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5. McAllen, TX
5. McAllen, TX
57% Projected gain in home prices (5-year)*
Median home price Median home price
2006: $70,000
2011: $109,000
Population Population
2006: 695,000
2011: 785,000
Per capita income Per capita income
2006: $17,000
2011: $23,200
*Metro region statistics

A Hispanic baby boom is working its way through the regional economy, and families will soon be trading up their digs. McAllen is already 85% Latino, and the average age of those households is two decades younger than that of non-Hispanic ones.

Latino families are also larger: 3.8 members, on average, compared with 2.4 for Caucasians. "These border towns have a housing shortage," Cochrane says. "There's pent-up demand. They'll be looking for more space and better space."

He predicts that incomes will catch up to the area's economic growth, currently more than double the state average of 2.9%. So far, cheap labor has driven a development boom. Manufacturers locate on both sides of the border to take advantage of low wages and the common market for goods created by NAFTA.

CAUTION: As the economy matures, higher-paying industries like health care and business services will grow. The area could lose its low-wage "nearshoring" edge, slowing down industrial growth and the demand for new homes.