In 2016, Dallas ranked #3 in the nationin median housing price increases, up 11%. Portland, OR topped thelist at 13%. The northern suburbs (Richardson, Plano, Carrollton)slightly outperformed the in-town areas inside LBJ by about 1.7%. Using a rolling 6-month average (forgive me for being a numbers geek)the intown areas saw a 10% increase and the suburbs saw an 11.7%increase. The midcities (Arlington, Grand Prairie and Irving) dideven better with a 15.7% increase.
Of course, there is no such thing as amedian house. Since houses vary in size, price per foot is a muchbetter metric to gauge performance. While everyone did well, we againsee the suburbs outperforming the intown areas in year over yeargains. My instinct tells me this has to do with the significantlyhigher price point of in town neighborhoods. The size of the marketdrops by half with every $100K price increase. With intown homes rapidly approaching the $400K level, the price pressure increasesgreatly making smaller gains expected.
While most home owners are primarilyconcerned with prices gains, looking at inventory levels and days onmarket give us a glimpse into the future. We have been in a strongseller’s market for over 4 years and 2016 was no different. Aninventory below 6 months is a seller’s market and all parts of theDallas area are well below that. In 2016, intown inventory levelsinched up a bit to 3.3 months while the northern suburbs remained thesame and the mid-cities dropped even further. In other words, buyerswho can’t afford to live in town are going out to the suburbs.Likewise with days on market, the time to sell a home. Up in town,down in the suburbs. While both of these markets are still very, verystrong, the curve is beginning to bend indicating a coming slow downin the rate of appreciation. This does not necessarily foretell adrop in prices, just a slowing down of the rate of increase.
So what’s coming? Mortgage rates haverisen over half a point in the last 4 months. Experts expect anotherrise in the coming year. This will make houses even less affordableand creating greater pressure on price increases. However, withcurrent inventory levels and marketing times so strong, the marketshould be able to absorb this if the economy continues to gainsteam.
When you are looking to make a move,you need to have someone on your side that knows the market. If youknow someone that could use my help making sense of the numbers, Iwould to help.