Houston Real Estate and Rental Market: What’s Up & What’s Down?
Published on: Monday, December 7th, 2015
As the largest city in Texas, with a population of over 2 million people, all eyes are often on Houston when evaluating the Texas economy and real estate. Houston’s economy is largely an industrial one, with energy, manufacturing, and aeronautics taking the lead. Houston is also known for its health-care sector, particularly biomedical research. Also significant to the Houston economy is its port, which is ranked first in the US for imports and export tonnage, and is also the 10th largest port in the world.
Demographically, Houston is a multi-cultural city thanks largely to its many colleges and universities (which include the University of Houston and Rice University), its energy and other industries, and the port. Over 90 languages are spoken in the city. Median family income in Houston is about $40,000.
Houston’s Real Estate Market
The Houston real estate market is alive and well, which is partly a reflection of a healthy energy sector and increasingly vibrant economy. Greater Houston added more than 86,000 jobs in 2013. Projections are that the Houston economy will continue to grow, with a projected 111,700 jobs added in 2014 and payrolls increasing an estimated 3.9 percent.
Houston’s home sales and prices are up, and inventory is low. Here are some numbers from the Houston Association of Realtors:
- Home Sales: compared with December 2012, single-family home sales in December 2013 rose 14.3 percent
- Home Prices: year-over-year single-family home prices rose more than 10 percent to $265, 017
- Inventory: Houston had a 2.6-month supply of inventory in December 2013, which is an all-time low
Houston’s Rental Market
The Houston rental market appears to be just as strong as its real estate market. Compared to December 2012, rentals of single-family homes were up 7.8 percent. Rentals of condos and town-home properties were up even higher-at 9.8 percent.
Monthly rents in Houston have been stable for single-family homes, remaining at about $1,612. However, rents for town-homes and condos have increased significantly, rising 12 percent in 2013, to $1,476/month.
Multi-Housing News Online reports that in the past year, the number of 100+ unit multi-family properties that sold increased by more than 40 percent, and sales for properties with fewer than 50 units doubled.
Similar to Seattle’s real estate market, apartment unit construction in Houston has increased, with the addition of 9,200 units in 2013. Despite the addition of these new units, the vacancy rate for multi-family housing in Houston has remained steady at about 6.4 percent, a rate that has slowly been falling in recent years, and which is below the national rental vacancy rate average of 8.2 percent.
An estimated 10,900 apartment units will be completed in 2014, and rents for Houston multi-family housing are expected to rise 3.6 percent.
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By Tracey March
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