Dallas Housing Market Trends: September 2023
The Dallas Texas housing market continued to soften from Spring and Summer market. Once July comes around the real estate in Dallas Texas will start to slow and decline until the next spring market kicks in. 2023 is no different from this typical trend that we have historically seen.
Median Sales Prices
The median sales price in Dallas Texas entire MLS system for September 2023 was down slightly from August and is now at $379,500 for a single family homes in Dallas. While this is only down .13% from August $380,000, from Spring peak in June 2023 of $390,600 the market is down 2.84%. Over the past decade, from June to December we will average about a 2.4% decline for the entire 6 month period. As you can see, the range over the past 10 years has been anywhere from +3.9% during the hyper covid market we had, to as low as -10.8% when the party came to an end and inflation and interest rates reared their ugly heads to cool the market. If I was a betting woman, prices and transactions will continue to soften over the next few months and bottom out around January. Of course this will depend on the Federal Reserves actions regarding interest rates and if we have finally slid into a recession that many have been predicting for months.
Median Original List Price in Dallas
The median original list prices softened more than the median sales prices in Dallas in September as Sellers acknowledged the softer market conditions.
The original list price in September 2023 was $394,000, which is only 0.5% lower than the price in August. However, compared to the peak price in May 2023, this number has dropped by 6.2%. Since this is the most current number that considers all inventory and not just sold homes, we can see that the pace of decline is increasing. But as we discussed earlier, this is normal for this time of year. When people sell their homes during the school year, usually due to a hardship or job transfer, they are more open to negotiations to get the home sold. So, there is a higher chance of getting a good deal in such situations.
As you may expect as well, the median percent of the original list price also declined to 97.2% and is down from the summer peak of 98.5%.
Closed Pending Sales and New Listings
As you can see below, closed sales continue to slow dramatically in the overall Dallas housing market, as well as new listings and pending sales. Often this will keep the prices from declining as the supply is reduced, thus those who still need to buy have fewer options to choose from and often are still competing against other buyers who have limited options as well.
Dallas Housing Supply
If demand for homes is decreasing, one might assume that home prices are falling rapidly. However, in economics, it's important to consider the other side of the equation, which is the supply. The supply of homes typically decreases because people don't want to sell during the school year unless they are forced to. This means that unless there is a must-sell situation, asking prices will not decline. Additionally, with interest rates currently at decade-long highs, many sellers have locked in low rates and selling now could be economically challenging since they may not be able to get a similar interest rate.
Looking at the months supply of homes in Dallas, Texas, it is currently at its highest point since 2021, but it's still lower than pre-pandemic levels. This is also supported by the inventory of homes for sale, which is a component of the months supply equation.
Although the supply is increasing, it's not at unprecedented levels, so prices are not expected to decline rapidly unless the supply of homes increases significantly and at a rapid rate. Many people are waiting for more favorable conditions to buy homes in the Dallas metro area since affordability is being stretched due to interest rates and inflation.
