Even Real Estate is Bigger in Texas: Checkout These 3 Markets
Texas continues to attract new residents from across the United States. With this population boom comes real estate opportunities. Checkout these Texas markets for your next investment.
It seems like everyone is moving to Texas lately.
Texas has been attracting transplants for years now, with about 4 million people added between 2010 and 2020, according to U.S. Census data. The trend continued through the pandemic, with Texas picking up an additional 310,288 newcomers in 2021 alone. Many of these transplants are millennials, according to SmartAsset, which found Texas was the top state for millennials to move to.
Among its draws are plenty of well-paying jobs in the technology and energy sectors; the lack of state income tax; large homes; and the relative affordability of residential housing. Among the Texas cities seeing an influx of newcomers are Houston, Fort Worth, and Dallas.
One attractor for the average worker is overall high wages. For instance, in Dallas, the average annual wage is $67,500, according to The Associated Press. Keep in mind that many millennials and tech workers moving to the state have far higher paying salaries. When you pair a competitive salary with lower cost of living you get the recipe for a state’s housing market to boom.
One thing for real estate investors to note: Texas counters its lack of state income tax with high property taxes, the seventh-highest in the nation according to SmartAsset, which reports the average effective property tax rate in Texas as 1.69%, with a typical homeowner paying $3,390 annually in property taxes. That rate is compared to the national average of 1.07%. It also has a state sales tax of 6.25%, and local taxes can take it up to 8.25%.
Let’s check in with some of Texas’ hottest real estate markets.
The city of Dallas area has about 1.3 million people, but when combined with the metro Fort-Worth area (listed separately below), it balloons to a metropolis of 7.6-plus million according to the latest census. You can find just about whatever you’d like in the booming city, from major art museums to a presidential library to plenty of parks and open spaces. And the entertainment and restaurant scene is smokin’ hot, with all spectrums covered from barbecue to sushi to steak to Mexican to high-end hotels and cocktails.
The median household income for the Dallas-Fort Worth-Arlington Texas metro area is $72,265 in 2019, according to the Census ACS. That pushes Dallas median household income to $8,231 higher than the median Texas household income and $6,553 greater than the US median household income, according to the Department of Numbers.
The median sales price of a home in Dallas is $410,00, according to Redfin, a 10.1% rise over the year before. The Dallas-Fort Worth rental market has skyrocketed, too, with apartment rents jumping 17%, according to local reports. The 2.5% rental vacancy rate likely has a lot to do with that spike. With such a tight rental market, there’s room for smart investors to capitalize. And experts continue to predict housing prices aren’t going down any time soon, especially as U-Haul ranked Texas as the country’s No. 1 growth state in 2021.
Dallas is consistently ranked as a pro-business city. Besides its relatively low cost of living, it’s got a business-friendly environment and a skilled workforce. Two major airports and a central U.S. location make it a natural business gateway, both nationally and internationally.
While Fort Worth and Dallas are just 35 miles apart and are often referred to as one giant city, they are technically separate. Fort Worth is usually seen as Dallas’ more casual cousin, the one you’d sit down and have a beer with, instead of a fancy cocktail. Fort Worth comes in at just under a million people. It’s cheaper to live there compared to Dallas, with housing costs 8.7% lower. That lower cost could be a cheaper way into the area real estate market — with room for growth — for investors.
Houston leads Texas as one of its most diverse cities, with 145 languages spoken amongst its 2.3 million residents. That diversity is reflected in the food scene (you’ll find burgers and barbecue next to southeast Asian and West African gems). And there’s no shortage of cultural capital, from museums to shopping to the space center.
The energy sector is big business in Houston, but so is life science, manufacturing, logistics, and aerospace. Houston prides itself on being pro-business with plenty of tax incentives and programs to boost business inside its borders.
Real estate is booming in Houston, too. With a strong economy and plenty of new transplants moving in — estimates put the mid-2020-2021 influx of new residents (a mix of birth and transplants) at 69,000 people, the third highest uptick in the U.S.. — the rental market looks especially attractive to real estate investors.
Off-market opportunities in the Lone Star State
Investors across the country see tremendous growth and opportunity in Texas. When you’re competing in a hot real estate market like in Texas, you want every tool at your disposal to find the right investment at the right price for you.
Sundae operates in a variety of markets across the state of Texas, many of which were featured in this article. Find competitive as-is and off-market properties across the country that you won’t find on the Multiple Listing Service (MLS).