Trends & News 5 Texas Real Estate Market Trends to Expect in 2020 by Hamza Abdul-Samad November 23, 2019November 5, 2019 by Hamza Abdul-Samad November 23, 2019November 5, 2019 With a population of over 28 million, The Lone Star State is the most populated state in the US. A large population brings with it many real estate investment opportunities. So it’s natural for property investors from all across the US to show interest in the Texas real estate market. But how’s the market looking for next year? What are the Texas housing market forecast and important trends for 2020? Texas Real Estate Market: Mashvisor’s Data In order to better understand the trends for investing in Texas real estate in 2020, we need to analyze the data of the Texas real estate market. You can obtain access to this investment data here, with Mashvisor! Mashvisor’s investment property calculator will analyze local rental markets and Texas houses for sale in a matter of minutes. To learn more about Mashvisor’s calculator, CLICK HERE! In the meantime, here is the data for the Texas real estate market: Pricing Median Property Price: $323,619 Price per Square Foot: $152 Price-to-Rent Ratio: 17 Traditional Investing Rental Income: $1,560 Cap Rate / Cash on Cash Return: 1.2% Airbnb Investing Rental Income: $2,883 Cap Rate / Cash on Cash Return: 4.5% Occupancy Rate: 53.8% Note: The cash on cash return and cap rate above are equal as both calculations are done with the assumption that property is bought with cash and not a loan. Mashvisor’s calculator can show you accurate cash on cash returns for investment property based on your financing method. Give it a try. 5 Texas Real Estate Market Trends for 2020 There is a lot to be said about the data mentioned above. With those numbers in mind, let’s get into the 5 Texas real estate market trends that investors should expect in 2020: 1. Affordable House Prices Arguably the highlight of the Texas real estate market trends is the affordability of its house prices. As seen above, the median Texas investment property price is $323,619. Texas house prices are lower than the US median property price, which is $325,200. Low Texas house prices are a blessing for all future Texas real estate investors. With affordable prices, all types of investors, experienced or beginner, can purchase Texas real estate investments. Median Texas house prices vary depending on the city of course. A number of cities, however, are well below the Texas median price. Best Cities in Texas for House Prices: 1. Eagle Pass Median Property Price: $173,618 Price per Square Foot: $102 2. Del Rio Median Property Price: $200,675 Price per Square Foot: $98 3. El Paso Median Property Price: $202,510 Price per Square Foot: $105 4. Mesquite Median Property Price: $206,826 Price per Square Foot: $120 5. Beaumont Median Property Price: $214,713 Price per Square Foot: $100 6. Abilene Median Property Price: $234,337 Price per Square Foot: $111 Related: The Cost of Investing in Texas Real Estate 2. High Real Estate Appreciation Rates Texas house prices are relatively inexpensive on the national level, but they are expected to increase in 2020. According to Zillow, property in the Texas housing market 2020 is projected to appreciate by 3.0%, which is more than the expected US average of 2.8%. With a high appreciation rate, Texas real estate investors will enjoy an increase in value on their long-term rentals. This will lead to profit in the event that the investor sells the property or uses the property’s home equity for financing purposes. Many of the best cities in Texas, such as the Dallas housing market, have an appreciation rate that is well above the state’s estimated rate, according to Zillow. Best Cities in Texas for Appreciation: 1. Irving – 5.0% 2. Dallas – 4.5% 3. DeSoto – 4.5% 4. Arlington – 4.2% 5. Edinburg – 4.2% 6. Mesquite – 4.2% Related: 5 Best Cities For Real Estate Appreciation in 2020 3. Profitable Traditional Investments The Texas real estate market is excellent when it comes to traditional investing. One of the reasons why this is the case is its economic success. With the 15th best state economy, 2nd