Galveston, Texas is a beach town that has been overshadowed by much larger cities like Houston. Yet it is much more affordable than other Gulf Coast cities. Galveston is know as one of Texas’ top tourist destinations. It is a coastal resort city with sandy beaches and a rich cultural heritage. In this blog, our focus will be on the Galveston real estate market trends and investment opportunities in 2020.
The Galveston’s tourism sector is a major contributor to the local local economy bringing in millions of dollars every year. The city of Galveston is home to less than a hundred thousand people. However, the Houston metro area has expanded so that its suburbs like Sugarland are part of the larger metro area. Today, Galveston Bay is encompassed by Greater Houston.
Galveston county is one of the nine counties in Texas becoming part of the larger Houston–The Woodlands–Sugar Land (or Greater Houston) metropolitan statistical area. This gives the larger Galveston real estate market a population of nearly half a million people. Galveston offers a wide variety of real estate for investors and home buyers – condos, single family detached homes and affordable mansions.
The median home prices in Galveston, TX from various sources easily runs over $220,000, which is about 10% higher than the average property price in Texas. It means you are going to get real estate in Galveston that is on an average less affordable than what you’ll find in the rest of Texas. Is Galveston, therefore, a good market to invest in real estate?
Let’s take a look at the latest Galveston housing market trends to come to a conclusion. It is important to analyze the market as a whole before deciding to buy, sell, or invest in a new property. There are many variables that can potentially impact the value of a home in Galveston (or any other market) and some of these variables are impossible to predict in advance.
Galveston Real Estate Market Forecast 2020
What are the Galveston real estate market predictions for 2020? Galveston housing market 2020 is shaping up to continue the trend of the last few years as one of the hottest markets in Texas. The latest real estate data from Zillow shows that the current median home value in Galveston is $221,587.
Galveston is currently a seller’s market – which means there are a lot of qualified buyers in the market place and not enough homes for sale in the market. The home prices have risen by 3.6% over the last year. Looking forward into the coming year, the Galveston real estate market forecast is that home prices will continue to increase by 1%. Since 2014, the Galveston home prices have increased every year from $163,000.
Here is the Galveston, TX real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 1% till Nov 2020.
The median list price per square foot in Galveston is $218, which is higher than the Houston-The Woodlands-Sugar Land Metro average of $123. The median price of current listings in Galveston is $299,000. The median rent price in Galveston is $1,350, which is lower than the Houston-The Woodlands-Sugar Land Metro median of $1,600.
Zillow reports that 12.7% of the listings in Galveston had a price cut in Nov 2019, which is a good thing for buyers. It shows sellers were willing to negotiate on prices as they were finding it more and more difficult to sell homes at asking prices. The median price per square foot in November was $218.
Galveston Real Estate Market Trends
We shall now discuss some of the most recent housing trends in the Galveston such as median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region. Trulia has currently 1010 resale and new homes for sale in Galveston, TX including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. Some of the most popular neighborhoods in Galveston are Bay Harbor, Sea Isle, Red Fish Cove and Anderson Ways.
In the past month, 104 homes have been sold in Galveston on Redfin.com. In addition to houses in Galveston, there were also 189 condos, 11 townhouses, and 32 multi-family units for sale in Galveston last month. The median listing price is $315,000. According to their statistics, the Galveston housing market is somewhat competitive. Homes in Galveston receive 1 offers on average and sell in around 58.5 days.
The average sale price of a home in Galveston was $266K last month, up 18.8% since last year. The average sale price per square foot in Galveston is $219, up 25.4% since last year. A hot listing in Galveston can sell for about 1% below list price and go pending in around 20 days.
Here is the latest Galveston housing market data for the month of Nov 2019 from Redfin.com. The sale to list price ratio shows us that it was a seller’s market in the past month.
