North Texas finished the year with strong December home sales. NTREIS data indicate home sales jumped 13 percent compared to the same time last year. Median home prices rose 5.1 percent, and average home prices in the Dallas-Fort Worth area rose 5.5 percent in December. The supply of homes for sale dropped about 7 percent to 25, 503 in December.
December provided another easy year-over-year comparison. At the end of 2018 the North Texas real estate market was experiencing a pronounced slump amid rising interest rates. There was also a big swan dive in the stock market in December 2018 adding serious uncertainty to the real estate market. The end of 2019 was the polar opposite after the Federal Reserve cut their benchmark interest rate 3 times in 2019 and resurrected massive liquidity injections to Wall Street banks during the last quarter of 2019.
Area home builders were still keeping a lid on new home prices in the Dallas-Fort Worth area. This, along with the big drop in mortgage interest rates, provided significant lift to the DFW real estate market in 2019.
Denton County managed to trounce the DFW averages with home sales jumping 25 percent for the month. Pending home sales were also up over 20 percent. Median home prices in Denton County rose 4.3% to $318,00 while average prices were 3.8 percent higher at $360,348.
The City of Denton also finished the year on a strong note with home sales rising 28 percent for the month. Median home prices in Denton rose 2 percent to $260,000, with average prices rising 1.3 percent to $273,620. The supply of homes for sale in Denton dipped to only 1.9 months, compared to 2.2 months in Denton County.
By all appearances is was a tremendous finish to an otherwise solid year for the North Texas real estate market. It was a particularly good year for Denton County as the area continued grow, with builders opening up more new developments. Denton County has made a strong contribution to growth in the DFW area with all of the new of new home sales.
The new year will likely be more sluggish by comparison. Being an election year, the Federal Reserve will likely be on hold in terms of policy. The notoriously political Wall Street backstop has to at least feign some appearance of their advertised apolitical stance.
In terms of the North Texas real estate market, 2019 provided a temporary reflation of area home prices back to near record highs in many DFW submarkets. The stimulus to demand provided by lower new home prices and dramatically lower interest rates also shrank the inventory of homes in the Dallas-Fort Worth area, temporarily reversing the mini correction we saw at the end of 2018.
With the easy year-over-year comparisons coming to an end, the North Texas real estate market will need to digest the Fed’s can-kicking policies and the multitude of distortions their policies have created. This will be no easy task. With asset prices (including North Texas Real estate) sitting at inflated levels, it will be a difficult balancing act. The good news for Denton County and North Texas is that pending home sales numbers suggest we will at least be able to start the year on a positive note. How we end the year is anyone’s guess.