Those who invested in the Dallas real estate market in 2019 enjoyed great success. But you haven’t missed out! The Dallas real estate market is projected to continue thriving in 2020. Experts named Dallas the 6th best market for overall real estate prospects and the 2nd best city in the Texas real estate market. It’s clear that the Dallas housing market forecast for 2020 is bright.
Let’s dive into the Dallas housing market forecast to fully understand why it’s so positive and why you should invest here. We’ll also name the top neighborhoods where you should invest in Dallas real estate so keep reading.
Related: 5 Texas Real Estate Market Trends to Expect in 2020
Dallas Real Estate Market: 2020 Trends
There are five real estate market trends that make Dallas a great place to invest in 2020:
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Traditional and Airbnb Dallas Rental Properties Will Be Lucrative
Investing in Dallas real estate rentals will be profitable in 2020. This is true for both traditional and Airbnb Dallas real estate investing. Mashvisor’s investment property calculator shows us that the average rental income for both types of properties is high in the Dallas real estate market:
- Average Traditional Rental Income: $1,925
- Average Airbnb Rental Income: $2,783
It’s important to keep in mind that these figures are merely averages. With Mashvisor’s investment property calculator, investors can easily find Dallas investment properties that generate above-average rental income! Start your search now.
Related: Investment Property Calculator for Analyzing Real Estate Investments
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Dallas Real Estate Will Have a High Appreciation Rate
Dallas real estate investors will benefit from high rental income and high property appreciation in 2020. Dallas house prices have had a recent history of high appreciation rates. According to NeighborhoodScout, properties in the Dallas real estate market appreciated by over 62% in the last 10 years. This placed the market in the top 10% for national real estate appreciation. This trend will continue in 2020. According to Zillow, Dallas real estate will appreciate by a whopping 5.2% next year.
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Airbnb Dallas Will Remain Legal in 2020
We’ve mentioned the profitability of Airbnb Dallas, but what about the local Airbnb regulations? Is Airbnb legal in Dallas and will it be in 2020?
There is no official regulation on whether or not Airbnb rentals are legal or illegal in the Dallas real estate market. Dallas is one of the few major cities without official Airbnb legal status. The only Airbnb regulations that hosts must abide by are paying a 7% Dallas Hotel Occupancy Tax and a 6% Hotel Occupancy Tax. Most importantly for Airbnb Dallas hosts, there are no restrictions on using non-owner occupied properties as Dallas short-term rental properties. This trend is expected to continue in 2020 as there has been no talk of a change in Dallas Airbnb laws. Airbnb Dallas real estate investors will continue to enjoy a friendly legal environment next year.
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The Dallas Real Estate Market Will Benefit From the City’s Growing Economy
Many of the positive Dallas housing market predictions tie in with the city’s strong economy. As the 4th best US metro economy (according to Business Insider), Dallas has the 4th highest GDP growth rate. The city’s job growth rate of 2.9% was tied for the third-highest among the 30 biggest metro areas. Its long-term job growth is very positive as well. Over the next ten years, the city’s job market is projected to grow by 45%. This is well over the US average of 33.5%. Speaking of the US average, Dallas’ unemployment rate of 3.6% is below the 3.9% US average. The city’s economic growth and prosperity will persist in 2020, which will undoubtedly benefit its rental market.
Related: Job Growth And Its Effects on the US Housing Market
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There Will Be High Demand for Dallas Real Estate
The Dallas real estate market will attract investors in 2020 according to the PwC Emerging Trends in Real Estate 2020 report. As mentioned previously, Dallas is ranked 6th for overall real estate prospects and is the 2nd highest in the Texas housing market, behind the Austin real estate market.
Demand for Dallas real estate investment rentals will also be high. This is because 59% of the city’s residents reside in a Dallas rental property. So buying an investment property in Dallas, you will find demand whether you wish to sell it before the end of the year or rent it out for years to come.
Even with the high demand, the Dallas real estate market will be a cool buyer’s market in 2020. This is in part because of the forecast for increased supply. The PwC reports that Dallas is 9th nationwide for homebuilding prospects. So while the US housing market will be a seller’s market, the Dallas rental market will harbor favorable conditions for buyers.
The Best Neighborhoods in Dallas for the Traditional Rental Strategy
Now that we’ve covered why you should invest in Dallas real estate, we can discuss where to invest in real estate. These are the best neighborhoods for traditional real estate investing, according to Mashvisor:
Near East
- Median Property Price: $358,246
- Price per Square Foot: $252
- Price-to-Rent Ratio: 10
- Traditional Rental Income: $2,871
- Traditional Cap Rate / Cash on Cash Return: 6.1%
Five Mile Creek
- Median Property Price: $203,876
- Price per Square Foot: $129
- Price-to-Rent Ratio: 13
- Traditional Rental Income: $1,280
- Traditional Cap Rate / Cash on Cash Return: 1.7%
Southeast Dallas
- Median Property Price: $172,855
- Price per Square Foot: $118
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $1,219
- Traditional Cap Rate / Cash on Cash Return: 1.5%
Dells District
- Median Property Price: $250,059
- Price per Square Foot: $175
- Price-to-Rent Ratio: 14
- Traditional Rental Income: $1,516
- Traditional Cap Rate / Cash on Cash Return: 1.3%
The Best Neighborhoods in Dallas for the Airbnb Rental Strategy
As it pertains to the Airbnb Dallas real estate market, we highly suggest investing in these neighborhoods:
Southeast Dallas
- Median Property Price: $172,855
- Price per Square Foot: $118
- Price-to-Rent Ratio: 12
- Airbnb Rental Income: $2,299
- Airbnb Cap Rate / Cash on Cash Return: 5.2%
- Airbnb Occupancy Rate: 55.3%
Five Mile Creek
- Median Property Price: $203,876
- Price per Square Foot: $129
- Price-to-Rent Ratio: 13
- Airbnb Rental Income: $1,986
- Airbnb Cap Rate / Cash on Cash Return: 3.5%
- Airbnb Occupancy Rate: 44.3%
Southwest Dallas
- Median Property Price: $270,663
- Price per Square Foot: $143
- Price-to-Rent Ratio: 17
- Airbnb Rental Income: $2,363
- Airbnb Cap Rate / Cash on Cash Return: 3.4%
- Airbnb Occupancy Rate: 62.3%
Dells District
- Median Property Price: $250,059
- Price per Square Foot: $175
- Price-to-Rent Ratio: 14
- Airbnb Rental Income: $2,437
- Airbnb Cap Rate / Cash on Cash Return: 3.2%
- Airbnb Occupancy Rate: 56.8%
The Bottom Line
Is Dallas a good place to invest in real estate in 2020? It absolutely is! The Dallas real estate market is projected to be one of the best markets nationwide in 2020. To get started searching for Dallas homes for sale, CLICK HERE to start your FREE 14-day trial with Mashvisor!
