Real Estate Market in Deep South Texas Still Promising
The McAllen-Edinburg-Mission metropolitan statistical area (MSA) market continues to soar. This secret jewel in South Texas continues under the radar only to be taken advantage of by a few real estate insiders. The Federal Reserve Board of Dallas has reported a 4.8% increase for Mcallen in The Dallas Fed's Texas Business-Cycle Index, an aggregate measure for current economic activity. In coordination with most part of the country, single-family home construction continues to slowly decline in this market. However, it is being more than offset by strong growth in commercial work, which has pushed up the overall value of construction in the first four months of 2007 to $90 million—an 18 percent increase compared with the same period last year, reports The Federal Reserve Board of Dallas. This news comes one month after reporting a record low unemployment and construction growth in April.
Strong growth is expected in the McAllen-Edinburg-Mission MSA in the retail and health care sectors. The highlights include the Rio Grande Valley Premium Outlets expansion set to begin June 2007. Home to the outlet mall, Mercedes, has seen sales and use tax receipts skyrocket since its opening in November 2006. From January to February alone, the city brought in $1.5 million in sales tax. There is also the$100 million corporate HQ for First National Bank. The planned complex, which is scheduled for completion by 2012, will be home to a small luxury hotel, conference center, call center, amphitheater, heliport, business dining club among other components. The growing health-care employment is also responsible for helping the Valley economy. It is expected that employment in public and private hospitals will have increased 44 percent and 46 percent at physicians' offices over the level of 2004 by 2014. And more jobs means an increasing population. A report released by the Real Estate Center at Texas A&M quotes the U.S Census Bureau estimates the population of the McAllen-Edinburg-Mission metropolitan statistical area has grown by 23.03 percent between April 2000 and July 2006 to 700,634 people.
One thing is undeniable, and that is the overall area building permits. This means overbuilding is possible. While The City of McAllen has seen a decrease in residential building permits, the overall small cities residential and commercial building permits have increased by double and even triple digits. This may be a concerned as some investor may label this market as being in a sellers market stage II, but some characteristics have not yet been seen. A perfect example, business and job growth have not begun to decline, which may allow this market to thrive for several more years.
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