Why the Texas Coast real estate market is so hot
Baby Boomers, like birds are flocking to the Texas coast and for good reason, Texas is the most affordable – high growth state in the nation. And the lone star’s future looks even brighter with billions in major new capital investments coming to the state.
The Texas coast has become the nation’s most promising emerging vacation home market, according to the wisdom of our nation’s most successful investors and economists, and based on factual evidence from the leading housing market indicators and Government compiled statistics.
- "What a man has to do to become rich in America is find out where people are going, get there first, and buy land" - Douglas MacArthur
- "Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming financially independent. For real estate is the basis of wealth." - Theodore Roosevelt
Mike Stuart, CEO of TexasGulfCoastOnline.com, the region’s leading real estate portal, says:
“When you have the fastest growing state in the country, the most successful economy, the most affordable oceanfront housing, strong rental demand, steadily appreciating property values, a wide diversity of location lifestyles and housing products and an emerging resort market that is remarkably transforming at a record pace – you have the recipe for wealth creation on an unprecedented scale.”
“Our market fundamentals are strong and in most cases, you can cover your typical mortgage costs from rental income.” “With all the negative press on the nation’s housing woes, there have never been better opportunities in such a clearly solid market poised for a great future.”
“We have the nation’s most must-see remarkable new projects under development - from ultra modern mega ocean front high-rises, to walk-able new-urbanism communities and affordable hurricane resistant modular homes.”
“Some unique attractions of our coastal area, besides the sub-tropical oceanfront climate, include the simultaneous beach and bay views you have from our barrier islands and that all our coastal resort markets are within the ideal 2 hours drive from our prosperous major metropolitan cities, including Houston, San Antonio, Austin and Dallas. Our major Metro’s alone can supply the sales and rental demands for our coastal markets”
“We also have huge external demand creating investment capital pouring into the region from innovative new projects like oil billionaire T Boone Pickens’s wind farm power plan, the already in-progress Texas crude oil refinery capacity investments of over 20 billion dollars, new nuclear plants, and the projected benefits of our recently approved NAFTA super highway”
Kieran Trass, author of “Grow rich with the property cycle” and “An insider’s guide to real estate hot spots”
In his book, Investor-author Trass describes how to identify real estate hot spots and avoid real estate cold spots is the issue for all property investors. Real estate hot spots refer to certain defined geographic areas where, for a period of time, property investors can achieve supernormal capital gains. Real estate cold spots represent the opposite end of the spectrum: property investments in these areas will result in less than market returns.
Kieran has spent many years specifically studying the property market and has found a number of key factors must be present for a hot spot or cold spot to emerge. He has also found that these factors apply regardless of the phase of the property cycle – boom, slump or recovery – and geographic location.
According to the criteria that Trass uses to identify real estate hotpots; he is describing the Texas coastal market to a "tee". His list of hot spot drivers include:
• Demographic factors such as: population increases, significantly improved amenities and surging market segment demand.
• Geographic factors such as: improved transportation, proximity to major population centers and waterfront locations.
• Social factors such as: improved visual appeal, new architecture and increased security.
• Economic drivers such as: strong rental demand, affordability and increasing property values.
Dr. Jim Gaines, research economist for the Real Estate Center at Texas A&M University, says:
“Texas is the most housing‐affordable, high‐growth state in the nation.”
Affordable housing is the state’s ace in the hole in the predicted future high stakes real estate version of Texas hold ‘em. In fact, the state’s leading expert on residential real estate is betting housing affordability will be the “most significant growth stimulant” for Texas over the next 25 years.
Gaines says housing affordability is just one card in a deck stacked in the state’s favor. The other winning cards include lower cost of living and cost of business, greater employment opportunities and an appealing lifestyle.
“Events and circumstances point toward a Texas‐sized boom between 2005 and 2030,” Gaines writes in the latest issue of Tierra Grande magazine, a periodical sent to all the state’s real estate licensees. “The state’s population and economy — as well as its housing and commercial real estate markets — are poised to explode in volume and prices.”
“Population will be a key player at the table as Texas is projected to grow by 13.6 million by 2030. Growth and prosperity will spread throughout the state. Texas leads the nation in job creation. If Texas maintains its average employment‐to‐population ratio as expected during the next 25 years, the state will add another 4.5 to 5.8 million jobs,” says Gaines. “Job growth is expected to be stimulated by overall U.S. economic growth and enhanced by Texas’ employment‐friendly characteristics.”
More people and more jobs will lead to higher personal income. “Extending the long‐term trend that began in 1969 suggests the state’s total personal income could increase by $1 trillion by 2030,” says Gaines. “The 2005 Texas median household income of $42,139 could reach nearly $68,000 by 2030.”
Read Dr Gaines Report on Texas Real Estate Boom
Donald Trump University’s Real Estate 101 course on building wealth with real estate investments-
specifically identifies Texas. “As to my own investment objectives, I look for at least four good sources of return: (1) cash flows, (2) appreciation, (3) added value, and (4) amortization. In my view, many Texas and non-coastal Florida properties, commercial and residential, offer promise.”
He also goes on to mention “Real estate offers more people more opportunities than any other type of investment. Great economy, poor economy, high interest rates, low interest rates, boom market, bust market—it makes no difference. I have made money through all types of markets and economic conditions. And so will you—if you learn to think and act as a real estate entrepreneur. Achieving wealth, personal independence, and financial freedom requires only two basic conditions: 1. Guide your daily life with an entrepreneurial mind-set, character, and action plan. 2. Apply a systematic possibility-driven method to discover, create, and harvest real estate value.”
He also criticizes naysayers of the past who missed out on many great real estate opportunities by listening only to negative national news for advice. He warns not to be influenced by negative press and forecasters who have repeatedly been wrong in the past.
Take a quick trip through a few of their far-off-the-mark forecasts from years gone by:
• “The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” ( Time, December 1, 1947)
• “Houses cost too much for the mass market. Today’s average price is around $8,000—out of reach for two-thirds of all buyers.” ( Science Digest, April 1948)
• “The era of easy profits in real estate may be drawing to a close.” ( Money, January 1981) and “The golden-age of risk-free run-ups in home prices is gone.” ( Money, March 1985)
• “If you’re looking to buy, be careful. Rising home values are not a sure thing anymore.” ( Miami Herald, October 25, 1985)
• “Financial planners agree that houses will continue to be a poor investment.” ( Kiplinger’s Personal Financial Magazine, November 1993)
Now think ahead. Who enjoys the highest net worth today? Those fear-induced folks who believed the press or those proceeded to acquire properties with the proper research and information.
From a Wall Street article Journal published April 2008 “Why Low-Cost Beach Towns Will Continue to Lure Buyers”
Question: In the past few years, we have seen huge gains in the prices of vacation homes in Galveston, Texas. How much will the housing boom's demise affect secondary or vacation homes?
Answer: I still feel bullish on coastal cities, the nation's 78 million boomers drive this market, and with many of them close to retirement-- 330 of them turns 60 every hour -- it's very un-likely that interest will drop in low-cost beach towns.
Based on everything we see, “One thing is for sure, now is the best time to invest in real estate on the Texas coast. We have both bargains and new development opportunities that you'll find no-where else in the world.” – says Stuart.
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Some of the leading indicators that testify to the strength of Texas