Dallas Real Estate Market Update November 2024
Hey, Dallas-Fort Worth! If you’ve been eyeing a new home or thinking about selling, or maybe you’re just a market-curious person, you’ve probably noticed that interest rates have been a bit…well, all over the place. Today, we’re looking at what those fluctuating rates mean for the Dallas market.
There are two main questions my clients ask me pretty consistently and we’re going to cover them here.
Are home prices falling in Dallas? And that’s because people want to know if the value of their home has gone up or down.
Is it a good time to sell a house in Dallas? And that’s because the underlying question here is, ‘If I were to sell my home today, how long will it take?
So, let’s start with rates.
Lately, mortgage rates have been like the moodiest rollercoaster in town. One minute they’re up, the next they’re down. And, like a rollercoaster, they can leave you feeling thrilled, terrified, or both. But why are rates behaving this way?
It all starts with the Federal Reserve's campaign against inflation. Back in 2022, inflation surged over 8%, so the Fed kicked off a series of rapid rate hikes—going from practically zero to above 5% by mid-2023. Their goal? Slow down inflation. But with each change, mortgage rates have swung, sometimes sharply, which makes buying a home feel like playing musical chairs.
And if you’ve seen any of my previous videos, you’ll know it’s not just the Fed manning this wild ride. Global factors—think the lasting impacts of COVID and geopolitical issues like wars or even the threat of war—have added even more unpredictability. In fact, rates haven’t been this volatile in nearly 30 years. So yes, the whole nation is caught in a game of rate roulette and it’s definitely taking its toll on the Dallas market.
I mean, in the latest mortgage application survey, we are only up 1% in mortgage applications from the same week one year ago. And at that time, rates were at 7.43%. They’re currently at 7.02%. So even with a 40 basis point drop, there is only a tiny bit of increase in interest.
And now, it’s looking unlikely that the Federal Reserve will drop the federal funds rate any more this year.
They only have one more meeting left this year and many people thought that we’d see one more 25 basis-point drop from that meeting. Well, that all changed after Federal Reserve Chair, Jerome Powell, said this on November 14, Quote - “The economy is not sending any signals that we need to be in a hurry to lower rates.” End Quote.
Which translates to, the FED isn’t in a hurry to lower rates. And in one day, the handy tool we use to gauge the likelihood of a rate drop at the next meeting went from 82.5% certainty we’d see a rate drop on December 18 to a 62.4% probability.
So, what’s a hopeful Dallas homebuyer to do?
Rate Lock: When rates dip, consider locking in a mortgage rate as soon as possible. A rate lock guarantees your interest rate won’t change for a set period. It’s like saying, “This rollercoaster stops here for me, thank you very much.”
And if you’re thinking that you don’t want to lock a rate in because just as quickly as rates go up, they seem to go down again, I totally get it. Rate fluctuations make it feel like a game of 'what if,' and it’s tempting to wait for a better deal. But here’s a little reassurance: a rate lock is more about protecting you from sudden increases than limiting your options if rates drop.
Some lenders even offer a ‘float down’ option, which allows you to lower your locked rate if rates drop significantly before you close. That way, you can enjoy the protection of the rate lock without missing out if rates happen to go down. You’ll want to know if that’s an option before locking in, so be sure to ask your lender first.
And while rates might go down, they could also go up. Locking now gives you peace of mind, and a bit of stability in a very unpredictable market. But ultimately, it’s about what makes you feel most comfortable.
And look at new construction. Right now, we have over 10,000 new construction homes listed for sale on our MLS. Builders typically have a lot more wiggle room when it comes to pricing and incentives and countless builders are offering amazing interest rate incentives. I just had one builder offer one of my clients a temporary buy-down starting at 2.875% for the first year. That’s nuts.
For sellers, high rates mean fewer buyers can afford to compete, which can slow down the market. So, how do you keep buyers interested?
Know the competitive landscape of what homes are for sale that a buyer who’s interested in a property like yours might also be considering. And price your home accordingly. Not above market to leave room to negotiate down. No, because that will turn your best buyers away.
Because that buyer. The one that’s looking at homes right now, that is your ideal buyer. The people who are willing to pay the most for your home are those who are looking now and aren’t finding what they’re looking for. They’ve seen what’s available. They know the market. They know when something is worth jumping on and they’re just waiting for your home to get listed.
But overprice your home, they’ll know from the pictures and details that the home is overpriced because they are essentially micro market experts on homes like yours.
So, because there are such few buyers out there, that ideal buyer will wait until you drop your price to be more in line with the market. And then if they do decide to come back or another home for them hasn’t swept them off their feet, they’ll come back with an even lower price than they would’ve offered had you priced it right in the beginning. Because a lot of times, your first price drop is pretty close to where that buyer would’ve landed with an initial offer. But now, you have time on the market going against you and time on the market is the enemy to your net.
Keep in mind too that you as the seller are also very influential as to whether or not your home gets sold. You’re responsible for the property's condition. Now, of course, when you work with Realtors like us, we’re going to advise you on how to make your home pop and how to present it in the most optional light for photos and videos and with staging help and all the works. But at the end of the day, it’s your house and you get to decide.
And be aware that the market will respond to your property condition and how it compares to the competition.
And this is just being a savvy seller. Even when the market was going bananas, we left no stone unturned when it came to marketing and getting our listings looking as good as they could because it only increased the attraction to their home even more.
Okay, so we can step off the rate rollercoaster for a second and talk about home prices. If you remember, at the beginning I said I’d answer the question, “Are home prices falling in Dallas?” And get to the heart of the question - has the value of your home gone up or down?
When we look at the median sales price year over year, we see that the median sales price is up 1.2% for a median sales price on our MLS of $374,583.
If you have been in your home for five years, the median price has gone up roughly 44%. In October 2019, the median price on our MLS was just $260,000.
However, if you bought your home in 2022, we are just now getting back in line with that median sales price, which was $375,000.
Knowing all of this, Is it a good time to sell a house in Dallas? Well, that depends. We know what the market is doing right now. You know exactly what you can expect as far as the competition and recent sales. We have no idea what’s going to happen next year. Last year at this time, experts were predicting that interest rates would even get back into the 5s this year and everyone thought 2024 was going to be a great sales environment, myself included.
That ended up being far from what happened. For rates or sales.
And right now, the median time on the market before going under contract is 39 days. So half of the homes are going under contract in less than 6 weeks.
Before you make up your mind, if you want a good look at what you could sell your home for in today’s market, let’s talk. There are buyers out there. It’s not a desolate land of tumbleweeds going by any home with a for sale sign out front. You can go to letstalk.thecrestedgegroup.com to schedule that call.
If you’re looking for a real estate agent, we’d love the opportunity to earn your business. We have three ways you can connect with us. You can reach us by phone or text at 214-803-4444 or send an email to me directly at jshannon@kw.com or go ahead and book a free introductory call with us at letstalk.thecrestedgegroup.com.