POPULATION According to the latest ACS Data Report, the Dal- las-Fort Worth metro ranks fourth in population of the top MSAs with nearly 6.4M, while Houston is in the sixth position with 5.9M residents. The report also states that the Dallas metro added 139,000 residents between 2017 and 2018, which is a 1.89 percent rise. Over a three-year span between 2015 and 2018, the city welcomed over 430,000 residents (6.17 percent increase). Solid job growth in high-paying jobs with a reasonable cost of living continues to draw new residents to the area. RENT AND HOME PRICE METRICS The median home value in Dallas-Fort Worth was $238,000 in September 2019, up 4.3 percent year over year. Home price appreciation has slowed in the last year versus a five-year growth of 48.8 percent and a 10-year surge in prices of over 76 percent. San Antonio and
Austin markets show the largest year-over-year growth of other Texas markets, where both were over eight percent appreciation year-over-year. Current rent-to-income ratio is a 32.18 percent, which is right at the national average for metro MSAs, and only marginally less than Houston (32.4 percent). As of September 2019, the average three-bedroom, single-family rental home in Dallas, is $1,710, second to Austin at $1,805 and $45 more than Houston at $1,665. The one-year change for a three-bedroom detached SFR is 3.57 percent, a $59 increase. Many markets across the country have slowed their explosive growth in the last year; however, Dallas is below the 5.5 percent national average rental price increase for three-bedroom SFRs. Memphis, TN and Phoenix and Tucson, AZ markets led the country with over 13 percent year-over-year rental increases. The University Park/Highland Park submarkets show the highest rents in the metro. Zipcode 75205 specifical- ly, tops the list at $2,925. South Dallas/Cedar Crest and
DFW ZIP PRICE HEATMAP
SUM (SFR2019 3BD AVG)
5-YEAR RENTAL PRICE INCREASE BY ZIPCODE
SUM (5-YEAR RENT CHANGE)
SUM (5-YEAR RENT CHANGE)
areas just east of Fort Worth range between $1,200 and $1,400 for a three-bedroom SFR.
Gross rental yields (excluding expenses) across the top 100 markets are at 8.5 percent. The Dallas-Fort Worth metro comes in at a strong nine percent, while Houston tops the Texas markets with a 10 percent gross yield. As the data highlights, the Dallas-Fort Worth market remains a strong area for investing in SFR real estate. Market-wide gross rental yields show that the market remains a favorable environment for buy and hold inves- tors looking for cashflow opportunities. Rent-to-income ratios at the national average show the overall market is not overheated; yet, there is still room for home sale and rent prices to grow over time. The data points to a healthy market, which should remain resilient in the event of an economic downturn. •
SATURATION, VACANCY & YIELDS Dallas-Fort Worth rental saturation for single-family properties (non-owner-occupied properties versus total) comes in at a relatively low 19.15 percent. Houston is higher at 21.1 percent. This indicates there is still plenty of room for investors. One potential downside to the market is the presence of large investors competing for available inventory. Large real estate investors with over 100 properties in their portfolio collectively own 6.3 percent of the non-owner-occupied SFR properties. The remainder are owned by small-to-midsize investors and individuals. Demand is also high for SFR rentals with a 6.4 per- cent vacancy rate and a moderate SFR rental listing duration of 25 days.
Fred Heigold III is the senior data analyst at RentRange, an industry leader in market data and analytics for the single-family rental housing industry.
86 | think realty magazine :: january / february 2020
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