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In 2025, Dallas homeowners and buyers may start to notice the real estate market cooling off, with early signs suggesting a possible dip in home prices.
We're going to break down 11 key factors that could be at play, from higher inventory to changes in buyer demand. Join us as we explore what might be driving this shift in Dallas' housing market.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
1) Housing inventory is rising in Dallas, giving buyers more options and less urgency to purchase
When the number of active listings jumps as significantly as it has in Dallas—a 50% increase in one year—it typically indicates a slowdown in demand.
Higher inventory means there are more homes available than there are buyers eager to buy them. With more choices, buyers don’t feel the pressure to bid quickly or aggressively, which can lead to homes sitting on the market for longer and prices dropping as sellers compete for buyer attention.
This rise in inventory suggests that the market is shifting, with the balance moving away from sellers, which usually foreshadows a cooling in home prices.
Source: Benzinga
We created this infographic to show how property prices in Dallas compare to other big cities in Texas. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
2) Dallas homes are taking longer to sell, showing that buyer interest is slowing down
Homes are now staying on the market for over 50 days, which is significantly longer than we’ve seen in recent years.
This increase in "days on market" often happens when buyers become less active or more cautious, taking their time to decide. Longer listing times mean homes aren’t selling as quickly, which can lead to price reductions as sellers try to attract offers. It has been reported on Business Insider that some sellers in the Dallas area are being encouraged to slash prices by 20-30% to attract buyers.
If this trend continues, it could signal that the market is cooling down, with demand tapering off and buyers no longer in a rush to lock in properties.
Sources: Home Buying Institute, Business Insider
3) Sales volume is dropping in Dallas, which means there’s less demand for homes overall
With an 11.16% drop in single-family home sales volume, fewer homes are being bought.
When fewer transactions occur, it’s often a sign of decreasing buyer interest or affordability issues—either way, it cools the market.
A drop in sales volume can also lead to a self-reinforcing cycle: fewer sales can make sellers more nervous and likely to lower their prices, contributing to further price drops.
This reduced activity points to a less competitive market and suggests that the feverish demand we saw previously may be subsiding.
Source: Texas Real Estate Research Center
- Why Dallas' real estate market is not overvalued in 2025
4) Dallas home prices are falling, which indicates buyers aren’t willing to pay as much
A 1.2% drop in the median home price in Dallas may seem minor, but it signals a broader trend. Also, more than one-third of homes in Texas saw price drops in August 2024. Another report mentioned that median home prices in Texas have fallen around 7% from their mid-2022 peaks.
In real estate, consistent price appreciation is usually a sign of a strong, competitive market. When prices start to decline, as we’re seeing here, it suggests that demand is slowing and buyers are no longer as willing to pay top dollar.
This kind of price softening often happens when the market begins to shift from being seller-friendly to more balanced or even buyer-friendly.
If this decline in home prices continues, it could lead to more sellers reducing their asking prices, creating a snowball effect where buyers start to expect lower prices, further cooling the market.
Sources: U.S. News Real Estate, Business Insider
- Why Dallas' housing prices might fall in 2025
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5) Buyers have more negotiating power as Dallas homes sell below asking price
The current sale-to-list price ratio in Dallas at 97.1%—meaning homes are selling for 97.1% of their listing prices—shows that buyers are gaining more power in negotiations, as sellers are increasingly willing to accept offers below asking price.
In a hot market, homes often sell at or even above the listed price, as buyers compete and bid aggressively. But when the sale-to-list ratio dips below 100%, it usually signals a market cooling down, as sellers have to compromise more to close deals.
This shift toward buyers getting discounts on listing prices indicates a weakening in demand, where sellers don’t have the upper hand they once did. Buyers now feel less urgency to offer full price, knowing that they can negotiate for a better deal.
If this trend continues, it suggests a growing imbalance in the market, where there are more homes than eager buyers willing to pay top dollar, further reinforcing the idea that the Dallas housing market is in a cooling phase.
