Despite recent freezing temperatures, Dallas real estate market is gearing up to be a hot spot for relocation in 2021. This means a big payoff for those who are looking to sell their homes, have already invested in the DFW real estate market, or are looking to start investing in real estate.
While states without an income tax, such as Texas, have always seen a high migration rate year after year, Texas has experienced a dramatic increase in demand in the housing market over the last few years with no signs of slowing down. More specifically, North Texas is welcoming, on average, thousands of new Millennials looking to call the Lone Star State home. This comes as no surprise, however, as Millennials are the first generation to have technology that makes it easier to leave home while staying connected.
Millennials taking more initiative in where they choose to plant their roots has made it clear that they will continue to play an increasingly important role in local economics, including the housing market.
For example, companies looking to recruit young talent will be more inclined to move their headquarters and expand their companies to states with high migration rates. While Texas’ migration rate continues to grow, the state also offers a central location in the U.S. with competitive access to ports and railways. Combine that with Texas’ business-friendly culture and it’s no wonder why large companies like Charles Schwab, AT&T, McKesson, and PGA of America have made the move to Texas.
As a result, the promise of new jobs and great opportunities attract an even greater slew of new residents to the state of Texas. Historically, the corporate headquarters will land in the city centers pulling the populations inward. However, now more than ever, telecommuting has replaced the central office.
But what does this have to do with the DFW housing market?
Traditionally, city centers pulled the majority of the population, but since the start of the COVID-19 pandemic, people are looking to escape over-crowded living spaces and expand into a larger dwelling, especially one with a home office. Confirming the trend, a recent survey found that McKinney, Irving, and Frisco all showed higher net migration than Dallas.
The powerful transition from city life to suburban living has spurred noticeable rent and home price gains relative to the past decades. Even as shelter-in-place orders start to lift, the inventory of homes 20 or more miles from the downtown Dallas metro area has declined sharply. Not to mention, there has been a sudden, large shift to homeownership from renting by 6% between the first and third quarter in 2020 (larger than the increase between 1997 and 2007).
While low-interest rates are an obvious reason behind the sudden, surging homeownership rates in North Texas, it can be concluded that COVID-19-related concerns are the driving factor. This is because while the demand for single-family, detached homes skyrocketed, the demand for condos remained flat. This is most likely because of their shared community spaces and elevators that are present in a condominium.
Now that you know what is happening inside the DFW real estate market, you can follow local news and see what new corporations are making the move to Dallas, what planned communities are popping up in the suburbs, and watch how COVID-19 continues to shift buying behavior. Being an informed buyer or seller will help you to make the best return on investment and show you how to capitalize on an opportunity.