By: Walter Bialas
Our market has seen unprecedented growth the last few years, adding close to 690,000 jobs since 2010 – a 23% increase. That is an amazing performance!
One of the prices for that level of economic expansion is the very tight housing market we now have. Rents are going up for apartments most everywhere, and single family homes are in short supply across Dallas-Fort Worth metroplex, with rapidly escalating prices. To understand where we stand, we pulled the Case Shiller home sales index. What is novel about Case Shiller is that it attempts to portray a “standard home” using re-sale numbers for the same homes being traded. The theory is that this is a better measure of price growth because it is not adding in homes of significantly different quality over time.
The chart below goes back to 2006, near the beginning of the price run-up. As you can see, Dallas did not drop much from its peak. And, while it bumped along through 2012, it regained its former peak by 2013. What we are feeling these days, however, is that our economic growth is driving pricing hard.
Today, home prices are 28% above our prior peak, while the US is still struggling and still fully 12% behind. With the kind of growth anticipated for DFW, this appreciation pattern will not likely change any time soon.
Why is this important? Well, since affordability has been one of our market’s major attractions to outside companies, this kind of rapid appreciation may impact our ability to recruit in the future. Next week, we take a closer look at affordability and how that may have shifted across our core counties.