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In Dallas, some of the city's most affordable neighborhoods have seen remarkable growth in recent years. In fact, prices in these areas have skyrocketed, with some quadrupling, making affordable housing an increasingly valuable asset.
Today, the median home price in Dallas has climbed from $133,300 in 2018 to nearly $400,000, with an estimated shortfall of about 60,000 affordable homes. This increase highlights a growing demand that outpaces supply, affecting affordability for many residents.
Yet, despite rising prices and demand, the Dallas market remains stable and far from overvalued. In the following, we’ll break down why this market is still a solid investment opportunity.
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) Over the last decade, the Dallas market has been growing at healthy and steady rate (8.28% on average)
The steady, long-term appreciation of 121.62% in Dallas over the past decade, averaging 8.28% per year, shows that the market has been growing at a healthy, steady rate—not in an explosive or risky way.
This kind of gradual growth is actually a good sign that the market isn’t overvalued. Instead of a quick, unsustainable rise, this pace reflects real demand and stability, backed by factors like job growth and population increases.
It’s proof that Dallas’s market has solid fundamentals, making it a strong, sustainable investment rather than one driven by hype.
Source: Norada Real Estate
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2) Home prices are actually stable in Dallas (-1.6% decrease)
As of September 2024, the median home price in Dallas was $413,000, reflecting a 1.6% decrease from the previous year.
This slight decline indicates that home prices are stabilizing rather than escalating uncontrollably, suggesting the market is not experiencing unsustainable growth.
Such stability reflects a market that is aligning with genuine demand and supply, not one driven by speculative or inflated growth.
Also, currently, we see modest projected declines (-0.3% by mid-2025), rather than dramatic corrections.
Sources: Redfin, Norada Real Estate
- Why Dallas' housing prices might fall in 2025
3) The population growth (+3.7% by 2030) will drive greater demand for real estate in Dallas
Dallas and the DFW metroplex are both showing strong population growth projections.
For the City of Dallas, the population is expected to grow from 1,358,309 in 2025 to 1,409,234 by 2030, which marks a steady 3.7% increase over five years.
Meanwhile, the DFW metroplex is projected to grow even faster, from 7,805,459 in 2023 to 8,479,851 by 2028—an impressive 8.64% rise. This makes DFW the fifth fastest-growing large metro area in the country, showing a clear trend of expanding population and increased demand in the region.
This high population increase is indicative of a sustainable demand for housing and commercial properties, reducing the risk of overvaluation.
Sources: Aterio, Dallas Express, Culture Map
4) Family incomes in Dallas have grown by 9.4%, while home prices have risen by only 5.6%
The Dallas-Fort Worth-Arlington housing market saw steady yet moderate price growth in both median and first-quartile home prices, at 5.6 percent and 4.7 percent year-over-year, respectively.
This stability, combined with a substantial 9.4 percent increase in family income, indicates that rising income levels have largely kept up with housing costs, helping to mitigate the affordability squeeze for buyers.
This shows that home prices in Dallas are not artificially high but reflect real demand and household purchasing power. This steady, fundamental growth indicates the market is solid, without signs of overvaluation.
Source: Texas Real Estate Research Center
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5) The Dallas metro area's price-to-rent ratio is 17.08, indicating a balanced market between buying and renting
The price-to-rent ratio of 17.08 in the Dallas metro area is a positive indicator.
When this ratio is too high, it often signals that buying is far more expensive relative to renting, which can point to an overvalued housing market.
In Dallas, this balanced ratio shows that property prices are in line with rental values, meaning buyers aren’t paying a heavy premium over what they’d pay in rent. It’s a healthy sign for both potential buyers and investors, as it suggests that the housing market isn't inflated and is sustainable for the long term.
In short, with a ratio like this, people can feel more confident that they’re investing in a Dallas market that offers value without the risk of a price bubble.
Source: RealWealth
6) Retail spaces in Dallas-Fort Worth are in high demand, with only 4.5% of them sitting empty (#1 in the country)
The Dallas-Fort Worth (DFW) retail sector is unlikely to be overvalued, as shown by the exceptionally low vacancy rate of 4.5%, coupled with the highest net absorption rate of any U.S. market.
The low vacancy rate indicates that retail spaces are not sitting idle, which often suggests a balanced market where demand matches or exceeds supply. High net absorption further supports this, showing that more retail space is being leased and retained by businesses, which implies long-term commercial viability.
This consistent demand and absorption without significant excess supply highlights the underlying strength of the retail market in DFW, making it less likely to be overvalued.
Source: MD Real Estate
7) Dallas has been ranked as the top U.S. commercial real estate market for 2025
Dallas has been ranked as the top U.S. commercial real estate market for 2025, according to PwC and the Urban Land Institute. It has also been ranked top 10 market ranking for six consecutive years.
