Best Real Estate Markets in Texas 2026: What the Data Shows About the Three Largest Metros

Texas is the most discussed state in real estate investing circles. Business-friendly, no income tax, population growth, warm climate. The long-term case for Texas remains intact.

The near-term data, as of February 2026, tells a different story.

PropertyIQ scores every U.S. metro on a 0 to 100 index updated monthly. Here is where the three largest Texas metros stand as of February 28, 2026.

The Scores

| Metro | PropertyIQ Score | YoY Value Change | Active Listings | Price Cut % | Days on Market | |---|---|---|---|---|---| | Austin, TX | 18 | -8.82% | 9,072 | 20% | 76 | | Houston, TX | 32 | -2.23% | 30,462 | 18.4% | 54 | | Dallas, TX | 31 | ~flat | 17,000+ | ~18% | 58 |

All data as of February 1, 2026. PropertyIQ scores as of February 28, 2026.

All three major Texas metros are scoring in the bottom third of the national index. That is not a coincidence — it reflects a shared dynamic: a supply surge that outpaced demand recovery after the 2021-2022 boom.

What Happened to Texas Real Estate

Texas markets saw extraordinary price growth between 2020 and 2022. Austin doubled. Dallas, Houston, and San Antonio all saw 30–50% appreciation in two years. Builders responded aggressively. Construction permits surged. New listings flooded the market.

Demand did not keep pace. Mortgage rates rose. Affordability broke down. Remote work tailwinds faded. The result: more homes competing for fewer buyers.

Austin (Score: 18)

The deepest correction of the three. Home values are down 8.82% year over year as of February 2026. The market still carries a 22.8% overvaluation gap relative to local income and rent fundamentals. Inventory is up 14.77% year over year.

A score of 18 reflects a market in active correction with significant supply overhang and valuation adjustment still to work through. Zillow forecasts an additional -2% decline near-term as of December 2025.

View Austin's live PropertyIQ Score →

Houston (Score: 32)

The largest inventory situation in the state: 30,462 homes for sale as of February 2026. Houston's demand score from PropertyIQ is 0 out of 100 — the lowest possible reading. The pending-to-active ratio is 0.30, meaning only one home goes under contract for every three listed.

The relative bright spot: Houston is only 7.4% overvalued relative to fundamentals. When the inventory overhang clears, Houston's underlying economics (diversified employment, median household income $80,458) support recovery.

Dallas (Score: 31)

Dallas mirrors Houston's pattern at smaller scale. Significant inventory build-up, price cuts widespread across listings, values roughly flat year over year. Like Houston, Dallas has structural economic strengths that will matter when supply normalizes.

What This Means for Investors

Investors in Texas right now have negotiating leverage they have not had since 2019. Sellers are cutting prices. Homes are sitting. The question is not whether deals exist — it is whether the market has found its floor.

On the PropertyIQ index, markets in the 18–32 range typically take 12–18 months to work through excess inventory and begin scoring higher, assuming stable employment and no further macro shocks. Texas employment remains strong. The correction is supply-driven, not economic-collapse-driven.

For cash flow investors: the rent-to-price math is improving as prices fall. Houston in particular is approaching rent ratios that pencil for single-family investors.

For appreciation investors: the data does not yet signal the floor. Patience is indicated.

PropertyIQ scores as of February 28, 2026. Listing and inventory data as of February 1, 2026. Forecast data as of December 2025. All data for informational purposes only. Not investment advice.