Taylor County: the builders leave, the bombers stay

Taylor County, November 2026

Taylor County spent the last eighteen months as the most watched county in Texas that most Texans could not find on a map. A data center campus the size of a small city went up on the edge of Abilene, thousands of construction workers moved in behind it, and the local housing market did something rare for a West Texas market: it repriced in about a year. The median home in the Abilene area sold for $300,000 in September, up 24.4 percent from a year earlier. Rents moved faster.

Two things changed this week. On Tuesday, Texas elected a governor who campaigned on a moratorium on data center approvals. On Thursday, the Air Force broke ground on a $78 million mission planning facility at Dyess Air Force Base, the first construction there built only for the B21 bomber. One of those is a construction boom that is winding down and may not be replaced. The other is a federal commitment that runs for decades.

The question for anyone pricing real estate in Taylor County is which of the two the current prices are paying for. Our answer is that they are paying for the first one, and the first one is ending.

Where the county line falls

Taylor County had an estimated 150,077 residents in July 2025, up 4.8 percent from the 2020 census base. Nearly all of the activity sits in and around Abilene, which spills north across the county line into Jones County. Dyess sits on the southwest edge of the city. The south and southwest side of Abilene, out along Buffalo Gap Road, is where the Wylie school district draws its students and where much of the market's newer housing sits.

Outside Abilene the county is small towns and ranch land: Tye next to the base, Merkel to the west, and Tuscola, Buffalo Gap, and Lawn to the south. The county is a one city county in practice, and every analysis of it is an analysis of Abilene.

The household numbers set the baseline. The median household income in Taylor County is $67,139, the median value of an owner occupied home in the Census five year survey was $198,600, and about 60 percent of homes are owner occupied. That survey covers 2020 through 2024, before the boom. The gap between that $198,600 and today's $300,000 sale price is the story of this piece.

The rating

We rate Taylor County overvalued.

This is not a call that Abilene is a bad place to own property over a long horizon. Dyess is a real anchor, the universities are growing, and the city has handled its windfall more conservatively than most. It is a call that the prices being paid today reflect a temporary surge in demand that is starting to reverse, sold into mortgage rates above 7 percent.

Four things drive the rating.

First, the demand shock is a construction workforce, and construction workforces leave. Reporting put the peak at somewhere between 4,000 and 6,000 workers in a city of a little over 100,000. The flagship campus is largely built. Oracle said in September that six of its eight buildings had been delivered. The permanent operating staff for a campus like this runs in the low hundreds, a fraction of the construction peak that filled motels and RV parks across town.

Second, the next wave of construction is the one most exposed to state policy. Crusoe's second Abilene campus, built for Microsoft, would bring another construction cycle through 2027. It depends on its own on site power plant. Texas has had a pause on new data center approvals at the grid operator and the environmental permitting agency since August, and the incoming governor has said she will extend it until the Legislature passes new rules. Nothing about that is final, but it is not the backdrop for underwriting a second boom.

Third, affordability has broken from local incomes. At $300,000 the median sale price is about 4.5 times the county's median household income. Using the pre boom Census home value, the same ratio was about 3 times. Mortgage rates averaged 7.18 percent this week, up from 6.22 percent a year ago. A buyer putting 10 percent down on the median home pays about $1,830 a month in principal and interest before taxes and insurance, about 37 percent more than buying the median home a year ago.

Fourth, the durable demand from Dyess arrives later and more slowly than the temporary demand it is being priced against. The B21 mission is a decade of spending, not a single year of it.

The bull case is real, and we take it seriously below. But we would not pay today's prices for the bull case.

The jobs

The Abilene metro had 81,200 nonfarm jobs in September, up 0.6 percent from a year earlier, with unemployment at 3.5 percent. That is a steady labor market, not a booming one. The sector detail is more telling. Mining, logging, and construction held flat at 5,600 jobs. Professional and business services grew 5.3 percent. Government fell 1.6 percent. Information fell 11.1 percent.

A construction surge that pushed rents this hard should show up in construction payrolls, and it does not show up much. The likely reason is that a large share of the data center workforce is employed by contractors based elsewhere, on temporary assignment. That matters for housing. Those workers rent, they do not buy, and when the job ends they leave without selling anything. Their demand inflated the rental market and the short term lodging market far more than it changed the permanent employment base.

