Founded in 2008, New Western operates a real estate marketplace for investors in more than 40 markets, including DFW. The service connects local investors with curated inventory lists and provides options for sellers, too.
About 85% of investors in DFW flipped between one to five properties In 2023, according to the report. About 59% of all home flips were sold at asking price. In 2024, New Western staff said they are expecting another great year for local investors in the area.
Zach Steinberg, senior general manager of New Western’s Dallas-Fort Worth office, broke down what he expects to see in 2024, what increased investor activity means for home inventory and more. Answers have been edited for style, length and clarity.
How did the Dallas-Fort Worth housing market perform in 2023?
The market did relatively well. There's still a shortage of housing in the metroplex as well as nationally. My office specifically here in Dallas sells distressed properties to investors, properties that need to be renovated. We're seeing the investor market day in, day out, and our customers really pay attention to the retail market because they're the ones that are investing. They’re the ones putting their hard-earned money into our properties to renovate, to put on the market for flip or to rent out. In my office, we sold over 625 homes in 2023. So we had quite a bit of activity, which is correlated to the low inventory out there in the retail market. I think in Dallas-Fort Worth, it's around 2.5 months of supply. In a healthy market, it’s usually around six months of supply, meaning if no new properties come on the market we will be out in 2.5 months.
Were there any other notable statistics or figures that stick out from 2023?
The median price of homes continued to rise. I think in DFW, it's probably pushing $350,000-$375,000, getting closer to $400,000, and inventory is still low. So it's pretty amazing that these prices continue to rise and inventory is still low. We have a lot of people moving here. And it's really great for investors because if property values go up, they can buy more properties that can make a little more spread on their deals. They can come back and buy more from us and still feel confident enough to put that product back on the market because it's always better to put a property on the market when prices are rising and when prices are falling, especially when you specialize in investments.
What are you expecting in 2024, and how will it be different from 2023?
We're expecting a really good year. Again, nothing has really changed. Inventory is still low, rates are still where they are, and there's tons of economic activity in DFW. There's still so many people moving here from the coasts, and there's a lot of homes in DFW that have 2%, 3% or 4% mortgages, and that can't be replicated right now, so those people are staying put. It's kind of a perfect storm: more people moving to DFW and low inventory. It's really good for New Western. It's really good for the local market because high demand and low inventory should see really good success for anybody that’s in the housing industry here in Dallas.
What should investors be cautious about in 2024?
I think the biggest unknown is still labor and materials. That changes all the time. There's still different supply chains. I've recently heard it's plumbing that’s going up. These things are kind of out of our wheelhouse, but there's still some inflationary factors in the materials and things like that. They definitely just need to keep an eye out but overall it's still a very general positive consensus. The market’s great, so as long as they keep their costs down on the renovations when they buy from us at a good investor price there still should be plenty of meat on the bone for them to exit the property in terms of profit.
What does increased investor activity mean for home inventory as people continue to move to the region?
I think it's a really good thing because we are kind of the future product that's coming on the market. You can't renovate a house in 30 days. So in my office in Dallas, we sell 50-60 homes per month. These homes take anywhere from two to six months to renovate, so the homes we sell now are going to be the spring and summer product. It's a really good thing that investors are active because it shows that it's a healthy real estate market. Investors should be very excited about Dallas, in 2024 and beyond.