Galveston Housing Market Trends in Nov 2019
|Median List Price||$315,000|
|Avg. Sale / List||95.0%|
|Median List $/Sq Ft||$211|
|Avg. Number of Offers||1|
|Median Sale Price||$266,000|
|Avg. Down Payment||42.1%|
|Median Sale $/Sq Ft||$219|
|Number of Homes Sold||104|
There are currently 1133 homes for sale in Galveston, TX on Realtor.com. The newly listed homes for sale are 23. The asking price of single family homes can start from $45,000 and can go up to $4M for a luxury property located in Pirates Cove neighborhood in the city of Galveston, TX. The median home price is Pirates Cove is $499,000. It is a very expensive neighborhood and homes are selling for $291/Sq Ft.
There are currently 264 rental properties in Galveston, and their rent prices range from $550 to $5,800 per month. There are 39 new construction homes for sale in Galveston within a price range of $279,900 to $1.39M. According to their statistics, in November 2019, the Galveston housing market was a buyer’s market, which means there were roughly more active homes for sale and less qualified buyers.
Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. In Galveston, the buyers have held good leverage in these negotiations in the past month. On an average, they could buy homes for 95.81% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
The median list price of homes in Galveston, TX was $319K in November 2019, trending up 14.2% year-over-year. The median listing price per square foot was $215. On average, homes in Galveston, TX sell after 75 days on the market. The trend for median days on market in Galveston, TX has gone down since last month, and slightly up since last year.
The median list price in Galveston is $314,900 on Movoto.com. The median list price in Galveston went down 4% from November to December. Galveston’s home resale inventories is 531, which decreased 6 percent since November 2019.
The median list price per square foot in Galveston is $213. In November 2019 it was was $219. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in December.
Galveston, TX Single & Multi-Homes Statistics
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
U.S. single-family rental market has seen steady rent increases between 2010 and 2019. According to CoreLogic’s latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas, it shows a national rent increase of 3% in April 2019, as compared to 2.8% in April 2018. The average sales price of new homes sold in the U.S. fell by 1.6% year-over-year in July 2019, to $388,000, according to the U.S. Census Bureau.
In fact, the median sales price of new homes sold fell by 4.8% to $312,800 over the same period. For existing homes, the median price was up by 4.3% to $280,800 in July 2019 from a year earlier, according to the National Association of Realtors. July’s price increase marks the 89th consecutive month of year-over-year gains. Demand remains robust. During the year to July 2019, new and existing home sales increased by 4.3% and 2.5%, respectively.
As per the real estate company called Neigborhoodscout.com, the median house price in Galveston, TX is $204,195, which indicates that home prices in Galveston are well above the national average for all cities and towns in the United States. Single-family detached homes are the single most common housing type in Galveston.
One and two bedroom single family detached homes are the most common housing units in Galveston. Other types of housing that are prevalent in Galveston include large apartment complexes, duplexes, homes converted to apartments and a few row houses. Galveston has a mixture of owner-occupied and renter-occupied housing.
After the great recession of 2008, renting a home has increased exponentially across the nation. There are currently over 136.57 million housing units in the U.S. In 2018, the total number of homeowner households hit an all-time high of 76.2 million. 36.6% of households rent their homes and 64.4% buy their homes (2018 U.S. Census Bureau).
Currently, there are 382 single family homes for sale in Galveston, TX on Zillow. Additionally, there are 54 single family homes for rent in Galveston, TX. Under potential listings, there are about 2 Foreclosed and 4 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Galveston, TX Foreclosures And Bank Owned Homes Statistics
As per the Galveston foreclosure data by Zillow, the percent of delinquent mortgages in Galveston is 1.3%, which is higher than the national value of 1.1%. There are currently 35 properties in Galveston, TX that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 169. In November 2019, the number of properties that received a foreclosure filing in Galveston, TX was 100% higher than the previous month and 100% higher than the same time last year.
|Total No. of Foreclosures in Galveston||35 (RealtyTrac)|
|Homes for Sale in Galveston||169|
|Median List Price||$292,000 (3% drop vs Oct 2018)|
Neighborhoods To Choose in The Galveston Real Estate Market
If you are looking to invest in the Galveston real estate, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Galveston investment real estate and you should be able flip it for a lump sum profit.
