We will discuss the latest Houston housing market trends. The Greater Houston housing market recorded its thirteenth consecutive month of positive sales. Single-family home sales and total property sales registered declines versus last July while total dollar volume rose. Pending sales, a forward-looking indicator of closed sales in one to three months, increased by 2.4 percent. Single-family home sales in the greater Houston region increased 13.6 percent in June, with 10,638 units sold compared to 9,362 the previous year.
According to HAR, the Houston real estate market is still hot, but statistics make it appear to be slower than a year ago due to a surge in home closings last July when the market began to normalise with the lifting of pandemic-related restrictions. Single-family homes sales were down 6.1 percent compared to last July. The single-family home average price increased 15.3 percent to $389,197 and the median price climbed 13.9 percent to $309,910. This is the second highest pricing of all time, trailing only last month's record-breaking figures.
Home prices are soaring amid low inventory and low-interest rates. Some buyers are hitting the market to find they can't compete with all-cash offers. In the upcoming fall season, the agents risk having extremely tight inventory for buyers especially with the prospect of rising mortgage interest rates. Single-family homes inventory reached a 1.8-months supply in July, down from 2.9 months a year earlier. However, that is the greatest supply of homes that the market has had in 2021.
Houston Housing Market Trends 2021 (Describes July)
In July 2021, the Greater Houston area housing market continued its momentum but home sales were down compared to last year. Despite the strong buying activity, the rate of growth was slightly slower in the year-over-year comparison. According to the most recent Houston Association of Realtors (HAR) Market Update, single-family homes sales were down 6.1 percent compared to last July, with 10,159 units sold versus the historic 10,822 that sold a year earlier. Homes valued at $750,000 and above topped sales volume once again, with a 36.7 percent year-over-year increase.
This was followed by an 18.9 percent increase in the $500,000 to $750,000 segment. The rise in high-end homebuying has driven prices to all-time highs. The average price of a single-family home increased 15.3 percent to $389,197, while the median price increased 13.9 percent to $309,910. This is the second highest pricing of all time, trailing only last month's record-breaking figures.
Single-family homes inventory reached a 1.8-months supply in July, down from 2.9 months a year earlier. However, that is the greatest supply of homes that the Houston area housing market has had in 2021 and reflects a 7.8 percent uptick in new listings. The ‘Close to Original List Price Ratio' for single-family homes reached 100.3 percent in June 2021, the highest level ever. This means that the majority of buyers paid more than the asking price for homes on the market. It was 100.2 percent in July, indicating that the high-dollar buying trend is continuing.
The HAR's most recent report on the Greater Houston Area Housing Market is available below. It analyses important housing indicators across the Greater Houston region between July 2021 and July 2020.
- Single-family home sales ended a 13-month positive run with a 6.1 percent decline, as 10,159 units sold versus 10,822 in July 2020. The year-ago sales surge came after COVID-related lockdowns were lifted, enabling Q2 2020 postponed closings to proceed;
- The Days on Market (DOM) figure for single-family homes fell from 56 to 26;
- Total property sales fell 3.7 percent with 12,383 units sold;
- Total dollar volume increased 11.4 percent to $4.5 billion;
- The single-family average price reached the second highest level of all time, increasing 15.3 percent to $389,197;
- The single-family median price rose 13.9 percent to $309,910 — the second highest median price of all time;
- Single-family homes months of inventory registered a 1.8-months supply, down from 2.9 months year-over-year and below the national inventory of 2.6 months;
- On a year-to-date basis, single-family homes sales are running 19.1 percent ahead of 2020’s record pace.
- Townhome/condominium sales jumped 23.9 percent with the average price up 10.0 percent to $245,160 and the median price up 8.7 percent to $200,000;
- Single-family home rentals fell 20.1 percent with the average rent up 11.4 percent to a record high $2,162;
- Townhome/condominium leases dropped 10.8 percent with the average rent up 5.8 percent to $1,756.
- $1 – $99,999: decreased 38.0 percent
- $100,000 – $149,999: decreased 37.7 percent
- $150,000 – $249,999: decreased 37.8 percent
- $250,000 – $499,999: increased 12.0 percent
- $500,000 – $749,999: increased 18.9 percent
- $750,000 and above: increased 36.7 percent
The Houston Housing Market's Performance in the Previous Year
Despite the pandemic, 2020 was a record-breaking year for the Houston real estate market. A record-breaking $35.3 billion worth of properties were sold (dollar volume). Single-family home sales surpassed 2019’s record volume by more than 10 percent. According to HAR’s 2020 annual market report, sales of all property types for the year totaled 115,523, an 11.6% increase over 2019’s record volume and marks only the second time in history that total property sales broke the 100,000 level.
