Dallas real estate market investment forecast in 2021

This market forecast includes data from data from Dallas and surrounding areas including Fort Worth, Arlington, etc.

Why Consider Dallas For Investing In Real Estate?

Dallas itself may not be the largest housing market in the country, but when you find yourself in its neighboring cities of Fort Worth and Arlington, you get a massive metropolitan area home to over 7.5 million. of people – rivaling only New York in terms of population.

The area – known to most locals as “DFW” – is a vast 8,600 square kilometer expanse of culture, industry and education. It is home to some of the world’s largest defense manufacturers, major oil and gas players, and a number of premier universities and colleges including Texas Christian University, Southern Methodist University, University of the North from Texas, etc.

Are you planning to invest in real estate in the Dallas area? Here’s what you need to know about the 2021 market.

State of the market

Dallas is recovering from the pandemic. Unfortunately, while many of its housing market indicators are improving, there are some key issues that could hold back the city – as well as those wishing to invest in them -.

Here are the three big trends we are currently seeing in the Dallas-Fort Worth area:

  • Supply is an issue.
  • Rentals are not in great demand.
  • Prices are on the rise, both on rentals and on single-family homes.

1. Supply is an issue. It looks like a throwaway (after all, supply is a problem everywhere these days), but in DFW it’s especially bad.

Not only is the current housing supply at record levels, it is also below the national average. To make matters worse, there doesn’t seem to be much hope on the horizon. Building permits are on the decline, builders’ confidence is waning and construction is getting more expensive. The only bright spot is in the multi-family home, which has seen a significant increase in permit activity over the past month.

2. Rentals are not in great demand. Rental vacations in Dallas have been everywhere: up, down, then back again. But now? They stand at 8.4%, well above national averages.

With more multi-family construction going on (see above about multi-family permit data), you wonder: who will be living in all these additional units?

3. Prices go up – both on rentals and single family homes. Like most of the country’s real estate markets, rents and house prices are on the rise in Dallas. Homes are nearly 12% more expensive than a year ago and rents are just under 3% higher.

Both fall within the national trendline for now, but relative to others Texas Markets (except for Austin), they are among the most expensive. For investors, this is a reason to be optimistic – especially those looking for rental properties (or those looking to sell a home in the short term).

Indicators of housing demand in Dallas

Graphics provided by Housing tides, an EnergyLogic company.

Demand is expected to weaken in the Dallas area this year as many of the region’s key indicators are trending downward. Although the region adds a good number of households each year, consumer confidence and employment are on the decline. With rising rents and house prices, this could stifle demand in the months to come. Overall, our data shows that the majority of Dallas’ demand metrics are “unsanitary” and “weakening”.

As in many cities in the United States, unemployment is on the rise in Dallas. The current unemployment rate in DFW is 6.5%, an improvement from the 12.8% rate seen almost a year ago, but higher than the current national average of 6.3%.

The region lost around 116,000 jobs last year. Job losses declined steadily between April and December, but edged up slightly in January. Despite this, they still represent a marked improvement over the 400,000 jobs lost last March.

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