Mid-Year 2025 Review: Navigating DFW Real Estate Trends

Key Takeaways:

• The DFW housing market has clearly shifted to favor buyers with inventory up 53% above normal levels and 66% of homes selling below list price.
• While the median home price has dropped $10,000 from last year to $410,000, the luxury market remains strong compared to entry-level and mid-market segments.
• Despite 74% of consumers believing it's a bad time to buy, market indicators show increasing buyer power with homes staying on market 50% longer than last year.
• Sage Senior Support's real estate division helps older adults manage this shifting market with specialized guidance on timing and negotiations.
• County-specific variations reveal different opportunities across the metroplex, with northern counties leading price corrections.

The Dallas-Fort Worth real estate landscape has undergone a remarkable transformation in 2025. What was once a red-hot seller's market has clearly shifted into buyer's territory, creating new opportunities and challenges for everyone involved in the housing market.

The real estate experts at Sage Senior Support have been tracking these changes closely, particularly how they impact older adults looking to right-size or relocate within the metroplex.

DFW's Housing Market Shift: Buyers Gaining the Upper Hand

The numbers don't lie – DFW's housing market has experienced a dramatic power shift. With inventory surging to levels 53% above normal and a staggering 66% of homes selling below list price in March 2025, buyers now have more power than they've had in years.

This reversal marks a significant departure from the frenzied bidding wars and above-asking prices that characterized the market in recent years. Sellers who once dictated terms must now adjust to a new reality where buyer preferences and negotiation carry more weight.

The change is particularly evident in how long homes remain available before selling. The average days on market has jumped to 72 days – a 50% increase from the 48-day average in May 2024. This extended timeline gives buyers breathing room to make thoughtful decisions rather than rushed offers.

Market Fundamentals: What the Numbers Reveal

1. Inventory Explosion: Where We Stand Now

Texas has become the fourth most oversupplied housing market in the United States, with inventory hitting a remarkable 123,000 homes in April 2025. This surge has pushed DFW's available housing stock to 4 months of inventory, up from 3 months last year.

While technically still short of the 6-month benchmark that traditionally defines a balanced market, the rapid inventory growth signals a significant cooling. With more options available, buyers can be more selective and deliberate in their home search.

2. Price Trends Across Housing Segments

The shift in market dynamics has created a fascinating split in pricing trends across housing segments. While DFW's median home price has dropped to $410,000 – a $10,000 decrease from May 2024 – this correction isn't uniform across all price points.

The luxury market has shown remarkable stability, continuing to hold its value even as inventory grows. In contrast, entry-level and mid-market homes are experiencing more noticeable price corrections as first-time buyers and middle-income families find themselves with more options and negotiating power.

Price per square foot metrics confirm this trend, with the closed price per square foot dropping to $217 – down from both the previous month and year. The close price to list price ratio now stands at 99%, a significant change from the 105% sellers regularly commanded in 2022 when buyers routinely offered above asking to secure properties.

3. Days on Market: Why Timing Matters

One of the most telling indicators of market shift is how long homes remain listed before selling. The average of 72 days on market represents a dramatic slowdown from last year's 48-day average. Perhaps more revealing is the median days on market – now 30 days compared to just 19 days a year ago.

This extended timeline creates important strategic implications for both buyers and sellers. For buyers, properties that have been listed for more than 30 days often present the best opportunity for price negotiations. For sellers, proper pricing from the start becomes increasingly critical to avoid lengthy market exposure.

County-by-County Analysis: Where to Focus Your Search

1. Northern Counties: Collin & Denton Leading the Correction

Collin County is experiencing the metroplex's most pronounced price correction, with median prices down 3.7% and inventory up by more than 60%. This area, once among the hottest markets in DFW, now offers buyers significant opportunities, particularly in cities like Plano, Frisco, and McKinney.

Neighboring Denton County shows similar trends with inventory up 63%, firmly placing it in balanced market territory. The combination of improved buyer position and still-strong fundamentals makes these northern counties particularly attractive for value-conscious buyers willing to act while others hesitate.

2. Core Counties: Dallas & Tarrant Stability

Dallas and Tarrant counties – home to the metroplex's largest cities – are showing more stability amid the broader market shift. Dallas County continues to see modest price growth, though inventory is increasing and selling times are lengthening. Tarrant County maintains relatively stable prices while experiencing inventory growth that favors buyers without triggering significant price drops.

