The Lone Star State is in high demand among real estate consumers – and it isn’t just because “everything’s bigger in Texas.”
A mixture of economic diversity, demographic shifts, government incentives, and a tech-forward attitude are helping push Texas real estate into the national spotlight. Whether you’re a buyer, seller, investor or real estate practitioner, it pays to know the driving forces behind the trend. In this post, let’s unpack why people are flocking to Texas real estate.
The State’s Proptech Scene Makes Real Estate a Relative Breeze
The state’s progressive attitude toward technology is a crucial reason for the recent boom in real estate transactions. Big cities like Austin and Houston determinedly foster proptech companies (short for “property technology”) that make the transaction process easier.
For instance, Nobul recently launched its platform to a receptive Texan audience. The innovative real estate digital marketplace supports consumers end-to-end by analyzing their realtor options, offering curated listings and providing access to market resources.
“Texas is a perfect fit for Nobul.” CEO Regan McGee told Click2Houston, “and there couldn’t be a better time for our technology to finally be available there.”
Consistent Population Growth Puts Texas Real Estate on the Upward Path
In the same interview, McGee pointed out that “Texas is the second most popular state in the United States for relocation, with more than 500,000 people moving to the Lone Star State every year.” People move to Texas for various reasons – job opportunities (see below), immigration, retirement, education, etc.
Crucially, these are evergreen reasons that won’t change anytime soon, meaning Texas’ population growth will likely continue unabated. That’s fantastic news for real estate investors because it means Texas’ real estate demand will probably outpace inventory in the long term.
Buyers Find Reasonable Prices and Favorable Tax Laws
Although Texas home prices rose nearly 8% in 2022, they’re still below the national average. Compare the median home price in California (around 708,000) to Texas’ median home price (around $257,000), and you get a pretty good idea of why the state is attractive to investors.
Incidentally, this disparity between California and Texas may help explain why technology is taking off in the state. Several big tech companies are moving their HQs to Texas to take advantage of lower costs, bringing jobs with them.
At the same time, Texas boasts attractive tax laws. There’s no transfer tax and no state-levied property taxes (property taxes are levied by local governments). The “homestead exemption” dictates that $25,000 of a property’s value can be exempt from taxes. And the state has capped the taxable value of a home from rising more than 10%.
Texas’ Diverse Economy Boasts an Enviable Job Growth Rate
As alluded to in earlier sections, Texas’ job market is strong and diverse. According to recent reports, Texas leads the US in job growth, adding more jobs last August than any month in recorded state history.
Employment has long been a pull factor for interstate migration. If the Texas job market can continue its upward ascent (forecasts look good), then you can expect to see even more injection in Texas real estate in the future.
In summary, it’s an excellent time to be a Texas homeowner. With job forecasts looking strong and population growth holding steady, it’s also probably a good time to enter the market.