A record-high average price of $347,164 and a record-high median price of $273,443 was achieved in December. The Houston real estate market ran much ahead of 2019’s record pace. The average amount of days a home stays on market even shortened from an average of 59 days to 46 days. According to local agents, nothing stays on the market for long as buyers are buying homes at a fast pace by taking advantage of the record low mortgage rates. Record-low mortgage rates and a dearth of homes for sale are two key reasons that help explain why the Houston houisng market will be booming in 2021 as well.
Houston Real Estate Market Forecast 2021-2022
Looking at the current statistics, what are the Houston real estate market predictions? Let us examine the price trends recorded by Zillow over the past few years. Houston has a track record of being one of the best long-term real estate investments in the U.S. Since 2012, the Houston home values have appreciated by nearly 81% — Zillow Home Value Index.
ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Houston is currently $217,545. It indicates that 50 percent of all housing stock in the area is worth more than $217,545 and 50 percent is worth less (adjusting for seasonal fluctuations). In May 2020, the typical value of homes in Houston was around $197,000. Houston home values have gone up 10.2% over the last twelve months.
NeighborhoodScout.com's data also shows that Houston real estate appreciated by nearly 60% over the last ten years. Its annual appreciation rate has been averaging 4.83%. This figure puts it in the top 20% nationally for real estate appreciation. During the latest twelve months, the Houston appreciation rate was nearly 4%, and in the latest quarter, the appreciation rate was 0.5%. If it remains steady, it annualizes to a rate of 2.03%.
The forecast by Zillow also points in the same direction — a rise in home values over the next 12-months. This indicates that the prices will continue to rise in 2021. Hence, now is a good time to buy a house in Houston. There exists a limited supply of homes in Houston, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.
In other words, based on the last latest key housing market indicators, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. Houston is a seller’s market so watch for upward pricing pressure in the near future if the trend continues.
Clearly, for the long-term investment, you cannot ignore underestimate Houston. Investing in a rental property for the long-term would build your equity and also generate cash flow through rental income. If you want to increase your cash flow in 2021, you will find great deals in the Houston real estate market.
Here is Zillow's home price forecast for Houston, Harris County, and Houston – The Woodlands-Sugar Land. The Zillow Home Value Forecast (ZHVF) is the one-year forecast of the Zillow Home Values Index (ZHVI). ZHVF is created using all homes, mid-tier cut of ZHVI and is available both raw and smoothed and seasonally adjusted.
- Houston-The Woodlands-Sugar Land Metro home values have gone up 10.4% over the past year and the latest forecast is that they will rise 14.1% in the next twelve months.
- Houston home values have gone up 10.2% over the past year and will continue to rise at a similar pace due to the tight supply of houisng.
- Harris County home values have gone up 10.2% over the past year and will continue to rise over the next twelve months from now.
Here is the graphical representation of how Houston home prices have grown from 2011 and their forecast until May 2022.
Greater Houston Real Estate Appreciation Trends & Forecast
The historical change in home prices for Houston-The Woodlands-Sugar Land, TX is shown below for the three-time periods. The Houston Home Price Index has increased for the last 29 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Houston Real Estate Market was 18% in the twelve months ended with the 1st Quarter of 1982.
The highest growth in home values in the Houston Real Estate Market over three years was 28% in the three years ended with the 3rd Quarter of 2015. The worst annual change in home values in the Houston Market was -10% in the twelve months ended with the 3rd Quarter of 1987. The historical change in home values has been calculated until the 3rd Quarter of 2018. For the upcoming updates, you can visit LittleBigHomes.com.
|Time Period||Greater Houston Real Estate Appreciation|
|Last 5 Years||40%|
|Last 10 Years||51%|
|Last 20 Years||146%|
OUR TAKE ON THE HOUSTON HOUSING MARKET OUTLOOK FOR 2021
Houston has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.
According to many experts, Houston has been in seller mode for several years now and there’s no reason to think that will change in 2020. With a record no. of sales in 2019, the Houston housing market was off to a big start to 2020. Home sales experienced a double-digit gain in February 2020 despite the local economy in bad shape due to plunging oil prices.