The permanent base is military, medical, educational, and industrial. Dyess is the largest employer in Abilene, and local officials put its annual economic effect at $3.6 billion. Hendrick Health, Abilene ISD, Wylie ISD, the three universities, the City of Abilene, and First Financial Bank round out the list, along with manufacturers including Great Lakes Cheese, Bridgestone Bandag, Rentech, and Tigé Boats. That base grows slowly. It did not suddenly need 25 percent more expensive housing.

The campus

The flagship campus is the Lancium site in Abilene, developed by Crusoe and leased by Oracle to run computing for OpenAI. At full buildout it is eight buildings, roughly four million square feet, and about 1.2 gigawatts of power capacity. The first two buildings came online in September 2025. Oracle reported six buildings, about 618 megawatts of IT capacity, delivered as of its September 10 earnings call. An independent tracker estimates the last two are now running, though Oracle has not given a date.

A planned 600 megawatt expansion of the flagship was cancelled earlier this year. In March, Crusoe announced a second campus next door: 900 megawatts in two buildings, with Microsoft reported as the tenant for about 700 megawatts of it. That campus is designed around a 900 megawatt power plant on site, paired with battery storage. Crusoe said land clearing has begun and the first building is expected to be energized in mid 2027.

The local economics of the flagship have been argued over from the start. The City of Abilene and Taylor County approved property tax abatements of roughly 80 to 85 percent on the project, and county commissioners approved a 20 year term. The tenant protested the campus's appraised value. Local agreements and company statements put permanent jobs somewhere between 57 and about 360, depending on the agreement. Against a construction peak in the thousands, the permanent figure is small.

None of this makes the campus a failure for Abilene. It brought sales tax revenue, taxable value, and national attention to the city. It does mean that the campus's effect on housing demand peaks during construction and falls sharply once the buildings are finished. The flagship is at or near that point now.

The pause

Texas froze new data center connections of 75 megawatts or more at the state grid in August while agencies audited the facilities, and paused approvals at the environmental permitting agency as well. The audit was expected to finish this year.

Gina Hinojosa, elected governor on Tuesday, pledged in October to issue a moratorium on all data center approvals until the Legislature passes protections on water, power bills, and tax incentives. She takes office January 19. The Legislature convenes January 12. Jefferies estimated before the election that about 13 gigawatts of announced Texas projects would be immediately at risk under her plan. Her largest lever over time is the Public Utility Commission, whose members the governor appoints.

For Taylor County the question is narrow. The flagship campus is built and is not what a moratorium on new approvals would stop. The Microsoft campus is the exposure. An on site power plant of that size needs state environmental permits, and the permitting agency is one of the two places Texas has already paused. Whether that campus has the approvals it needs in hand, and whether a new administration would treat a project already under site preparation as new or existing, are the two facts that decide whether Abilene gets a second construction cycle or a gap.

The same question hangs over the wider region. Crusoe filed in October for a $4.8 billion campus near Jayton in Kent County, with construction scheduled to start in January 2027, and is building another in Childress. Those are outside Taylor County, but Abilene is the nearest large city to Jayton, and a statewide pause slows that pipeline too.

The bombers

Dyess is one of three bases the Air Force selected for the B21 Raider, Northrop Grumman's new stealth bomber, and is slated to be the third main operating base. The first B21 goes to Ellsworth in South Dakota in 2027. The $78 million, 46,000 square foot mission planning facility that broke ground today is the first construction at Dyess built only for the B21. Local officials expect about $1.6 billion in military construction at the base over the next 10 to 15 years.

At the State of Abilene in March, local officials described two waves of arrivals. The first would come from consolidating the remaining B1 bombers at Dyess, which they estimated at about 3,000 families over roughly three years. The second, tied to the B21, they estimated at about 5,500 people including airmen, families, contractors, and civilians. Those are local estimates, not Air Force figures, and the timing depends on retirement and delivery schedules that the Air Force sets. Local officials have proposed a dedicated off base military housing development of 800 to 1,000 homes near Dyess.

This is the bull case for Taylor County, and it is a good one. Military families buy and rent houses, enroll children, and stay for years. The arrivals are paid for by the federal government and do not depend on Austin's view of data centers. A thousand new homes built for military families over a decade is the kind of steady demand that supports prices.

The problem is timing and scale. Spread over a decade, these arrivals add demand gradually. The data center workforce added demand all at once and is now taking it away. The housing market has priced the sudden version. Dyess will supply the gradual one.

The housing

The Abilene Association of Realtors reported a September median sale price of $300,000, up 24.4 percent from a year earlier. Closed sales fell 15.4 percent to 215. Active listings fell 19.3 percent to 555. Inventory stood at 2.4 months, down from 3.3. Homes spent an average of 36 days on the market.

