CONCLUSIONS The Dallas-Fort Worth metro has been a great choice for single-family investment since the lows in 2012. It has been a favorite target for inves - tors since the last recession for several reasons, including excellent equity and income apprecia - tion supported by rising population, job growth, and wage increases. Rapid single-family home price appreciation is beginning to price out first-time homebuyers, yet low inventory and record-low interest rates continue to spur demand and goose prices even higher. Once forbearance programs end, we expect home prices to flatten or moderately drop with the increase in inventory. The largest concern for home prices may be 2+ years away, when the FED begins to raise interest rates again. Even if there is a moderate pullback in home prices over the next couple years, we don’t foresee a large crash occurring. Owners have a record amount of equity built up, and a myriad of government programs to protect borrowers and mitigate another foreclosure crisis. 2021 rental price increases will be unsustain - able if 10-20 percent of the renter-class work - force remains unemployed and thousands of renters are evicted. Rent prices were already reaching an affordability inflection point in some sub-markets before COVID, and low interest rates have created an environment where it is cheaper to own than rent for many areas of the market. Investors currently looking at Dallas MSA would be wise to factor in a potential decrease in rental income for one-two years to make sure the numbers pencil on your next investment property due to a potential surge in evictions and ongoing unemployment challenges. Bottom line, Dallas is a rapidly growing market with a strong and diverse economy which will bounce back after the pandemic abates. Low cost, high yield opportunities are scarce due to the limited inventory and low-rate driven demand. Short-term risks are building between the for- bearance term and eviction moratoriums expiring around the new year. Cautious investors may want to see how the market reacts after the new year, as there could be better deals in the spring from distressed sales. •
The 2019 Census shows that the Dallas-Fort Worth-Arlington TX Metropolitan Statistical Area (MSA) is the 6th largest in the U.S. with over 7.57 million residents. Dallas is the fastest-growing metro in the US in the last 5 years, adding 683,000 residents with a rapid growth rate of 9.9 percent.
The Dallas MSA economy is the 6th largest in the U.S. by GDP, supported by many Fortune 500 (and other large companies) headquartered there. Dallas’s diversified economic base has a large cohort of professional services, health & education, technology and trade/transportation jobs. This region has a high concentration of oil & gas companies that have been significantly impacted by the slowdown in travel due to COVID-19. That being said, this area continues to experience business growth in other industries, which is helping to drive the rapid population increases. Prior to COVID-19, the Dallas job market had been booming, adding around 80,000 new jobs per year. Over the last five years, the Dallas Metro area ranks first in total jobs added and 9th by percentage increase (8.4 percent job growth). As of October, the area has recovered roughly half of the jobs lost compared to the lows in April, primarily lagging in the Leisure and Hospitality. Higher wage jobs in Financial Services have recovered completely and Professional/Business Services is only down 1.2 percent. Many temporary layoffs have been restored; however, September data showed a rise in unemployment up to 7.5 percent. The unemployment rate could rise further through the winter as companies continue to announce layoffs, and as of November end, COVID-19 cases continue to spike around the metro and the entire state of Texas.
The median household income of $72,265 is above the national median income of $68,700. One-year median household income is up four percent from 2018 to 2019, and up over 21 percent for the last five years as more high-wage jobs enter the marketplace. Information and statistics from the Bureau of Labor Statistics employment data, Department of Labor report, Census/ACS Tables and RentRange® data sources.
Dallas-Ft. Worth MSA Index: 2012 to Current
Employment Change Median Household Income Home Value Rent Price
Fred Heigold III is the senior data analyst at Altisource® / Rent- Range®, an industry leader inmarket data and analytics for the single-family rental housing industry.
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