Realtor.com® has been fueling headlines and feeding bloggers with its super “sexy” list of the hottest housing markets in the country. In its latest report, issued in mid August, the company ranked three Texas metro areas among the “Top 10 Hottest Zip Codes for Midyear 2015.” By their estimation, Austin, San Antonio and Plano are three of the most sizzling real estate markets in the U.S. right now.
Realtor.com’s economic data team evaluates housing conditions in thousands of zip codes and metro areas across the country, looking for areas where homes are selling much faster than the national average.
“Each locale on this list is emblematic of the key trends driving housing this year — healthy local economics, job opportunities, and affordability,” said Jonathan Smoke, the company’s chief economist.
Specifically, the real estate markets are ranked based on listing data taken from the Realtor.com website, including the number of listing views (to measure demand) and the median age of inventory (to measure supply). These and other factors are used to identify the “hottest” housing markets.
Three Texas Housing Markets Among the Hottest
Out of the top ten zip codes at mid year, three were located in Texas. Here are three Texas housing markets that are currently outpacing the nation in terms of home buying activity:
- Plano, TX, 75023 (ranked #4 nationally)
- San Antonio, TX, 78247 (ranked #6)
- Austin, TX, 78729 (ranked #8)
In each of these real estate markets, homes are selling four to nine times faster than the national average. This is largely the result of strong demand but limited inventory, an imbalance that leads to faster sales.
Here’s a city-by-city overview of local housing trends and conditions in these areas:
Plano Home Prices Rising Steadily in 2015
According to data collected by the real estate information company Zillow, home prices in Plano, Texas rose by a whopping 15% over the last year or so. The company expects house values in the area to climb another 7% or so over the next 12 months (Aug 2015 – Aug 2016).
Plano is a city in the Dallas-Fort Worth metro area. Like many cities in the area, Plano enjoys a strong local economy and a relatively high rate of employment. Legacy West, a 240-acre mixed-use development currently under construction, will bring even more companies and jobs into the area. A strong and growing local economy attracts residents and gives them the financial means to buy a home. This helps drive the local real estate market in Plano, Texas.
San Antonio Home Sales Up by Double Digits
According to CoreLogic, a financial data company, average home prices in San Antonio, Texas rose 5.3% in June compared to a year earlier. Realtor.com reports a 10.5% increase in the median list price (a different metric) for this real estate market, from July 2014 to July 2015.
Home sales made a double-digit jump in July. According to a monthly market report from the San Antonio Board of REALTORS (SABOR), total sales of existing and new homes in the metro area rose 18.6% in July compared to the same time last year. Nearly 3,000 sales were recorded for the month of July.
“Not only is the San Antonio area reporting strong numbers,” said Angela Shields, SABOR president, “but the whole state has experienced immense growth as well.”
San Antonio’s population has grown steadily in recent years, nearly twice as fast as the rest of the country. This brings more people into the housing market, on both the purchase and rental side. The city’s jobless rate is below 4% and well below the national average.
You may notice a pattern here. These Texas cities offer good job markets and affordable housing, which attracts new residents and drives population growth.
Austin Housing Market Attracts Upwardly Mobile Buyers
Having lived in Austin for six years, I can say it is one of the most unique cities in Texas. It’s an eclectic mix of college town, political hub, and live-music hot spot. It also has a strong economy and a tech industry that attracts young, upwardly mobile residents from elsewhere in Texas and across the country. This drives housing demand and fuels the local real estate market.
Homes are fairly affordable in the Austin area (especially when you get into some of the surrounding neighborhoods and bedroom communities), and this makes it well suited for first-time buyers with limited funds. This, combined with the strong local economy, is largely what brings people into the area in the first place. It’s a self-perpetuating cycle of market growth. And apparently, it’s a Texas thing.
Disclaimers: This story contains third-party data and commentary relating to the real estate markets in Austin, Plano and San Antonio. Such information is deemed reliable but not guaranteed. The “hotness” rankings described in this article do not necessarily reflect the views of the publisher.