- Introduction to the Houston Area Housing Market
- Overview of the Houston Real Estate Market
- Factors Affecting the Houston Housing Market
- Home Values in Houston
- Understanding the Factors that Influence Home Values
- Historical Home Value Trends in Houston
- Current Home Values in Different Neighborhoods of Houston
- Analysis of the Houston Housing Market
- Housing Market Trends in Houston
- Supply and Demand Dynamics in the Houston Area
- Impact of Economic Factors on the Housing Market
- Houston Apartment Market
- Overview of the Houston Apartment Market
- Rental Price Trends in Houston
- Factors Influencing the Apartment Market in Houston
Introduction to The Houston Area Housing Market
Overview of the Houston Real Estate Market
The Houston area housing market around June of this year faced declining house sales and other challenges. However, on the other side, it has also shown positive signs of recovery. After a long period of decline, the luxury segment showed signs of a slight gain. Similar is the case with showings and pending sales that showed an upward trend too.
Among the factors to be considered about the future Houston real estate market trends are the state of the national economy and changes in the real estate market. But as the Houston housing market trend slowly adapts to the volatile economy indices, players must be careful while navigating the market.
Currently, the Houston area housing market is going through a period of stabilization. For long, it has been suppressed by the devastating effects of high interest rates and the pandemic. The market is showing positive trends now even though a few downsides do exist.
Factors Affecting the Houston Housing Market
There has been a surge in the development and growth in Houston in recent years leading to rising real estate prices across the city.
So, what are the factors that determine Houston home values?
- Population growth: Houston and its suburbs are witnessing a rise in population because of increased job opportunities. In the rush to acquire properties, real estate prices are going up. This trend is seen more in Sugar Land, Katy, and The Woodlands, the most prized real estate in the Houston suburbs.
- Job growth: A boom in employment rate is observed after top companies in the USA like Amazon, Microsoft, and HPE moved into Houston in the recent past. This has led to higher incomes for a section of the residents who can now buy or rent properties in Houston.
- Infrastructure improvements: Over the past few years, there have been heavy investments in Houston for improving public transportation networks, roads, and related infrastructure. This has made Houston an attractive destination for potential homebuyers.
- Macroeconomic factors: Several macroeconomic factors have impacted the real estate market in Houston in recent times. Investors have been attracted to the city due to the low cost of living and competitive mortgage rates.
These factors have benefitted greatly both buyers and sellers in the Houston area housing market.
Home Values in Houston
Understanding the Factors That Influence Home Values
How is the housing market in Houston now? In a nutshell, it is booming now, whether it is the residential or the commercial sector, and hence, the most opportune time to make major decisions about real estate deals. Calculating the appropriate price of your property is important as you can quickly close a deal.
A report based on a survey in Houston shows that almost 36% of people do not list their properties correctly. As a result, they suffer major losses. If people were aware of the factors that govern real estate prices, they would not have to face these issues.
The survey points out some key points and factors that affect the housing market in Houston.
- Location of the property: The location of your property is a defining factor affecting the housing market in Houston. Properties near transport hubs like bus and train stations, shopping centers, hospitals, and schools have a higher price tag. The perceived value of the neighborhood is another point here. A property in a reputed area will be sold at a much higher price than one in a small unpopular district in Houston, even though both might be of similar construction and style.
- Condition and design of the property: The size, condition, age, and design of a property, according to the survey, influence home values in Houston. Buyers judge a property by the doors, windows, tiles, and condition of the paint before they agree to pay the asking price. Renovated homes or those with improvements fetch a higher price.
- Getting a second opinion: A real estate agent might not always evaluate the best-asking price for your property. Get the opinion of two or three agents before fixing the list price of your property.
- Condition of surrounding properties: Your house might be in very good shape but if the surrounding properties have a rundown look, it will affect the price of yours too. The type and quality of real estate around your house play a big role in the value of your property.
These are some of the factors that affect the housing market in Houston.
Historical Home Value Trends in Houston
Homes today in Texas and particularly Houston are selling at a dizzying pace. This is not surprising at all considering that home prices have soared in almost all metro areas of the state.
The historical home values in Houston have been clearly explained in a recent report published by the Texas Association of Realtors. It considers the home-selling activity across the state in the decade between 2011 to 2020.