This reflects the city’s strong economic rebound since the pandemic, backed by its diverse industry base, steady employment growth, and impressive property performance. Dallas offers a variety of high-quality industrial spaces, with thoughtful new builds that cater to future demand, like sustainable facilities with flexible features. The result? Strong annualized returns of 7.9% over five years and 8.8% over ten years in the Dallas commercial real estate market.
The demand for data centers is also soaring (as shown in another part of this article), and Dallas is well-positioned with low vacancy rates, a sign of strong market fundamentals.
This all, with the other data point shown in this article, shows Dallas’s real estate market is growing at a sustainable rate, supported by actual demand rather than speculative pricing.
If you want to buy a property there, feel free to use our real estate spreadsheet tailored to Dallas real estate market.
Sources: PwC, DMagazine, Texas Standard
- Why Dallas claims the #1 spot in real estate for 2025
8) In the Dallas-Fort Worth-Arlington area, there are now 50% more homes available for sale compared to last year
A 50% increase in housing inventory in Dallas means more options for buyers, easing competition and pressure on prices.
High inventory levels help prevent excessive price growth and are a sign that the market is cooling off from previous highs, reducing the risk of overvaluation.
Source: US News Real Estate
9) In Dallas, very few people (less than 1%) are losing their homes because they can’t pay their mortgages
Low foreclosure rates (below 1%) indicate that Dallas homeowners can afford their mortgage payments, reflecting a stable market where housing costs are within buyers’ financial reach.
This suggests responsible lending practices and minimal speculative buying, as low foreclosure numbers imply people are purchasing homes to live in rather than for short-term investment.
The absence of widespread financial strain among homeowners supports the idea that home prices are growing at a sustainable pace, aligned with local wages and economic conditions, reducing the risk of an overvalued market.
Source: National Association of Realtors
10) Dallas shows an exceptional economic strength, wih +11.2% employment growth
The Dallas region's strong economy, with an impressive 11.2% job growth since February 2020, shows there’s a solid demand for workers, which, in turn, is boosting both population and income levels.
This creates more demand for housing, as more people want to settle here, supporting property values in a sustainable way rather than driving them up to risky levels.
Dallas' fourth-place ranking in U.S. metro job growth—right after Raleigh, Charleston, and Austin—shows a trend: real estate values in Dallas are driven by genuine demand, with rising employment and income supporting sustainable prices, not overvaluation.
Sources: DallasFed, TheRealDeal
- Why investing in Dallas residential real estate in 2025 is a good idea
11) The median home prices ($382,000) in Dallas is below the national median of $400,000
Despite strong demand, Dallas’s median home prices ($382,000) remain affordable compared to the national average ($400,000).
This balance between growth and affordability indicates that home values aren’t inflated beyond realistic purchasing power.
Actually, Dallas is seeing a steady supply of housing and has a well-managed development pipeline, ensuring prices are not artificially driven up by shortages.
Source: TheRealDeal
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12) The Dallas data center market ranks #4 nationally with just 1.4% vacancy rate
Data centers are a critical, high-value property type that tends to attract stable tenants with long leases. This brings steady income, which supports sustainable property values rather than inflating them based on short-term trends.
Dallas's data center market ranking #4 nationally (some sources say #2), with only a 1.4% vacancy rate, is a good sign then.
A strong data center market means Dallas is attracting businesses needing tech infrastructure (like Google, who is investing in a second Texas campus in Red Oak area, with initial investment of $330 million), potentially rising to over $600 million, boosting the overall economy. This foundation keeps property prices at realistic, supported levels. No bubble, then.
Sources: DMagazine, DataCenterDynamics, New York Post
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So, is Dallas' property market overvalued? Not really!
Dallas' property market is not overvalued, and here's why. The city has experienced a steady growth rate of 8.28% on average over the past decade, which is a healthy sign of stability rather than a risky boom.
Home prices have actually decreased slightly by 1.6% from the previous year, indicating stabilization rather than unsustainable growth. This aligns with the genuine demand and supply dynamics, not speculative or inflated growth.
Moreover, the population in Dallas is projected to grow by 3.7% by 2030, driving sustainable demand for real estate. This growth supports property values in a sustainable way, reducing the risk of overvaluation.
Family incomes in Dallas have grown by 9.4%, while home prices have risen by only 5.6%. This balance shows that rising income levels have largely kept up with housing costs, indicating that home prices reflect real demand and purchasing power.
Additionally, the price-to-rent ratio in Dallas is 17.08, suggesting a balanced market between buying and renting. This means property prices are in line with rental values, indicating a sustainable market without the risk of a price bubble.