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Not so fast with the gloomy forecasts for Dallas’ housing economy.
Yes, the local home market appears to be cooling after years of scorching hot sales.
And some analysts have suggested there’s a Dallas home price bubble getting ready to burst.
But a new forecast by Zillow says the market is likely to outperform the rest of the country in 2019 when it comes to home price gains and housing market health.
Zillow surveyed more than 100 real estate economists and investment experts for their take on the U.S. housing market and future home value growth.
According to Zillow’s research, markets in Denver; Washington, D.C.; Atlanta; Dallas; Las Vegas; Phoenix; and San Jose, Calif., are likely to outperform the rest of America in 2019.
“Denver, Washington, D.C., Atlanta and Dallas were named as the four markets most likely to outperform the national average rate of home value appreciation,” Zillow senior economist Aaron Terrazas said in the report. “All four were on Amazon’s final list of 20 candidate cities [for its second headquarters] before the retail giant selected the New York City and the Washington, D.C., metros to split the planned headquarters.
“Amazon is the gift that keeps giving, especially for the metros that competed to host its HQ2.”
The economists on Zillow’s panel said they expected U.S. home value to grow an average of 3.8 percent in 2019.
Homebuying is likely to be more challenging next year due to rising mortgage interest rates and continued price increases.
“Over the past few years, home prices have grown rapidly thanks in large part to rock-bottom, historically low mortgage interest rates that helped keep monthly mortgage payments low even as prices rapidly rose,” Terrazas said. “That is beginning to change, and price growth can be expected to show more sensitivity to interest rates as rates climb back to levels more in line with historic norms.
“A majority — 58 percent — of panelists said home values today were somewhat or much more sensitive to changing mortgage rates than in years past.”
North Texas home prices are about 5 percent higher in 2018 after several years of double-digit annual appreciation.
D-FW home prices were forecast to grow 4.3 percent next year in a recent Realtor.com report.
A recent study by Florida Atlantic University warned that Dallas and Denver could be in a home price bubble and are threatened with “pricing corrections in the near future.”
But local analysts don’t expect declines in home values in 2019.
Instead, they say the rate of home price gains and overall home sales are likely to moderate.