When looking to invest in Galveston real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Galveston investment property should be low. The neighborhoods in Galveston must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services, schools and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. Galveston is a moderately walkable city in Galveston County. There are 11 elementary schools, 8 middle schools, 4 high schools and 6 private & charter schools. There are 25 neighborhoods in Galveston.
The western portion of Galveston is referred to as the “West End”. Communities in eastern Galveston include Lake Madeline, Offats Bayou, Central City. Some of the best neighborhoods in Galveston, Texas are Pirates Beach, Sea Isle, Colony Park, Surfside, East End, University of Texas Medical Branch, San Jacinto, Indian Beach, Evia, The Strand, Pirates Cove, Spanish Grant, Palm Beach, Estates of Sunset Cove and Downtown Galveston.
Grand Beach has a median listing price of $660K, making it the most expensive neighborhood. Central City is the most affordable neighborhood of Galveston, with a median listing price of $127,000. Central City is the 5th most walkable neighborhood.
Here are a few good neighborhoods in the Galveston real estate market which have the experienced the highest appreciation rates (List by Neigborhoodscout.com).
|3||25th St / Ave P|
|4||Sealy St / 35th St|
|5||The U of Texas Medical Branch / Church St|
|6||Ave Q / 32nd St|
|7||Ave N / 32nd St|
|8||39th St / Ave S|
|9||Ferry Rd / Harbor View Dr|
|10||Broadway St / 21st St|
Is Galveston a Good Place For Real Estate Investment?
Investing in good real estate markets is touted as a great way to become wealthy. Is Galveston a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying a property in Galveston is good investment? If you want to find out whether Galveston real estate is a good investment or not, you need to drill deeper into local trends. The Galveston real estate trends will tell what the market holds for the year 2020. We have already discussed the Galveston housing market forecast for 2020.
Purchasing an investment property in Galveston real estate is a little different from shopping for your car or primary residence. While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the Galveston real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Galveston that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s now discuss what we feel about the Galveston real estate market, which can help investors who are keen to buy an investment property in this city.
The Affordable Galveston Housing Market
The average home in the Galveston housing market is a little over 200,000 dollars. This is ten percent below the national average. Properties on the north end of Galveston Island are much more expensive, while a Galveston real estate investment property by the airport costs much less due to the noise. Jamaica Beach is considered less desirable, too, though it means you can find 60-100,000 dollar Galveston real estate investment properties here.
In part, you’re paying more for being further from the main roads to the mainland. That’s the same reason the Pelican Island area is much cheaper than the rest of the Galveston housing market – you pay for it in higher transportation costs. Even the beachfront homes there cost less than those on Galveston Island that have easy access to I-45.
However, Galveston isn’t seeing the same appreciation as hotter markets like Austin and Houston. This is why the Galveston real estate market is seeing steady home prices. It is a fair commute to good paying oil refinery jobs in Texas City, and Houston’s buzzing downtown is even further. This is why Galveston area homes appreciate at below the state average. The Galveston housing market saw roughly 3 percent appreciation in 2019 and is expected to see 1 percent appreciation in 2020.
The Massive Rental Market
The Galveston real estate market contains two massive populations of renters. One is the large contingent of tourists who arrive in droves in Spring Break continue coming through Labor Day. Roughly 7.5 million people visited the city in 2019. This is one reason why the Galveston real estate market was ranked among the best in the country on short term rentals to tourists in 2016.
The other is the large student market. Texas A & M University at Galveston is a smaller, more intimate school than the Texas A&M branch in College Station. The other is University of Texas campus in Galveston. This is notable for being one of the few medical schools in the state. This means you can buy Galveston real estate investment properties to cater to college students attending school year-round or just September-May.
