As DFW’s population increases, housing is in short supply, but Scott Carnes has a few ideas that may give you an edge
DAVID TAFFET | Senior Staff Writer
taffet@dallasvoice.com
Think your rent is too damn high? Spiking rents are the trend around the country, but Dallas and other cities in the DFW area don’t even rank in the top 10 in price hikes.
The No. 1 spot for annual percentage increase is Austin where residents are paying 40 percent more this year than last. As of December 2021, the average renter was paying $2,290 per month for an apartment or rental property.
The rest of the Top 10 list includes New York City and three surrounding suburban areas, four cities in Florida and, at No. 10, Portland, Ore., with a 29 percent increase and average rents even higher than in Austin.
What’s behind the rise in rental rates and housing prices? In Austin, Portland and Florida and cities like Dallas, it comes back to a growing population and a shortage of housing.
About 300 people move to the DFW area each day. We can assume some of those are couples and some are families. But still, there aren’t 100 to 150 new housing units added each day. And that means there is a housing shortage.
Homebuilders still haven’t caught up with demand since the last housing bust. And according to Zillow, Dallas has the largest shortage of new homes. Zillow reports that since the Great Recession, there’s a shortage of 1.35 million new single-family homes in the 35 largest housing markets.
But are home prices too high? Fitch Ratings recently reported on the Top 20 housing markets. Houses are overvalued across the country except in three markets — Dallas, Detroit and Las Vegas. The most overvalued markets? San Francisco and Seattle.
Scott Carnes, a real estate agent with Dave Perry Miller, agrees that current home prices in Dallas will hold their value. And areas like Preston Hollow and the Park Cities have seen the biggest jump in prices.
“People want single-family homes,” he said. And that’s kept something of a cap on prices in Oak Lawn, where few single family homes remain. But over the last year, condo and townhouse prices have been steadily creeping up as well.
What should purchasers know in this market?
“I warn clients they could be outbid by cash buyers,” Carnes said.
He acknowledged that it doesn’t always make sense. Why go with a lower bid from a cash buyer when waiting just a few weeks could mean a difference of tens of thousands of dollars in some cases?
Another thing Carnes suggested is getting pre-approval for a mortgage. “Some lenders can do a final approval up front without knowing the house,” he said. That shortens the time until closing. Otherwise the mortgage company would be waiting for the inspection and could delay closing until certain repairs are made.
Another thing Carnes said he’s seen in this market is buyers making an offer for the property as is. In other words, buyers are not requiring the seller to make repairs. What makes more sense, Carnes said, is only requiring the major repairs — roof, foundation, air conditioning — and taking care of the small items yourself once you move in.
“Ask for anything safety-related,” he stressed.
How much can someone expect to have to put down? Carnes said there are still zero-down programs available, and some lenders are requiring just 3 to 5 percent down. But expect to put down 20 percent in most cases.
Up-front cash would be 1 or 2 percent earnest money — the deposit that’s refundable within a certain period or applies to the down payment. Inspections begin at $450 but are more likely to be double that amount, depending upon what needs to be inspected.
And finally, “Buyers need to be patient,” Carnes advised.
Inventory is improving. We started the year 50 percent down on inventory compared to a year earlier. Supply chains are improving. People are back to work. New houses and condos are being built and steadily coming on line — but maybe not quite enough to satisfy the needs of the area’s ever-growing population.
