DFW home sales skyrocket to record heights

The Lone Star state has set some all-time record highs in 2016 as Dallas-Fort Worth sales — and prices — continued to skyrocket, and one analyst says he expects the housing market to continue to boom for the foreseeable future.

"With all the job growth and in-migration of companies moving to Dallas-Fort Worth, we're going to continue to see a tremendous amount of activity," Ted Wilson, principal at Dallas-based Residential Strategies, told the Dallas Business Journal.

Photo JIM R. BOUNDS

"In today's world, the lower price points are found on the existing home side and there's been a huge demand for affordable housing," he added.

The Texas Association of Realtors released its year-end report for 2016 on Tuesday, which showed Dallas-Fort Worth-Arlington home sales grew 4.8 percent in 2016, with 98,625 existing single-family home sales. In that time, home prices rose 9.4 percent to $232,000, according to the data.

In Texas, home sales increased 4.6 percent to 324,924 single-family homes, with the median price rising 7.7 percent to $210,000.

Jim Gaines, the chief economist at The Real Estate Center at Texas A&M University, said he expects this year's housing market to keep pace with last year's strong levels of housing sales.

However, home prices are outpacing household incomes, which is a concern to Gaines and Wilson — who see this as potentially being a stumbling block to future home sales growth.

"Household incomes are rising at a disproportionally low rate than home prices, creating housing affordability challenges across the state," said Gaines, in a statement.

"In housing development, labor shortages and regulatory barriers are slowing construction and, in turn, driving up new home sales," he added.

Wilson said existing homes on the market are helping fulfill the demand for affordable homes.

"Only 16.2 percent of the new homes sold are affordable to a household in Dallas making the median household income," he told the DBJ."This means if you are making under $70,000 a year, you have to look at the existing home market because there's not many new homes in that price point."

The median price of a new home is about $345,000. That is far more than the maximum amount the median household in Dallas can afford, which is about $240,000, he said.

"As far as we can see inventories are remaining tight and, in all likelihood, there will continue to be a lot of growth in Dallas-Fort Worth in the next few years," Wilson told me.

"As rates go higher, housing will remain expensive," he added. "There's no bubble here and I've told people if you are in the market for a house and qualify, it's as good a time as any to buy."

Want to see what else Wilson sees for this year's housing market? Check out his housing forecast.

By: Candace Carlisle, Senior Reporter, Dallas Business Journal, February 21, 2017. A link to the original article can be found here.