2023 Dallas Fort Worth Real Estate Market Update

“We’re in a recession.” “The housing market is ripe for a crash!” 

When it comes to real estate, recent headlines create a feeling of doom and gloom. 

Yet, how true are they? 

Let’s begin with recessions - a recession itself does not equal a housing crash. Many people are understandably scared from 2008, a recent example that has led us to correlate the two. However, history shows us a different story. During the last six recessions, only two of them have caused home values to decrease (including 2008). Throughout the other four, home values have actually increased. 

Real estate is also hyper local, with media headlines often sensationalized, making them incredibly misleading. I love this quote from Jason Lewris, Cofounder and Chief Data Officer at Parcl:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

With that in mind, let’s take a look at where real estate was in 2022, where it is now and what we can expect in 2023. With our 2023 real estate market update focused locally on the Dallas and Fort Worth area, you’ll be able to make your own informed decisions. Although no one has a crystal ball, I believe 2023 will be a better year in real estate than the headlines are projecting. 

Where we were:

Due to COVID, 2020 and 2021 saw an unprecedented real estate market. Both locally and nationally, historically low interest rates mixed with historically low inventory. 

This caused a total frenzy where buyers were essentially willing to do whatever it took to buy a new home. We saw buyers pay upwards of $100K over appraised value, waive inspections, purchase homes sight unseen. It nearly felt like you needed to offer up your first born child to purchase a home! 

In this frenzied market, sellers became extra greedy. For all intents and purposes, they could essentially throw a For Sale sign in their yard and get whatever they wanted. The craziness of this market caused home values to appreciate 15-20% year over year. 

Meanwhile, with low interest rates and quick equity gains, many homeowners refinanced their homes and are now sitting pretty with a sub 3% interest rate.

Where we are: 

Fast forward to midway through 2022. 

In an effort to curb inflation, the Fed raised interest rates, leading buyers to develop a sense of hesitancy. With buyers now waiting on the sidelines, homes are sitting on the market longer, causing an increase in inventory. 

The market change means sellers now have to be more realistic with pricing and more negotiable in terms of repairs. Although buyers are having to lock in higher interest rates, they have more negotiation leverage.

Where we’re headed: 

As we head into 2023, we’re approaching a more balanced market very similar to that of the  2018-2019 pre-pandemic market. I prefer this for both buyers and sellers, especially if you’re looking to sell your current home and upgrade to a new one. 

The Fed is projected to stop raising interest rates as quickly with rates expected to level out around 5-6% by mid year. Paired with reasonable prices, more buyers will enter the market. 

Interestingly, inventory will still be considered low in this “seller’s market.” DFW continues to be one of the fastest growing metroplexes in the US. as businesses and people move to the area and new home builders aren’t able to keep up with demand. Also, those who refinanced when interest rates were around 3% are more likely to stay in their homes, contributing to fewer available homes for sale on the market. 

Combining these trends with pricing your home correctly, marketing it well and having realistic expectations based on your Realtor’s pricing strategy, you could be in a great position to sell for top dollar. 

However, I mentioned a balanced market for both buyers and sellers. 

While inventory is considered low, there are actually more homes on the market than in the last few years. As such, buyers will have more options to look at and more time to make decisions, giving them more negotiation leverage. 

This translates into a market where you can sell your current home for a great price and subsequently go on and buy your next home without a major bidding war that could lead to an overpay.

Overall, 2023 is showing signs of a great year for the real estate market in Dallas-Fort Worth. Experts are predicting home values in the metroplex to appreciate by about 5%, historically a very good number and far from the fear the media have been projecting. 

As long as you have a good strategy going into it, both buyers and sellers will be able to benefit from this more balanced market.

If you enjoyed this post and want to discuss the market in more detail, please reach out to me at Leah@finepointhomes.com. I’d love to chat!