Oil prices have a big impact on Houston's housing market. As oil prices plunge, it could mean a potential slowdown for Houston’s economy. Keeping aside the oil prices, the Houston Real Estate Market forecast for 2021 is still on the positive side. Although the desire to own a home remains strong, the combination of higher home prices and rising mortgage rates was making it increasingly difficult for many first-time buyers to afford one. Houston and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term.
In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Houston can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Houston real estate market remains strong and skewed to sellers, due to a persistent imbalance in supply and demand.
Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. While the rapid real estate appreciation Houston witnessed earlier in the decade has slowed, the combination of a strong economy, low unemployment, and a lack of inventory in many market segments continues to push home prices in Houston.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Houston (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Houston Rental Market Trends 2021
Before the pandemic, the average rent for an apartment in Houston was $1,118, a 2% increase compared to the previous year, according to RENTCafe. The average size for a Houston, TX apartment is 880 square feet with studio apartments being the smallest and most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage. 48% of the households in Houston, TX are renter-occupied while 52% are owner-occupied. More than 80% of the apartments in Houston fall in the price range of $500 – $2.8K.
The Zumper Houston Metro Area Report analyzed active listings in July 2021 across 7 metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Texas one bedroom median rent was $1,019 last month. Spring was the most expensive city with one bedrooms priced at $1,150 while Huntsville ranked as the most affordable city with one bedrooms priced at $540.
The Fastest Growing Cities For Rents in Houston Metro Area (Year-Over-Year)
- Huntsville had the fastest growing rent, up 10.2% since this time last year.
- Conroe saw rent climb 7.5%, making it second.
- Spring was third with rent increasing 4.5%.
The Fastest Growing Cities For Rents in Houston Metro Area (Year-Over-Year)
- Houston saw rent jump 4.6% last month, making it the fastest growing.
- Baytown rent grew 2.2%, ranking as second.
- Conroe saw rent climb 2%, making it third.
As of August 31, 2021, the average rent for a 1-bedroom apartment in Houston is currently $1,095. Compared to last year, the average rent price has remained flat. Over the past month, the average rent for a studio apartment in Houston decreased by -8% to $1,185. The average rent for a 1-bedroom apartment decreased by -11% to $1,095, and the average rent for a 2-bedroom apartment decreased by -12% to $1,390.
- Two-bedroom apartment rents average $1,390 (a 3% increase from last year).
- Three-bedroom apartment rents average $1,750 (a 6% increase from last year).
- Four-bedroom apartment rents average $2,065 (a 15% increase from last year).
Some of the most affordable neighborhoods where the asking prices are below the average Houston rent:
- East Little York, where the average rent goes for $530/month.
- El Dorado – Oates Prarie, where renters pay $579/mo on average.
- Acres Home, where the average rent goes for $599/mo.
Impact of COVID-19 on The Houston Housing Market
2019 was a strong year for Houston’s real estate market. Single-family home sales, total property sales, pricing, total volume, and inventory all increased year-over-year from 2018. The median sale price rose 4.7% from 2018 to $244,000. According to Realtor.com's pre-pandemic forecast, the Houston-The Woodlands-Sugar Land, Texas was expected to see a 0.3% growth in sales and 0.2% in home prices in 2020.
The home prices were expected to flatten nationwide, increasing by just 0.8% and buyers were expected to continue to move to affordability, benefiting mid-sized markets. According to the Bloomberg report on Houston Real Estate Market – “Far from declining, the Houston home prices and rents are expected to rise given the sudden housing shortage. Out-of-state investors have even started to swoop in to acquire damaged homes to repair and sell or rent.”
As was expected the Houston housing market started well as we entered into 2020. Sales of single-family homes went up by around 14% in January as compared to the previous year, a big start to 2020 that was driven by low mortgage rates and demand for homes priced between $250,000 and $750,000.
The median sold price rose by 4.5 percent to $234,000 and the average price climbed 4.6 percent to $291,034. Home sales experienced another double-digit gain in February 2020 as buyers came out in droves to take advantage of low mortgage rates. Total dollar volume for March jumped 11.0 percent to slightly more than $2.6 billion.
Then came the pandemic which interrupted the real estate sector in this region. Before April, home sales had been outpacing 2019’s record volume as consumers took advantage of historically low interest rates. Home sales starting declining from April onwards as the Coronavirus pandemic gripped the nation. After a stellar performance in February, the month of March saw very little disruption in the real estate activities.
