The F.I.R.E. Report

Median Home Prices in Southern DFW Same as Feb '22



Market Analysis

The latest DFW MLS numbers show that for the southern part of the metroplex, home prices are about the same as they were one year ago. At the end of January, the median price of a single family home in the Mansfield, Arlington, Kennedale, Grand Prairie region stood at $355,000. This is just 1% higher from a year ago and exactly the same as February of 2022.

Looking at the graph above (NOTE: You can interact with the graph to see price points at various dates), we see that the peak price occurred in May of last year (2022). Since then we have seen declines in nearly every month. To be sure, this is not completely out of the ordinary. Real estate prices tend to be cyclical, and the fall/winter months tend to be the low points. Of course, the past several years have been anything but typical, and you can see from the graph that we really haven't experienced that kind of typical cycle since before 2020. I say all this because it is going to be interesting to see where prices go as we head into the spring and summer months - the months in which prices tend to rise anyway.

Why Today’s Housing Market Isn’t Headed for a Crash

67% of Americans say a housing market crash is imminent in the next three years. With all the talk in the media lately about shifts in the housing market, it makes sense why so many people feel this way. But there’s good news. Current data shows today’s market is nothing like it was before the housing crash in 2008.

Back Then, Mortgage Standards Were Less Strict

During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. Banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance an existing one.

As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies.

As the US enters the third year of the pandemic, its economy isn’t done throwing curve balls. The Federal Reserve’s rate hikes coupled with a return to “normalcy” by consumers have tamped down the housing market. Silicon Valley behemoths like Meta, Alphabet and Yahoo are dismissing tens of thousands of their workers, with a particular focus on middle managers. Dell is eliminating about 6,650 jobs as it faces plummeting demand for personal computers. And while more economists come around to the soft-landing school, a new theory about the US economy has appeared. Instead of a big downturn, the US might experience a slew of little ones, or a “rolling” series of micro-recessions where different sectors (like housing right now) experience a downturn at different times. But even in the worst-case scenario, one where there’s an actual recession, further major waves of layoffs are increasingly unlikely, Kathryn A. Edwards writes in Bloomberg Opinion. “The tradeoff between short-term cost-cutting and human capital appears to be changing, as qualified workers become harder to find and hire,” she said.