A solid foundation

Dallas deemed the No. 7 U.S. housing market for growth and stability

The Dallas market is hot — but investing in a home here is a good bet.

Photo by Ariel Skelley/Getty

While housing markets throughout the United States continue to shatter price records, a new study shows that markets in Texas — including Dallas — are the best for growth and stability.

In the study, "Best (and Worst) Housing Markets for Growth and Stability – 2022 Edition," finance website SmartAsset compared home value data in 400 metropolitan areas across the U.S. They looked at statistics from every quarter from the first quarter of 1997 through the fourth quarter of 2021.

Half of the metro areas in the top 20 are in Texas.

Dallas-Plano-Irving places seventh, with a 228 percent rise in prices from 1997 through the end of 2021. It estimates there's only a 1 percent chance that a Dallas-area home would suffer a 5 percent drop in value within 10 years of being purchased.

Next door, Fort Worth-Arlington-Grapevine ranks 15th, with a 213 percent rise in home prices and, like Dallas, a 1 percent chance of a 5 percent loss in value in value over a 10-year period.

By comparison, Austin ranked No. 1 in the study (up from No. 2 last year). Austin-area home prices soared 368 percent from 1997 through the end of 2021, the study says. That was the biggest spike among all of the metro areas examined in the study. Meanwhile, it estimates there’s a zero percent chance of a 5 percent loss in value over a 10-year period.

Home-buying expert Liz Hutz notes that the two main drivers of home price increases are economic growth and job creation, both of which have enjoyed a torrid pace in Texas. For instance, Texas in November surpassed its previous pre-pandemic employment high by inching close to 13 million jobs.

“We will continue to unleash the full might of our economy, attract new business investments, and ensure a more prosperous future for all who call Texas home,” Gov. Greg Abbott vowed in December.

Elsewhere in Texas:

In SmartAsset’s 2020 and 2021 studies, Midland, Texas, ranked first for growth and stability. This year, it lands at No. 3. According to the 2022 study, home prices in the Midland area jumped 266 percent from 1997 to 2021, with a zero percent chance of a 5 percent decrease in home value over a 10-year period.

Houston ranks sixth, with a 221 percent rise in home prices over a 25-year span and a zero percent chance of a 5 percent loss in value over a 10-year period.

San Antonio comes in 11th, with a 214 percent rise in home prices over a 25-year span. It also has a zero percent chance of a 5 percent loss in value over a 10-year period.

Odessa (No. 8), San Angelo (No. 10), Waco (No. 12), and Bryan-College Station (No. 17) are also among SmartAsset's best markets for growth and stability.

Nationally, the three cities joining Austin and Midland in the top five best cities for growth and stability are: Boulder, Colorado (No. 2), Rapid City, South Dakota (No. 4), and Fort Collins, Colorado (No. 5).

The five worst are: Flint, Michigan (No. 1), Monroe, Michigan (No. 2), East Stroudsburg, Pennsylvania (No. 3), Detroit-Dearborn-Livonia, Michigan (No. 4), and Rockford, Illinois (No. 5).

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REAL ESTATE NEWS

Nearly half of Dallas home sellers are slashing prices amid buyer’s market

Photo by Dillon Kydd on Unsplash

Nearly 58 percent of San Antonio home sellers dropped their list price in February

Prospective home buyers in Dallas may want to seal the deal this spring. According to a new Redfin report, nearly 47.3 percent of home sellers in the city dropped their list price in February.

Two other Texas cities clocked ahead of Dallas: In Austin, the number was 55.2 percent, and in San Antonio, it was an eye-popping 57.9 percent — the highest share among the 50 most populous regions in the U.S.

According to the real estate marketplace, Texas’ dominance on this list isn't coincidental. Along with Florida, the state has been building more homes than anywhere in the nation, giving prospective buyers more options and bargaining power.

Nationwide, 34.2 percent of February home sellers cut their asking price, a 31.5 percent rise from a year earlier and the highest share ever since Redfin began tracking markets in 2012. The average cut was $40,915, approximately 7 percent of the original sticker price.

Redfin attributes the discounts to a classic supply-and-demand imbalance. High mortgage rates combined with economic uncertainty have kept buyers on the fence while sellers continued to flood the market with new homes. The company speculates that the real rate of cuts may be higher since it does not account for delisted properties.

“A lot of people who couldn’t sell their homes last year opted to delist instead of reducing the price, with a plan to relist this spring because they knew that would give them a better chance of selling,” says Redfin real estate agent Aditi Jain, via a release “Some homeowners need to move immediately, but those who can afford to time the market may get a better price.”

Redfin says that spring consistently produces the lowest share of price cuts, with May having the lowest share in six of the past 10 years, and April taking the title in three others.

Sellers who closed in December faced the highest likelihood of cutting their price. Sellers who have owned their homes longest are also better protected from market fluctuations.

Owners who have lived in their homes for at least seven years cut prices at a rate of 31.8 percent, compared to 37.4 percent for those who have owned for two years or less. More recent buyers who purchased their homes at the height of the pandemic boom are now reluctant to accept what the market will actually bear.

The five U.S. cities with the highest shares of cut listing prices are:

No. 1 — San Antonio, Texas (57.9%)
No. 2 — Austin, Texas (55.2%)
No. 3 — Dallas, Texas (47.3%)
No. 4 — Tampa, Florida (45.9%)
No. 5 — Fort Lauderdale, Florida (44.9%)

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