McAllen Housing Market Trends in 2024: 

Home Sales

According to Redfin, in October 2024, the number of homes sold in McAllen was 80, slightly down from 81 the previous year. This slight dip in sales might be attributed to several factors, such as rising interest rates, a limited housing inventory, or a general economic slowdown. However, the decrease is relatively minor, suggesting the market is still active.

Based on my understanding, the decrease in home sales isn't alarming. In fact, it could be a positive sign of market stabilization. Buyers and sellers are becoming more cautious in their decisions, which can lead to healthier transactions in the long run. It's not a sudden crash; rather, a sign of a more controlled and balanced market.

Home Prices

As mentioned earlier, the median sale price of homes in McAllen reached $293,500 in October 2024. This represents a 2.1% increase compared to the same time last year. While there's a price increase, it's important to note that the rate of increase has slowed down. The growth in home prices isn't as dramatic as it was in the past few years. This could mean the peak of the rapid price escalation has passed.

The median sale price per square foot is currently at \$141, which represents a 2.1% decrease compared to last year. This data point suggests that buyers might be getting slightly more house for their money compared to last year, although it's a minor change.

One of the key factors influencing home prices is the supply and demand dynamics of the market. When demand for houses exceeds supply, prices tend to rise. However, if supply increases or demand slows down, prices might stabilize or even decrease.

Housing Supply

One of the major challenges in the McAllen housing market is the limited housing supply. There are fewer homes available for sale compared to the number of buyers interested in purchasing. This limited inventory is contributing to the competitive nature of the market, as buyers often find themselves in bidding wars or competing with multiple offers.

Market Trends

The McAllen housing market currently displays several notable trends:

• Slowing Price Growth: The rate at which home prices are increasing has slowed down compared to previous years.
• Increased Days on Market: Homes are staying on the market for longer compared to last year, with an average of 98 days.
• Slight Decrease in Sales: The number of homes sold has slightly decreased.
• Competitive Market: The market remains competitive, with some homes receiving multiple offers.

Is It a Buyer's or Seller's Housing Market?

Based on the current McAllen housing market trends, it's leaning towards a more balanced market, with elements of both buyer and seller advantages.

• Buyer Advantages:
  • Slower price growth provides more negotiation power.
  • Homes stay on the market for longer, giving buyers more time to consider.
• Seller Advantages:
  • The market is still competitive with some homes receiving multiple offers.
  • Demand remains relatively strong, given the consistent home sales and price growth.

In essence, it is a good time for buyers to take a look around. The rapid escalation of the last few years is gone. However, sellers should also know that a significant price drop is not expected, but they also have to be ready to negotiate and accommodate buyers.

Are Home Prices Dropping?

While there has been a slowing down of price growth, the median sale price has still increased compared to last year. Therefore, it's not accurate to say that home prices are dropping significantly. However, the situation could change in the coming months.

Based on my experience, the McAllen housing market is more resilient than some other markets in the region. It's a desirable location with a relatively strong local economy. Therefore, a major price crash is unlikely. Still, buyers might benefit from the slowing price growth and potentially negotiate a better deal.

Here's a Summary Table

Factor	October 2024 Data	Year-over-Year Change	Significance
Median Sale Price	$293,500	+2.1%	Slowing Growth
Homes Sold	80	-1.2%	Minor Decrease
Median Days on Market	98	+62	Increased
Sale-to-List Price	96.2%	-0.31 pt	Minor Decrease
Homes Sold Above List Price	11.2%	-12.2 pt	Decreased
Homes with Price Drops	23.0%	-2.9 pt	Decreased

Source: Redfin

McAllen Migration & Relocation Trends

Redfin data suggests that about 57% of homebuyers in McAllen are looking to stay within the metropolitan area. However, a significant portion (43%) are looking to move out, with Austin being the most popular destination, followed by San Antonio and Dallas.

Looking at the inbound migration, people are moving into McAllen from areas like Salt Lake City, Los Angeles, and Miami.

These migration trends suggest that while McAllen is a desirable location for some, others are seeking opportunities in larger metropolitan areas like Austin, San Antonio, and Dallas.

Schools in McAllen

McAllen has a good school district. It also has a large number of private and charter schools. McAllen ISD is the largest school district in the Rio Grande Valley, and it offers a wide range of educational programs. For families with children, the quality of the school district is an essential consideration when buying a home.

Climate's Impact on McAllen Housing

McAllen is known for its hot and humid climate, and this can have a significant impact on the housing market. In my view, it's essential to assess the potential effects of natural hazards like floods, fires, wind, and heat when considering buying a home in the area.

Flood Factor: 43% of properties are at risk of severe flooding over the next 30 years.

Fire Factor: 49% of properties are at risk of wildfire over the next 30 years.

Wind Factor: 99% of properties are at severe risk of a severe wind event over the next 30 years.

Heat Factor: 93% of properties are at extreme risk of heat over the next 30 years.

Source: First Street Foundation

The McAllen housing market forecast suggests a relatively positive outlook for the next few years, with a gradual but steady increase in home values. According to Zillow's predictions, home values in McAllen are expected to rise by about 4.4% by October 2025. Let's dive into the details to understand this prediction better.

Understanding Home Price Forecast for McAllen

Zillow's forecast uses a blend of historical data, economic trends, and current market conditions to predict future home value changes. Based on their analysis, here's what we can expect for McAllen:

Forecast Date	Projected Home Value Change (%)
November 2024	0.1%
January 2025	0.5%
October 2025	4.4%

As you can see, the forecast projects a slow and steady climb in home values over the next year or so. It's important to remember that these are just predictions, and the actual market performance might vary. However, I believe this outlook is generally positive for the McAllen housing market and bodes well for both buyers and sellers.

McAllen's Position Compared to Other Texas Regions

It's interesting to compare McAllen's forecast to other Texas regions.

• Several cities like Jacksonville, Stephenville, and Hereford show similar trends, with a slightly higher growth projection.
• On the other hand, some cities like Brownsville and Waco show a much lower growth trajectory or even a slight decrease in home values.

This information highlights that the McAllen region is performing favorably compared to other parts of the state, potentially showing resilience against current economic challenges.

Will Home Prices Drop or Crash in McAllen?

Based on the current forecast, I don't foresee a significant price drop or housing market crash in McAllen. Zillow projects a steady increase in home values, which does not suggest a crash. However, it's important to remember that external factors can influence the housing market.

• Interest rate hikes: The Federal Reserve's actions impact mortgage rates, potentially making it more expensive to buy a home.
• Inflation: Increased costs of goods and services can impact affordability and consumer behavior, leading to market adjustments.
• Regional and local economic conditions: Changes in job markets and employment rates can impact housing demand.

Possible Forecast for 2026

Predicting the McAllen housing market beyond 2025 becomes more speculative, but based on the trends we see in the current forecast and the regional economy, I believe we could see home value growth continue at a similar pace.

It's crucial to stay informed and consider the factors mentioned above. While the current forecast is positive, it's important to remain cautious and monitor market changes as they unfold.

My Final Thoughts

The McAllen housing market seems to be doing fairly well amidst economic challenges, with a steady and positive growth forecast. While nothing is guaranteed, the outlook is generally optimistic, suggesting a favorable environment for both homebuyers and sellers. I am confident that McAllen will continue to be an attractive and stable housing market in the coming years.