Sherman, TX, still ‘juiced up’

Out past Plano and McKinney on North 75 lies Sherman, a small Texas city of less than 44,000 people. Despite being more than 60 miles outside Dallas proper, this potential tech manufacturing hub has residential developers and investors aiming to double its population.

There are now 34 planned development projects in this North Dallas suburb, according to a map given to ABC 7 from the city of Sherman. If they were to be completed, these developments would bring more than 8,000 single-family lots and 10,000 multi-family units to a town that currently only has 15,000 houses.

“The northward expansion that we’ve been talking about for thirty years, well, it’s here,” said Sherman City Council Member Josh Stevenson. “You’re going to turn around, and it is going to seem like tomorrow, and there’s just going to be people everywhere.”

When confronted with residents’ fears over their fast-changing community, Stevenson said that only about 30 percent of the developments are cleared for the first phases of construction. In neighboring North Dallas submarkets, like Frisco and Celina, declining demand has already stalled homebuilding, with single-family permits dropping 40 percent year-over-year.

Meanwhile, Sherman was the only Texas market named in Moody’s Analytics’ list of “overvalued” housing markets likely to see home prices fall over the next year. Chief economist Mark Zandi specifically named Sherman as one of the top ten most “juiced-up” regional housing markets, estimating it to be 60 percent overvalued.

Overall, Zandi predicts that the year-over-year rate of home price growth will flatline by this time next year across the U.S.. In Sherman, he expects home prices to drop between 5 and 10 percent within a year. On Twitter, Zandi pointed to the city’s migration flows compared with the share homes owned by investors as cause for alarm.

Despite the warning signs, residential developers and investors are still betting big money on Sherman to double in size as city officials lure in massive industrial developments.

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Governor Greg Abbott announced another semiconductor facility on Monday. The company behind the development, GlobiTech, is a U.S. subsidiary of the Taiwanese tech manufacturing giant GlobalWafers Co. Abbott promised the company a $15 million cash grant from Texas’ enterprise fund for the project, along with at least $34 million in local tax incentives, which he claimed would facilitate more than a thousand new jobs in the area and prompt billions of dollars of investment.

The Sherman Economic Development Corp. approved $20 million in cash payments for the project, as well as the sale of 144 acres of land, valued at $14.4 million, for the rock-bottom price of $144, according to the Dallas Morning News.

“Sherman has spent years building a business-friendly climate and laying the groundwork to support large employers,” said Sherman Mayor David Plyler. Last year, the city beat out Singapore to become the site of Texas Instruments’ almost $30 billion development of semiconductor plants. Upon completion, which is expected sometime in 2025, it is promised to bring 3,000 new jobs to Sherman.

When announced as ambitious mixed-use developments in 2020, Bel-Air Village, Heritage Ranch and The East Village by Munson Realty were projected to bring “billion dollars of private investment” to Sherman, according to community and support services manager Nate Strauch at the time. To date, the only one to release an update for investors was Heritage Ranch, which announced a groundbreaking this month — two years after the original date.