Local brokers have argued that much of the jump is a shift in which homes are selling rather than what any given home is worth. In July, when the median jumped 26.3 percent, sales under $300,000 fell from 57 percent of the total to 45 percent, and the average home sold got larger. That argument has merit for any single month.

It does not hold for the trend. Redfin's figures for the city show the median price per square foot up 25.2 percent from a year earlier, which strips out much of the size effect. In August, 32.5 percent of Abilene homes sold above list price, up 15 points from a year earlier, and the median home sold in 20 days, down from 44. Those are signs of buyers competing, not just of a different mix of houses selling.

Rents tell the same story more sharply. Zumper puts the average one bedroom rent at $1,000, up 11 percent from a year earlier, and the average two bedroom at $1,495, up 15 percent. Overall asking rents, which include single family homes, moved far more: Zillow's average asking rent in Abilene was up about 45 percent from a year earlier in September. Before the boom the Census median gross rent in the county was $1,159. At a September panel hosted by the chamber, speakers described rents across the area as having doubled and even tripled in some cases. The Abilene Housing Authority estimated the city was already short about 5,600 rental and ownership units before construction began.

Two things make us cautious about the rental figures. They were set by demand from temporary workers, and the market has started to show it. Zillow's average asking rent fell by about $100 from August to September even as it remained far above a year earlier. And a large part of the city's response, new RV parks and short term housing, was built to serve that same temporary demand. When the crews leave, that supply stays.

South Abilene and Wylie ISD

The south side is the part of the county most likely to hold its value, and the part we would look at first if prices fell.

Wylie ISD drew a B rating, a score of 88, in the 2026 state ratings, with four of its six rated campuses at A. The district opened a new elementary school this fall. Much of the market's new construction sits in the district, which is part of why the citywide median has climbed: when newer, larger homes make up more of the sales, the median moves up with them.

The south side is where owner occupants with school aged children buy, and where military families with a choice tend to look. That is durable demand. But south side homes also carry the most new construction risk. If the builders who added supply for the boom keep adding it into a cooling market, the newest product is the first to feel price pressure. We would want to see new home inventory and builder incentives before paying 2026 prices here.

Central and north Abilene and Abilene ISD

Abilene ISD covers most of the city, including the older central neighborhoods, the north side near the data center campus, and the Dyess elementary school on base. It is also where the boom left its biggest fiscal mark.

The district entered state recapture this year, owing about $1.2 million under the rules that send local property tax revenue from districts with high property wealth per student back to the state. For a district that has never been thought of as property rich, crossing that line shows how fast taxable value has risen relative to enrollment. The board cut the total tax rate by about six cents to $0.8887 per $100 of value, eliminated a $12 million deficit over two years, and voted to pay off certain bonds early, saving more than $12 million in interest. That is careful management of a windfall.

For housing, the older central and north side stock is where the rental surge hit hardest. Smaller, older single family homes were the natural housing for crews on long assignments. Those homes, and the buyers who paid up for them expecting today's rents to last, are the most exposed when the construction workforce shrinks. This is the part of the county we would rate most clearly overvalued.

Tye, Merkel, and the south county

Tye sits against the fence line at Dyess, and Merkel sits about 15 miles west on Interstate 20. Both have small markets, little inventory, and few sales in any given month, which makes their prices hard to read from the data. Their value case is almost entirely Dyess: if the local arrival estimates prove out and housing near the base stays tight, these towns are where overflow demand lands, and they are where an off base military housing development would most likely go.

South of the city, Tuscola, Buffalo Gap, and Lawn are served by Jim Ned CISD and have long drawn buyers looking for acreage within commuting distance. They saw less of the rental surge than Abilene proper and are priced more on land than on the boom.

We would treat all three areas as fairly valued relative to the city, with the caveat that thin markets can move a long way on a few sales.

The colleges

Abilene Christian University enrolled a record 7,877 students this fall, its ninth straight record year, up 8 percent from last year and 48 percent over five years. Hardin Simmons University reported 1,264 undergraduates, roughly flat. McMurry University also reported growth. Cisco College and Texas State Technical College add a workforce training base.

The universities matter for housing in two ways. Students create steady rental demand near campus that does not depend on data centers or the base. And the boom tested that demand: when the construction surge filled rental housing, universities including ACU scrambled to open short term student housing. As the construction workforce leaves, student renters are the group most likely to fill some of the units it vacates, at lower rents than the market has been charging.

