Lubbock real estate, is it worth investing in? Lubbock is on the 11th rank in terms of the most populated city in Texas. As the capital city of Lubbock City, the population of the metro area was 327,424 in 2020 and it seems to be continuously increasing.
Lubbock itself is located in the northwestern corner of the state. Both historically and geographically, the city is well known with the nickname Llano Estacado which means the southern spot of the highland.
For many years ago, the city was famous for its agricultural industry. Even the cotton industry of cotton became the main reason why Lubbock developed very rapidly. Well, many people migrate to the city to be part of it and this is how property investment is quite recommended here.
Indeed, Lubbock may not be as popular as Houston or Dallas. You should not choose this city if the crowd is your target. But in case the future is what you think about, buying a house in Lubbock is a good try. Nowadays, the price tends to be more affordable than in the other 2 cities mentioned earlier. However, its stable increase and the significant growth of population become reasons why it will be very profitable.
So, if Lubbock is the next city where you want to invest your money, read the following explanations.
The History of Lubbock Real Estate Market
To know if a city is really good for home investment or not, it is very important to take a look back at its market data history. Yes, history is basically the preview of what happens next. Although it may not 100% accurately predict the future, the history of the real estate market is still a good reference.
For Lubbock, there are many indicators to analyze to measure its history in the real estate market. But above all, the most important things are the House Price Index (HPI) and House Affordability Index (HAI).
HPI monitors the house price change from time to time. On the other hand, HAI compares the median price of a house with the median income of people in the property market.
Many indexes have reported the HPI and HAI for the Lubbock TX real estate. One of them is by Freddie Mac, known as the Freddie Mac House Index Price (FMHPI). Based on the latest data per April 2022, the change in the median home price in Lubbock for the last 5 years is 44%.
The percentage is calculated from April 2017 in which the HPI is 160.1. Meanwhile, the HPI of Lubbock in April 2022 is 230.9. Other changes to calculate are the home price for a year and a month, they are 16.1% and 1.6% respectively.
For the HAI, it uses 100 as the basic number of the index. The real estate market with an HAI above 100 tends to be more affordable to buy. On the other hand, if it is below 100, the houses tend to be profitable to rent.
In Lubbock, the HAI is 159, meaning the average house price in the city is still affordable for people. That’s why buying a house in Lubbock and renting it becomes a smart investment choice.
Lubbock Population and Growth
In 2020, the population in Lubbock is 262,655. The average population growth is 1.06% every year, making the population increase up to 2.14% since the last census. The growth may not be as significant as in other cities in the US but it cannot be said to be low also. Well, it is by seeing the data in 2010 in which the population of the city in Texas was 257,141.
Generally, Lubbock has had consistent population growth since the beginning of the 1900s. Even from 1950 to 1960, the city grew with a population of more than 100,000. Then, the record was again broken with the number of 200,000. From the census conducted in 2010 until now 2022, the population growth of the city is 10%. The consistency shows that Lubbock will always be developed in the future.
The average family income in Lubbock is $71,273 with a poverty rate of 19.89%. Lubbock is currently famous as Hub City. It is because the city is the center of economy, Healthcare, and education in Texas.
Being the center of some sectors at once makes the population growth not only influenced by birth but also immigration. Many people throughout Texas and from other cities come in every year for various purposes starting from studying for a job, to looking for a better life.
Youngsters come for studying as Lubbock is one of the homes for some of the best universities and high schools in the country such as Texas Tech University. Meanwhile, adults are working here as there are some headquarters of big companies, such as the Covenant Health System and Lubbock United Supermarket.
Lubbock is also awarded by the central government and one of the best cities in the world to start small businesses for its ideal location. Some other factors why the city is the best for business are because of the ease of cooperation with the local government and the price of rental space which tends to be more affordable compared with other cities. The same thing is for home for sale in Lubbock TX.
Current Conditions of the Lubbock Real Estate Market
In 2022, there is an increase in house demands in Lubbock. Uniquely, most buyers are not from Texas but other states. Based on some surveys, there are reasons why those buyers prefer hunting homes in Lubbock. The reasons are the low inventory and higher supplies than in other cities.
The latest report from the Texas Real Estate Research Center shows that the transaction process of properties in Lubbock tends to be fast. The house is averagely marketed only for 55 days until it is sold out. It just proves that in this city, the demands are higher than the supplies.
To make it clearer, the primary market statistics in Lubbock are as follows.
First, the Zillow Home Price Index is $204,040 to May 31, 2022. The price itself has increased by 19.3% since 2021 and it has been developed also up to 38% since 2017.