Source: Why Move To Dallas
6) Price per square foot is up in Dallas, suggesting buyers are opting for smaller, more affordable spaces
The increase in price per square foot might seem contradictory, but it actually suggests buyers are more cautious and selective, opting for smaller, less expensive homes to manage costs.
Paying more per square foot but for less space indicates that buyers are perhaps stretched financially or more focused on affordability, leading them to downsize.
This behavior can dampen overall market prices as larger homes take longer to sell or experience price cuts. This shift hints at a cooler market with more cautious, budget-conscious buyers.
Source: Texas Real Estate Research Center
7) Rental vacancies are stable, suggesting Dallas renters aren’t rushing to buy homes
While rental vacancy rates staying stable at 9.3% might seem neutral, it actually hints at a balanced rental market where tenants and landlords are in equilibrium.
This balance could mean that people are less inclined to buy homes, choosing instead to rent. In a booming housing market, rental vacancies would typically be lower as more people rush to buy.
With stable vacancies, there’s no immediate pressure driving renters to become homeowners, further reducing demand in the buying market and cooling off home prices.
Source: U.S. News Real Estate
Our team designed this infographic to show how competitive the real estate market in Dallas is vs. other major cities in Texas. It shows the percentage of sales above the list price, a key indicator of market competition.
8) Builder confidence is dropping in Dallas, indicating that builders expect lower demand
Builder confidence dropping by 15 points to 43 shows that builders are feeling less optimistic about future housing demand.
This lower confidence often translates to fewer new projects and slower development. Builders’ caution suggests they’re anticipating a slowdown in buyer interest and possibly lower prices.
When builders pull back, it often means they foresee reduced demand, reinforcing expectations that the market is cooling off.
Source: U.S. News Real Estate
9) Mortgage delinquencies are rising, hinting at financial strain among Dallas homeowners
A slight increase in mortgage delinquencies (up 0.2% to 3.9%) might sound small, but it’s a signal that some homeowners are feeling financial pressure.
As delinquencies rise, more properties might eventually enter foreclosure, which would add to housing inventory and put downward pressure on prices.
Rising delinquencies can dampen buyer confidence and make lenders more cautious, further cooling demand and the overall market.
Source: U.S. News Real Estate
10) Job growth is slowing in Dallas, meaning fewer new buyers are entering the market
A slower employment growth rate in Dallas, while positive, suggests a cooling economic environment.
With only a 1.51% increase in jobs, Dallas is seeing slower growth compared to previous years, which means fewer new residents with the financial means to buy homes. Employment is a key driver of housing demand, and with slower job growth, fewer people may be looking to purchase homes, leading to a cooler market overall.
This moderation hints that demand won’t be as strong as it was in past years, aligning with expectations for a cooling housing market.
Source: Texas Real Estate Research Center
11) Closed sales are decreasing in Dallas, which reflects lower buying activity
A 7% drop in closed sales means that fewer transactions are successfully making it to the finish line.
Lower closed sales could be due to tighter financial conditions, reduced demand, or affordability issues.
Whatever the cause, this decrease in final sales transactions is a clear signal of cooling market conditions, as fewer sales generally lead to a slowdown in price growth or even price declines, especially if inventory continues to rise.
Source: Real Wealth
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So, is Dallas' housing market cooling off in 2025? Yes, it is!
Dallas' housing market is cooling off in 2025, and here's why.
First, there's been a 1.6% decrease in median home prices from the previous year, showing that prices are stabilizing rather than skyrocketing. This is a sign of a market aligning with real demand and supply, not speculative growth. Additionally, the 50% increase in housing inventory means more options for buyers, easing competition and pressure on prices.
Moreover, the median home price in Dallas is $382,000, which is below the national median of $400,000, indicating that home values aren’t inflated beyond realistic purchasing power. The price-to-rent ratio of 17.08 also suggests a balanced market, where buying isn't significantly more expensive than renting.
Finally, the strong economic fundamentals, like 11.2% employment growth and a 3.7% population increase by 2030, support sustainable demand for housing. These factors, combined with low foreclosure rates and rising family incomes, show that Dallas' market is cooling off in a healthy way, reducing the risk of overvaluation.