HARLINGEN — The area’s hottest housing market on record is cooling down — but still blazing.
For two years, the area’s new home sales were hitting record numbers, sending construction booming, with Space X and Harlingen’s medical complex helping to drive the market.
Then interest rates jumped.
“It was just too hot before,” Frank Strubhart, a Harlingen realtor, said. “It had to slow down. It was just too hot. But there’s a lot of growth coming into Harlingen. There are still a lot of subdivisions going up. You can see them clearing land, especially on the west side of Harlingen.”
From October 2021 to last September, Harlingen’s housing starts jumped to 261, boasting a total construction value of $44.3 million, compared with 256 housing starts valued at $38.3 million the year before.
Then about two months ago, the Fed boosted interest rates from 2.78 percent to about 6.5 percent, Connie de la Garza, a real estate broker who served two terms as Harlingen’s mayor, said.
“For the last two months the number of listings available for sale are going up and the number of sales are going down,” he said.
But the local market is still hot, Strubhart said.
“The interest rates have affected it very little,” he said. “It has decreased a little but there’s a lot of construction going on. There’s still a shortage of inventory for sale between $80,000 and $170,000.”
Hot off the boom
In San Benito, the housing boom that marked her top-selling spree is still running hot, broker Velma De Los Santos, who sits on the city’s Planning and Zoning Commission, said.
“The last two years have been my best in 40 — the market as a whole,” she said. “It’s just really exciting to see. There’s still a shortage of homes. We still don’t have enough inventory.”
Meanwhile, land sales are soaring.
“Land, in particular, is going strong,” Lolly Burns, a Harlingen realtor, said. “Land sales have not slowed down. People still have the dream of getting a little land and developing land. People know putting their money into land is a safe investment compared to the stock market.”
Top market
Across Texas, the area is one of the state’s top growth markets, Mauricio Saldana, marketing director with U R Home Texas, said two days after his company held a ribbon-cutting ceremony at its new 103-lot Russell Ranch subdivision off Lovett Road in San Benito, with home and lot prices ranging from $240,000 to $360,000.
“The Valley’s growing,” he said. “Harlingen’s a big one, Brownsville’s a big one, Weslaco’s a big one and, of course, Edinburg.”
Meanwhile, growth is spreading into San Benito, he said.
“It’s growing,” he said. “It’s the quiet before the storm.”
In Harlingen, the company has launched Paloma Ranch, a 130-lot subdivision off Paloma Lane, and Palm Valley Heights, a 26-lot subdivision west of Stuart Place Road off Williams Road, Saldana said.
“It’s growing tremendously there,” he said. “That’s our bread-and-butter.”
Space X expanding
For years, the city’s growing medical complex has helped drive new home sales here, realtors said.
“There are a lot of people in the medical field retiring so there are new people coming in to replace them,” Strubhart said.
Now, Space X’s expansion is driving new residents into the area.
“They’re growing like crazy,” Pat Hobbs, executive director of Workforce Solutions Cameron, said.
After Space X opened its Boca Chica Beach launch site in 2014, it hired about 200 employees, he said.
Today, the company has put 1,600 employees on its payroll, Hobbs said.
“It’s really having an impact on housing and transportation,” he said. “It’s all good.”
Growth trend
At Harlingen City Hall, officials are banking on the city’s growth to roll into 2023.
“We’re hoping the trend will continue — and it’s looking that way,” City Manager Gabriel Gonzalez said. “The whole region is growing.”
Based on the 2020 Census, the city’s population jumped by about 11 percent in the previous 10 years.
“One of the biggest things for Harlingen is we have one of the lowest cost-of-living factors in the country — and that’s a big factor,” Gonzalez said. “A lot of people have come to town and want to buy a home. You’re at a point where it’s hard to find a house that stays on the market very long before it’s snatched up.”
