You've Been Warned: Buying A House In These Texas Cities Will Cost You

Between devastating wildfires and crippling hurricanes, the list of places that are safe to live in the United States keeps shrinking. As climate change-fueled natural disasters continue to get worse, and more frequent, knowing where to buy a house (or where to avoid buying a house) can be even more complicated than it already was (as if juggling increased interest rates and record-high home prices weren't difficult enough). This can make it especially important to do additional research into the potential hazards of geographic areas and cities before deciding to buy.

Between a lack of state income tax and a generally lower cost of living than coastal states, some people are choosing to move to Texas. With two of the top 10 largest cities in the country, and varied lifestyle offerings among urban, suburban, and rural geographic areas, Texas can be an appealing option for a wide range of people. That said, there can be some serious downsides to be aware of. This is why we spoke with Joel Medrano, CEO and president of PPS House Buyers of Houston, about the places in Texas you might want to avoid when shopping for a new home.

However, before delving into the top cities to avoid, Medrano did share the place in Texas he thinks is the best for would-be homebuyers. "I'd say that Frisco/Plano stands out objectively," he said. "This area offers top-notch schools, a strong corporate presence, modern infrastructure, family-friendly communities, and solid health care facilities." Now, let's dive into the cities in Texas that Medrano recommends reconsidering.

When it comes to small towns and cities, there is no shortage of options in Texas. However, among these, Joel Medrano warned against two, in particular: Midland and Port Arthur. Located in West Texas, Midland has a population of about 140,000 people and Medrano said, "The market here can be unpredictable due to [Midland's] reliance on the oil industry. Midland has seen rapid price spikes in boom times, only to follow with steep declines when the industry slows down. These swings make it harder for buyers to predict long-term value, so proceed with caution if you're looking for stability."

As for the coastal small town of Port Arthur, Medrana said that the city's location exposes it "to hurricanes and other natural risks. Additionally, the refineries in the area have raised environmental concerns, impacting air quality and potentially diminishing the appeal of long-term residency. It's also worth noting that insurance costs here can be steep due to the location."

As for mid-sized cities, Medrano advised against border city El Paso. While El Paso is one of the largest cities along the U.S.-Mexico border, and faces a unique set of economic and social concerns, the reason for Medrano's caution might not be what you'd expect. "The water scarcity issues facing El Paso could lead to increased utility costs and even affect property values in the long run," he noted, adding that "as these challenges evolve, they could create a less stable environment for real estate investments, so buyers should consider this factor carefully."

Two larger Texas cities also stood out for Joel Medrano when it came to places that homebuyers might want to reconsider. First, Medrano pointed to certain neighborhoods in Texas' third-largest city, Dallas. He told us, "In some neighborhoods undergoing rapid gentrification, prices are being pushed up quickly. While this may look attractive initially, the prices may not hold long-term value, so it's important to weigh the sustainability of these increases before diving in." Dallas neighborhoods like Oak Cliff and West Dallas have been particularly affected by gentrification, with property taxes quadrupling since 2017 in some areas.

Medrano also expressed caution when it came to purchasing in Austin, saying, "The COVID-era surge drove Austin's home prices to new heights, and we're now seeing a leveling off as the market cools." While these cooling prices might seem attractive to would-be homebuyers, Medrano warned against moving too fast in Austin's market, explaining that "much like parts of Dallas, Austin's prices may not fully reflect sustainable long-term values just yet, so a close evaluation of each property's worth is critical."

According to Zillow, the typical home value in Austin for 2024 is $525,797, which marks a 4.8% decrease in value compared to the year prior and a noticeable decline since the city's peak home price of $646,894 in June 2022. It's also worth noting that homes in Austin are taking roughly 62 days to reach pending after hitting the market (which is not far from the new average time it takes to sell a home in 2024).