Economic indicators

This Dallas suburb's housing market is 'turning ugly,' indicates new report

McKinney's housing market is ripe for a downturn, according to GoBankingRates.

Photo courtesy of City of McKinney

By one measure, the housing market in McKinney is not sitting pretty. McKinney ranks 33rd on a new list of the 50 U.S. housing markets that are “turning ugly.”

It’s the only Texas city on the list, which was released by personal finance website GoBankingRates.com.

The report notes that while home prices have risen an average of 9.4 percent over the past two years across the U.S., prices have fallen 1.3 percent in McKinney. Plus, McKinney is saddled with one of the highest percentages of listed homes with price cuts among the cities on this list.

Here’s the data rundown for McKinney:

Median list price: $379,243
Two-year price change: -1.3 percent
Percentage of underwater mortgages: 4.3 percent
Foreclosures: 1 in every 2,546 homes

To identify places that face a sizable risk of a housing downturn, GoBankingRates evaluated 500 cities to study rates of foreclosures and underwater mortgages (houses that are worth less than what’s owed on them). The site also examined changes in median home listing prices, the number of days that homes spend on the market, and the percentage of for-sale listings with price cuts. It then combed through those figures to see which housing markets are lagging behind the U.S. as a whole.

The report is quick to point out that a housing market on the 50-city “turning ugly” list isn’t necessarily headed for a crash. However, a spot on the list indicates that conditions are ripe for a housing downturn.

But one realtor group isn't taking the report's findings as gospel.

Bill Head, communicators director at the MetroTexas Association of Realtors, says that contrary to findings, home sales in McKinney have been robust for several years. This August, 276 single-family home sales were recorded in McKinney, compared with 298 in August 2018, 327 in August 2017, and 276 in August 2016, according to MetroTex data. Meanwhile, the median sale price of a single-family home in McKinney rose from $279,450 in August 2016 to $336,500 in August 2019.

“In general, the real estate market in most municipalities in Collin County — and that includes McKinney — are the healthiest in North Texas, and I would see no reason that the market will not remain quite healthy moving forward,” he says.

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Dallas was a top-10 destination for Gen Zers on the move for 2023

Photo by Lance Asper on Unsplash

Who wouldn't want to live in a Gen Z paradise like Dallas?

As Gen Z enters adulthood, many are flocking to the nation's biggest cultural hubs like New York City, Los Angeles — and now Dallas, which had the ninth-highest inflow of Gen Zers in 2023.

Dallas' new reputation as a Gen Z hotspot was unveiled in a recent report by American home improvement brand This Old House, which analyzed migration trends across multiple generations using 2023 U.S. Census Bureau data.

Dallas saw an influx of 13,770 Gen Z residents last year to become the generation's No. 9 most popular city. That's 4,223 more Gen Zers than the net migration rate from 2022, the report found.

Real estate marketplace Zillow seems to agree on a statewide scale, declaring Texas as the No. 1 destination for Gen Zers on the move in 2024.

However, as Gen Z Dallasites may have learned, it's going to take a big bite out of their paychecks to live in such a highly sought after city. A March RentCafe housing cost analysis predicted Gen Z adults living in Dallas are likely to spend over $149,000 on rent by the time they are 30 years old.

While Dallas saw big gains in its Gen Z population last year, many other big cities saw a mass exodus. Plano, for example — which gained 1,295 Gen Z residents in 2022 — lost 4,028 Gen Zers in 2023, the report discovered.

The biggest Gen-Z exodus was in El Paso, with a drop of 5,607 — "a sharp turn from 2022 when the city saw an increase," the report said. "Other cities, including Plano, Texas; Memphis, Tennessee; McKinney, Texas; and Wichita, Kansas, are seeing similar declines."

"Gen X, baby boomers, and the Silent Generation are also moving away from major cities, particularly New York City and Washington, D.C.," the report said. "They’re heading to some of the same cities as Gen Z, including Houston and Jacksonville, Florida."

The top 10 cities that gained the most Gen Z residents in 2023 are:

No. 1 – New York City, New York
No. 2 – Los Angeles, California
No. 3 – Houston, Texas
No. 4 – Philadelphia, Pennsylvania
No. 5 – Chicago, Illinois
No. 6 – San Diego, California
No. 7 – Seattle, Washington
No. 8 – Charlotte, North Carolina
No. 9 – Dallas, Texas
No. 10 – Minneapolis, Minnesota

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