Q4 2022 Multifamily Real Estate Report: Dallas, TX
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Did you know that Dallas, TX is the largest metro area in the United States that is completely landlocked? Well, now you do.
In 2022, the population in the Dallas/Fort Worth metro area reached 6.5 million at a 1.42% growth rate.
The city’s unemployment rate was at 3.1% in December of 2022. Ultimately, Dallas’ multifamily real estate market saw a strong 2022, with nearly $18 billion in sales, increasing rental rates, and increases in new multifamily unit construction added to the pipeline.
General Area Overview & Demographics
Dallas is the ninth-largest city in the United States. The racial and ethnic makeup of Dallas is diverse, with the majority (53%) being Hispanic or Latino, 27% White, 22% Black or African American, 5% Asian, and 2% from other races.
Dallas, TX Median Household Income & Population
The median income for households in Dallas was $48,553 as of 2021. This was lower than the national median household income of $56,835. Additionally, 21% of the population lives below the poverty line.
The median age in Dallas is 33.7 years old, making it slightly younger than the national median age of 38.5 years old. Additionally, 24% of the population is between the ages of 18 and 34, while 25% are older than 65.
Higher education in Dallas is plentiful. The city is home to numerous universities, including the University of Texas at Dallas, Southern Methodist University, Texas Woman’s University, and Texas A&M–Commerce. Additionally, there are many community colleges and technical schools located in the area.
Dallas is home to numerous attractions and sites, including the Dallas Museum of Art, the Perot Museum of Nature and Science, the Sixth Floor Museum at Dealey Plaza, and the Arboretum and Botanical Garden.
Additionally, the city has several professional sports teams like the Dallas Mavericks (NBA), Texas Rangers (MLB), and FC Dallas (MLS). There are also many shopping and dining destinations located throughout the city.
The climate in Dallas is humid subtropical, with hot summers and mild winters. The average high temperature in the summer months is around 95°F (35°C), while the average low in the winter months is around 39°F (4°C). Spring and fall are pleasant seasons, with temperatures ranging from 50 to 80°F (10-27°C).
Summary of Dallas Multifamily Real Estate Performance in Q4 2022
Occupancies for Dallas multifamily real estate were at 94.3% in Q4 2022, a .07% decrease from the previous quarter.
The Northeast submarket had the highest occupancy rate at 94.6%, while the Central submarket had the lowest at 92.7%.
Multifamily absorption was negative at -1808 units, bringing the total absorption for the year to -5,860 units.
What are multifamily rents like in Dallas?
The average monthly rent for Dallas multifamily was $1,534 in Q4 2022. This was a slight decrease from Q3 2022’s rent figures, which were about $1,542 per month.
Rent was highest in the Uptown/Park Cities submarket at $2,404 per month.
East Fort Worth had the lowest rental rates at $1,115 per month.
Purchase & Leasing Activity
Dallas’s multifamily sales volume reached $18 billion in 2022. Approximately $3 billion of total sales volume for the year occurred in Q4 2022.
The average sales price for 2022 was approximately $172,400 per unit.
Notable Multifamily Real Estate Deals in Dallas in Q4 2022
Notable deals were not reported for Dallas’ multifamily real estate market in Q4 2022.
New Multifamily Real Estate Development Activity in Dallas in Q4 2022
Dallas/Fort Worth had 6,362 new units delivered in the final months of 2022. There were 64,652 units in the pipeline in Q4 2022, a 30% increase year-over-year.
Approximately 10,000 units broke ground in Q4 2022.
Market Forecast for Dallas’ Multifamily Real Estate Market
Approximately 30,000 new multifamily units are expected to come online in 2023. This is a positive forecast compared to 2022’s low number of deliveries.
With a higher number of deliveries projected, vacancies are expected to increase slightly as well. Rent is also projected to rise by 4% in the coming year.
Takeaways for Multifamily Real Estate Investors
In many multifamily markets across the country, current and projected supply is outpacing demand and causing concern for investors.
Dallas, however, is projected to see an increase in demand that could keep up with new supply. Rental rates are also forecasted to continue climbing.
Do your research, stay diligent, and happy investing.
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