The Dallas Housing Market Area (HMA) in northeast Texas includes Collin, Dallas, and Denton Counties. Each county is treated as a separate submarket in this analysis. The city of Dallas is the 10th largest city in the nation, with more than 1.2 million people. Seven other cities in the HMA have a population of more than 100,000 each, including Plano, in southern Collin County, with a population of 250,000; Denton, in Denton County, with a population of 104,000; and five other cities in Dallas County with a population of more than 100,000.
 

Summary

The Dallas HMA is undergoing an economic recovery. Following a period of slow growth and job losses in several sectors between 2001 and 2003, job growth in Collin County returned to double-digit levels in 2005. During the past 12 months, the increase in jobs in Collin County totaled 32,300 or 15 percent. In Denton County, the number of jobs increased by 13,100 or 10 percent. During the same period, Dallas County recorded an increase of 3,700 jobs, following a loss of more than 100,000 jobs from 2000 to 2005. Overall, the number of jobs in the HMA has nearly reached the 2001 level. An important economic driving force in the Dallas area is the Dallas/Fort Worth International (DFW) airport. Located on more than 18,000 acres, the airport is home to businesses that employ more than 75,000 people and contribute more than $14 billion annually to the area economy. The airport is close to both Collin and Denton Counties. Both counties and the downtown Dallas area are expected to continue to be strong growth centers in the HMA during the forecast period.

Sales Market

The home sales market in the HMA, which has been robust for the past 5 years, recorded more than 61,000 sales during the 12 months ending March 2006, 10 percent higher than the 55,500 sales in the previous 12-month period. For the past 12 months ending March 2006, the average home sales price was $204,250, an increase of 4.5 percent compared with $195,500 for the 12 months ending March 2005. Recent interest rate increases have slowed the gains in the number of homes sold, but the annualized home sales rate has been above 60,000 for the past 3 months. As interest rates are forecast to continue to increase, sales are expected to continue to decrease, but not significantly, because of continued employment growth.

Economic Conditions

Between 1990 and 2000, nonfarm employment in the Dallas HMA increased by 59,000 jobs annually, or more than 3 percent, to approximately 1.85 million jobs in 2000. Since 2000, the HMA has recorded a net decrease of more than 3,100 jobs annually.  The 2001 recession significantly affected the HMA with a loss of 80,000 jobs between 2001 and 2004, including losses of 27,000 jobs in the information sector and 28,000 in the trade sector. In 2002 and 2003, job growth slowed significantly in Collin and Denton Counties. Between 2000 and 2005, Dallas County lost more than 130,000 jobs, including losses in every sector except government. An economic recovery began in 2004, with an annual job increase of 7.9 percent in Collin County and 3.7 percent in Denton County. Dallas County has continued to lose jobs but at a much slower rate each ear since 2003. The most significant employment growth during  the past 12 months occurred in Collin and Denton Counties. In Collin County, the number of jobs increased by 32,300, or 15 percent, to 250,300. Although all sectors recorded increases, the greatest increases were in the trade, financial activities, and professional and business services sectors. Mixed-use town centers, business parks, and residential development are spurring growth in Collin County, where a number of major corporations are headquartered, including Dr.Pepper/Seven-Up, Electronic Data Systems Corporation, Frito-Lay, JCPenney, and Perot Systems.

During the 12 months ending March 2006, the number of jobs in Denton County increased by 13,200, or 10 percent, to 150,500. Major job growth occurred in the professional and business services, trade, education and health services, and government sectors. The University of North Texas (UNT) and business and residential developments are responsible for much of the growth in Denton County. UNT, which has more than 33,500 students and 3,600 faculty and staff, contributes to the local economy with its annual expenditures of nearly $500 million. Dallas County continued to lose jobs through 2005 but showed an increase of 3,100 jobs for the 12 months ending March 2006, the first increase in 4 years. Gains in the professional and business services and financial activities sectors offset continued losses in the information, trade, and manufacturing sectors. The downtown area in the city of Dallas is undergoing more than $2 billion in rehabilitation and expansion of housing, cultural, and recreational opportunities. Average employment by sector in the HMA during the past two 12-month periods is presented in Table 3. The DFW airport, constructed 30 years ago on the Dallas-Tarrant County border, has become a strong base for economic development in the entire metropolitan area. In addition to attracting the businesses located at the airport and in the commercial and industrial zones within the 18,000 acres of airport property, the airport has influenced significant commercial and residential development in surrounding communities. The airport itself is just completing an expansion and redevelopment program totaling more than $2 billion.

