The unassuming Dallas suburb of Celina saw meteoric growth of 26.6%, more than 53 times the nation’s average growth rate of 0.5%. Following Celina were several smaller, less well-known Texas towns:
Fulshear: 25.6% increase
Princeton: 22.3% increase
Anna: 16.9% increase
Georgetown: 10.6% increase
Prosper: 10.5% increase
Forney: 10.4% increase
Kyle: 9% increase
Larger Texas towns fared well, too. Houston is currently the fourth-largest U.S. city, gaining on third-place Chicago.
Why Texas?
Favorable taxes, jobs, lower-priced housing, a warm climate, and high-quality living have all driven the population surge from colder, high-priced Northern cities. However, the dramatic population increase in smaller towns might be more straightforward than that.
“The list of fastest-growing cities includes a lot of smaller cities that are not likely to be on many people’s radar,” said Danielle Hale, chief economist of Realtor.com, in a press release. “Smaller areas often top these lists because their smaller size makes it easier for them to see large percent changes.
How Affordable Are the Top Small Towns in Texas?
According to Realtor.com data, affordability isn’t always at the top of the list when choosing a place to live. Celina’s median home price of $679,999 is way above the national average. Rather, it’s coveted for its good schools and low crime rate. The hour-long commute to Dallas is also a plus.
Similarly, Fulshear, also high on the list, has a median home price of $519,000 and is only an hour away from Houston.
Texas Cash Flows, Too
While some of the fastest-growing cities in Texas comprised pricey single-family homes, less expensive housing in the state also dominates the country’s cash flow markets, too. Texas occupied six of the 10 most cash-flowing markets in the U.S., according to BiggerPockets data.
Why Southern Texas is a Great Place to Invest
McAllen, Texas, has been an investor favorite for years. According to BiggerPockets data, the city has a rent-to-price ratio of 0.84%, a median “owner-occupied” sales price of under $100,000, and a median rent price of around $800. Low-cost housing and rents mean that many investors can scale quickly.
Although Realtor.com data tells a slightly different story, with the median home price sold being $285,300, this is likely due to the vast spread of house prices between lower and higher in the city, which offers multiple types of employment, from consulting services, financial services, medical, and education. Homes valued at around $150,000 in 2023 experienced an 80% increase in market value over the preceding five years. Other areas saw prices increase by over 100% in the same period as residents from California and elsewhere relocated during the pandemic amid the remote working boom.
BiggerPockets data reveals that the other southern Texas cities of Odessa, Corpus Christi, and El Paso also dominate the highest cash flow cities in the country due to affordability. The border towns and Gulf areas offer multiple types of employment, from military bases to medical, e-commerce fulfillment centers, food processing, and energy. In an age of high interest rates, these affordable Texan towns with robust employment make them great places to invest, either as an all-cash buyer or with a larger down payment, to refinance once rates fall.
Beware of Rising Property Taxes
Though many parts of Texas offer affordable housing, pricier cities that have appreciated significantly in recent years have seen property taxes soar, making them some of the most expensive in the country.
According to a recent analysis by Axios, median property taxes on Texas single-family homes grew by 26% between 2019 and 2023 without accounting for inflation. Lawmakers have been trying to stem the increases and have had some success. Many property owners across the state saw their taxes fall by 28% in 2023.
“The bottom line is that it’s a much more taxpayer-friendly environment, particularly for homeowners, than it was before 2019, and even more so after last year’s increase in the homestead exemption,” Lynn Krebs, a research economist at the Texas Real Estate Research Center at Texas A&M University, told Texastribune.org. Before the cuts, some residents saw their tax bill increase by as much as 31% between 2018 and 2023.
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