A Blog From Nicholas Brown
Dallas-Fort Worth remains one of the hottest markets in the nation. As we get closer to the end of Q3 2017, DFW is holding strong as a top 10 market for employment growth. Total non-farm employment growth is over 3%, and showing no signs of slowing down, as corporations such as Boeing and Toyota continue to relocate into the area. Job and population growth in North Texas bolster continued demand for rental housing. “We add 90,000 to 100,000 people a year in Dallas,” says Steve Bancroft, senior managing director of Dallas-based Trammell Crow Residential. “It’s like adding a Frisco every 18 months.”
According to Zillow, the average list price of a home in DFW is $314,250, and Zillow predicts that number to grow by over 4% within the next year. The job growth combined with the continually rising cost of home-ownership has laid the groundwork for some of the best investing fundamentals in the world.
With such a high percentage of people choosing to rent, this has led to an overall occupancy rate of 95.5%. With occupancy holding strong, rents have increased by 8.8%, across all asset classes, since January 2016. The highest performing submarket is East Arlington, with an average rent of $900 and a YOY rent growth of 11.8%.
One could argue that the construction cycle in DFW has peaked. Rising construction costs have led to a sharp decline in projected completions by the end of 2018. Class A rents are at an all-time high for North Texas. History has shown that this is when the emphasis really shifts to the class B and C markets. Renters in these situations have a tendency to seek more affordable options, which creates more demand for class B and C apartments. This is exactly why we are seeing double digit rent growth in many Dallas and Fort Worth submarkets, and occupancy rates above 96% in those same areas. This is really a perfect storm for investors who specialize in class B and C value-add.
The high rate of job and population growth in Dallas-Fort Worth not only bodes well for the area as a whole, but for the apartment sector, it means continued demand in an already high-demand market.
Nicholas Brown (BIO) is an Advisor with Greystone Investment Sales Group in Dallas, TX. If you want to learn more about our Single-Family Rental Portfolios, Multi-Family, and Land listings or to request a free Property Valuation, please contact our office: