Dallas Real Estate Market: Prices & Trends In 2023

In this article

Dallas, Texas, is one of the fastest growing metropolitan areas in the country, with a large, diverse, and growing economy. With home prices below the national average and strong cash flow potential, Dallas has several attributes that support favorable long-term conditions for real estate investors.

population and the labor market

Located in northeastern Texas, the Dallas metropolitan area actually consists of two large cities and one small city: Dallas and Fort Worth, and then the smaller city of Arlington that lies in between. Taken together, the Dallas metropolitan area has a population growing well above the national average. The median age of Dallas residents is just under 33, which is close to peak home buying and family composition Age – which indicates a strong and sustainable housing demand in the area.

Dallas’ large and diversified economy helps insulate it from an economic downturn. The region has large medical and educational institutions and a large airline presence anchored by American Airlines and Southwest Airlines. The unemployment rate is low but slightly above the national average and has risen slightly in recent times.

House prices

Despite strong demand and a strong economy, investment conditions in Dallas remain attractive. As of this writing, the average sales price in the Dallas area is just over $400,000—relatively close to the national average but lower than cities with comparable economies of size.

It is important to note that while prices in Dallas have been relatively flat over the past several months, the pace of growth has slowed significantly. This is to be expected, given the macroeconomic climate, but it’s worth noting that the estimate in Dallas, as a whole, is likely to be modest or even slightly negative in the months ahead.

Rental growth and cash flow

Rental growth has followed similar patterns to housing but varies slightly by city within the metropolitan area. Rents in Arlington, for example, have held steady over the past six months, while rents in Dallas and Fort Worth have declined modestly. Some drop in rents is not of concern, given the rapid pace of rent growth in recent years, and most of the data supports that the drop in rents will be minimal.

When looking at cash flow prospects for Dallas, they vary greatly by location within the metropolitan area. Areas near Fort Worth and south Dallas have rent-to-price ratios (a good proxy for cash flow) near 1% — a good sign of cash flow potential. However, North Dallas and most of the area between Dallas and Fort Worth have rent-to-price ratios that indicate that cash flow will be hard to find. Overall, strong cash flow potential for a metro area of ​​this size!

Inventory and market health

Looking ahead, there are signs that although the Dallas housing market has softened – it is still on fairly strong ground. New listings are declining, and while inventory is up off pandemic lows, it’s actually been down over the past several months. This indicates a market with fairly strong competition for real estate and perhaps even a seller’s market.

In addition, although days in the market (DOM) have almost returned to pre-pandemic levels, they are down in the latest reading. A new data point does not constitute a trend, so this will be an important metric to watch in the coming months.

winning strategies

Overall, Dallas is a strong and inclusive market for real estate investors. It has a reasonable price point, strong cash flow potential, and a strong economy to support future growth. While the national housing market is experiencing a correction, Dallas is holding up relatively well. Prices have been relatively flat, and leading indicators suggest that the market will be one of the more stable housing markets in the country over the coming months.

Victor Stephen, an investor-friendly real estate agent in the Dallas area, says, “Investors we see winning now tend to BEAF properties. We aim for an entry price 10-20% lower than the previous market high, and we want to see today’s rental price covering PITI.At this point in the market cycle, when most retail buyers are sitting on the sidelines, our investors have more opportunity than ever to get We have B+ or even grade A quality stock, and ready inventory. It’s one of those rare market cycles where investors are one of the last players in the market. We can get ‘premium’ assets at discounts without competing with dozens of retail buyers.”

If you’re interested in learning more about investing in Dallas, partner with a local, investor-friendly real estate agent like Victor Stephen, who can It guides you through the strategies, tactics, and neighborhoods to focus on.

Here’s how to do it Contact Steffen at Agent Finder:

• Search for “Dallas, Texas”
• Enter your investment criteria
• Select Victor Steffen or other agents you want to contact

Steffen is ranked #22 of 86,000 EXP Realty agents by sale volume and #5 in the state of Texas. He and his wife are active real estate investors, owning a variety of cash-producing assets including leaseholds, long, medium and short term leases. They plan to continue building their portfolio with a focus on new build assets and 20-50 unit clusters in 2023.

Note by BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.