The Lubbock real estate market is currently on the rise. While the rest of the country suffered through the economic downturn, Lubbock real estate stayed strong and continued to grow. Lubbock, known as the “healthcare hub,” of the South Plains, has seen strong job growth and unemployment numbers from the healthcare field that has helped spur the real estate market. The demand for real estate is strong from this robust college area, and ripe with investment opportunity. With more building permits and low home prices, Lubbock real estate investing should have every opportunity to grow in the coming year.
According to Realtor.com, the average sales price in the Lubbock housing market is $128,291. This is well below the national average, but makes the area very affordable. This relatively low sales price has helped make Lubbock one of the most affordability big cities in Texas. As a result, Lubbock real estate investing will continue to see a lot of action. For all intents and purposes, investors should look to Lubbock, along with most major cities in Texas. With the average resident just over 31 years old, the Lubbock real estate market is primed for a first-time buyer boom. Much of the economy is based on local colleges and universities that have a need for off campus investment property. Average sales prices may be below the national average, but with solid market fundamentals in place, it surely won’t stay this way for very long.
Local equity has appreciated over the last few years, and the average list price is on the rise. Over the last 30 days, the average list price has seen a 9 percent increase from the previous month. Higher list prices do not necessarily equal higher sales prices, but it is a good indication of where the market may be heading. Increased sales prices lead to increased equity that can be redistributed into the local economy. Even if these equity gains stay in the property, it will give buyers confidence that their investment in real estate is a good one.
One of the factors that is leading the Lubbock real estate push is local unemployment, or lack thereof. The current local unemployment rate is 2.9 percent, which is lower than both the statewide average (4%) and the national average (5.4%). Reduced unemployment is pushing buyers to have more confidence, and to get active in the real estate market. It also directly leads to job growth, and is one of the reasons that the local economy is as strong as it is. In addition to strong healthcare practices, the local economy and unemployment rate are driven by Texas Tech University. The university, located in the heart of the Lubbock housing market, is responsible for roughly $1.5 billion dollars to the local economy, according to a study by the Rawls College of Business. This influx of capital does not appear to be on the decline any time soon. This should keep local unemployment numbers low, which will help eliminate any foreclosures.
According to RealtyTrac, there were just over 50 new foreclosure filings in the Lubbock area over the last 30 days. This represents a 24 percent drop from the over 70 new filings just 30 days ago. This number has remained fairly flat from the same time one year ago. The majority of foreclosures in the Lubbock housing market are to be placed up for auction. At 54.9 percent of the distressed property market, Lubbock real estate investing should see a lot of deals form this area. The remaining 45.1 percent of distressed homes in the Lubbock housing market are bank-owned, meaning they are currently serving lending institutions as non-performing loans. Each scenario should help Lubbock real estate investors, as each of these properties represents a new deal.
Another positive for the Lubbock housing market is in the number of new housing permits added. Since a low of 972 permits in 2009, the number has seen an increase every year. In 2013, that number hit an eight year high of 1977. There has also been an increase in the number of multifamily permits from 245 in 2009, to just over 1,000 in 2013. Much of this growth can be attributed to the demand for housing from the university. Many recent graduates are staying local and looking to buy in Lubbock. The increase in multifamily permits can be attributed to investors looking to reap the benefits of student housing overflow.
Information provided by Trulia indicates that both the number of listings and the average list price have been increased over the last 30 days. This may be due to a strong seasonal push from buyers. The most popular neighborhoods during that time were Preston Smith, Maedgen Area, Waters and the Heart of Lubbock. In terms of average list price change, the North Overton and Kings Park areas saw increases of 18.6 percent and 17 percent respectively. There was a 24.6 percent reduction from the West End and Raintree dipped 22.4 percent. The area with the highest average list price was Clapp Park, which came in with an average of just under $2,000,000.
Lubbock real estate is growing in every way. The population has risen to just under 300,000 people. The economy has recently added many new retail shopping centers, in addition to the already strong health care sector. The real estate market has grown in conjunction with the area. With an increase in new housing permits and a rising average list price, the real estate market is sure to continue its ascent. With foreclosures in check and unemployment a non-factor, there are pillars in place that should continue to drive the market forward. The popularity of Texas Tech University continues to rise, as income generated will only continue to grow. How quickly first-time homebuyers and recent graduates jump into the buyer pool will determine just how quickly and how far the Lubbock housing market will go.
Lubbock Real Estate Market Summary:
- Current Median Home Price: $128,291
- Unemployment Rate: 2.9%
- Population: 239,538
- Median Household Income: $47,172