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Old 07-14-2016, 07:14 AM
 
Location: The Windy City
5,332 posts, read 3,931,309 times
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Is the DFW area becoming less affordable?

I'm wanting to buy a house in the next few years and I've seen homes which sold for $150K-$200K are now selling for almost double that price. It's really hard to find a decent home in my price range in Arlington, Mansfield, and HEB areas.

My apartment rent has gone from $750 to $900 in just a few years. Next year I'd imagine I'll be paying around $1000 for a 1br.

This is all in Arlington, which is one of the not-so-desirable parts of the metro.

I guess it seems like the area is no longer affordable to my budget. I wonder if this is a rent and housing bubble or if prices will keep hiking like this for a long time?
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Old 07-14-2016, 08:08 AM
 
Location: North Texas
24,571 posts, read 35,600,574 times
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Quote:
Originally Posted by lepoisson View Post
Is the DFW area becoming less affordable?
Definitely.

Quote:
I guess it seems like the area is no longer affordable to my budget. I wonder if this is a rent and housing bubble or if prices will keep hiking like this for a long time?
I don't see prices continuing to increase at this rate for much longer...call it a gut instinct. I think prices will keep going up but not at the same rate as they have over the last few years.
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Old 07-14-2016, 08:26 AM
 
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I agree that prices will keep going up, but at a much slower rate. Some analysts have predicted a that Dallas is in a bubble, but it's hard to ever tell for sure.
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Old 07-14-2016, 08:45 AM
 
Location: The Windy City
5,332 posts, read 3,931,309 times
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Quote:
Originally Posted by aggie972 View Post
I agree that prices will keep going up, but at a much slower rate. Some analysts have predicted a that Dallas is in a bubble, but it's hard to ever tell for sure.
I guess we'll never know until a bubble bursts. I do think that the rent price increases will slow down soon.

I find it hard to believe that people will pay over $1000 a month for a nothing-special 1br apartment in Arlington. I know I will not.
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Old 07-14-2016, 09:06 AM
 
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Yes, of course Dallas is getting more expensive. There are 24% MORE people in the metroplex than there were 10 years ago. Home prices have gone up 30%ish since 2009. But I wouldn't call it a bubble. The DFW area has transformed into a major national economic powerhouse in the last decade. With that, come more jobs, more people, and upward pricing pressure due to demand. I think the rate of appreciation will settle down soon, but I don't think those $300k homes are ever going to be $200k again, nor will it ever be possible to buy new construction under $200k again. That DFW doesn't exist anymore.
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Old 07-14-2016, 09:34 AM
 
Location: Richardson, TX
164 posts, read 208,084 times
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Quote:
Originally Posted by TurtleCreek80 View Post
Yes, of course Dallas is getting more expensive. There are 24% MORE people in the metroplex than there were 10 years ago. Home prices have gone up 30%ish since 2009. But I wouldn't call it a bubble. The DFW area has transformed into a major national economic powerhouse in the last decade. With that, come more jobs, more people, and upward pricing pressure due to demand. I think the rate of appreciation will settle down soon, but I don't think those $300k homes are ever going to be $200k again, nor will it ever be possible to buy new construction under $200k again. That DFW doesn't exist anymore.
Agreed - the "bubbles" of the previous decade were caused by irresponsible loans (interest-only mortgages, ARMs with crazy variable rates) and irresponsible lending (you're self employed and get paid all cash under the table? Sounds good to us, here's your check for $400K). I have sympathy for those affected, I had a lot of family in areas where these bubbles popped. The mindset at the time was that RE prices would go up forever and if they didn't buy as soon as the possibly could, even if they didn't have the money or qualifications to do it, they'd never be able to live the American dream of home ownership.

What is contributing to housing price increases here is a continuous influx of population and business. As of 2013, DFW had more than 1,500 corporate headquarters and ranked 4th in the nation for metropolitan areas in that regard. Realistically, the Dallas of the late 2000s/early 2010s was very underpriced and in about 2012/2013 it began to catch up. I do think we will see prices stabilize and will only see more modest appreciation over the next several years, but the real estate economics of DFW needed an adjustment, which it got.

