The residential real estate market in the Dallas region has held strong, says Chris Westrom. Westrom, Texas General Manager at Opendoor, sees that continuing into 2021. Market indicators are continuing to improve, even though they typically start slowing this time of year, he said in a recent interview.
Why the flurry of activity? Mainly because Dallas is a highly desirable place to live, especially for people focused on business, he says.
“Dallas is extremely business-friendly and is one of the largest corporate headquarters concentrations for a variety of industries,” Westrom said. The region also boasts entrepreneurial opportunity and ranks as one of the best places for college graduates to start a career
An Opendoor survey in August indicated 53 percent of people said the pandemic influenced their decision to relocate. While summer is traditionally the peak season for residential home sales in the U.S., a few markets, including Dallas, are still very active, according to Westrom.
Opendoor also released the most popular neighborhoods for homebuyers in Dallas-Fort Worth in early November. Tarrant, Arlington, Frisco, and Denton were some of the hottest spots in the region for home shoppers, according to the data.
According to Opendoor data, ZIP codes in Southeast Arlington (76002), McKinney (75072), Watauga (76137), Arlington (76001), Saginaw (76179), Fort Worth (76120), Corinth (76210), Keller (76248), White Settlement (76108), and Frisco (75033)—saw the most interest with actual in-home visits to its owned properties from prospective buyers during the four months of June, July, August, and September 2020
Westrom attributes the Dallas-Fort Worth activity partly to increasing job opportunities. “We’ve experienced less unemployment compared to other cities across Texas,” he said. Along with DFW’s lower cost of living, which housing affordable for many buyers to get more space and land, Westom said, “there’s plenty of family activities, a diverse nightlife, and an amazing food scene.”
Still, with the uncertainty in the economy, Westrom says, “innovation and adaptation are the keys to success” right now. Here’s his take on the state of the residential market.
What’s the outlook for DFW residential real estate into 2021?
The residential real estate market in the Dallas metro area has held very strong—much stronger than we’ve experienced even in recent years. Right now, homes are selling quickly and at higher prices.
Market indicators, which take days on market and appreciation into consideration, are continuing to improve, even though they typically start slowing this time of year. As we head into 2021, I believe this strong market will continue.
Given the pandemic and pressure on our economy, there will continue to be uncertainty and things could change quickly. And with the holidays approaching, it’s unclear what the impact will be. Historically the market slows down in December, but this year has been highly atypical, so it’s tough to predict.
How does that compare to the national outlook?
Nationally, the market remains strong, but we are starting to see some cities begin to slow down, which is normal for this time of year. Dallas is above average.
What opportunities and challenges do you see ahead for residential development?
I see two opportunities. The first is tied to financing. This year, mortgage rates have reached historic lows, and the Federal Reserve announced plans to keep them low through 2023. As a result, more homebuyers are entering the market and experiencing stronger purchasing power, enabling them to afford more home than they could otherwise.
The second opportunity is continued innovation in the real estate industry. With safety as a top priority, technology has helped make certain aspects of the transaction safe and contact-free. When it comes to buying homes, virtual and self-tours are gaining popularity. In an August 2020 Opendoor survey, we found twice as many homebuyers felt more comfortable touring unoccupied homes compared to occupied ones. Realtor.com found in a May 2020 survey that 65 percent of homebuyers believe that virtual tours will continue to be a great resource even after the pandemic.
The real estate market will also have some challenges ahead. I anticipate we’ll continue to see low home inventory with high buyer demand. There has been limited availability of building materials, especially lumber, that is causing delays in new home construction and renovation projects. As a result, the prices for new homes and projects are rising.
Continued uncertainty from the global pandemic is another major factor. Things could change quickly. Nobody knows for sure what will happen to the housing market and economy at large, making forecasting and predicting the future very difficult.
What changes in the residential market are you seeing as a result of the pandemic and which ones do you expect to remain long term?
In the residential market, I expect we’ll continue to see a decreased supply of new housing inventory. This is likely driven by homeowners waiting to put their homes on the market or delaying due to health concerns—risks of people coming through the home for showings, open houses, etc. I don’t expect this will be a long-term factor, but it may take a while until people feel more comfortable.
Working from home has also become more commonplace, so people are looking for more space in suburban areas, since they may not be tied to city centers as much. An Opendoor survey from August 2020 found 32 percent of respondents listed their job allowing them to work remotely full or part-time as a reason for moving. And I expect people will continue to flock to new cities or suburbs, even post-pandemic.
Lastly, buyers are searching for homes with different priority features compared to previous years. For example, home offices and backyard spaces have become more important, when they may have been less dominant pre-pandemic. I predict these preferred features will continue to be on the top of buyers’ lists long term.
How would you advise those in residential real estate to manage these changes and the widespread uncertainty in the economy?
My advice is to continue to put your clients and customers first. Understand their needs, goals, and risk tolerance as you develop a plan to best serve them. It’s important to stay informed about current trends, both market and sub-market, and leverage data when possible. Remain flexible, knowing that things could change quickly, and be willing to react and change certain aspects of how you do business if needed. Innovation and adaptation are the keys to success.
A version of this story first published in the Fall 2020 edition of the Dallas-Fort Worth Real Estate Review.
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