In 2016 builders started 29,892 homes in Dallas-Ft. Worth, showing a new home starts increase of 11.2% over the previous year, according to Metrostudy’s quarterly survey.
The surveys have shown that there is a slowing of demand for homes above $400,000, which may be due to affordability. Metrostudy says it corresponds to builder’s feedback regarding slowing demand at higher price points and in communities where prices have appreciated significantly over the past 3 years. Builders have responded by increasing buyer and Real Estate Agent incentives, and in some cases, lowering base prices.
For the first time in DFW’s history, NTREIS recorded over 100,000 home sales in a calendar year. Existing home sales grew 6.9% year-over-year for 2016 and inventory decreased by 1.2%. The median price of existing homes rose to $225,000, 10% higher than twelve months ago.
“As builders and developers realize that the heyday of 2015 and mantra “if you build it, they will come” is over, they grapple with how to address the mismatch of new home supply and buyer demand,” said Paige Shipp, Director of Metrostudy’s Dallas office. “A few builders are taking the leap to provide new homes below $200,000 in less desirable school districts with no buyer options. While this solution proves feasible for some buyers, others crave affordable, new homes in top school districts proximate to employers. The solution to the age-old problem of affordability is complex and will only be resolved once municipalities, developers and builders work together to deliver homes priced to meet the demand.”