With oil trading for under $45 a barrel and Texas having such a huge presence in the oil industry, some are wondering how plummeting crude oil prices will affect the DFW real estate market. Although Houston is much more likely to suffer from what’s happening in the energy sector, housing analysts are still realistic about cutbacks spreading to other parts of the state.
But one thing DFW has that many other regions in Texas aren’t experiencing is unprecedented job growth, which should help keep the red hot housing market around Dallas moving in the right direction.
After such an incredible year in terms of home sales and home value gains, it’s important to note, however, that even a moderate slowdown doesn’t mean the market or the local economy is taking a turn for the worse. After all, it’s nearly impossible to remain at a record-setting pace forever, right?
On the other hand, a rise in mortgage rates could be one potential factor in an eventual market slowdown, especially among young buyers who are still on the fence about buying. But even still, with most market projections showing an increase of just 3% to 4% in home prices (compared to almost a 10% gain in 2015), affordability challenges might not be as much of a problem as some may have initially thought.
Unfortunately, meeting housing demand in DFW is also still an issue, with inventory numbers still significantly lower than normal market levels. New construction starts totaled about 28,000 homes in 2015, which is easily the highest volume since the recession, but still well below what we saw prior to the downturn.
But with more new homes on the way, the apartment market still sizzling, around 75,000 new jobs coming to the area this year alone, and interest rates still at a manageable level even despite the possibility of an increase, 2016 should still be a very healthy year for the DFW real estate market, regardless of issues in the energy sector or other potential challenges that are expected to pop up along the way.