Let us check the main points in the report.
The median home prices in the Houston area increased at a moderate pace of 68% from 2011 ($154,500) to 2020 ($260,000). There was a massive rise in the number of units sold in the same period, going from 58,223 homes sold in 2011 to 99,339 in 2020, an increase of over 71%. The same goes for the average price per square foot, rising from $83 in 2011 to $133 in 2020.
Overall, the historical figures for the real estate market in Houston City and the surrounding areas point to a steady upward climb on all parameters.
Current Home Values in Different Neighborhoods of Houston
Here are some of the current home values in the key neighborhoods of Houston.
- Greater Heights: $675k
- Acres Home: $339.9k
- Memorial: $599k
- Greater Uptown: $495k
- Alief: $227k
- Kingwood: $339.4k
- Washington Avenue – Memorial Park: $617.5k
- Oak Forest – Garden Oaks: $525k
- Near Town – Montrose: $699.5k
- Greater Fifth Ward: $349.9k
Analysis of the Houston Housing Market
Housing Market Trends in Houston
The Houston housing market trend shows that it is slowly but steadily recovering from the damaging effects of high interest rates and the pandemic of the recent past. Let us go through some of the key trends of the Houston area housing market.
- Lower sales but with a positive outlook: The downside in the Greater Houston area is that there has been a decline in home sales for the 16th straight month. These figures are as of July 2023. However, this rate of decline was the minimum in a year, indicating a positive climb in the number of home units sold.
- Slow stabilization: The supply of homes in Houston in July 2023 increased to 3.2, the highest since May 2020. Even though sales declined by 15.3% compared to the July 2019 pre-pandemic era, the under-$100,000 housing segment witnessed a gain. Not only do these figures show a steady stabilization of the real estate market but also indicate that buyers are treading with caution when it comes to buying homes.
- Pricing trends: There are signs of price stability in the single-family home segment. Even though average prices rose marginally from 0.6% to $428,140, the median price touched $340,000, a fall of 2.3%.
Supply and Demand Dynamics in the Houston Area
Several factors have contributed to the continuing demand for home values in Houston. The rise of population growth is at the top of the list. Others include low mortgage interest rates, a favorable business environment, job opportunities, and a desirable quality of life. The need for a stable investment opportunity has further driven the demand for home ownership in Houston.
However, while demand has remained relatively robust, significant challenges have been posed on the supply side due to limited housing inventory. This has resulted in a seller’s market with intense competition faced by buyers. The limited listings have also contributed to rising home prices because buyers are willing to pay a premium to acquire property in Houston.
Impact of Economic Factors on the Housing Market
Economic indicators heavily govern the real estate market. Here are a couple of them.
- Interest rates: This is a two-pronged movement. Lenders can set their mortgage rates, but the Federal Reserve lowers or increases interest rates at set times during the year after analyzing macroeconomic data. The lower the interest rate, the lesser will be the cost of a mortgage. This factor in turn increases demand for homes and the asking prices and benefits sellers in the long run.
- Economic growth: The health of the economy has a huge impact on the housing market. It is represented by goods and services pricing, employment data, GDP, and other indicators. When the economy is on a roll, the prices of homes go up. On the other hand, there is reduced demand when the economy is shrinking because of lower incomes and less confidence of the people in the market.
Houston Apartment Market
Overview of the Houston Apartment Market
The focus of the state of Texas apartment market is on innovative building techniques and green technologies. This leads to affordable homes without compromising on the quality of the construction. By default, this results in a wide range of eco-friendly housing options as well as lower utility bills.
The reason why there is a booming Houston apartment market now is because there is an abundance of available land which pushes down home prices. Further, the Houston area housing market caters to all sections of the society. It ranges from ultra-modern facilities in cities to spacious properties in rural areas at various price points.
Factors Influencing the Apartment Market in Houston
Several factors influence the Houston apartment market.
- Low cost of building apartments due to friendly building regulations
- The cost of living in Houston, Texas is lower when compared to other states with budget-friendly real estate available.
- The tax structure of Texas is unique. There is no state income tax which contributes to lower apartment costs and tax burdens.
If you are looking for apartments, starting from large luxury ones to single-room units, do not forget to tap into the Houston apartment market.