Texas Coast Draws Buyers Seeking Less Expensive Vacation Homes

PORT ARANSAS, TX—While Texas home prices rose steadily in recent years, prices are still below $300,000 almost everywhere, especially when compared to the average home price in Seattle–more than $500,000–or San Francisco–more than $1 million. As a result, some of the most affordable investment beach towns are located on the Gulf Coast, especially in Texas. In four-season coastal communities such as Port Aransas, set along 18 miles of beachfront on Mustang Island, the average 50-foot Gulf front lot costs less than $1 million–well below the $4 to $5 million-plus average found in coastal California and Florida.

"Texas continues to have astronomical growth driven by people migrating here from other states. According to the US Census, five of the 15 fastest growing cities in the US are located in Texas," Harry B. Adams IV, managing partner at McCombs Properties, developer of Palmilla Beach Resort and Golf Community, tells GlobeSt.com. "Many of the migrants to Texas are professionals taking high-skilled jobs. They are attracted to the strong economy, pro-business culture and low taxes. These successful people are looking for ways to invest their money while enjoying the true reward of financial success–making lifelong memories with loved ones."

Indeed, since 2010, the Texas population has grown by 3.5 million, a million more than either Florida or California–resulting in 1.5 million new homes. Some 2 million of the new residents came from elsewhere (especially California) attracted by new jobs, a fast growing economy, more reasonable home prices and no state income tax.

For small coastal communities such as Port Aransas, 2019 visitor arrivals from Texas and around the country have so far exceeded last year's numbers by 40%. Those arrivals are expected to increase thanks to 3,300 out of 4,200 lodging units (up from 2,200 last year) that are now open for business since Hurricane Harvey with elevations of 10 to 11 feet above sea level. Port A is a two- to four-hour drive from the primary markets of Austin, San Antonio and Houston.

"The coast now has a second home for everyone from the cost conscious to the most discerning traveler," Jeff Lamkin, CEO of Sea Oats Group, developer of Cinnamon Shore, tells GlobeSt.com. "A majority of family vacationers prefer to travel within driving distance for cost and convenience. Second home owners prefer to buy close enough to use it for a weekend. The Texas Coast is in close proximity to 23 million people in a growing economy. Both lifestyle and investor buyers of second homes have begun to see the value of today's purchase with a path toward steady appreciation as the market evolves."

Port Aransas' nearly 20 miles of uninterrupted beach has long been recognized as a top deep sea fishing destination for its proximity to deep water on the edge of the continental shelf, while offering outstanding bay fishing in the waterways surrounding Mustang Island. Home to hundreds of permanent and migrating birds, Mustang Island features lots of undeveloped green space (uncommon in most coastal vacation home communities), including six sites along the Great Texas Coastal Birding Trail. Visitors can also swim, surf, fish, hike, bike and kayak at Mustang Island State Park or take in the island's massive wetlands at the Port Aransas Wetland Park.

"Other than price, there's a distinct culture on the Texas Coast that you won't find anywhere else. In Port Aransas, with a long, rich history of fishing and beach-going, there's something really special about the way you can seamlessly drive on the beach, find the perfect spot to park and jump on into the Gulf waters," Mallory Harnden, Brandon Miller Group, marketing project manager for Sunflower Beach, tells GlobeSt.com, tells GlobeSt.com. "Not to mention the plethora of wonderful restaurants, museums and endless outdoor activities available. Owners and renters throughout the region enjoy the ability to host large family gatherings together in one home and avoid the hassle of coordinating the flights, hotels and itineraries. In Port Aransas, families can simply drive in and start enjoying the beach, pools and restaurants."

Port Aransas' new developments include the destination's first conference center, slated to open in 2021 for gatherings of 500 to 2,000 attendees; a 225-room conference center hotel, slated to break ground in February 2020; and a new beachfront/bayfront marina and resort. The three main resort developments in Port A are Cinnamon Shore, Palmilla Beach Resort and Golf Community, and Sunflower Beach Resort and Residences.

"The construction of luxury homes and condos in Cinnamon Shore, Palmilla Beach and Sunflower Beach has played a significant role in our expansion to new segments of the market," Keith McMullin, broker with Port Aransas Realty, tells GlobeSt.com. "Quite simply, prior to these communities, Mustang Island didn't have investment properties and vacation rentals nice enough to appeal to the very high-end, luxury clientele in the major Texas metro markets."

Cinnamon Shore is a 1,000-acre master-planned beachfront family- and pedestrian-friendly community that will add Cinnamon Shore South, a $1.3 billion 300-acre expansion that will more than quadruple the existing community. It will include luxury homes, Town Center residences, community pools, a dining district with several restaurants, a retail destination, a health and wellness center, and a boutique hotel.

Palmilla Beach Resort and Golf Community opened a new golf course on June 1 with nine holes of links-style play, plus a 3-hole, par 3 course and a driving range. Palmilla Beach' offers resort amenities, concierge-style service and homes ranging from condos and townhomes to cottages and custom homes. Homesites begin in the $200s and completed homes from the $500s.

"Vacation rental demand continues to increase in Port Aransas and the city heavily invests in adding value to the island with events that draw people from all over Texas. Based on the strength of the economy and the demand for vacation rentals and home ownership in Port Aransas, McCombs Properties set out to transform the Texas Coast in Port Aransas. Ultimately, we chose to develop a community at a standard of quality that had never been seen before on the island," Adams tells GlobeSt.com. "We are passionate about protecting the authentic personality of Port A while adding the perk of a luxury resort and destination to the island. Our inspiration is the luxury community of Rosemary Beach with its upscale, coastal architecture. Palmilla Beach is a New Urbanism-themed community lacing coastal luxuries and conveniences throughout the land plan. This includes three food and beverage venues, and the only links-style golf course in Texas that meanders among the windswept Mustang Island dunes with views of the Gulf."

Sunflower Beach Resort and Residences within 50 acres of protected dune preserves, features beach homes, several lots and 21 single-level poolside condos. It has nearly completed the first phase of 25 one- and two-bedroom beach cabins priced from $382,000 to $499,000 at The Camp.

"There has been a shift in the perspective from the Texas Coast towns as being smaller and quaint to a more prominent vacation destination," Harnden tells GlobeSt.com. "You can see that through the more recent resort-style developments including Sunflower Beach that offer a variety of vacation home options at various price-points and feature extensive amenities that build community such as beach concierge services, golf cart and bike rentals, large family pool and a private adult pool, on-site cafe and direct beach access. Sunflower Beach aims to offer a wide variety of home offerings, ideal for anything between a couple's getaway or large family get-together."

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Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.