Real Estate Forecast

Why Dallas-Fort Worth’s sizzling real estate market may start to simmer

The craziness of buying a house in Dallas-Fort Worth is slowing down, experts say.

Photo courtesy of Ebby Halliday Realtors

At the MetroTex Association of Realtor’s annual “state of the DFW Real Estate union,” Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University, told 300-plus Dallas-Fort Worth real estate agents that they might expect a slowdown in the frenetic market we are experiencing, to what he called a “new norm”: 2.3 percent growth instead of the 3, 4, or 5 percent we have been seeing.

Gaines said prolonged lower oil prices and job cuts in the energy industry will result in slower growth in Texas. But the impact hasn’t really been felt yet, he said.

“We went through this in the ’80s — there is a lag effect of when those prices come down, and it really hits the economy,” Gaines said. “It’s anywhere between one to three years. We know that it is going to impact the state’s economy — it’s going to affect employment throughout the state,” he said. “It’s coming, but it hasn’t hit yet.”

Gaines predicted that even in North Texas, which has less exposure to the energy industry than other regions do, employment gains will moderate next year.

“But the slowdown is from a record high to a little bit less,” he said. “Growth in Dallas-Fort Worth has accelerated enormously.”

Houston is hurting, said Gaines in so many words, due to loss of oil jobs. Midland too. The energy sector is definitely down, and $80 a barrel is not in the wings.

Dallas-Fort Worth, Plano, and all, not so much. Gaines said North Texas will still see growth in high tech, healthcare (all those doc in the boxes sprouting up like banks in high-net worth neighborhoods), and professional and business services. The population expansion continues. But the local growth issues are a strain on our in-state and local resources.

Texas produces 50 percent of the nation’s oil, and we are still the homebuilding capital of the world. According to Gaines, these are the macro issues facing Texas real estate today:

Changing demographics. First-time homebuyers are increasingly millennials, and they have changing lifestyles and buying habits.
Capital. Foreigners are coming in and buying up real estate with cash.
Interest rates. Prepare for them to go a little higher. The increase won’t kill us, but it could hurt buyers on the credit fringes.
Credit terms and availability. Washington is finally slackening the reins on lending.
Urbanization. Two out of three people live in the big Metropolitan Statistical Areas in Texas, and more people are heading there.
Home affordability. This could be a problem — looking at Gaines charts, it appears that the median price of a home in DFW is now near $280,000. That’s a lot better than the average home price in the Bay Area or LA, or metro New York or D.C., but that’s high for us. Where do people who can only afford $150,000 for a house live?

Home affordability may be a bigger problem in Dallas-Fort Worth, given that home price increases have been outpacing wage gains that in the area.

“We have smaller household income today in real terms than we had in 1999,” Gaines said. “Affordable workforce housing is going to be a major issue. We are not building enough houses in the $150,000-to-$200,000 bracket.”

Lower gas prices may be bad news for the oil industry, but it’s great news for consumer and makes the suburbs more attractive to buyers.

Local agents say the market is already simmering down. As Dave Perry-Miller told me earlier this week, it’s still busy, just not as frenetic. I do see home prices on the upper end of the luxury market softening; home prices that may have been over-reaching are being pulled back. But beautiful, exciting product will still fly off the shelves, and the under $700,000 market is still extremely hot because of demand.

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A version of this story originally was published on Candy's Dirt.

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Hottest Headlines of 2025

Popular suburbs move into Dallas' hottest real estate headlines of 2025

Photo courtesy of City of McKinney

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Editor's note: As the year comes to a close, we look back at the 10 most-read real estate stories in Dallas for 2025 — including new honors for several local suburbs, market trends, and all-important Walmart news. These are the 10 hottest real estate headlines of 2025 in Dallas:

1. Dallas-Fort Worth suburb blooms as No. 1 best place to live in U.S. One Dallas-area city took the top slot on a list of "the 100 Best Places to Live in 2025." The list — from relocation marketing platform Livability.com — put Flower Mound at No. 1 for its appealing size and affordability. The suburb also claimed the No. 7 spot in a ranking of America's most livable small cities.