Population and Households

The population of the Dallas HMA has increased by an annual average of 67,400, or 2 percent, from 2000 to 3,548,000 on April 1, 2006.  During the 1990s, the annual population growth was 2.8 percent, or 75,300. A decline in annual average population growth in Dallas County from 36,000 during the 1990s to 16,000 since 2000— largely as a result of the economic downturn—is the primary reason for the lower rate of growth in the HMA during the current decade.

The number of households in the HMA has increased by an average of 21,750 annually, or 1.8 percent, since 2000 to 1,279,000 as of April 1, 2006. During the 1990s, the number of  households grew by nearly 25,000, or 2.5 percent, annually. Since 2000, approximately 46 percent of the population growth in the HMA has occurred in Collin County. As of April 1, 2006, Collin County is estimated to have a population of 680,000, an average annual increase of 31,400, or 5.6 percent, during the past 6 years. The number of households increased by an average of 12,200 annually between April 1, 2000 and April 1, 2006.

On April 1, 2006, Dallas County had a population of 2,315,000, an increase of approximately 16,000 annually, or 0.7 percent, during the past 6 years. Less than 25 percent of the population growth in the HMA since 2000 took place in Dallas County. During the 1990s, the Dallas county population rose 36,600 annually, or 1.8 percent. 

The population of Denton County increased from 432,976 in April 2000 to 553,000 currently, an annual gain of 20,000, or 4.2 percent, during the 6- ear period. During the same period, the number of households in the county increased by 7,000 annually, or 4 percent, to 201,000 as of April 1, 2006.

The population of the HMA is expected to increase by 74,000 annually over the next 3 years to a total of 3,770,000 by April 1, 2009. Nearly half the gain, more than 35,000 annually, is expected to occur in Collin County, and about 30 percent, or 22,000 annually, is forecast to occur in Denton County. During the forecast period, population growth in Dallas County is expected to remain approximately the same as during the past 6 years at 16,000 annually.


Housing Market Trends

Sales Market-Collin County
The percentage of homeowners in Collin County increased from 69 percent to 73 percent from 2000 to 2006 (see Figure 6). Single-family home construction in the county, as measured by building permits, continues to set records. Since 2000, permits have been issued for more than 66,000 homes compared with fewer than 56,000 homes for all of the 1990s (see Figure 7). During the past 12 months ending March 2006, permits were issued for nearly 12,800 homes, an increase of 11 percent compared with the previous 12- month period and 35 percent higher than the average annual rate of 9,500 permits during the period 2000 to 2003. Growth in the housing market is occurring throughout southern Collin County, primarily along the Dallas North Tollway and Route 121. Development is particularly concentrated on the northern side of Plano and in and around Frisco and McKinney, which include numerous, large single-family subdivisions and mixed-use developments and town centers. In the Frisco area, new 1,250-square-foot homes with three bedrooms and two baths are selling for less than $130,000; however, most new homes in Collin County sell in the range of $300,000 to $500,000. The sales market in Collin County is balanced, with an estimated vacancy rate of 1.4 percent, since job growth has resulted in higher levels of in-migration, creating strong demand.

 According to the multiple listing service data from the Real Estate Center at Texas A&M University, during the 12 months ending March 2006, more than 15,500 homes were sold in Collin County, a 17-percent increase over the previous 12 months and 30 percent above the 12 months ending March 2004. The average sales price for the past 12 months was $231,200, a gain of 5 percent, compared with the average price of $220,500 for the previous 12-month period.

It is expected that Collin County will continue to be the primary growth area in the HMA, accounting for 52 percent of the forecast demand for single-family homes during the next 3 years. The total demand for new sales housing is 35,800 for the next 3 years. An estimated 3,600 homes are currently under construction. Table 4 provides a breakdown of demand for new market-rate sales housing by price ranges during the forecast period for Collin County.

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