This Expert Explains What's Behind The Record-High Home Prices In Dallas-Fort Worth
Combine a strong local economy that’s attracting new residents from other states with a shortage of homes for sale -- and that means housing prices are going up across North Texas.
A report released this week shows that Dallas-area home prices jumped more than 8 percent in December compared to a year earlier. Dallas had one of the biggest increases in the country.
Steve Brown reports on real estate for The Dallas Morning News. He talks about the price of finding a home in Dallas-Fort Worth.
...on the state of housing prices in D-FW: "They're now at a record high of about $230,000 for a medium price. But you're really hard pressed to find houses in that price range. There is really not much available under say $300,000.
"You do have so many young people that have wanted to buy while interest rates were low, but complicating that, you have all these investors that have come in and bought up all these moderate priced houses to turn them into rent houses. So, there's just not very much for sale. So, that's what's made the home prices go up faster than the apartments."
...on why it's cheaper to rent a home in North Texas: "So, an average apartment is just over a $1,000. To buy a mid-priced home, by the time you factor in the insurance and the property taxes, then you're getting up $1,500, $1,600 a month.
"Only [in] a third of the country right now is it cheaper to rent than buy. Housing prices in a lot of areas of the country are still depressed since the recession and have not recovered like they have here. So, there are still bargains out there. But there is not nearly the bargains here in a lot of places like say Arizona, Nevada, Florida, where they suffered huge crashes of housing during the recession, and they've not caught back up yet."
...on the concern that rising prices could lead to a bubble: "No one wants to use the 'B word.' There is concern because home prices and apartment rents in Dallas-Fort Worth are growing at a many multiple-of-wage increases, and have done so for the last few years. We were sort of under-priced to being with, so there was some running room there, but you can't just keep increasing the price of a commodity of housing faster than the ability of people to pay for it.
"So a lot of analysts and even the builders themselves recognize that 'Yeah, this has worked for a while, but we can't keep growing the price of stuff faster than peoples ability to pay for it.' And there is a lot of discussion about that worry about that; it's just right now no one is willing to do anything about because the demand is so strong."
This interview has been edited for brevity and clarity.
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