Market Of The Month – Dallas, Tx

Glitz, glamour, and cowboys–Dallas, or as the locals say, “Big D,” oozes with personality. It’s famous for its football team, big hats, and rhinestones, and where air travelers often get stuck. Not many cities are honored with a TV show of the same name.

Dallas attracts anyone from millennials to retirees. The largest metropolitan area in the state naturally is one of the most popular places to live in Texas. Unlike other major cities, it still has room to grow. Put it together: big population, high demand–no wonder Dallas is an attractive market for real estate investors. Check out the data:

Dallas Population Growth

Dallas now has over 7.5 million people living in the greater metropolitan area, and that figure is skyrocketing. The US Census Bureau shows that the DFW Metro area gained more new residents in 2018 than any other Metro in the nation. According to one source, the Dallas-Fort Worth Metro added more than 1 million people in an eight-year period.

That growth doesn’t show any signs of slowing down. Commercial real estate company Cushman and Wakefield projects that the DFW metro will add another 1.3 million residents from 2020 to 2029.

Dallas Job Market

The entire region offers diversity in its industries. Specific to Dallas, the leading sectors are technology, financial services, and defense. North Texas ranks third for new technology job postings, second only to New York and Washington, DC. Closer to Fort Worth, oil and gas, manufacturing, and aviation are leading employment markets.

In a Texas-sized Metroplex like Dallas, you’d expect numerous companies to set up headquarters. Over 10,000 corporate headquarters are in Dallas, making it the largest concentration of corporate HQ’s in the United States. Approximately 22 DFW companies were on the Fortune 500 list in 2018. These include the Dallas-based AT&T, Exxon Mobil Corporation, and American Airlines.

The region’s top employers were healthcare company Baylor, Scott & White, Walmart stores, the Dallas Independent School District, Bank of America, Lockheed Martin, and American Airlines. Toyota and State Farm also have significant operations in North Texas. Healthcare and social assistance work employs nearly 400,000 people. Another 340,000 work in hospitality.

Before the pandemic, DFW’s unemployment rate was 3.3%, slightly below the national average. Traditionally, the Dallas Metroplex trends under the national unemployment average.

During the turbulent times starting spring 2020, employment declined in the greater Dallas metroplex, with the leisure and hospitality industry reporting the largest loss. However, even its losses were less than the national average.

As of November 2020, the Dallas-Fort Worth-Arlington MSA annual job losses stood at -2.3%. The metroplex’s unemployment rate of 7.1% was 9th in the state. The area has gained 191,300 jobs since April 2020. November marked the seventh straight month of job gains since the peak of losses in the spring.

Dallas Housing Market

Dallas was poised to be another year of steady price gains in 2020. However, the pandemic is moderating price gains. This is anticipated to be a short-term trend, with housing values appreciating again as the overall economy begins to recover.

Looking at performance over time, housing values have climbed steadily since 2014. Gains may not be as dramatic as other large cities, but they are steady.

In November 2020, Dallas housing reported a median price of $330,500. The Texas A&M Real Estate Center reports that the average sales price of homes in the DFW is up almost 16%, while active listings are down 44%. In some counties, like Collin in Denton, inventory is at its lowest levels in at least a decade.

Single-family construction permits are on the rise, with Dallas Fort Worth coming in second to Houston in issued permits. The third quarter of 2020 had housing market indicators showing slight improvements in housing affordability.

Dallas Rental Market

A major study of large US Metropolitan areas ranked Dallas Fort Worth as the third-highest rated region for millennials. Remember, millennials are more likely to rent than prior generations at the same stage of their life. Dallas is one of the fastest-growing areas for renters in the state and nation.

Rentcafe reports that around 42% of Dallas households are renter-occupied. The average rent for a Dallas apartment was $1,250, which was a 1% increase compared to October 2019.

Housing demand is expected to continue as Dallas’s population grows. Multifamily permits rose for the third straight month in November, but they were down year-over-year. Affordable housing will be critical to Dallas’ economy and growth.

Invest in Dallas Real Estate

Dallas offers cultural attractions, entertainment, lots of retail and shopping, and high quality of life. While those things may not directly matter to a real estate investor, they entice people to call the Dallas metro area home. So does its rapidly growing job market. With strong population growth expected to continue throughout the decade, Dallas is a prime market for the real estate investor.

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