And you can rent the same Galveston real estate investment properties out to tourists in the summer. Or you can buy beachfront homes in the Galveston housing market and rent them out to tourists who will visit nearly year-round. Note that beachfront homes are often over 300,000 dollars. On the flip side, the beaches are lined by affordable condos that try to maximize population density in order to meet demand. This means you might be able to snap up two or three condos for half a million dollars.
The Landlord Friendly Legal Climate
The Galveston real estate market is much more landlord friendly than some other Texas cities, though the state of Texas in general is landlord friendly. Owners of a Galveston real estate investment property do have to register it with the city before renting it out. Hotel taxes are owed. However, there are no limits on how often you can rent to tourists.
There really aren’t zoning restrictions limiting short term rentals to hotel districts. Texas itself favors property owners. There is no limit on security deposits, though they have to be returned in a month assuming no repairs are required. Late fees apply if someone is one day late with the rent. You don’t have to give notice to enter, especially if there is an emergency.
The Impact of Geography
The Galveston real estate market is defined by the island it sits on. The limited space and vast areas designated wildlife refuges limit where homes can be built. Then there’s the fact that many people pay a premium to be by the water, when they can actually be in walking distance of it. This has its downsides, too. If Houston has to evacuate for a hurricane, so does Galveston – and they have fewer evacuation routes. The Galveston housing market has some of the highest property insurance rates in the state.
Flood insurance and windstorm insurance are extra, and they’re expensive. This creates an interesting dichotomy in the Galveston real estate market. Rents are 250 dollars less a month than the average rent in the Houston – Sugarland – Galveston metro area. Yet properties near the water and university command much higher rents. The large number of apartments and small condos explains why the cost per square foot of a Galveston home is far higher than the Houston area average (218 versus 123 dollars per square foot).
The Low Tax Rates
Texas doesn’t have an income tax. The state makes up for this by having some of the highest property tax rates in the country. (Illinois, New Jersey and others do beat Texas in this regard.) The Galveston housing market has higher than average property tax rates, but it beats Houston. For example, the effective property tax rate for a Houston home is 2.1 percent. For homes in the Galveston housing market, it is 1.8 percent.
Investing in Galveston Real Estate or Not: The Conclusion
Maybe, you have done a bit of real estate investing in Galveston but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Galveston is more than the resort town for south Texas. It is a vibrant coastal city with multiple universities and an active port to provide steady regional employment in addition to the massive annual flood of tourists.
A good cash flow from Galveston investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Galveston real estate investment opportunity would be a key to your success. If you invest wisely in the Galveston real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. Most investors naturally gravitate to residential property investment.
When looking for the best real estate investments in Galveston you should focus on neighborhoods with relatively high population density, employment growth and strong appreciation potential. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy investors who have retired early on in their lives by investing locally in the Galveston real estate market. As with any real estate purchase, act wisely. Evaluate the specifics of the Galveston housing market at the time you intend to purchase.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Galveston real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Good Markets To Invest in Real Estate in 2020
The other real estate market which looks good for investment in 2020 is Green Bay in Wisconsin. Green Bay is a steady, stable and profitable housing market in an area marred by decline and, occasionally, rebirth. That makes it a good opportunity for real estate investors. The Green Bay real estate market is stable because the Green Bay economy is diversified and stable.
Roughly one in five jobs are in manufacturing, but more importantly, the job market has other, growing sectors. The city remains a transportation hub; it is a major distribution hub for Wisconsin with roads, railway connections, highway access and pipelines. For example, there’s a petroleum storage terminal.
Another good market to invest in real estate is Billings in the state of Montana. The Billings housing market offers strong market fundamentals like decent rates of return and slow, steady growth. It stands out for the low tax rates, low regulatory burden and landlord-friendly legal system.
The Billings housing market has strong, long-term potential for growth. The city’s population is a few years younger that the state and national average. The strong local economy attracts young people from the surrounding area and helps it retain those who graduated from local colleges.
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Updated Market Prices, Trends & Forecasts
College market / Rental market
Impact of geography