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10 Cities in Texas Expected to See Falling Real Estate Prices (2024)

The Texas real estate market, once a shining example of affordability, is currently going through a period of adjustment. While the state continues to attract homebuyers looking for a lower cost of living, rising interest rates and changing market dynamics have some asking: Which areas could see price declines?

We analyzed data from Zillow to determine 10 metropolitan areas in Texas where real estate prices are expected to fall most in the next twelve months (end of May 2025). This information should serve as a starting point for your home purchase and is not a definitive guarantee. The real estate market is complex and local factors always play a role. Here is a closer look at the 10 metropolitan areas:

Top 10 Places in Texas Where Real Estate Prices Are Expected to Fall

1. Pecos, Texas:

Leading the pack is Pecos, with a projected price decline of 9.6% through May 2025. Known for its stunning desert landscapes and rich history as a ranching center, this remote West Texas community could feel the effects of a slowdown in the oil and gas industry. As a major employer in the region, fluctuations in oil prices can affect Pecos' economy and real estate market.

2. Big Spring, Texas:

Another West Texas city with a strong connection to the oil and gas industry is Big Spring. Real estate prices are expected to fall 9.1% next year, and Big Spring's economy could mirror trends across the energy sector. Beyond its ties to industry, Big Spring offers a vibrant arts scene and a strong sense of community that could continue to attract residents even as the real estate market changes.

3. Lamesa, Texas:

Rounding out the West Texas trio is Lamesa, which is expected to see a price decline of 8.7%. These three communities could see a correction after a period of rapid growth fueled by the oil and gas boom. Lamesa itself is known for its agricultural production and the annual Lamesa Watermelon Festival in the spring, a beloved local tradition.

4. Raymondville, Texas:

The real estate market in the South Texas city of Raymondville is expected to experience a decline of 8.2% through May 2025. As a smaller metropolis with a rich cultural heritage, price trends in Raymondville could be influenced by regional economic factors, including the agricultural sector and proximity to the Mexican border.

5. Alice, TX:

South Texas also makes the list with Alice, where home prices are expected to drop 8.1%. While these price drops may seem significant, it's important to remember that they're relative to the current market. Alice offers a friendly small-town atmosphere and a strong sense of community, which could continue to be attractive to home buyers even if prices adjust.

6. Beeville, Texas:

In Beeville, another South Texas metropolis, home prices are expected to decline by 7.8%. Like other entries on this list, this could be a course correction after a period of significant growth. Beeville has a historic downtown and a thriving arts scene, making it an attractive option for those seeking a small-town lifestyle.

7.Sweetwater, Texas:

Back west, Sweetwater's real estate market is expected to see a 7.4% price decline. Like many major Texas cities, Sweetwater's economy is tied to the oil and gas industry, which can affect real estate prices. In addition to its ties to the industry, Sweetwater offers a rich history and a tight-knit community atmosphere.

8. Rio Grande City, Texas:

Located on the Texas-Mexico border, the Rio Grande City real estate market is expected to decline by 6.9%. When considering this forecast, it's important to understand local economic trends specific to Rio Grande City, such as its role in international trade and its proximity to the Mexican border. The city also has a vibrant cultural scene and rich history.

9. Zapata, Texas:

Zapata, another border city in the top 10, is expected to see a 6.6% price decline. Similar to Rio Grande City, Zapata's real estate market could be influenced by factors beyond national trends, including the city's role in international trade and its unique cultural heritage.

10.Beaumont, Texas:

Beaumont in East Texas is the last metropolitan area on our list, with prices expected to drop by 6.4%. Beaumont's economy is tied to the oil industry, so keeping an eye on energy prices is important to understanding the local market. Despite this connection, Beaumont offers a rich cultural scene, beautiful historic neighborhoods, and a thriving arts community.

Remember, this is just a forecast. While the data can provide valuable insights, it's important to remember that the Texas real estate market is a complex ecosystem, just like any other market. Here are some additional factors to consider when deciding whether to buy a home in these major Texas cities:

  • Local labor market: A strong and diverse labor market can help mitigate potential price declines. Researching the top employers and key industries in these areas can give you a sense of their economic stability.
  • Stock levels: A balanced inventory, where neither too many buyers nor too many sellers are in control, can lead to fairer prices. Examine current inventory levels in these metropolitan areas to understand market dynamics.
  • Affordability: Even with price reductions, these areas may still be significantly more affordable compared to other parts of the state or country. When evaluating potential price reductions, consider your budget and long-term financial goals.
  • Long-term growth potential: Look beyond current market trends. Is the metro investing in infrastructure or attracting new businesses? These factors could indicate future growth and potential real estate appreciation.

Here are some resources to help you with your research:

  • Websites of the cities and counties: These websites often contain information about local economic development plans and demographics.
  • Local Chambers of Commerce and Industry: Chambers can provide insights into the business world and the labor market.
  • Real estate agent: A qualified real estate agent with expertise in your chosen metropolis can provide valuable guidance on local market trends and specific neighborhoods.

The Texas real estate market is still evolving. By considering the data along with these additional factors, you can make informed decisions and find the perfect Texas home that fits your budget and lifestyle goals.


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