Commercial

The clearest commercial effect of the boom has been sales tax. The City of Abilene reported sales tax revenue up 37 percent for October through March, an increase attributed directly to data center construction. To its credit, the city has treated the money as one time revenue: its annual financial report sets data center effects aside, and staff have recommended holding the windfall in reserves rather than building it into recurring spending. That is the right call, and it will matter when the construction spending fades.

Hotels, RV parks, restaurants, and building suppliers were the direct beneficiaries, and they face the sharpest adjustment as crews leave. Lodging in particular added capacity to serve demand that will not last at its peak level. The industrial base, from cheese making to boilers to boats, is unaffected by the data center cycle and is the more durable part of the commercial picture.

Taxes and water

Property taxes cut both ways in Taylor County right now. Rising home values are raising appraisals, and the boom added hundreds of millions of dollars in commercial value, which helped Abilene ISD lower its rate. Because the largest new property carries a large abatement, the long term tax benefit is smaller than the headline values suggest. Homeowners should expect higher appraisals from this year's sales to show up in next year's notices even if prices stop rising.

Water is the long term constraint. The reservoirs serving Abilene stood at 40.6 percent full this week. Lake Fort Phantom Hill was at 66.6 percent, Hubbard Creek at 35.6 percent, O.H. Ivie at 40.7 percent, and Lake Abilene itself at 6.6 percent. The data center campus uses closed loop cooling that does not evaporate water, and each building needs about a million gallons to fill its system once. That is a small draw compared with the city's total use. But any growth story in West Texas, military or industrial, eventually runs into water, and a county with its reservoirs at 40 percent does not have a large margin.

The public companies and the exchange

First Financial Bankshares (Nasdaq: FFIN) is the largest public company headquartered in Taylor County. The Abilene based bank reported record third quarter net income of $74.3 million, or $0.52 per diluted share, up from $0.36 a year earlier. Its net interest margin was 3.91 percent, it earned 1.93 percent on average assets, and nonperforming assets were 0.71 percent of loans and foreclosed assets. Classified loans rose to $294.5 million from $253.0 million a year earlier, a number worth watching. The bank has 81 locations across Texas, with total assets of $15.2 billion, and it raised its quarterly dividend to $0.22 from $0.19. Fee income tied to oil and gas mineral interests also rose.

The Texas Stock Exchange began trading in July, and Texas banks have led the move toward it. Texas Capital moved its primary listing, Origin Bancorp began trading there in October, International Bancshares has shifted, and Cullen/Frost begins trading on the exchange November 12. First Financial has made no announcement and remains on Nasdaq. For a bank whose identity is built on being Texan and conservative, it is a notable holdout, and one of the larger Texas based banks yet to act.

The other public companies tied to the county are tenants and suppliers rather than local businesses. Oracle (NYSE: ORCL), headquartered in Austin, leases the flagship campus. Microsoft (Nasdaq: MSFT) is the reported tenant at the second Crusoe campus. Northrop Grumman (NYSE: NOC) builds the B21. American Electric Power (Nasdaq: AEP) owns AEP Texas, the wires utility for Abilene. Crusoe and Lancium, the developers, are private.

What we would want to see

• Abilene area median sale price holding at or above $290,000 through the first quarter of 2027 while active listings rise, which would show the price gains are not dependent on the construction workforce.
• One and two bedroom rents in Abilene holding within 5 percent of their October 2026 levels through spring 2027 as the flagship campus completes.
• Confirmation that Crusoe's Microsoft campus has its environmental permits in hand, or a clear statement from the new administration on whether projects already under site preparation fall under a moratorium.
• Air Force confirmation of the timing for B1 consolidation and the first B21 arrivals at Dyess, and a start on the proposed off base military housing development.
• Abilene area reservoir storage above 50 percent by summer 2027.
• City sales tax revenue staying within 15 percent of its pre boom four year average after construction winds down, which would show the city has kept recurring spending off the windfall.

Taylor County is a place we would look at, but not at these prices. Dyess and the universities give it a floor that most boom towns lack, and the B21 is the best long term demand story in West Texas. The current prices were set by a construction workforce that is leaving and a second data center cycle that the state may not allow. We would wait for the crews to go, watch what rents and listings do in the first half of 2027, and look first at the south side and the towns near the base when they do. Until then, we rate Taylor County overvalued.

This piece is general commentary about a real estate submarket written for a general readership. It is not advice to any particular reader and is not an offer to buy or sell any security or property. See the disclosures page for positions and terms.