Market Insights | Summer 2024 | Dallas-Ft. Worth
Summer 2024
Average
Rent
Average
Occupancy
YTD Sales
Volume
YoY Rent
Change
The Dallas-Fort Worth-Arlington Metropolitan Statistical Area (MSA) is home to over 8.1 million people, is the fourth most populous metro area in the nation, and serves as the economic and cultural hub of North Central Texas. The city of Dallas is the 9th most populous city in the nation with a 2023 estimated population of 1,302,868 residents, and the city of Fort Worth had the second largest increase in population in the U.S. from 2022 to 2023, adding 21,365 residents. As of 2023, Fort Worth is the 12th largest city in the United States, with a population of 978,468, nearly on par with Austin’s 979,882 population.
The Metroplex is America’s fourth-largest urban economy and has a strong and diversified economy that includes the industries of technology, retail, manufacturing, and professional and business services. Greater Dallas is credited with the fastest year-over-year rate of job gain growth (6.7%) among the nation’s major metropolitan areas and is one of the world’s leading corporate headquarters centers. There are 21 Fortune 500 and 47 Fortune 1000 companies in the DFW area. Collectively, these companies have average year-over-year revenue increases of 4.2% and an average change in profit of 6.9%. McKesson is the highest-ranked company on the DFW list, ranking No. 9 based on 2023 revenue of $276.7 billion. The city of Dallas is the site of a district Federal Reserve Bank and houses over 62,000 businesses, including global leaders like Texas Instruments, AT&T, Comerica, and Southwest Airlines.
Source: GREA Research, CoStar
Employment
Total nonfarm employment for the Dallas-Fort Worth-Arlington, TX, metropolitan area increased by 64,000 over the year in June 2024, a job gain rate of 1.5% compared to 1.7% nationally. During the same period, the industry Supersector labeled other had a gain of 6,300 positions and a year-over-year job growth rate of 4.5%. The government industry Supersector gained over 15,600 jobs, a growth rate increase of 3.4% over the past year.
Dallas-Fort Worth-Arlington, TX, is comprised of two metropolitan divisions - separately identifiable employment centers within the broader metropolitan area. Employment in the Dallas-Plano-Irving division comprises over 70% of the metro area’s total nonfarm employment. Dallas-Plano-Irving had 3,069,100 positions, a gain of 41,800 jobs, and a percent change of 1.4% over the past year. Employment in Fort Worth-Arlington, TX, with nearly 30% of the area’s employment, stood at 1,221,400 jobs, with 22,200 jobs added and a year-over-year growth rate increase of 1.9%.
| % ∆ from June 2023 | |||
|---|---|---|---|
| Metro Area Employment (Thousands) | June 2024 | Dallas | National |
| Total Non-farm | 4,290.5 | 1.5% | 1.7% |
| Mining and Logging | 113 | 1.4% | -1.3% |
| Construction | 147.1 | 3.5% | 3.0% |
| Manufacturing | 314.7 | 1.9% | 0.2% |
| Trade, Transportation, and Utilities | 899.9 | 0.7% | 0.6% |
| Information | 90.6 | -2.5% | -1.2% |
| Financial Activities | 372.7 | 0.9% | 0.4% |
| Professional and Business Services | 775.5 | 0.2% | 0.5% |
| Private Education and Health Services | 513.4 | 2.5% | 4.1% |
| Leisure and Hospitality | 439 | 0.7% | 2.4% |
| Other Services | 144.8 | 4.5% | 1.7% |
| Government | 479.8 | 3.4% | 2.6% |
Source: Bureau of Labor Statistics
Rental Market
Multifamily demand in Greater Dallas remained strong in the first half of 2024, sustained by the metro's strong economy and growing population. Denton and Collin Counties have had a population surge of 50% since 2010, and multifamily demand has been highest in rapidly expanding submarkets like North Fort Worth, Allen / McKinney, and Frisco / Prosper. The influx of new deliveries, concentrated in the luxury segment in rapidly expanding submarkets throughout the Metroplex, has put downward pressure on occupancy levels and has caused a rise in renter concessions. Over 35% of A & B-Class properties in these areas have concessions in place, the highest level since 2020. Rent growth declined to -1.5% in the luxury segment over the past 12 months, and the average asking rent for A & B-Class properties in greater Dallas is $1,777 in Q3 2024.
Even though renter demand has rebounded in the more affordable, mid-tier property category, rent growth over the past year in this category has decreased -1.2%, the first time negative growth has been reported since 2010. The average occupancy rate over the past year for C-Class properties was 89% compared to the pre-pandemic average of 94%, a direct indicator of the impact of the higher pricing of mid-tier properties on renters. The average asking rent in Q3 2024 for Class-C properties in greater Dallas is $1,335.
Overall, Rent growth is expected to return positive to just over 1% by the end of 2024 and rebound close to 3% in 2025. The occupancy rate is forecast to hold steady before tightening closer to 90% over the next 12 months.
Average Monthly
Mortgage Payment
Average Monthly
Rent
Source: CoStar
Average Rent / Vacancy
Asking Rent / Bedroom
Multifamily Construction
Dallas-Fort Worth has historically been a national leader in multifamily construction activity. While economic and demographic growth remains strong, permitting activity and the number of construction starts have declined due to high financing costs and the softening of property performance. The Dallas metro is above the national average of 4.1% but below other Sun Belt markets like Phoenix, where about 8% of inventory is under construction, according to CoStar. Even though occupancy rates are decreasing across submarkets, the influx of new businesses and relocations to the metro due to favorable economic conditions and demographic growth will sustain multifamily demand for the rest of 2024 and into 2025.
