rates for the average 30-year fixed rate mortgage hover around 4 percent, while just two years ago, rates were closer to 4.6 percent. Prospective buyers looking to settle down in Dallas could benefit by looking into homes in the upcoming months, rather than waiting to see what the market does.