Are North Texas Real Estate Prices Falling? – NBC 5 Dallas-Fort Worth

If you’ve paid rent in the past two years, you’ve probably felt the burn in your wallet.

Rental costs hit all-time highs in North Texas in 2021 and earlier this year as demand for housing – both homes for sale and rentals – soared to new highs and spurred a real estate frenzy.

“2021 is a year where we will probably never see anything like this again, anytime soon. Maybe in our lifetime,” said Jay Parsons, head of economics and industry directors for Richardson-based RealPage.

“We had this perfect storm of events when COVID hit. We had this freak work from anywhere. People move. Most people had more money than before because of stimulus, because of wage growth. We’ve seen more rental demand in 2021 than any year in the three decades we’ve tracked the rental housing market. »

But now everything is changing and the market is changing. The pendulum is finally turning in favor of tenants.

“2022 is just a very different year. Inflation has gone up, consumer confidence has gone down, and people are a lot more nervous right now. When we’re nervous, we’re more likely to sit still and wait” , Parsons said. .

He said due to these factors, rental prices have stabilized in recent months across the country and North Texas.

“Just as you’ve seen in the housing for sale market, there’s been a significant slowdown in rental demand and 2022,” he said. “DFW is still going strong. But in Dallas and across the country, there was only a freeze in household formation, housing demand, consumer confidence and high inflation.

Rental markets constantly mimic housing markets, so with rising interest rates, home buying has slowed. Therefore, we no longer see huge rent increases.

“No one has a crystal ball, but one thing I’m going to tell you is that the rental market moves with the housing market for sale. And right now the demand for houses for sale is going down and the demand rental goes down. I think they’re kind of staying put, they’re waiting for it to end,” Parsons said. “Now that demand has cooled, rents follow. When we’re uncertain about the state world and our financial situation, human nature is to wait. And I think people have hit the pause button on housing searches right now in general.”

Parsons said there may even be rent reductions this winter, according to the property manager. So if your lease ends in the next six months, you probably won’t have to worry about your rent going up by several hundred dollars. It might even stay the same or increase slightly.

“Over the next three or four months I think we’ll see reductions in rents. I don’t think it would be a dramatic reduction in rents, but I think there will be better deals out there than you you’ll see,” Parson said.

Typically, the winter months are the best time of year to find or renew a lease, with low demand for accommodation during the holidays.

“Just like a general consumer tip, you will always get a better deal if you look at times when others don’t. Winter is a time of low demand, so you can use that to your advantage,” Parsons said. “One of the things that I think a lot of renters don’t understand is to be prepared to be flexible about your move-in and move-out dates. Property managers worry about what they call crawl management, where they want to make sure they don’t have too many leases expiring at the same time that cause too many vacancies. They will therefore generally offer you a lower monthly rent in exchange for a lease term that may not be ideal. It may be an 11 month lease, or it may be a 14 month lease. You may find a better deal if you’re willing to be more flexible.

The calm in the market is a far cry from the start of this year and last year. But even though rent increases have slowed, they have stopped at a high point.

According to a new study by Rent.com, the average rent for a bedroom in Dallas is still hovering over $1,500, an increase of 11% from last year. Three-bedroom rent is up the most from a year ago at 51%, averaging nearly $2,600 a month in the area.


Rent.com

Some neighborhoods like Lake Highlands, Oak Cliff, Knox Henderson and Las Colinas have seen rents skyrocket over the past year and a half.

Click here to read the rest of the report.

Due to high prices, many families still struggle to pay rent. In August, the City of Dallas announced another round of funding to help families receive rental assistance.

Despite rising rents, Parsons said rent is still relatively affordable in DFW compared to other parts of the country.

“If you look at some of the other major markets across the country, especially coastal markets like New York, DC, Boston, Los Angeles, San Francisco or Seattle – the average rent in Dallas is about half of what you would pay to live in these types of cities,” he said. “So it really does look like a lot, there’s definitely been significant growth. It’s flattening. But DFW is still a much more affordable market.

RealPage also shared more good news for the DFW rental market.

“Over the next year we are going to see a lot of new apartments being built. I think anyone in DFW can drive around and see apartments being built. There are more apartments being built in Dallas-Fort Worth in any other part of the country,” Parsons said. “And this additional supply will certainly give tenants more options. This should also be positive for rents, as there will be more competition and more availability of supply.”

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