Tyler, Texas, is a small city in northeast Texas, with a steadily growing population of 107,192. Just outside the eastern edge of the DFW metroplex, Tyler operates as a major hub for transportation, medical services, education, and more. The town is home to major employers like Brookshire Grocery Company (which holds its headquarters in town) and has over 20,000 students at the University of Texas at Tyler. If you're looking for an excellent blend of small-town charm with booming economic opportunity, finding a home in Tyler is a great first step. In this article, we'll explore the local real estate market trends, including prices, growth, investment opportunities, and more.
Tyler, TX, housing market forecast 2023
In general, Texas real estate markets have flourished over the past few years, with properties rising steeply in value. However, it's important to look at the market trends as closely as possible to evaluate whether a specific neighborhood or town has both a promising market with homes that aren't overvalued and a positive long-term economic forecast.
Home values: Are they increasing or decreasing?
Tyler, Texas, is the seat of Smith County, and according to research gathered by the National Association of Realtors (NAR), Smith County homes have a median price of $282,324
. Tyler's median home value was $204,158
in 2019, indicating roughly a 38.3% increase in home values across the last three to four years.
Let's put this in the context of Tyler's nearest market neighbor, the DFW metroplex
. The Dallas-Fort Worth-Arlington market saw similar gains of 38.1% in the past three years but has a much higher median home price of $372,400. This means new residents in Tyler can experience similar appreciation and economic advantages compared to Dallas residents, all while working with a smaller budget and enjoying greater access to Tyler's amenities. Both Tyler and the DFW markets continue to experience appreciation that surpasses the national markets. Nationally, homes appreciated 34.6% in the past three years and, during the recent market correction from the end of 2022 through the first half of 2023, only appreciated 0.3%. DFW homes, by comparison, saw a continued 1.9% growth across the past year. This indicates that the north and northeastern regions of Texas will continue to have a strong housing market and see growth in the future.
The impact of today's interest rates
Today's mortgage interest rates
are higher than they were a year ago and significantly higher than their lowest point below 3% just a couple of years ago. Homeowners looking for real estate in current markets will see mortgage loan rates hovering around 7.5% for a conventional 30-year fixed-rate loan, while 15-year rates are around 6.6%. This is a small decline of August's higher rates. But lenders aren't anticipating significant reductions in interest rates until the end of 2024.
Although waiting for lower interest rates can be a valid strategy at times, the extended timelines for expected reductions and the ongoing sharp increases in property values in the Tyler area suggest that waiting could result in higher costs.
Tyler, TX, market forecast for rental property investors
Tyler, Texas, uniquely suits real estate investors seeking diversification in their holdings and the exploration of various investment avenues. Some of the factors that make the Tyler, TX, real estate market favorable for rental property investors are as follows.
It's a transportation and commerce hub: Tyler is the intersection point for major state, federal, and farm-to-market roads. It also sits just south of Interstate 20, which brings in plenty of traffic and job opportunities.
It's a college town: The University of Texas at Tyler has 20,000 students. Opportunities to rent out single-family homes, duplexes, and other residential properties to college students continue to be abundant and can yield significant profits for investors who meticulously choose suitable homes near campus.
Homes still follow the 1% rule: Many residential rental property investors currently face a major challenge as home values have significantly exceeded the conventional 1% rule of thumb. Under this rule, rental properties are considered potentially profitable when the monthly rental income is at least 1% of the property's purchase price. However, in the current Tyler market, while property values have increased significantly, achieving a 1% rental yield may require careful property selection and investment strategies.
Smith County housing market trends in 2023
Tyler is part of the Tyler-Jacksonville statistical area a few counties west of the Texas-Louisiana border. The area is full of small towns and farms, with Tyler comprising nearly half the county population. The region offers very affordable housing options, with typical single-family homes requiring a monthly mortgage payment of $1,263
. This price is just $509 higher than a year ago.
Tyler's real estate market by neighborhood: Where should you buy?
Tyler is home to multiple different neighborhoods offering different price ranges, features, and amenities. You can find beautiful suburban homes within Tyler's city limits, enjoy sprawling estates around Lake Tyler, or settle down in a farmstead in the woodlands surrounding Tyler. Three popular neighborhoods in Tyler are:
Enjoy the best of upscale living around Lake Tyler
in Whitehouse, Texas. Since 1949, this lake has offered fun lakeside recreation and beautiful views. You can purchase a lot for a custom home on the Lake Tyler shore, or you can purchase a luxurious home with bright, naturally lit interiors and an outdoor living space with all your favorite outdoor features.
The lake and surrounding woodlands are well-known for the biking, camping, and golfing amenities dotting the shoreline, and you can also enjoy plenty of fishing and boating with the local marinas and resorts.
If you love golfing at a resort-style course or coming home to a beautiful street of homes with big windows, rustic vibes, and elegant architecture, visit Cascade Estates
. This neighborhood surrounds the 142-yard champion-style golf course and clubhouse, and the community offers socializing, indoor and outdoor recreation, and the best parts of Texas's mild climate. Visit Tyler's boutique downtown shops, enjoy your pick of farm-to-table restaurants, and explore Tyler's best attractions in this corner of the Tyler, TX, real estate market.
is a small, exclusive community near Lake Bellwood. The homes are a collection of custom-built houses with luxurious amenities, beautiful architecture, and breathtaking gardens and landscapes. This area was officially designated as the Azalea Residential Historic District and a National Historic District as of June 2003. Along with its namesake of blooming azaleas, the neighborhood is covered with maples, oaks, and wisteria. If you're looking for a beautiful home like no other, browse through the open homes of the Azalea District.
Reach out to Sissy Bellar for a custom real estate analysis and homebuying experience
Sissy Bellar and the S.E.T. Real Estate team are here to help guide your home buying journey through the Tyler, TX, real estate market. Reach out today
to start searching for your dream home in Texas.