Fort Worth’s real estate landscape this spring has navigated through challenging elements, with rising interest rates tempering demand amidst a deficit of properties for sale. Even though price inflation has seen some easing, concerns about affordability persist. Complications over the country’s debt ceiling and the specter of an approaching economic downturn add to the mix. Yet, the residential property market in the Metroplex has demonstrated its toughness, with prices maintaining a steady ascent, albeit below the previous year’s levels as of May.
There’s been an impressive 47% increase in active listings in Fort Worth and Tarrant County, and over a 100% rise in the adjacent Parker County, as per data from the Greater Fort Worth Association of Realtors. Home sales in Fort Worth during May remained nearly on par with the prior year’s numbers. It begs the question: given the economic ambiguities of 2023, what sort of tremor could instigate a full-scale collapse in North Texas’ housing market?
Chris Kelly, the CEO of the Ebby Halliday Companies, posits one theory. He suggests that such a downturn could only be triggered by a particularly harsh and deep recession leading to skyrocketing unemployment rates and consequent distressed property sales outnumbering the population inflow to North Texas. While Kelly admits that such a scenario is possible, he deems it highly unlikely considering the current economic health of North Texas.
The Federal Reserve has raised interest rates consistently for several months in a bid to regulate spending and inflation. Opinions amongst economists are mixed; some argue a recession is not on the cards, while others predict a mild one could result in further layoffs and reduced expenditure.
In the event of a recession, Kelly and other experts agree it would be a moderate one without high unemployment reminiscent of the 2008 financial crisis. North Texas would weather the storm better than the rest of the U.S. due to its robust and varied economy and healthy population growth.
Deputy Chief Economist and Director of Forecasting at RealPage, Arben Skivjani, anticipates a mild recession at the worst, possibly towards the year’s end. Skivjani underscores that the strength of the economy is sometimes more perception than actuality. Uncertainty stemming from factors like the debt ceiling and international conflicts can influence people’s comfort levels and spending habits.
Mark Dotzour, former Chief Economist at Texas A&M’s real estate center, firmly believes that the North Texas housing market will hold firm. He cites the current lack of inventory as the primary reason.
Under normal circumstances, the housing market possesses around six months of listings to match current buyer demand. Currently, North Texas falls short of that standard. As of May, Fort Worth only had two months of inventory, indicating a still competitive buyer’s market. Dotzour suggests a shift towards a buyer’s market would only happen if supply ballooned to 10-12 months, causing a drop in home prices.