After real estate prices hit record highs earlier in 2022, the Texas real estate market has started to cool a bit. Home prices — while still above pre-pandemic levels — are not growing as rapidly. This means buyers may now be able to get into homes without having to pay above the asking price, as has been the norm over the past few years.
It remains a seller’s market, but buyers now have more choices. There are more homes for sale now than at any time since the fall of 2020.
Major Factors Contributing to the State of Today’s Texas Market
Housing prices have risen dramatically over the past few years. A Zillow analysis shows that a typical mid-price property grew in value by nearly 64% over the past five years and almost 16% over the past year. If you owned a home in Texas in 1991, it’s generally worth three times what it cost then.
The Texas Real Estate Research Center at Texas A&M University tracks real estate prices going back to 1990. Today, the average price of a home in Texas stands at $373,580, and the median price is $300,000. But despite all that growth, there is one major factor slowing things down — rising interest rates. Buyers simply can't afford the same home prices they could a year ago.
More homes on the market paired with lower demand could lead to downward pricing trends in 2023. However, unlike other places in the country, Texas continues to grow at a record pace. Every week, the state’s population grows by 3,800 people.
Texas continues to rank in the top five states most attractive to businesses. Businesses such as Oracle, Hewlett Packard, Charles Schwab, Toyota, Samsung, Kubota, and more have moved headquarters to Texas or building new plants. Amazon, Google, and Tesla have all expanded their Texas operations.
While all Texas metro areas are seeing growth, Austin and Dallas continue to rank in the top five of the fastest-growing cities in the country. The Dallas-Fort Worth area was recently ranked in a survey of 2,000 real estate agents as the second-best city in the country for real estate investors.
Californians continue to migrate to Texas at a significant rate, finding they can often find homes that are twice the size and half the price here.
These unique factors make Texas a unique place for real estate that might not echo nationwide trends.
Which Texas Cities Are Growing the Most?
The U.S. Census Bureau recently updates its list of the cities that grew the most over the past year, and eight Texas cities were among those showing the largest increases nationally for cities with a population over 50,000.
1. San Antonio
San Antonio topped the nation in growth, adding more than 13,000 people over the past year. San Antonio is home to the Alamo and the famed River Walk, man-made canals that run for miles just below ground level with a walkway for strolling the restaurants and shops. It’s also home to the NBA’s San Antonio Spurs and the San Antonio Stock Show and Rodeo, one of the largest rodeos in the country. Fort Sam Houston, Lackland Air Force Base, Kelly Air Force Base, and other military facilities are nearby.
2. Fort Worth
Fort Worth came in at #3 nationally, adding nearly 13,000 new residents. The fifth largest city in Texas and the 13th largest city in the country, Fort Worth is a modern city that still pays homage to its roots as the center of the Texas Longhorn cattle trade. It boasts a robust arts community, including multiple museums and the Van Cliburn International Piano competition. Fort Worth is home to Texas Christian University, Texas A&M Law School, and Texas Wesleyan.
3. Frisco
Frisco city added nearly 8,000 new residents, coming in at #8 nationally for the largest population increase, and now claiming a population of more than 200,000. Part of the DFW metroplex, it houses a large number of commuters working in Dallas and Fort Worth. Frisco was designated as Tree City USA by the National Arbor Day Foundation and serves as the HQ and training facility for the NFL’s Dallas Cowboys, the NHL’s Dallas Stars, and FC Dallas in Major League Soccer.
4. New Braunfels
Just behind Frisco, New Braunfels ranked #9 nationally, adding more than 7,500 residents. Located between Austin and San Antonio, this picturesque area is surrounded by natural landscape. The Guadalupe and Comal Rivers offer a great place to cool off in the hot summer, and you’ll often find groups of tubers floating downstream. It’s also home to Gruene Hall, a music venue that is favored by local artists and country performers.
5. Georgetown
Georgetown added more than 7,100 residents and came in at #10 nationally. Located 25 miles north of Austin, Georgetown is known as the red poppy capital of Texas. You will find wildflowers growing all over the place. The annual Red Poppy Festival attracts tens of thousands of visitors in April. It is also home to Southwestern University and Blue Hole Park, which sports a lagoon connected to the San Gabriel River.
6. Leander
Number 12 on the top 15 list of cities with the largest population growth is Leander, which grew by more than 10% and is now home to 67,000 residents. Leander is northwest of Austin and a favorite area for those that commute into Austin for work. Leander also features more affordable housing, high-quality education, and access to Lake Travis.
7. Denton
Denton added another 5,800 residents to its population, which now exceeds 148,000, and ranks #14 on the list nationally for growth. Also in the DFW metro, Denton is known as “Little Austin” due to its music festivals, including performances at the North Texas State Fair, Arts and Jazz Festival, and the Thin Line Fest, which attracts more than 300,000 visitors annually. It’s also home to the University of North Texas and Texas Woman’s University.
8. McKinney
Rounding the top 15 nationally, McKinney grew by more than 5,500 and has not topped 202,000 residents. Consistently ranked as one of the most livable places in the country, McKinney retains its small-town feel with a historic downtown lined with trees while being just 30 minutes from Dallas. The area also supports a large number of vineyards.
Most Populous Cities in Texas
Five Texas cities also made the Census Bureau’s list of the top 15 most populous cities as well, creating significant opportunities for real estate. The cities are:
Houston: Ranked 4th nationally with a population of 2.28 million
San Antonio: Ranked 7th nationally with a population of 1.45 million
Dallas: Ranked 9th nationally with a population of 1.28 million
Austin: Ranked 11th nationally with a population of 964,000
Fort Worth: Ranked 13th nationally with a population of 935,000
It’s a Good Time to Become a Texas Real Estate Agent
If you’ve been considering a career change, it’s a fantastic time to get into real estate. Education is affordable and readily available and demand continues for high-quality real estate agents.
Ready to explore a new career in Texas? Register to start yourTexas pre-licensure courses today!
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Updated 12/21/22
