Texas is home to some of the fastest-growing cities in the United States—should you invest before it’s too late?

Everything is getting bigger in Texas—including the growth of some of its most obscure cities. According to the latest news U.S. Census Bureau Data show that between July 2022 and July 2023, 8 of the 15 fastest growing Citibankit is at This country is in Texas.

The growth rate in the humble Dallas suburb of Celina is 26.6%, more than 53 times the national average. 0.5%. Celena is followed by several smaller, less well-known Texas towns:

• Ful Cut: increased by 25.6%
• Princeton: increased by 22.3%
• Anna: Growth of 16.9%
• Georgetown: increased by 10.6%
• Prosperity: 10.5% increase
• Forney: increased by 10.4%
• Kyle: 9% increase

Larger Texas towns are also doing well. Houston is currently the fourth largest city in the United States, surpassing Chicago in third place.

Why Texas?

Favorable taxes, job opportunities, less expensive housing, a warmer climate and a higher quality of life are all driving population growth in cold, high-priced northern cities. However, the dramatic population growth in small towns may be more immediate than that.

“The list of fastest-growing cities includes many smaller cities that are unlikely to attract attention,” Danielle Hale, chief economist at Realtor.com, said in a report. Press release. “Smaller areas usually top these lists because their smaller size makes them easier to see. big Percent change.

What are house prices like in Texas’ top small towns?

According to Realtor.com, affordability not always Be at the top of your list when choosing where to live. Celina’s median home price is $679,999, well above the national average. quite, it’s mouthwatering Because of its good schools and low crime rate. The one-hour commute to Dallas is also a plus.

Likewise, top-ranked Fulshear, which has a median home price of $519,000, is just an hour outside of Houston.

So does Texas cash flow

Although some The fastest growing cities in Texas include Expensive single-family homes, less expensive housing also dominate the state cash flow marketalso. Texas accounts for 6 of the 10 largest cash flow markets in the United Statesaccording to BiggerPockets data.

Why South Texas is a Great Place to Invest

McAllen, Texas has been an investor favorite for years. According to BiggerPockets data, the city’s rent-to-price ratio is 0.84%, the median sales price for “owner-occupied” homes is less than $100,000, and the median rent is about $800. Low-cost housing and rent mean many investors can scale up quickly.

Although real estate agent network The data tells a slightly different story, with the median home price at $285,300, likely due to the large difference between lower and higher home prices in the city, which provides Various employment types, from consulting services, financial services, healthcare and education. In 2023, homes valued at approximately $150,000 experienced 80% increase Market value over the past five years. As residents in California and other areas relocated during the epidemic, home prices in other areas increased by more than 100% during the same period. Remote work boom.

Other South Texas cities of Odessa, Corpus Christi and El Paso also dominate the list of cities with the highest cash flow in the country due to their affordability, BiggerPockets data shows. Border towns and the Gulf region offer many types of employment opportunities, from military bases to healthcare, e-commerce fulfillment centers, food processing and energy. In an era of high interest rates, these affordable Texas towns and strong employment make them great places to invest, whether as an all-cash buyer or with a larger down payment that can be refinanced once rates drop .

Beware of rising property taxes

While affordable housing is available in many areas of Texas, property taxes have soared in cities where home prices have appreciated significantly in recent years, making them among the most expensive in the country.

According to recent analysis AxiosWithout adjusting for inflation, the median property tax rate for single-family homes in Texas increased by 26% between 2019 and 2023. Lawmakers have been trying to stem the growth, with some success. In 2023, taxes for many property owners across the state dropped by 28%.

“The bottom line is that the environment now is more favorable to taxpayers, especially homeowners, than it was before 2019,” said Texas Real Estate Research Economist Lynn Krebs. This is even more true after the homestead exemption was increased last year. Texas Tribune. Before the cuts, some residents’ tax bills increased by as much as 31% between 2018 and 2023.

final thoughts

The problem property tax is controversial. duty free Otherwise it will be used School district maintenance is a tough sell Realized. Lt. Gov. Dan Patrick told the Texas Public Policy Foundation last year that the state would need about $55 billion to offset school district maintenance costs in 2024-2025, equivalent to nearly two-fifths of the state’s $144.1 billion general fund budget.

If taxes continue to increase without lowering interest rates, investors will need to keep a close eye on their bottom line cash flow numbers and choose to invest with a large down payment or as an all-cash buyer. Those who invested more than a decade ago have enjoyed some Golden Year exist appreciation and cash flow.

However, that doesn’t mean another halcyon era for Texas investing isn’t coming. and corporate relocation and cities attracting new residents, Texas remains a great place to deploy cash. However, unless you’re ready to invest a lot of money, at least look for appreciate rather than cash flow.

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Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.