According to a recent study by WalletHub, five Texas cities landed in the top 10 for Best Real Estate Market. Frisco placed first because it has the largest share of young homes.
WalletHub found that about 30.9% of homes in Frisco are young, which means home units were built between 2010 and 2019.
“Frisco tops the other cities in terms of building permit activity and also ranks high for maintenance affordability,” said Jill Gonzalez, an analyst with WalletHub.
Maintenance affordability includes home energy and telephone costs.
The study further found that Frisco has the largest population growth rate at 35.65% and the largest job growth rate at 14.59% compared to the 299 other cities on the list.
“The population growth rate was just one of the 18 metrics that contributed to the final ranking,” Gonzalez told Dallas Express.
Other metrics include home value forecast, median days on the market, share of seriously underwater mortgages, rent to price ratio, and foreclosure rate.
Frisco outranked Dallas, which landed at No. 137, due to an increase in Dallas home value forecasts from 7.6% to 10.3%.
“Frisco also has lower foreclosure and vacancy rates,” Gonzalez said in an interview. “Other areas where Frisco ranked higher than Dallas include maintenance affordability, population growth rate, job growth rate, unemployment rate, and median credit score.”
In addition to Frisco, three other Dallas-Fort Worth cities ranked in the top five best places to buy a home, including Allen, McKinney, and Denton.
“The area is affordable and has a good economic environment,” Gonzalez said. “The fact that Texas has four cities in the top five is an indication of the health of the state’s real estate market. It also means that the state’s economy is recovering from the pandemic.”
McKinney scored 4th, followed by Denton and Allen, with population growth rates of 26.37%, 10.96%, and 13%, respectively.
“They did not rank first because they had a lower share of young homes, less affordable maintenance costs, and lower population and job growth rates,” Gonzalez said. “They also ranked lower in terms of unemployment rate and the median credit score. Allen ranked high because it had no foreclosures and the largest share of young homes at 16.3%.”
According to WalletHub data, Fort Worth ranked No. 26 because it has a large share of people delinquent on their mortgage debt, a low median credit score, and a high vacancy rate, while Richardson, Carrollton, Irving, Grand Prairie, and Plano all ranked in the top 20% of the list. Arlington ranked 86th compared to 123rd for Mesquite.
“One of the reasons they didn’t rank even higher include a lower median home price appreciation that ranges from 83.5% in Grand Prairie to 55.8% in Plano,” Gonzalez added.
Overall, to improve its housing market, North Texas requires a better home value forecast, which would translate into a higher median home price appreciation, according to Gonzalez.
“It should also have a lower share of seriously underwater mortgages, a lower percentage of people delinquent on their mortgage debt, and a lower vacancy rate,” she said. “Other areas where it could improve include maintenance affordability and population growth rate.”