largest state economy, and a GDP of $1.645 trillion in 2017, the state lives up to its “everything’s bigger in Texas” motto. The state’s job market is very diversified, with the largest industries including construction, schooling, restaurants and school services, software publishing, and energy sectors. The Texan economy has experienced great growth in 2019. The median household income of the state increased by 4.67% and its job market grew by 2.15% over the year, according to Data USA. Being a cool buyer’s market (whereas many large states are currently hot seller’s markets), the Texas real estate market provides plenty of opportunities for traditional long-term rentals. Best Cities in Texas for the Traditional Strategy: 1. Beaumont Rental income: $1,310 Cap Rate / Cash on Cash Return: 2.3% 2. Mesquite Rental income: $1,424 Cap Rate / Cash on Cash Return: 2.1% 3. Corpus Christi Rental income: $1,473 Cap Rate / Cash on Cash Return: 2.1% 4. Texarkana Rental income: $1,219 Cap Rate / Cash on Cash Return: 1.9% 5. Del Rio Rental income: $1,188 Cap Rate / Cash on Cash Return: 1.8% 6. Houston Rental income: $1,875 Cap Rate / Cash on Cash Return: 1.5% 4. Successful Airbnb Rental Property Investments Airbnb rental properties are also a profitable form of investing in Texas. A popular destination for both domestic and international tourists, the Texas real estate market has seen great success with Airbnb. As it pertains to Texas Airbnb laws, investors need to know that each city has its own Airbnb regulations regarding non-owner occupied rentals. Some city markets, such as the Austin real estate market, have clear and defined Airbnb laws, while others have not adopted official Airbnb legislation. Overall, Texas housing market predictions for Airbnb will remain positive in 2020. Best Cities in Texas for the Airbnb Strategy: 1. San Antonio Rental Income: $2,487 Cap Rate / Cash on Cash Return: 3.2% Airbnb Occupancy Rate: 54.7% Notable Airbnb laws: permits, 9% Hotel Occupancy Tax, 7% general occupancy tax, 1.75% Bexar County hotel occupancy tax. 2. Lubbock Rental Income: $3,071 Cap Rate / Cash on Cash Return: 7.5% Airbnb Occupancy Rate: 57.4% Notable Airbnb laws: No official Airbnb laws. 3. El Paso Rental Income: $2,399 Cap Rate / Cash on Cash Return: 4.9% Airbnb Occupancy Rate: 66% Notable Airbnb laws: No official Airbnb laws. 4. Garland Rental Income: $2,861 Cap Rate / Cash on Cash Return: 5.5% Airbnb Occupancy Rate: 65.6% Notable Airbnb laws: No official Airbnb laws. 5. Austin Rental Income: $3,686 Cap Rate / Cash on Cash Return: 3.3% Airbnb Occupancy Rate: 58% Notable Airbnb laws: operating license, 9% city hotel occupancy tax, 6% state occupancy tax. Find a Profitable Airbnb Investment Property 5. High Property Taxes Texas has the third-highest effective property tax rate in the US at 1.86%. As a result, when considering where to invest in Texas real estate in 2020, Texas real estate investors should be aware of each county’s property taxes. Investors in the Texas real estate market pay an average of $2,275 per year on a property with a median price of $125,800. Here are the property taxes, as a percentage and value based on median property price, of the most populated counties in the Texas real estate market: Property Taxes of the Most Populated Counties in Texas: 1. Harris County: 2.31%, $3,040 2. Bexar County: 2.12%, $2,484 3. Tarrant County: 2.37%, $3,193 4. Collin County: 2.19%, $4,351 5. Fort Bend County: 2.48%, $4,260 6. Dallas County: 2.18%, $2,827 7. Montgomery County: 1.99%, $3,123 Related: Real Estate Taxes: Everything a Real Estate Investor Needs to Know There’s no doubt about it. The Texas real estate market will be one of the best states to invest in rental property in 2020. To start searching for Texas houses for sale, CLICK HERE to start your 14-day FREE trial with Mashvisor! Start Your Investment Property Search! START FREE TRIAL Affordable MarketsAirbnbAirbnb RegulationsProperty TaxTexasTraditional 0 FacebookTwitterGoogle +PinterestLinkedin Hamza Abdul-Samad Hamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property. 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