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Home purchases are down or unchanged in more than half the Dallas-area’s residential districts this year, ending several years of ever-increasing sales.
While house sales are slowing in many areas, prices continued to rise in the first half of 2018 — albeit at a smaller rate than in recent years.
Median home sales prices are up this year in all but a handful of neighborhoods, according to data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.
Some of the biggest price increases are in affordable residential areas including Irving, Oak Cliff, southeast Dallas, DeSoto, Cedar Hill and The Colony where there is strong demand for homes from both first-time buyers and investors. Median prices in those areas are up by double-digit percentages from the first half of 2017.
Most of the slowdown is concentrated in higher-priced neighborhoods that have already seen high sales volume and big price hikes in recent years.
"We have some buyer fatigue starting to show up," said Ruben Gonzalez, chief economist with the home sales firm Keller Williams. "People on the upper end especially are starting to bump up on the budget ceiling.
"They are going to be more particular than they were two or three years ago when the market was on fire," Gonzalez said.
Home sales in the Dallas-area are down about 1 percent so far in 2018 from record levels last year. The biggest declines have come in two of the area’s most expensive markets: Colleyville, down 18 percent from the first half of 2017, and North Dallas, down 13 percent.
Sales also are down this year in fast-growing Collin County suburbs including Allen, Frisco and Plano. Real estate agents say fewer out-of-town corporate buyers are showing up at their door than in the last couple of years.
"Maybe the market is normalizing now that the relocation mad rush is over," sales agent Valerie Collins said.
The time it takes to sell a house in the Dallas area has increased this year, as well as the total inventory.
Longtime Dallas real estate agent Barry Hoffer says he’s seeing more price cuts on houses that don’t quickly attract a buyer.
"We’re not seeing the buyer frenzy that we did two years ago — multiple offers on most houses," said Hoffer, who is with Ebby Halliday Realtors. "Under $400,000 it still moves very quickly because you have buyers, investors, flippers and lots of people competing for the same product."
Hoffer said higher home costs, rising mortgage rates and reduced tax benefits to home ownership are contributing to this summer’s market cool down.
"You have a lot of factors coming together that are causing a little bit of slowdown, more days on market and the inventory building," he said.
With continued strong job growth in North Texas, more than 300 people a day are moving to the area, which guarantees a robust appetite for both homes and apartments.
"Demand right now is still super strong — especially in Texas it’s been crazy good," said Keller Williams’ Gonzalez. "We still have an inventory shortage in a lot of places, but that’s concentrated at the entry-level price points."
Buyers also are wondering how long the current economic cycle will last, he said.
"People are starting to feel like we are at a peak in the growth cycle right now," Gonzalez said. "That might be effecting their decision-making.
"Sometime in the future things may be slowing down because we have been going strong so long."