Midland, Texas Tops U.S. for Biggest Home Price Gains—Fracking Impact
Danielle Hale, chief economist for realtor.com
MIDLAND – (By Dale King, Realty News Report) – A recent realtor.com survey shows Midland, Texas — an oil- and gas-rich city about 425 miles west of Houston — ranks first nationwide for housing price gains.
“Midland is the fastest-rising housing market in the United States,” the SmartAsset-backed report declares.
Midland’s resurgence is tied to a strengthening energy industry. West Texas Intermediate crude traded at $68.53 a barrel on Wednesday, a considerable rebound from two years earlier when prices dipped below $30 per barrel. Job growth in the area is robust and the regional rig count has climbed back up.
Midland surpassed Colorado markets like Denver and Greeley in recent price growth. The only other Texas city in the top 10 was Frisco, north of Dallas, while seven additional Texas municipalities placed in the top 25, including Odessa at number 12.
“When houses sell quickly, you know there is not a lot of supply,” said Danielle Hale, chief economist for realtor.com. That shortage is a central issue in Midland — inventory is limited.
Realtor.com reports about 850 homes currently listed for sale in Midland, while only 43 rental units are available.
Hale noted the median listing price in Midland for June was $350,000, up 26 percent year-over-year. The SmartAsset report adds:
“For the second year in a row, Midland takes the top spot as the fastest-rising housing market in the nation, according to Census Bureau data. Over the past five years, we estimate the median home value increased by 22 percent, the fourth-fastest rise in our dataset.”
Midland has held the number one spot for three consecutive months, Hale said; the city previously topped realtor.com’s list for four months in 2014, from August through November.
Hale also pointed out that, for the first time in six years, no California markets appeared in realtor.com’s top five hottest markets for June 2018. Instead, markets such as Columbus, Ohio; Boston; and Fort Wayne, Indiana, were highlighted. These areas may offer opportunities for buyers because their prices are either below the national median of $299,000 or are growing more slowly than the U.S. average of 9 percent.
It’s not just the weather that’s heating up in Midland. The oil boom has returned, bringing many jobs. While the national unemployment rate is around 4 percent, Midland’s unemployment is approximately 2 percent, Hale said. “The job market is strong; incomes are strong.” She reported the average worker wage in Midland is about $84,700 — substantially higher than the national average.
The SmartAsset analysis indicates Midland’s home-value growth aligns closely with household income gains. The average household income rose from $59,500 in 2012 to $71,500 in 2016, a 20 percent increase, earning Midland the top rank for that metric.
Overall, the report lists the fastest-rising housing markets as: Midland (first), followed by Denver, Colorado; Greeley, Colorado; Vista, California; Oakland, California; Aurora, Colorado (tied with Oakland for fifth); Seattle; Fort Collins, Colorado; Frisco, Texas; and Bellevue, Washington.
Additional Texas cities named among rapidly rising markets include Odessa (12th), Austin (15th), Pearland (17th), Round Rock (18th), Richardson (19th), League City (20th), and McAllen (22nd).
Midland serves as the county seat of Midland County, with part of the city extending into Martin County. Recent census figures place the city’s population at about 132,950, with the metropolitan area totaling just over a quarter-million residents.
The city’s character changed dramatically after oil was discovered in the Permian Basin in 1923. Situated atop that oil-rich basin, Midland became the administrative center for West Texas oil fields. The area has experienced multiple oil booms; today, extensive drilling and hydraulic fracturing in the Permian Basin account for roughly one-fifth of the nation’s petroleum and natural gas production.
Data released on July 13, 2018, showed a swift turnaround in rig activity in Midland County. Over the prior two weeks, 13 rigs were added, reversing a 10-week decline. That week, Midland County reported 51 operating rigs, seven more than the previous week.
