Texas has been one of the hottest housing markets over the last decade. Thanks to booming cities like Austin, Dallas, Houston, and San Antonio; coupled with no state taxes many Americans have flocked to the Lonestar state and driven up property prices.
Several factors have fueled notable demand volumes in Texas. This state has benefited from sizable domestic migration, and corporate relocations have led to some of the fastest-growing economies as well, which is especially true in Austin and the Dallas/Fort Worth metroplex. Economic and population growth coupled with favorable demographics have set the stage for demand tailwinds in the Lone Star State.
Texas has had some of the strongest housing appreciation rates in the country over the past decade. Over the past decade, Texas housing prices have risen 125.74 percent, which equates to an annual home appreciation rate of 8.48 percent, according to the data collected by NeighborhoodScout. If you are a house buyer or real estate investor, Texas has been one of the finest long-term real estate investments in the United States over the past decade.
With nine years of solid business expansion and unemployment the lowest it’s been in over 40 years, it’s easy to understand how real estate investing in Texas can offer attractive opportunities. There’s no state income tax, and Texas promotes a business-friendly environment, recently being ranked as the second top state for business in the U.S.
The large and growing population of Texas, thriving cities with diverse economies, and world-renowned higher education and research facilities such as Texas A&M and the University of Houston help create demand for apartments and investment in Texas.
For investors with a long-term, buy-and-hold investment strategy, markets with stable growth rates over the long run may offer better opportunities than those that rise quickly over a short period of time. The top three commercial real estate markets in Texas; Dallas-Fort Worth, Houston, and San Antonio benefit from large and growing populations, thriving diverse economies, and world-class research universities:
- The economy in Texas continues to grow,
- Population in Texas keeps growing, with unemployment at a +40-year low,
- International exports are a significant part of the Texas GDP,
- Tax burden for residents and businesses is less in Texas,
- Real estate investors in Texas currently benefit from rising rents, declining vacancies, and positive net absorption.
Texas housing market trends and stats
If you’re looking to buy a house in Texas, you may get a better deal than you would in other states. According to the most recent data from Texas Realtors, the median home sale price across the state was $345,000 in Q3 2022. That number is up 11.3 percent from the same time the previous year, but still more than $25,000 cheaper than the current national median sale price of $370,700.
The Texas Realtors data also reveals that while active listings in the state are up significantly since 2021, closed sales are actually down by 14.8 percent. This isn’t much of a surprise since mortgage rates in Texas have risen dramatically from last year’s record lows, as they have everywhere else.
Texas properties are spending more days on the market before they close than in 2021, as well. According to ClosingCorp, the statewide average for closing costs, which typically run between 2 and 5 percent of a loan amount, is $4,548.
Fortunately, many areas in the state are quite affordable, particularly the ones that are away from major cities like Dallas, Houston, and Austin. For instance, in Bankrate’s list of the best places to live in Texas, College Station earned a 9 out of 10 for affordability.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
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What makes Texas an attractive destination for apartment investing?
Texas boasts a strong economy, a growing population, and favorable laws for real estate investors. The state also has a low cost of living and no state income tax, making it a desirable location for businesses and individuals alike.
How has the population growth in Texas affected apartment investing?
The population in Texas has been growing steadily for years, leading to an increased demand for housing, including apartments. This demand has resulted in a rise in rental prices and a higher occupancy rate, making the state a prime location for apartment investors.
Are there any specific cities in Texas that are particularly attractive for apartment investing?
Yes, several cities in Texas are considered hotspots for apartment investing, including Austin, Dallas, Houston, and San Antonio. These cities have strong economies, growing populations, and a high demand for rental properties.
How can investors mitigate the risks of apartment investing in Texas?
To mitigate the risks of apartment investing in Texas, investors should conduct thorough research on the local market and economic trends. They should also work with experienced professionals, such as real estate agents, property managers, and attorneys, to ensure that their investments are sound and secure.
