The Texas real estate market has been a prime investment location for years. It’s full of top-performing cities in which property investors have found success time and time again. But when it comes to choosing the best city in this market, which one wins: Dallas vs Houston?
Today, we’re going to be comparing Dallas real estate and Houston real estate in 2019. We’ll analyze each market separately, then determine which location wins: Dallas real estate market vs Houston real estate market.
Dallas Real Estate Market 2019
The best way to analyze any real estate market is to look at the numbers. Mashvisor’s investment property calculator evaluated rental property performance in each city. Here’s all the data you need to know about the Dallas housing market:
- Median Property Price: $403,696
- Price per Square Foot: $199
- Price to Rent Ratio: 18
- Average Days on Market: 70
- Monthly Traditional Rental Income: $1,878
- Traditional Cash on Cash Return: 1.0%
- Monthly Airbnb Rental Income: $3,088
- Airbnb Cash on Cash Return: 2.5%
- Airbnb Occupancy Rate: 54%
The Dallas real estate market is a great opportunity for buy-and-hold real estate investors. Cash flow is the name of the game and it’s something you’ll definitely find with Dallas real estate investments in 2019. This is a city that is experiencing rapid growth in its economy and housing market, but it still remains relatively affordable.
The fourth most populous metro in Texas (with a population of 7.4 million people), you can expect to find a strong investment with Dallas real estate. Let’s talk more specifically about what makes Dallas real estate such a strong asset for investment in 2019.
Dallas Real Estate Market Trends
According to Zillow, Dallas houses have increased in value by an impressive appreciation rate of 9.6 percent. Currently, the city holds a median home value of $213,300. This trend of real estate appreciation is expected to carry on in 2020, with Dallas investment properties projected to gain 4.5 percent within the next year.
An increase in value shouldn’t worry real estate investors as this boost isn’t coming from housing market pressure. Positive economic conditions are driving high value for investment properties in Dallas. You’ll find a buyer’s market in this city, meaning there is a good level of Dallas houses for sale for you to choose from.
Related: Are These 6 Cities a Buyer’s Market or a Seller’s Market in 2019?
With the population increasing at a steady rate year after year, demand for Dallas rentals continues to go up. 58.5 percent of the market is made up of renters and increased renter demand has helped push rental rates in the market. From 2012 to 2018, the median rental rate in the Dallas metro area went up 26 percent.
Investing in Dallas real estate properties is sounding like a good idea. But to know exactly where to invest for optimal results, we recommend these neighborhoods:
Five Mile Creek
- Median Property Price: $197,486
- Monthly Traditional Rental Income: $1,299
- Traditional Cash on Cash Return: 2.1%
- Monthly Airbnb Rental Income: $2,718
- Airbnb Cash on Cash Return: 8.6%
- Airbnb Occupancy Rate: 47%
Farmers Market District
- Median Property Price: $387,780
- Monthly Traditional Rental Income: $2,677
- Traditional Cash on Cash Return: 4.8%
- Monthly Airbnb Rental Income: $3,339
- Airbnb Cash on Cash Return: 4.9%
- Airbnb Occupancy Rate: 56%
Coppell
- Median Property Price: $310,990
- Monthly Traditional Rental Income: $2,305
- Traditional Cash on Cash Return: 4.6%
- Monthly Airbnb Rental Income: $3,078
- Airbnb Cash on Cash Return: 6.1%
- Airbnb Occupancy Rate: 51%
Interested in a more in-depth analysis of the Dallas housing market? Check out the Dallas Real Estate Market Report 2019.
Houston Real Estate Market 2019
Let’s balance the Dallas vs Houston narrative out. Time to talk about Houston real estate. Let’s first give you Mashvisor’s data on the Houston housing market, then talk more about the market’s trends.
- Median Property Price: $391,027
- Price per Square Foot: $167
- Price to Rent Ratio: 17
- Average Days on Market: 66
- Monthly Traditional Rental Income: $1,881
- Traditional Cash on Cash Return: 1.6%
- Monthly Airbnb Rental Income: $2,352
- Airbnb Cash on Cash Return: 1.3%
- Airbnb Occupancy Rate: 50%
The biggest city in Texas, Houston has got a metro population of 6.9 million. With one of the strongest economies in the country, Houston is the base for 49 Fortune 1000 Companies. Houston has got one of the lowest costs of living in the nation. This coupled with its steady employment growth and strong job market leads us to only expect a continued increase in population.
Houston Real Estate Market Trends
Houston home values may not be increasing at the same rate as Dallas homes, but they have been steadily rising for years. The current median value of Houston real estate is $188,700 which is up 5 percent from last year. Also expected to continue appreciating in 2020, Zillow estimates Houston home values to go up 2.5 percent within the next year.
We’re seeing a tighter inventory of Houston houses for sale but supply levels are still high enough to meet buyer demand, keeping Houston a buyer’s market. Rental demand is high as 56.8 percent of Houston housing is rented rather than owned.
Houston is a great market for investing in both single-family homes and multi-family homes. Real estate investors will find a good balance of options for both property types as single-family homes make up 45 percent of residential Houston real estate, and apartment complexes make up 43 percent.
Related: Your Guide to Investing in Single Family Home vs. Multi Family Home in 2019
So are you now wondering where to invest in the Houston real estate market? Here are the top neighborhoods in 2019:
Golfcrest – Bellfort – Reveille
- Median Property Price: $170,509
- Monthly Traditional Rental Income: $1,338
- Traditional Cash on Cash Return: 3.4%
- Monthly Airbnb Rental Income: $4,243
- Airbnb Cash on Cash Return: 15.0%
- Airbnb Occupancy Rate: 53%
Pecan Park
- Median Property Price: $194,500
- Monthly Traditional Rental Income: $1,445
- Traditional Cash on Cash Return: 3.3%
- Monthly Airbnb Rental Income: $3,278
- Airbnb Cash on Cash Return: 7.1%
- Airbnb Occupancy Rate: 54%
Fort Bend – Houston
- Median Property Price: $113,593
- Monthly Traditional Rental Income: $1,247
- Traditional Cash on Cash Return: 5.7%
- Monthly Airbnb Rental Income: $1,794
- Airbnb Cash on Cash Return: 5.5%
- Airbnb Occupancy Rate: 41%
Want data on individual Houston investment properties? Use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes!
Which One Wins?
Honestly, there isn’t a clear answer. Both of these are strong real estate markets which each have their own advantages. You’ll find neighborhoods in each city which perform well for either rental strategy, and you won’t have pressure from intense buyer competition in both markets. So the answer comes down to what the best real estate market is for you and your goals. And the best way to figure that out is to take your investment criteria and let Mashvisor’s tools give you some insight into your investing decisions in 2019.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
Related: Want to Own a Successful Real Estate Investment? Use These Tools