Construction activity will remain steady in the Fort Worth area as renters opt for lower-density suburban options with more affordable rents. Downtown Dallas and Uptown/Park Cities submarkets have added significant amounts of new inventory in the past decade, and supply in these areas has likely reached its peak. Construction is concentrated on areas surrounding the Central Business District, including Northwest and West Dallas. Approximately 6,600 units were under construction in the Downtown Dallas area at the end of 2023, down from around 9,000 units in 2016.
Multifamily Completions
Past 12 Months
Single Family
Permits
Multifamily Permits
(5+ Units)
Median Single
Family Price
Completions / Net Absorption
There were 9,301 construction starts in the first two quarters of 2024 compared to 20,600 starts in the first half of 2023. Approximately 45,000 units are under construction, representing 5.1% of total inventory.
Units by Submarket Delivering in 2024
Units Under
Construction
Units UC Delivering
in the Next 4 Quarters
| Submarket | Units Under Construction | % of Total UC | Units Delivering in Next 4 Quarters |
|---|---|---|---|
| Allen / McKinney | 3,506 | 11.0% | 4,056 |
| Arlington | 931 | 1.6% | 1,011 |
| Denton | 3,348 | 13.2% | 2,323 |
| Downtown Dallas | 801 | 8.4% | 532 |
| Downtown Fort Worth | 0 | 0.0% | 302 |
| East Dallas | 1,742 | 2.8% | 594 |
| East Fort Worth | 666 | 5.9% | 0 |
| Ellisi County | 743 | 9.2% | 1,188 |
| Far North Dallas | 643 | 1.3% | 1,056 |
| Farmers Branch / Carrollton | 2,063 | 4.5% | 1,141 |
| Frisco / Prosper | 7,572 | 20.5% | 4,393 |
| Garland / Rowlett | 2,582 | 9.5% | 1,951 |
| Grand Prairie | 366 | 3.7% | 1,454 |
| Grapevine | 207 | 2.1% | 0 |
| Hood County | 0 | 0.0% | 0 |
| Hurst / Euless / Bedford | 0 | 0.0% | 56 |
| Irving | 0 | 0.0% | 0 |
| Johnson County | 264 | 4.2% | 766 |
| Las Colinas | 789 | 2.3% | 516 |
| Lewsville / Flouwer Mound | 886 | 2.9% | 1,740 |
| Mesquite | 660 | 2.2% | 490 |
| North Dallas | 213 | 2.7% | 0 |
| North Fort Worth | 793 | 3.4% | 1,599 |
| North Richland Hills | 0 | 0.0% | 352 |
| Northeast Outlying | 682 | 16.2% | 152 |
| Northwest Dallas | 309 | 1.1% | 1,021 |
| Northwest Fort Worth | 2,894 | 12.7% | 2,399 |
| Oak Cliff | 1,008 | 5.1% | 394 |
| Parker County | 104 | 2.0% | 885 |
| Plano | 180 | 0.4% | 1,164 |
| Richardson | 865 | 3.5% | 361 |
| Rockwall / Wylie | 3,213 | 32.6% | 1,831 |
| South Dallas County | 0 | 0.0% | 890 |
| Southeast Dallas | 903 | 5.2% | 411 |
| Southeast Fort Worth | 1,447 | 11.1% | 507 |
| Southeast Outlaying | 180 | 9.5% | 372 |
| Southwest Fort Worth | 2,128 | 5.6% | 1,409 |
| Uptown / Park Cities | 1,216 | 4.1% | 356 |
| West Dallas | 846 | 10.5% | 1,350 |
| Wise County | 0 | 0 | 240 |
Multifamily Sales
Sales volume in the Dallas metro was approximately $6 billion over the past 12 months. GREA reported capitalization rates are estimated at close to 5% for the Class-A segment. 5.5% for Class-B properties and north of 6% for Class-C. Transaction volume is down around 80% from the peak of $26 billion reported at the end of 2021 when nearly 20% of the market's stock was traded.
Strong multifamily fundamentals will continue to perform over the longer term, bolstered by the increasing need for workforce housing, an overall shortage of housing supply, the high cost of new home ownership, and the influx of a new generation approaching prime renter age.
YTD Transaction Volume
12 Mo. YoY Change
12 Mo. Market Price/Unit
Annual Price Change
Average Sales PPU / Cap Rate
Interest rate volatility and the high cost of debt caused values to soften and capitalization rates to increase.
Team
Todd Franks
Chairman / Founding Partner
Mark Allen
Executive Managing Director
Sean Reynolds
Senior Managing Director
Chibuzor Nnaji
Senior Managing Director
Byron Griffith
Senior Managing Director
Jeff Burgfechtel
Senior Managing Director
Sean Scott
Managing Director
Lee Robinson
Senior Managing Director
Esther Cho
Managing Director
Nicholas Brown
Managing Director
Jared Rice
Managing Director
Angel Flores
Director
Ryan Quaid
Associate
Craig Jasso
Associate