MIDLOTHIAN — Rental prices in busy, bustling cities such as the Dallas—Fort Worth Metroplex, have consistently anchored in high prices — that is until the scale flipped to the suburbs.
Midlothian placed second behind Weatherford in a recent study of the fastest growing rental prices in DFW, with an average increase of 10 percent over the 2016 calendar year. Waxahachie also found itself on the top-10 lists, as the city placed No. 3 on the list of "fastest growing rents" with housing rentals averaging $1,015.
The study, conducted by Rent Café, noted most residents are split into two types of thought — rent control or commodity dependent — and the newfound “supply and demand” movement should also bring promising economic growth to the 76065 and 75165 zip codes.
“We see a trend in many major US cities because there’s a large, new supply of apartments coming on the market in urban areas that’s slowing the rent increases in the main cities,” stated Nadia Balint, Rent Café’s Real Estate Writer. “On the other side, there’s not much being built in the suburbs, a lot less supplies coming on the market. Yet, the demand is shifting a little bit from the city areas towards the outside of the cities, moving into the suburbs for lowers prices. This shift in demand is starting to show in price increases, and this is true for many large US cities, including Dallas and Fort Worth."
In an article posted by the Rent Café at the end of 2016, Dallas apartments cost 5.9 percent more in rent than they did 12 months prior, with the average rent crossing over the $1,100 threshold. Meanwhile, rental prices have increased by 6.3 percent in Fort Worth, reaching $1,000. The Dallas-Fort Worth Metroplex as a whole posted a 4.9 percent average year-over-year rent increase, 90 basis points over the national average growth rate, according to market data from Yardi Matrix.
Although Dallas remains one of the best U.S. cities for budget-conscious renters with rental rates growing at a modest pace, 6,000 new units of apartment construction are to thank for that.
As for Midlothian, the average rent is now $1,000 — up 10.1 percent year-over-year, which is the second-highest jump in the Metroplex behind only Weatherford. Though the increase comes at a higher price, the city allows for more elbowroom, expansion, and is prime for DFW commuters.
“It’s certainly a good sign for the local economy, and when you have an increase in demand, you have more people that are moving into the area that are renting," Balint said. "But you don’t have any new apartments coming on the market at all. No new large developments have been built here since 2008, and there’s nothing major under construction there right now. Whatever’s on the market as of now, it’s serving this increase in demand, so prices will inevitably go up."
The Dallas Business Journal also compares Midlothian's 10.1 percentage with its sister-city, Waxahachie. The Gingerbread Capital also made the top 10 with a more modest, but still very healthy, 7.5 percent growth rate.
“Over a ten percent increase in Midlothian seems like a lot but I looked at a five-year period for the rent increases and I noticed that rent increased a lot slower than Waxahachie, and Midlothian increased by 19 percent; versus Waxahachie that increased 30 percent, Fort-Worth increased 30 percent, and Dallas, 22 percent,” Balint added.
The Dallas Business Journal also reported on the transferred expansion from city to suburbia, stating relocations to North Texas have held steady and the influx of new apartment complexes have caused rent increases to slow dramatically compared to this time last year.
The single-family home market is still robust, and in North Texas, there are expected to be approximately 32,000 new homes built. It'll be the first time in a decade — before the market crashed — that the region has hit the 30,000 mark.
“We are looking at this shift toward the suburbs as far as renting, and it’s an interesting phenomenon that’s taking place in the Dallas-Fort Worth area. We do expect to see a growth in this market, probably as the major city markets are saturating with enough apartments, developers who start moving into the suburbs to create more supply,” Balint acknowledged
According to Midlothian Economic Development, DFW’s Southern Star is the 22nd fastest growing district in Texas with a population of 34,000. The department also reports some 900 companies have expanded into bigger markets with a rising median income of $85,329 — setting the once small town apart from the rest.
“Take Midlothian for example; generally, it’s mainly a ‘supply and demand’ issue, people are escaping the higher prices in the cities and going into the lower-priced suburbs. If we were to focus on Midlothian, you have a suburb that has a consistent population in job growth in recent years. It has quality schools, an above average medium household income, and it’s still close enough within a half-an-hour or one hour drive to either major cities,” Balint explained. “With these fundamentals, many investors would say, ‘this is a healthy real-estate market, and it might be underpriced and has potential to grow.’ Case in point, I looked at Midlothian, and I noticed the largest and most expensive rental property in town, the new owners subsequently increased the rent on average by 14 percent by just one year, mainly because they saw it as underpriced for the area. Increasing rent 11 to 12 percent in just one year is enough to affect the overall average rent in the city,” she expounded.
As for future predictions of the escalating rent status in Ellis County, Balint is confident that these price increases will cultivate the Cement Capital of Texas. She added, “There are signs that there’s still a lot of room to grow for Midlothian.”
To read Rent Café’s report, visit rentcafe.com
Chelsea Groomer @ChelseaGroomer