When your unofficial state motto is “Everything is Bigger in Texas,” anything that is small seems to be overlooked or forgotten. But in the nation's second largest state, small towns can boast that they rival their bigger counterparts in two ways – high school football and the housing market.
The major metropolitan areas, especially Houston, have gotten a lot of attention for their housing gains lately, but many of Texas' smaller towns are also making huge housing strides – even if most people haven't noticed yet!
The housing markets in smaller cities in Northeast Texas, especially Longview, Marshall, Nacogdoches, Palestine, Paris, Texarkana, and Tyler, have been trending upward since the second half of 2012, according to researchers at the Texas A&M Real Estate Center (TAMREC). Several factors can be credited for the growth, but as is the case with real estate everywhere, location seems to be the most important one.
Here’s what makes the location for these cities so desirable:
- The urban sprawl from Dallas continues in a Northeast pattern
- The region is home to several lakes, where wealthy Texans are purchasing lakefront property for their second/vacation homes
- Older buyers who are nearing retirement are choosing to settle down in these cities and towns in the Upper East Side of Texa.
And why wouldn't they?
Home prices in these smaller towns are increasing, but they are going up at a slower rate than other parts of the country. According to economists at TAMREC, prices are currently up 12% from 2011 and 6% over 2012. That's bad news for homeowners looking to make a significant profit by selling their home, but it makes Northeast Texas an attractive option for buyers. Plus, the cost of living in this region of the state is also cheaper than some other areas around the Lonestar State.
Another factor working in this area’s favor? There's plenty of inventory available, especially in the high-end and mid-level price ranges.
And, unlike many other areas around the country, Northeast Texas did not feel much of the sting from the housing market's collapse, so there are fewer distressed properties for sale. Economists say that you can thank all of the local and regional banks for the lack of foreclosures in the area. For the most part, these smaller lenders did not get involved in the sub-prime lending procedures that larger financial institutions did during the housing bubble in the mid-2000s. On one hand, that's a good thing for the local housing market. Fewer distressed properties means home prices in the region did not significantly drop, and therefore, don't have as far to rise either.
But for lower-income buyers hoping to purchase a cheap home, Northeast Texas may not be the best place to look. For that reason, many of the young people who grew up in these towns are moving to bigger cities for better paying jobs.
As a result, most of the buyers in this region of Texas are older, financially-stable adults who are looking for their retirement or second/vacation home. So, unlike metropolitan areas, where the jobs entice people to move to the area, in Northeast Texas, it's the exact opposite. Here, the location is the biggest selling factor, and the people bring their jobs with them.
Apparently, it’s a big selling factor, too. Experts at TAMREC expect home sales figures in the region to grow even further in the months to come, so maybe sometimes, bigger isn't always better!
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