These core counties tend to be less volatile in changing markets, making them attractive to buyers seeking long-term stability with modest appreciation potential.

3. Emerging Buyer's Markets: Rockwall, Kaufman & Hunt

For buyers prioritizing affordability and maximum negotiating power, the outer counties offer compelling opportunities. Rockwall County has become a true buyer's market with nearly six months of inventory. Kaufman County shows significant inventory growth creating increasingly buyer-favorable conditions. Hunt County has fully transitioned to a buyer's market with inventory exceeding six months.

These areas combine lower entry prices with maximum buyer advantage, though buyers should carefully consider commute times and amenities when evaluating these more distant locations.

Consumer Sentiment: What Homebuyers Really Think

1. Purchase Sentiment Trends

Despite the objective improvements in buyer conditions, consumer sentiment remains cautious. According to Fannie Mae's May survey, 74% of consumers still believe it's a bad time to buy a home – though this represents a slight improvement from April's 77%.

Interestingly, 61% of respondents simultaneously feel it's a good time to sell, up from 58% in April. This difference reflects the psychological complexity of the current market, where consumers recognize the shifting dynamics but remain wary of high absolute prices and economic uncertainty.

The broader Home Purchase Sentiment Index rose by 4.3 points in May to 73.5, suggesting gradual improvement in overall housing market outlook despite lingering concerns.

2. Mortgage Rate Expectations

Mortgage rate expectations show signs of cautious optimism. The latest data reveals that 29% of consumers now anticipate rates will decrease over the next 12 months – up from 26% in the previous survey. This modest improvement in rate outlook contributes to the slight uptick in overall homebuying sentiment.

Looking ahead, consumers expect home prices to increase by 3.1% over the next year, suggesting that while they recognize the current market correction, they don't anticipate a prolonged or severe downturn.

Strategic Moves for the Second Half of 2025

1. For Buyers: Using Your New Advantage

Buyers entering the DFW market in the second half of 2025 should use their strengthened negotiating position. With 66% of homes selling below list price, there's ample room for strategic offers, especially on properties that have been listed for more than 30 days.

Consider these tactical approaches:

• Request seller concessions for repairs or closing costs rather than focusing solely on price reductions
• Include longer inspection periods to allow for more thorough property evaluation
• Consider contingencies that would have been rejected outright in previous years
• Target homes that have had price reductions or extended market time
• Expand your search to include previously competitive neighborhoods now experiencing inventory growth

2. For Sellers: Adjusting to Market Realities

Sellers must adapt to the new market dynamics to achieve successful outcomes. With homes taking 50% longer to sell than last year, pricing strategy becomes critical.

Key strategies for sellers include:

• Price competitively from the start – the data shows that initial overpricing leads to longer market exposure and often lower final sales prices
• Invest in professional staging and photography to stand out in an increasingly crowded market
• Consider pre-listing inspections to address potential issues before they become negotiating points
• Be prepared for more substantial buyer requests during inspection periods
• Develop a clear plan for price reductions if the property doesn't generate adequate interest within the first 3-4 weeks

3. For Investors: Long-term vs. Short-term Outlook

Investors face a complex landscape with distinct considerations for different investment horizons. Short-term flippers should exercise extreme caution, as quick price appreciation can no longer be assumed. The 72-day average market time creates holding costs that can quickly erode profit margins.

Long-term investors, however, may find attractive opportunities, particularly in the following scenarios:

• Properties in need of significant renovation that intimidate typical homebuyers
• Luxury properties where price adjustments have been most significant
• Cash-flow focused investments in emerging counties with strong rental demand
• Properties with lot value or expansion potential in established neighborhoods

What's Next for DFW Real Estate?

The DFW real estate market is experiencing a correction, not a collapse. The region's strong economic fundamentals and continued population growth provide a solid foundation that will prevent the kind of dramatic downturn seen in previous housing cycles.

The second half of 2025 will likely see continued inventory growth and price moderation, particularly in entry-level and mid-market segments. Luxury properties may show greater stability, especially in established high-end neighborhoods.

County-specific performance will continue to diverge, with some areas reaching true buyer's market territory while others maintain more balanced conditions. This variation creates opportunities for buyers to target areas aligned with their priorities, whether that's maximum negotiating power, long-term appreciation potential, or lifestyle considerations.

Sage Senior Support offers specialized real estate expertise to help older adults manage the evolving DFW market with confidence and make informed decisions about their next move.