The best real estate investments are those in a location that enjoys a stable economy, high job and population growth, and a strong real estate market. The Dallas real estate market has ranked as one of the top real estate markets for the aforementioned reasons. Not only is the city attracting domestic real estate investors, but foreign as well. Canadian real estate investors, alone, invested over $326 million in North Texas in the past year. According to the National Association of Realtors forecast, moreover, the Dallas area will be one of the strongest real estate markets in the country. What is it about the Dallas real estate market that makes it stand out to real estate investors? Should you be buying an investment property in Dallas this year? What should you know about the Dallas housing market?
Related: 4 Reasons to Invest in the Dallas Real Estate Market
In this article, we will tell you all about the Dallas real estate market and why you should invest in it this year. We will then present you with data about Dallas’ best neighborhoods.
Dallas Real Estate Market
The Dallas real estate market is one of the top performing markets nationwide. The city continues to attract people to relocate and invest in it for the affordability of its housing market and living, overall. The pro-business environment and the amenities the city provides, moreover, continue to be the main reasons why many come to invest in Dallas real estate.
According to Zillow, the median home value in Dallas rose by nearly 8% in 2017. Furthermore, Dallas housing market predictions show the median home value will rise by another 4% through the end of 2018. While home values have been increasing in the Dallas real estate market, the rate they have been growing at has been slight and steady. We recommend that you invest in Dallas real estate before prices rise too high.
Home sales in 2018 have been 11% higher than they were last year. The number of homes listed for sale has, in addition, increased by 8% this year. According to real estate market analysis, some neighborhoods such as Oak Lawn and Garland have 25% more homes up on the market this year. The Dallas real estate market expects inventory to continue to increase this year. It is important to note that with the increasing interest rates, and number of homes listed on the market, home price gains are expected to be lower. Fortunately, however, shortages of supply will be mitigated.
Airbnb Dallas
Short term rentals have marked a success in Dallas. Last year alone, booked Airbnb listings grew by 34%, according to Dallas Business Journal. An online marketing platform connecting landlords and tenants together, Airbnb has and continues to flourish in Dallas real estate. As of January 2018, Dallas had more than 80,000 guests across 1,400 Airbnb rental properties. As compared to last year, this number has almost doubled. The increasing demand for Airbnb within the Dallas rental market can be contributed to two reasons: the large influx of tourists flowing into the city every year and the location of large headquarters that continue to host big events thus creating more demand for short term rentals.
Related: All You Need to Know About Dallas Investment Properties
Moreover, while Airbnb created a tax division a couple of years ago, the company now has been working out tax agreements with over 250 cities across the nation to mitigate such division. These agreements make Airbnb responsible for paying taxes. The company is currently working with the State of Texas to put these agreements in place, as they are expected to be effective in Texas this year. Given the exponentially increasing Airbnb growth rate, buying a rental property and investing in Airbnb will bring about a high return on investment. If you are buying a rental property this year, we recommend that you look into the Airbnb Dallas market.
Other Reasons Why You Should Invest in Dallas Real Estate Market in 2018
- Land: Located in the second largest state with an abundance of land, Dallas makes an attractive choice for real estate investors and developers. There’s still plenty of land available that you can buy and build your investment property on. If you don’t want to go through the hassle of construction, major construction efforts are also taking place. Developers are building more spaces to meet the increasing demand. Therefore, as a real estate investor, you will have more inventory to choose from.
- Low Cost of Living: Families and millennials continue to choose to settle in Dallas because of its low cost of living (including taxes) and abundant job opportunities. In fact, the strong economy, high salaries, and low cost of living continue to distinguish Dallas from other cities and make it a hot destination for many real estate investors.
- Low Crime Rate: What makes the Dallas real estate market more attractive to invest in is the fact that the city enjoys a low crime rate. Especially for families, a neighborhood that is safe makes an important factor in the decision making.
- Employment Growth: Analysts have concluded that Dallas ranks first among 12 other metropolitan cities in the country in both the rate of job growth and the number of jobs added over the year. Last year, employment witnessed a 3.4% growth, as compared to the national average standing at 1.6%. To sum up, Dallas makes a great place to start your real estate investing business.
- Rental Market: Dallas rental market is one of the most thriving. Last year alone, the demand for rentals, short and long term rentals, increased by 14%. This is because young people continue to move to Dallas and prefer starting out with rental properties before buying their own home. Therefore, the Dallas rental market makes the perfect opportunity to invest in.
Top Neighborhoods
To give you a better idea about Dallas neighborhoods, below we provide you with statistics about Dallas’ top performing neighborhoods. Consider the following neighborhoods if you want fruitful investments. Remember to do further neighborhood analysis when considering one.
City Center District
- Median Property Price: $451,167
- Airbnb Occupancy Rate: 56.61%
- Traditional Rental Income: $2,185
- Airbnb Rental Income: $2,737
- Airbnb Cash on Cash Return: 0.41%
- Traditional Cash on Cash Return: 0.07%
- Airbnb Cap Rate: 0.41%
- Traditional Cap Rate: 0.07%
Related: Everything to Know About Dallas Real Estate Investing
Oak Cliff
- Median Property Price: $541,021
- Airbnb Occupancy Rate: 59%
- Traditional Rental Income: $1,991
- Airbnb Rental Income: $2,727
- Airbnb Cash on Cash Return: 0.99%
- Traditional Cash on Cash Return: 0.25%
- Airbnb Cap Rate: 0.99%
- Traditional Cap Rate: 0.25%
Whether you are looking for short term rentals such as Airbnb rental properties, or long term rentals, Mashvisor will help you find a property to align with your goals. To start out your 14-day free trial with Mashvisor, click here.
Bottom Line
Although prices are increasing, home values in Dallas remain more affordable than many other major metropolitan cities. This year, in particular, more inventory will be available to buyers thus mitigating any shortage in supply. Take advantage of the strong economy, and rising population, and invest in Dallas real estate market today. Visit Mashvisor to explore the Dallas real estate market more and get to know about its neighborhoods.
