While many metropolitan areas of the country continue to have a struggling real estate market, the Houston market continues to thrive. In the latest statistics provided by the Houston Association of Realtors, total property sales jumped 28.8% in April 2013 from April 2012 sales while enjoying a 45.9% increase in total dollar volume for sales. Single-family home sales increased just over 27% from April to April while the median sales price jumped 14.5% to $184,900. One of the most telling statistics for the health and strength of the Houston metropolitan area real estate market is the dramatic decrease of 37.7% in the inventory of single-family homes. The Houston market, as of April 2013, now has just 3.4 months of inventory on market.
The healthy economic climate of Houston definitely contributes to the health of the real estate market. In just the last 12 months, the Texas Workforce Commission states that more than 111,000 new jobs have been added locally to the market, representing the local 5.9% unemployment rate for the area, representing 0.5% better than the state as a whole. In April, eight of the eleven major industries in Texas gained more jobs than were lost, with the transportation and utilities sector enjoying the largest increase. The positive job numbers for the Houston metropolitan area are translating into an increase in home purchases and for rental properties.
The rapidly growing energy industry in Houston is representative of the strong economic growth of the metropolitan area in terms of jobs, and real estate. While the energy sector is growing on a national level, in Houston, it is more evident than in other communities. Construction of new residential and new commercial properties continues to experience rapid and sustained growth throughout the Energy Corridor as energy companies seek relocation and expansion. Many analysts believe that growth in real estate construction in the area is in part due to the lack of zoning laws. The market represents a successful capitalistic approach to zoning and development by allowing the market demand to dictate hot areas for commercial and residential development.
The Woodlands area, developed in the mid 1970s, is home to a mix of commercial and residential properties in a master-planned community. Shopping, businesses, parks, restaurants, entertainment venues, and a large network of hiking trails contribute to a healthy and active lifestyle just 30 minutes from downtown Houston. This community is currently experiencing high demand for both residential and commercial properties after the announcement of Exxon Mobil’s new 385 acre campus that will house over 10,000 employees. Speculative office, industrial and residential properties are in various stages of development and construction dot the landscape in the Woodlands area as demand continues to outpace inventory.
Houston’s diverse economy also drives significant foreign investment in the real estate market. In fact, data released from Real Capital Analytics, Inc indicates that nearly $3 billion worth of real estate has been purchased by firms outside of the United States over the past 36 months. Now, the Houston metropolitan area is considered one of the top 5 elite real estate markets in the world and is recognized for its low purchase prices and quick returns through appreciation on real estate properties, whether commercial or residential. Analysts believe that Houston is poised for extraordinary growth, and more importantly, sustained growth, for the coming years.
Favorable mortgage and financing rates continue to encourage purchase of residential properties throughout the metropolitan area. The low 30-year fixed-rate mortgages make home buying more affordable and come without the inherent risk of drastically fluctuating ARMs of years past. Investors and savvy homeowners looking for a deal in the Houston market can still find homes in foreclosure for a reasonable price; the median price of foreclosure properties remains low at $83,500. At the other end of the spectrum, the demand for homes over $500,000 continues to escalate, with single-family sales increasing in this sector by nearly 70%. The Houston real estate market is as diverse as the city and offers financially sound investment opportunities in all classes and sectors for institutional and individual buyers.
Source – Houston’s Homebuying Bonzana Shows No Let-Up in April. May 29,2013. Retrieved from http://www.harconnect.com/2013/05/29/houstons-homebuying-bonanza-shows-no-let-up-in-april/ on June 11, 2013