2. North Dallas neighbor ranks as No. 1 most affordable city in U.S. A Dallas suburb landed on top of a list of the most affordable places to live: McKinney ranked No. 1 based on its relative cost of living and high median household income.

3. Massive mixed-use development coming to key intersection in McKinney. McKinney is getting a new $1.3 billion mixed-use development. Called Long Branch, it will be a 155-acre project at the northwest corner of US-75 and the future 380 bypass, consisting of housing, retail, office, grocery, and hospitality. The development has 80 acres slated for active development, and will unfold over the next decade in four tracts.

4. Dallas-area suburb ranks as 3rd best place to live in Texas in 2025. The Dallas-Fort Worth mid-city of Coppell has been ranked the third best place to live in Texas in 2025 by rankings and review website Niche.com. The survey determined the best places to live in based on crime rates, public school rankings, the local cost of living, job opportunities, and more using data from the U.S. Census Bureau, the FBI, and others.

Coppell, Dallas suburb Coppell was ranked the third-best place to live in Texas for 2025. City of Coppell, TX Municipal Government/Facebook

5. 11 Dallas suburbs soar as fastest-growing U.S. cities in last decade. It's no secret that Dallas-Fort Worth's population is growing faster than most other metros in the U.S., but now several surprising Dallas neighbors have been named among the top 10 fastest-growing suburb nationwide over the last decade. Celina nearly led the nation with an astonishing 314 percent increase in population from 2014 to 2023, according to a growth study by marketplace platform StorageCafe.

6. Dallas neighbor is the No. 1 fastest-growing affordable city in U.S. A national study has declared Texas is home to the most affordable, fast-growing cities in the country, with Dallas suburb Frisco taking the lead at No. 1. Frisco and five more Dallas neighbors ranked high on GoBankingRates.com's list of "50 Most Affordable, Fastest-Growing Cities in 2025."

$Millennials moved to Texas more than any other state in 2019, with Frisco being\na top choice.$ Frisco is the most-affordable, fastest-growing city in the country. Photo by Roger Robinson/Visit Frisco

7. Dallas neighbor beckons movers as top U.S. suburb with small-town feel. Wylie, a city less than 30 miles from downtown Dallas, ranked as the No. 7 most highly sought-after U.S. suburb of 2025 in MoveBuddha's national survey. In addition to being recognized as the 7th most desirable American suburb, Wylie also ranked as the second-most desirable suburb to move to in Texas.

8. 2 Dallas neighbors rank among fastest-growing wealthy suburbs in U.S. Celina and Prosper, two boomtowns north of Dallas, are among the top three fastest growing affluent suburbs in the country. The cities' affluent status was unveiled in a GoBankingRates' study ranking the "30 Fastest-Growing Wealthy Suburbs in America" for 2025.

The Old Celina Park in Celina, Texas Celina is the No. 2 fastest-growing wealthy 'burb in America. Photo courtesy of celina-tx.gov

9. 6 Dallas suburbs make top 10 list of best Texas cities to move to. Advisors at ConsumerAffairs, a customer review and news platform, ranked the 50 most populated Texas cities across five main categories — affordability, safety, economy, health care and education, and quality of life — to determine which were the best places to move to. Each city was given a score out of 100 possible points. Four of the top five best places to move to in Texas are located in Dallas-Fort Worth: Allen (No .1), Frisco (No. 2), Plano (No. 3), and McKinney (No. 4). Two more DFW suburbs, Mansfield (No. 6) and Richardson (No. 10), rounded out the top 10.

10. Booming Celina hits the big time with its first Walmart Supercenter. The city of Celina is getting its first mega Walmart: According to a release, it will be a Walmart Supercenter located at the northwest corner of Preston Road (Highway 289) and the West Outer Loop. The store has been in the works for a few years, but the Celina Economic Development Corporation celebrated the opening in a groundbreaking on April 16.