The Dallas real estate market is one of the hottest real estate markets in the country in 2021. Homes are selling fast, leading to higher prices and bidding wars. Homes for sale in Dallas, Tx sell in an average of 38 days, receiving at least 2 offers.
Mashvisor’s heatmap and analytics tools track data on new listings for sale, AirBnB listings, average daily rate, occupancy rates, median prices, traditional and Airbnb rental cash on cash return, among others, for all cities in the US every month to find the most profitable as well as the most affordable real estate markets for each quarter.
Based on February 2021 data for all of Mashvisor’s traditional listings in Dallas TX and AirBnB Dallas listings, this article will show you what’s happening in the Dallas real estate market, and where the best places to invest are.
What’s Happening In the Dallas Real Estate Market?
According to the data, there is an almost equal number of for sale and AirBnB listings, with 2401 new AirBnB listings and 2234 new for sale listings. These numbers are slightly higher than the total number of listings in January, which was 1,972 AirBnB listings and 2,273 for sale listings. What this shows is that the current housing inventory is improving. Based on MetroTex’s assessment of the Dallas housing market, there was only 1.3 months supply – the lowest in the last decade.
A report from Realtor.com that examined 2021 Dallas real estate market trends showed that Dallas would outperform the nation’s average in home values. According to the report, in the Dallas Fort Worth metro area, home values could appreciate by a combined 15.7% in 2021.
Our data show that in January, the average house price in the Dallas Fort Worth metro area was $456,459. In February, it was $467,388. That’s a 2.4% price growth. North Dallas real estate prices are in the high end with a median home price of $803,788. The South East and South West of Dallas seem to offer the best cash on cash return for both Airbnb and traditional investors based on Mashvisor’s data. These are places where real estate is comparatively cheaper, strategically positioned to offer investors the best ROI on Texas houses for sale e.g. South East Dallas and Five Mile Creek.
While you can snap up profitable investment properties in the Dallas housing market, you need to move fast. In a balanced market, homes spent an average of 90 days. The average days on market for southeast Dallas homes was 28 days and for Five Mile Creek real estate, it was 40 days. On average, homes in Dallas receive 2 offers for every listing.
Higher Price Brackets Aren’t Equal to Best Return
We find that the places with the highest median prices also have the lowest cash on cash return for both Airbnb and traditional rentals. When assessing Dallas income properties, cash on cash return calculates cash earned on a property versus cash invested in the property. In North Dallas, the average price is $803,788, Airbnb cash on cash return is $1.08 and traditional rental COC is 1.38.
Also in the second most pricy market, Arts District, the median price is $709,983. The average rent for a studio apartment in Arts District, based on Mashvisor’s February data is $2,246. The traditional rental COC is 0.92 and AirBnB rental COC is 0.29. Oak Lawn, a small neighborhood with a population of 44,370 and an expansive nightlife and restaurant scene, has seen substantial home price appreciation of late. The median price is $513,208 but Mashvisor’s data shows that Airbnb CoC was in the negative here at -0.91 while traditional rental CoC was 1.08. It also has the lowest AirBnB occupancy rate at 43.53%
In the relatively inexpensive South East Dallas neighborhood, AirBnB CoC is 7.2, the highest across all Dallas markets, while the traditional rental CoC is 3.62. In southeast Dallas, arguably the best neighborhood in Dallas for investors, the median home price is $200,565. Homes here are expected to see a lot of competition as the median days on market is only 28 days.
Related: 10 Tactics to Achieve the Best Return on Investment in Real Estate
Housing Supply is Low in Cheaper Markets
Supply is low in the Dallas real estate market
While housing supply in Dallas remains relatively low, homes at the comparatively lower end ($200,000 – $299,000) are experiencing the largest median home price gains due to low inventory. According to Mashvisor’s property listing stats, houses in places like Five Mile Creek, Cedar Crest, South East Dallas, and Dells District have the lowest inventory of homes for sale and the lowest AirBnB listing numbers. As expected, buyers and investors may have to compete via bidding wars in these markets. Inventory is comparatively highest in pricier Dallas neighborhoods like North East Dallas, Oak Lawn, and Arts District.
Related: How Real Estate Supply and Demand Should Affect Your Investment Decisions
Should You Invest In the Dallas Texas Real Estate Market?
Pros
- Dallas is the 6th hottest housing market in the country in 2021, based on Zillow’s Fourth quarter 2020 market survey. Median home prices in Dallas are expected to grow by nearly 16%.
- Dallas’ population grew by nearly 2% in 2020. And the population is still expected to grow in 2021 as people move into the DFW in droves. The DFW is projected to see the biggest population surge in the country this decade with an expected population growth of nearly 18% by 2029.
- Dallas is home to 42 Fortune 1000 companies, many of them located in Irving, North West Dallas. The DFW is also home to major colleges including the University of Texas at Arlington, the University of Texas at Dallas, the University of North Texas, and Southern Methodist University.
- Dallas has experienced one of the largest growth in home values in the last five years. Home values have risen 53% in the last five years and prices are still rising. Use Mashvisor’s neighborhood heatmap tool to view the home values map, comparing rental comps in your desired area by listing prices.
- Based on Mashvisor values, the average days on market in the Dallas real estate market is currently 38 days which is 28 days faster than 2019 values.
Cons
- The current unemployment rate in DFW is 6.5%, an improvement from the 12.8% rate seen almost a year ago but higher than the current national average of 6.3%.
- Vacancies for Dallas rental properties in the multi family bracket are well above national averages at 8.4.
- Housing supply is tight, leading to bidding wars and higher prices.
Best Places to Invest in Dallas in 2021
Based on our report, you’ll find the five best places to invest in real estate 2021 for the Dallas real estate market below. However, you should know your risk tolerance, budget, and goals before buying homes for sale in Dallas, TX.
1. South East Dallas
Median price: $200,565
Airbnb occupancy rate: 60.72%
Airbnb average daily rate: $192
Airbnb monthly income: $2,555
Airbnb cash on cash return: 7.2
Traditional rent income: $1,250
Traditional rental COC: 3.62
2. North East Dallas
Median price: $396,576
Airbnb occupancy rate: 61.16%
Airbnb average daily rate: $137
Airbnb monthly income: $3,187
Airbnb cash on cash return: 4.19
Traditional rent income: $1,601
Traditional rental COC: 1.75
3. Five Mile Creek
Median price: $234,269
Airbnb occupancy rate: 55%
Airbnb average daily rate: $127
Airbnb monthly income: $2,452
Airbnb cash on cash return: 5.52
Traditional rent income: $1,257
Traditional rental COC: 2.92
4. Dells District
Median price: $269,805
Airbnb occupancy rate: 59.94%
Airbnb average daily rate: $130
Airbnb monthly income: $2,507
Airbnb cash on cash return: 4.58
Traditional rent income: $1,611
Traditional rental COC: 3.53
5. Urbandale-Parkdale
Median price: $305,615
Airbnb occupancy rate: 61.67%
Airbnb average daily rate: $162
Airbnb monthly income: $2,287
Airbnb cash on cash return: 3.83
Traditional rent income: $1,430
Traditional rental COC: 2.6
Related: How to Evaluate a Neighborhood Before Investing
The Bottom Line
Some experts predict a Dallas real estate market crash due to the rate at which prices have risen in the Dallas real estate market. But with home construction ramping up, skyrocketing prices are bound to stabilize towards the end of the year.
Looking for the best deals in Dallas investment properties? check out Mashvisor’s property listings.