To answer your question: DFW started to become less affordable about 3-4 years ago. It's still very affordable when compared to LA, SF, NYC, Miami, and other big metro areas. However, instead of being priced like Des Moines or Kansas City as we were 10-15 years ago, we're priced more like Chicago. In many ways Dallas probably IS the Chicago of years past as far as size, economy, and influence. I moved here in 2005 and it's been a heck of a thing to watch unfold before my eyes.
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Old 07-14-2016, 09:34 AM
 
16,931 posts, read 2,152,702 times
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Quote:
Originally Posted by lepoisson View Post
I guess we'll never know until a bubble bursts. I do think that the rent price increases will slow down soon.

I find it hard to believe that people will pay over $1000 a month for a nothing-special 1br apartment in Arlington. I know I will not.
Do you remember when gas was a dollar? Folks said they would never go on vacation at 2.50.
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Old 07-14-2016, 09:46 AM
 
Location: The Windy City
5,332 posts, read 3,931,309 times
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Quote:
Originally Posted by LookingInRichardson View Post
To answer your question: DFW started to become less affordable about 3-4 years ago. It's still very affordable when compared to LA, SF, NYC, Miami, and other big metro areas. However, instead of being priced like Des Moines or Kansas City as we were 10-15 years ago, we're priced more like Chicago. In many ways Dallas probably IS the Chicago of years past as far as size, economy, and influence. I moved here in 2005 and it's been a heck of a thing to watch unfold before my eyes.
Dallas is a nice place to live, but I would NEVER pay Chicago prices for housing here. And I would hope that DFW prices never approach that amount.

Quote:
Originally Posted by Threestep View Post
Do you remember when gas was a dollar? Folks said they would never go on vacation at 2.50.
I remember those times. But gas prices went up across the entire country. There is/was really no way of avoiding it.

However, it's alarming to me that housing prices keep skyrocketing here, yet salaries stay the same. What happens to all of the people who are here and can afford $1000 rent or a $175,000 home, but cannot afford $1500 rent or a $250,000 home (like myself)? My guess is that these people will simply leave and that the influx of people will slow as housing keeps increasing. I guess this will make prices more stable.

I moved here from Kansas City to get into a different field. I got a small salary increase. But now that I think about it, I probably lost money because I am paying $900 for rent instead of $700.

I've come to accept the fact that I will never be able to own a home here unless I get a salary increase, or find a better paying job.

I guess the alternative is just to move somewhere where the cost of living is more stable and affordable.
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Old 07-14-2016, 09:50 AM
 
Location: North Texas
24,571 posts, read 35,600,574 times
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Quote:
Originally Posted by lepoisson View Post
I remember those times. But gas prices went up across the entire country. There is/was really no way of avoiding it.

However, it's alarming to me that housing prices keep skyrocketing here, yet salaries stay the same. What happens to all of the people who are here and can afford $1000 rent or a $175,000 home, but cannot afford $1500 rent or a $250,000 home (like myself)? My guess is that these people will simply leave and that the influx of people will slow as housing keeps increasing. I guess this will make prices more stable.

I moved here from Kansas City to get into a different field. I got a small salary increase. But now that I think about it, I probably lost money because I am paying $900 for rent instead of $700.

I've come to accept the fact that I will never be able to own a home here unless I get a salary increase, or find a better paying job.

I guess the alternative is just to move somewhere where the cost of living is more stable and affordable.
We're exploring our options as well. (Mostly we want out of north Texas because of the weather and overcrowding, not the cost of living.)

I don't think there's going to be a mass exodus out of here though. The job market here is better than many other cities and it keeps people here despite decreasing affordability. I think it'll have to get really bad before companies stop relocating here.
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Old 07-14-2016, 09:59 AM
 
12,449 posts, read 24,109,246 times
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Quote:
Originally Posted by lepoisson View Post
However, it's alarming to me that housing prices keep skyrocketing here, yet salaries stay the same. What happens to all of the people who are here and can afford $1000 rent or a $175,000 home, but cannot afford $1500 rent or a $250,000 home (like myself)? My guess is that these people will simply leave and that the influx of people will slow as housing keeps increasing. I guess this will make prices more stable.
Yes, that stinks, but it's exactly what happens. There are millions of people who once lived in Manhattan, Brooklyn, San Francisco, etc who were priced out of their neighborhoods and/or cities as prices escalated. We ended up in our neighborhood because we were priced out of our first choice neighborhood back in early 2013. It happens.

Prices are dictated by market demand. So if you won't renew your apartment lease for $1000, but someone else does, the apartment is worth $1000, regardless of whether you agree or can afford it. If no one will pay $1000, then the landlord will cut the price until he finds the market. In 2015, DFW's net population gain was almost 145,000 people. There are still far more people moving in than moving out.
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