On the back of strong job creation, the Houston property market continues to set records in 2017. Sales of property all round are buoyant while single family homes and townhouse properties in Houston registered record highs for prices in May. Furthermore, the rental market in the city had an extremely busy month.
The Houston economy was hard hit by the drop in oil prices in 2016. However, diversification in industry and services has meant the city’s job market has emerged less affected than many analysts believed.
Houston job creation booming
Figures so far this year have been particularly impressive. Job growth is currently on track for just under 3%, a massive hike on last year’s timid 0.3%. The number of new jobs created in April reached 18,700, one of the highest monthly increases in 35 years.
“This is the best oil downturn that Houston has ever seen,” said Ted Jones, Chief Economist at Stewart Title Guaranty Co. Jones was quoted extensively in an article on the Houston property market in the Houston Chronicle talking about the mid-year situation in the city.
Jones reports that the demand for property in Houston is growing on the back of strong job creation. “What we have is an incredibly healthy housing market,” he said. “It’s also a very competitive seller’s market.”
Record Houston property market figures
Statistics for the Houston property market in May back up Jones’ affirmations. Sales and figures are both running ahead of figures for 2016, a record year in itself. The Chair of the Houston Association of Realtors (HAR), Cindy Hamann, expects 2017 to set another record for Houston real estate.
Single family homes had a particularly good month. Sales grew by 11.5% compared to May 2016 and by 7.4% between January and May. Prices for this type of property in Houston also increased. The over 4% rise brought the median price to US$235,000, the highest ever.
May turned out to be an excellent month for townhouse and condo properties in Houston too. Sales soared by 16.5% over the 12 months. Median price increases were slightly more contained with a rise of 0.9% to bring it to US$163,500.
Inventory better but still low
The Houston property market has suffered from a chronic shortage for several years and 2017 is proving to be no exception. However, the situation improved marginally in May. The supply of single family homes in the city stood at 4.1 months, the highest for nearly five years. Despite the rise, the figure still sits well below the 6 months considered by analysts to indicate a balanced market.
The supply of townhouses and condo properties also grew. In May this year, 4.2 months’ inventory was available for this type of property in Houston, a considerable jump on the 3.4 months registered a year earlier.
Houston rentals boom
New residents in Houston are not only buying properties; the city’s rental market also experienced an exceptional month for new contracts in May. Rentals for single family homes in Houston went up by 31%. Those for townhouses and condo saw an even more spectacular rise as the number of new contracts increased by 46.2%.
Average rental rates remained more or less stable. The median average for a single family home stood at US$1,779 in May and at US$1,565 for a townhouse or condo.
“The Houston market has shown remarkable resilience,” says Dies Poppeliers, Managing Director at BRIC Group. “Figures for May prove that the city remains one of the best places in the US to invest in buy-to-let properties.”
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Source: Houston Chronicle, Houston Association of Realtors)