The majority of new developments under construction in the city have starting prices above $300,000, with most new construction averaging between $340,000 and $500,000.
While the average McKinney household income has increased just over 9 percent since 2007, according to the U.S. Census Bureau, it has not kept pace with the housing market.
Jeremy Tillett, owner of McKinney-based Tillett Realty, said the local housing market is among the most competitive markets in the country.“Most homes in our area sell for thousands of dollars above list price in only a day or two of being listed,” he said.
Tillett said that most homes for sale in McKinney are listed at or above $250,000, which can price out one segment of the population—young families headed by millennials, or people younger than 35 years old.
According to the Dallas Builders Association, the most desired price range for clients in their 30s includes homes below $200,000.
Tillett said some pre-existing homes in the $200,000 range in the North Texas area are available in cities such as Melissa, Anna, Van Alstyne, Howe and Princeton, but home prices in these cities are now also rising. He said it is almost impossible to purchase a new home in any city in the area for less than $200,000.
“If a seller has a home for sale in that price range, they will have no trouble selling it probably within the first few days on the market,” he said. “Most of the homes for sale in McKinney are listed for $250,000 or more, which does make it hard for buyers in their early 30s to purchase in McKinney.”
The effect of the more expensive housing market is filtering down to McKinney ISD. District officials said they are seeing a change in the age demographics as the typical McKinney family ages.Impact of rising costs
In fall 2015, when the district was considering what would be included in its May 2016 bond election, officials looked to Bob Templeton, MISD’s demographer.
At the time, Templeton expressed concern over McKinney’s housing market and told district officials he expected more growth in older elementary school grades and in middle school classes. The reason, he said, was because of the average price of a McKinney starter home, which was $250,000 in late 2015. When comparing that price to surrounding cities and their school district growth, he said he found most families who were able to afford those starter homes were older and had older children.
Templeton also told MISD officials that the district could lose younger families to districts such as Anna or Melissa as younger families extend their starter home search farther north, where home prices are a little less expensive.
Templeton’s projection has held true for 2016.
According to Templeton’s 2016 second-quarter report, the district had a drop in young elementary students.
For example, during the 2011-12 school year, there were 1,853 kindergarteners, 1,878 first-graders and 1,917 second-graders. In contrast, enrolled this year, there are 1,625 kindergarteners, 1,730 first-graders and 1,740 second-graders.
“The primary reason we are seeing a drop in elementary school students is that many of our neighborhoods are beginning to stabilize and age,” Cody Cunningham, chief communications and support services officer for MISD said. “This is particularly true in some areas of Stonebridge Ranch. Many empty-nesters are choosing to stay in McKinney, which is great for our community, but we have just recently started to see growth in more affordable housing options for young families.”
Future trends
Templeton and his team do not expect a rise in elementary student population until 2023-24. Cunningham said the projected increase is likely from children of homeowners reaching elementary age and entering the McKinney ISD system.
“I don’t think we ever anticipated growth to continue at the rate we saw in the late ’90s and early 2000s, when we were growing 1,500 to 1,800 students per year,” he said. “Some of our largest student classes are currently in our high schools and will be graduating, but there are plenty of signs that we will see an uptick in enrollment as more houses are built in the northern sectors of the school district and regeneration occurs in some existing neighborhoods.”
Nearly 40 percent of all new home closings in MISD in the past year were in Press Elementary zone, due to activity in Trinity Falls and Erwin Farms in McKinney’s northwest sector, according to Templeton.
“Based upon recent campus additions and renovations, as well projected growth, we anticipate the need for a new elementary school in five to seven years,” Cunningham said. “In the areas where we are seeing significant growth, such as the Trinity Falls development, we still have ample capacity at schools including Press Elementary, McClure Elementary and Vega Elementary.”
For years, the city of McKinney has been preparing for the eminent explosion of growth in the northwest sector.
Martin Sanchez, owner of Sanchez & Associates, is partnering with the city to extend Laud Howell Parkway from US 75 through the northwest sector. After the road is complete, he has plans to break ground on the first phase of what could be the largest community in the sector—a 2,500-acre community known as Cross F Ranch.
“We plan on releasing the first 550 acres for the spring 2018 sales season, which means we hope to be bringing on the first few neighborhoods for sale in the March-May 2018 time frame,” Sanchez said.
Sanchez said his firm is working aggressively to meet some of the housing demand with plans that include townhomes, patio homes and homes with a variety of lot sizes. Prices will range from $250,000 to $1 million.
“Currently in some areas of other communities, the least expensive home we can build is $500,000 and up,” he said. “Unfortunately the days of being able to deliver a starter home of under$250,000 are gone. They are not a reality in today’s market.”