Second, the median home listing for a house in Lubbock is $245,000. The number is found from the last research reported by Realtor.com in April 2022. At the same time, the median price of a house per square is $129.
Third, the selling price ratio in Lubbock is 100.8%, meaning that a house in the city is sold quite near to the price offered. In addition, as has been mentioned above, a house can be sold only 55 years after the first offer.
Lastly, there are 54 neighborhoods in Lubbock. The prices of houses there vary from the cheapest to the most expensive. The most affordable neighborhood in the city is Clapp Park where the median house price is $105,000. Meanwhile, the most expensive one is Lakeridge Country Club Estates with a median price of $455,000.
Then, what about the rental market? A report from the same source, the Texas Real Estate Research Center shows that the housing market in Lubbock including in the Lubbock metro population area is getting normal after the COVID-19 pandemic in the last 2 years.
The appreciation of the house price is even at its peak in 2022. The ratio of selling prices is above the demand prices up to 100.80% in May 2020. It becomes the main reason why around half of the houses in Lubbock are rented.
The primary statistics for home rentals in Lubbock are as follows.
First, the median rental price for a house with 3 bedrooms is $1,499 per month per June 2022. The number has increased up to 11% since last year. The percentage is also the median price increase from year to year.
Second and last, the houses of single families in Lubbock are up to 70% of the total houses. Meanwhile, 50% of total houses in the city are rented. That’s why having a house in Lubbock to rent is a prospective investment choice.
Lubbock Real Estate Market Forecast
In 2020-2021, undeniably, many sectors collapsed because of the pandemics. And yes, Lubbock was one of the cities that was affected deeply by the virus. As a home for many migrants particularly those who came for work, Lubbock must face the truth that many people were gone from it.
Interestingly, the city is also one of them that can recover quite faster until the pandemics are stated to be gone. Those affected sectors are continuously recovered including in the area of Lubbock housing.
The most visible recovery is for the job market. Before the pandemics, the unemployment level was only 2.80%. The percentage was the lowest recorded in the last 10 years. Now, in the mid of 2022, the unemployment level is very similar to that before the pandemics. Some employment sectors that are recovered fastest are sectors of construction, professional and business, and recreation.
The fact that Lubbock can recover fast and the stable median home price from year to year just shows the bright future of the city for property investment. Currently, pandemics are still influencing home prices in some areas, making houses and lands considered more affordable than in others.
It is interesting to know that many people who moved out from Lubbock have not been back yet. Well, they can be back or not in the future. But something sure is, if they are not back, their companies are ready to open new vacancies to hire new people to replace their positions.
Those companies are famous with a thousand people applying for a job where everyone opens vacancies. Well, you must have heard some of the following names such as Covenant Health, UMC Health System, Johnson Control, United Supermarket, and Texas Tech Health Sciences Center.
In addition, Lubbock is also a home for more than 52,000 college students. There are almost always 13,200 graduates every year in big education institutions such as Texas Tech University, Texas Tech University, and Health Sciences Center, and South Plains College.
The improvement and recovery of job markets bring good signs to the real estate market. In 2023 and some next year, the demand for houses will increase whether they are to live in or to rent. Meanwhile, the supplies are getting limited as you can see this year. It causes price increases and this is how for the next 5 years, properties can be quite expensive in Lubbock.
It is not exaggerating to say that today is the best time to buy property in Lubbock. Some conditions mentioned above indicate that current prices are quite affordable and it will be very profitable in the future.
Lubbock Real Estate Market FAQs
- How is the Lubbock housing market?
In the period 2021-2022, Lubbock property values have increased by 19.3%. It is calculated that since 2017, the increase is almost 38%. Meanwhile, based on recent research from Realtor.com, the median listing price of the city is $245,000. Per square feet, the median price is $129 in Lubbock.
- Is Lubbock Texas a good place to live?
Yes, it is. Lubbock is affordable in terms of houses and living costs. Based on the house affordability index by Freddie Mac, Lubbock gets 159, meaning that the city is affordable enough to buy or rent a house, at least, when it is compared with other cities in the US. By seeing the stable price improvement, Lubbock is also ideal for property investment.
Even Money Magazine mentioned Lubbock as the third best place to live in the country. The indicator is not only based on housing but also on others such as lifestyle, transportation, jobs, health care, education, and weather.
- Where is the best place to live in Lubbock?
Some areas are known as the best place to live in Lubbock. They are Shallowater, Idalou, Abernathy, West Carlisle, Buffalo Spring, and New Deal. Buying and renting houses in those areas are considered affordable. Besides, they also offer comfortable neighborhoods, as well as their locations, which are not too far from public facilities.