Thanks to Steve Brown for the following news. Follow @SteveBrownDMN on twitter.
More good news was reported for the DFW real estate markets this week, particularly on the commercial real estate side. While Dallas area homes for sale inventory is at multi-year lows, DFW’s office vacancy rate is also at one of the lowest in decades – at just over 16% in December. While oil prices are the elephant in the room regarding Texas real estate forecasts, only 5% of DFW’s office growth has come from energy companies since 2010. Houston, on the other hand, had 80% of it’s office growth derive from the energy boom. DFW office rental rates are also at record highs, now averaging over $20 a foot, while those looking to rent an office in the Uptown area, are looking at about double that rate.
Economists expect sustained lower energy prices to cool the white-hot Texas jobs market, as Texas gained a record 441,200 jobs over 12 months ending in November 2014. They expect 140,000 fewer jobs to be created in 2015. This dip shouldn’t do much to slow down the Dallas area home builders though, as DFW home starts were up 30% in the 4th quarter of 2014. While 25,902 homes were started by Dallas – Fort Worth builders in 2014, that’s still just over half of the 48,000 homes that north Texas home builders started in 2006. Dave Brown, with Metrostudy, states that one new home should be added for every two new jobs created. Since most Dallas area home builders are concentrating on the $200,000 plus and upper end markets, sellers of existing homes are enjoying close to double digit home price increases. In fact, Houston and D-FW lead the nation.
On the more great DFW real estate news front, DFW industrial construction is at the highest in more than a decade, as the vacancy rate matches last years 5.8%. More than 15.3 million square feet is in construction. For comparison, just over a million feet was built in 2012.
Retail real estate is also humming along, thanks to the grocery business. Shopping center vacancy in Dallas – Fort Worth is now less than 10%. According to Herb Weitzman, of the Weitzman Group, grocers have accounted for about 75% of the new construction, with Walmart creating almost half of that total. The Walmart haters won’t like that!
Let’s hope for another great week in Dallas area real estate. It’s an owner’s market, but there are always opportunities for buyers. Call me if I can help you at 214-690-9682.
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