How Well is the Dallas Real Estate Market Insulated from COVID?

[David Y M.]

This is extremely subjective because nobody really knows which way the market is going. We don't have really any great data yet, and forbearance of up to 12 months seems like it would greatly insulate most real estate prices from taking a nose dive in the near future. 

I was just looking at charts from the 2008 and the Dallas market seemed to be pretty insulated from the Great Recession. The median house prices went mostly sideways and a little down, but nothing like other parts of the country. Oil is also taking a massive hit, but the DFW isn't as dependent on that industry as much as Houston. Affordability/Cost of living is also pretty attractive, but would like to hear any thoughts on this. Also, if anybody can provide any bills that were enacted in Texas over the last couple years that also helps this argument, that would be appreciated. Thanks!

[Bruce Lynn]

Jan/Feb/March sales were up about 8-10% over 2019.

I think inventory in many price ranges is still tight.

So now maybe instead of 10 offers you get 2 or 3.

I just saw an article about 600 California companies wanting to move to Texas.

Also I don't think Amazon HDQ 2 has worked out like they thought and back looking at Dallas for big office.

Also just this week saw info about Goldman Sachs making basically 3rd HDQ in Dallas with nearly all divisions represented and their CEO saying basically that not all financial talent is in NYC and more companies need to understand that.

This crisis will pass.  It may change some things, but in the end people will still need housing.  This will not be like 2008.   Interest rates will probably remain super low at least for the next year or two, so that will be a good thing.  

Almost everyone I know is figuring out new and better ways to do things.   I think it is a refreshing break for a lot of people on how to rethink their business.  

Everyone is focused now on 1 month and how cash flow works when tenants don't pay/can't pay.  Great investors look for solutions to problems.  Smart people will figure this out.  Maybe we just leverage less, or maybe we get 2-3 months deposits in the future....or like some places 1st and last month's rent (in my market we only get 1st month's rent currently in most cases) or maybe there will be loss of rent insurance, and plenty of other solutions.