With prices steady and demand strong, the real estate market is shifting gears but not losing momentum.
The Dallas luxury market is still standing overall, with Preston Hollow showing a slight softness, reports Arthur Greenstein of the Arthur Greenstein Group. “Nothing dramatic, just a mild cool-off.” Median sales prices are down, but cost per square foot hasn’t slipped much, said the veteran real estate professional.
“We did see more sellers jump in last year when prices spiked, which added some extra inventory to the market,” Greenstein said. “But it’s not flooded. Buyers have a bit more room to negotiate than they did in 2024, but we’re not in full-blown buyer’s market territory — yet.”
Cullum Clark, director of the George W. Bush Institute-SMU Economic Growth Initiative, explained that the slowdown has occurred gradually over the past three years. “To find a time as soft as we are now, you’d have to go back probably to the mid-teens,” Clark said. He doesn’t anticipate significant price declines. However, the slowing market may give buyers more time to do their homework before purchasing.
The shift from a tight to a more historically normal market is due in part to a rapid rise in interest rates, which has made mortgages much more expensive over the past five years. According to the Federal Reserve Bank of St. Louis, average rates on a 30-year fixed mortgage rose from 2.67% in December 2020 to 6.81% in June 2025.
The rise has suppressed long-distance moves nationally. One driver of the Dallas luxury market is buyers moving to the area from California, who may defer relocation if it means replacing their current mortgage with a new one at more than double its rate, Clark explained.
“I do think the demand to live in the Dallas area is still growing,” he said. “We are still a net destination for inbound moves and are likely to continue to be so in years to come. But nonetheless, from an interest rate point of view, there’s been a significant slowdown.”
The supply of homes, both nationwide and in the Dallas area, has also outpaced demand. Nationally, there are considerably more homes on the market per individual than there have been at any time since the start of the COVID-19 pandemic, Clark said.
Real estate professional Valerie Dillon with Perry-Miller Streiff Group said she is working to educate sellers on the importance of pricing their homes correctly and ensuring that their properties are move-in ready. Houses can continue to sell rapidly with multiple offers, but they need to appeal to buyers.
“I still think there are a lot of buyers out there, but I don’t think we have a ton of inventory that buyers are ready to pounce on, unless it’s priced right,” she said, “unless that person has to be in a home, and it’s updated.”
Preston Hollow has long been one of the area’s most desirable neighborhoods, Greenstein said, with its prime location making it ideal for families, professionals, and luxury property investors.
“The area offers buyers a unique blend of exclusivity and convenience, with proximity to some of the city’s best private schools, upscale shopping, and top-rated dining,” he said. “And streets like Deloache Avenue, Strait Lane, and Meadowbrook Drive are still flexing.”
—Sarah Hodges contributed to this report
