Dallas has been keeping up fairly well with the surrounding cities in terms of rent growth. Currently the general trend in the largest US metros is that the main cities are cooling off while the suburbs post exceptionally high increases, but Dallas’ case is a more balanced one.
At the end of 2016, Dallas apartments cost 5.9% more in rent than they did 12 months prior to that, with the average rent crossing over the $1,100 threshold. Meanwhile, rents have increased by 6.3% in Fort Worth, reaching $1,000. The Dallas-Fort Worth Metroplex as a whole posted a 4.9% average year-over-year rent increase, 90 basis points over the national average growth rate, according to market data from Yardi Matrix.
Although Dallas rents are a hair above the metro average, the Big D is headed in the same direction as Los Angeles, Phoenix or Atlanta, in that most of its surrounding cities will soon catch up, and even outpace it in terms of rent growth. Supporting this hypothesis is the latest Yardi Matrix rent forecast, which anticipates a 20-basis-point decrease in rent growth by the end of 2017, to 5.7%.
Fort Worth-area cities and Ellis County take the lead, Prosper and Little Elm lose traction
It looks like rent growth accelerates as you go farther away from Dallas. Weatherford, about an hour of driving from central Dallas, and half-an-hour from Downtown Fort Worth, led the pack last year with a staggering 10.5% increase year-over-year in December. The Ellis County city of Midlothian followed with a 10.1% rent growth—also at about a half-hour drive from both metropolitan cores. The nearby Waxahachie also made the top 10 with a more modest, but still very strong 7.5% growth rate, and speaking of Ellis County, we have to mention Red Oak, which also beat Dallas with a 6.6% rate.
Out of the Fort Worth-area cities, White Settlement has earned the elegant 3rd rank (although residents could probably live without this kind of grandeur), and with an 8.8% increase Haltom City has also found itself in the fast-lane.
The heatmap shows other well-defined regions of intense growth, such as that along Interstate 30 (including Arlington, Grand Prairie, Garland and Mesquite), as well as the Plano–Richardson area. On the other hand, due to the expanding rental inventory, rent growth has been limited in Dallas, where north of 6,000 new units came online in 2016.
Although a couple of the more expensive cities have managed to significantly increase their rents, such as The Colony (7.9%), Sachse (7.7%), or Richardson (6.3%), it was mainly the “cheaper” neighborhoods that have seen the biggest growth in 2016. In fact, the top of the previous list looks quite similar to the bottom of this one: the $685 average rent in Greenville is the result of a 9.1% increase, and the West Fort Worth city of White Settlement was also up there with a 9.4% growth—now at an average rent of $780. And of course, the undisputed winner of the rent growth race, Weatherford is also among the 10 least expensive cities of the Metroplex with a $884 average.
Last year was not about out-of-control growth all across the metro, though. Rents in cities like Rockwall, Coppell and Flower Mound have grown by less than 2%, and that 0.4% increase in Fairview can be considered as a stagnation, really.
The only cities where the average rent has actually decreased are the Denton County suburb of Little Elm and the nearby Prosper, with negative rent growth rates of -6% and -9.4%, respectively.
Dallas & Fort Worth Rent Changes Mapped
Northern- and Eastern-Dallas Submarkets Pick up Heat, but the City Center Radiates Cold
Although the Dallas-Fort Worth Metroplex is indeed a more balanced case, it hasn’t escaped the national trend that the rent growth rates of suburban areas far outpace the metro cores. The outskirts of Dallas proper—especially the northern and northeastern areas are glowing red hot on the map below, which means rent growth rates of double digits. Zip code 75230 had the steepest y-o-y increase, at no less than 13%.
The centrally located zip codes, however, have had growth rates lower than 5%, without exception. Zip code 75202 even had negative rent growth, meaning that the average rent actually decreased by 1%
Eastern-Fort Worth Revving up, but Central Neighborhoods Stand Still
Arlington was among the top 10 cities that posted the highest proportional rent growth in the metro, 7.5% to be specific. How come we’re discussing Arlington when we should be talking about Fort Worth? Just take a look at the heatmap below, and it’ll be clear as day: the zip codes adjacent to Arlington had by far the highest rent growth in the city, and meanwhile most of the central areas had slim to none. Zip codes 76115 and 76140 have seen the biggest increases, 15% and 13%, respectively, whilst both in 76102 (Downtown Fort Worth) and 76114 the average rent dropped by 3%.
Use this interactive table to look up rent changes in your city:
|City||Average Rent 2016||Average Rent 2015||ChangeYoY||Units Delivered|
|North Richland Hills||$1,018||$962||5.8%||159|