According to HAR, Houston home sales were more than 11 percent ahead of the levels at this point in 2019. Buyers were taking advantage of historically low mortgage interest rates through the first half of the month. 7,566 single-family homes were sold in March compared to 6,995 a year earlier, accounting for an 8.2 percent increase and the ninth consecutive month of positive sales.
The single-family home median price rose by 4.1 percent to $249,900, and the average price rose by 3.8 percent to $309,785. Both figures represent the highest prices ever for March. Sales of all property types totaled 8,965, up 6.9 percent from March 2019. Inventory of single-family homes was at a 3.5-months of supply, down from 3.8 months last March.
Impact of COVID-19
This housing market was impacted by the pandemic and slumping oil prices which led to a decline in home sales. Single-family home sales saw a double-digit drop of 19.1 percent in April with 6,199 units sold throughout greater Houston compared to 7,666 a year earlier. Prices remained unaffected.
The median price reached the highest level ever for April, increasing 2.4 percent to $251,000. Inventory of single-family homes was at 3.6-months of supply, down from 3.9 months last April.
Houston home sales fell for a second straight month in May due to the impact of COVID-19. The steepest decline was seen in the most affordable and the most expensive segments. Homes priced below $100,000 dropped more than 37 percent while those priced above $750,000 dropped more than 56 percent.
In May, single-family home sales fell with a year-over-year decline of 20.2 percent, marking the second straight month of declines. The new listings have also declined. The inventory of single-family homes shrank to 3.5-months of supply in May versus 4.1-months a year earlier. The Days on Market (DOM) figure for single-family homes grew from 54 to 58 days.
Total dollar volume dove 25.9 percent to $2.23 billion. The average price of single-family homes fell from 7.4 percent to $298,199, the first decline since January 2018. The median price was remained unchanged at $249,000. Townhome/condominium sales dropped by 36.0 percent. The average price of condos was down 2.3 percent to $206,146. The median price was up 2.9 percent to $175,000.
A huge number of homes went under contract in May after COVID-19-related stay-at-home orders expired which led to a surge of closings in June. Home sales in the Houston housing market were back up to levels considered to be normal for the summer buying season.
Homes priced between $250,000 and $500,000 led the way among all housing segments, soaring 28.3 percent year-over-year. The second-best performer consisted of homes in the $500,000 to $750,000 range, which jumped 18.6 percent, according to H.A.R.
Just like the previous month, closed sales were up by 22.2 percent for the week ending July 6 fueled by the increase in listings that went under contract in May and June. However, the fear of pandemic and its impact on real estate sales is still looming large due to a spike in cases across greater Houston and other parts of Texas.
Whether home sales would continue to climb up or plunge again in the third quarter of 2020 is not certain. New listings were down for a fifth consecutive week during the week ending July 6 compared to 2019.
Pending sales, which have been strong over the last several weeks, also reflected mounting concerns related to a spike in coronavirus cases with a 3.6 percent decline for the week ending July 6 compared to the same week in 2019.
With a slew of pending transactions converting to closed sales in August, the Houston housing market achieved its third consecutive month of positive home sales. On a year-to-date basis, the market is running 2.8 percent ahead of 2019’s record pace.
Single-family home sales, total property sales, and total dollar volume all rose compared to August 2019. Pending sales soared 35.9 percent. However, total active listings – or the total number of available properties – fell 23.0 percent.
It is quite evident that the ongoing pandemic has had a major impact on home sales in the Houston real estate market. Houston home sales dropped sharply in April & May from both the previous month and year as the housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order.
However, as can be seen in the above reports released by HAR, the pent-up demand resulting from COVID-19 has boosted home sales since June 2020. Virtual technology developed by the Houston Association of Realtors (HAR) made it possible for consumers to attend open houses and property showings remotely, without putting their health at risk. By the time 2020 was over, April and May emerged as the only negative sales months, as the market rebounded over the summer and gained momentum each month for the rest of the year.
New real estate records were set throughout the year, with July going down as Houston’s greatest one-month sales volume of all time – 10,815 single-family units sold. A record-high average price of $347,164 and a record-high median price of $273,443 was achieved in December. On a year-to-date basis, the average price rose 5.9 percent to $324,069 while the median price increased 6.1 percent to $260,000. Total dollar volume for full-year 2020 jumped 18.1 percent to a record-setting $35.3 billion.
***The lastest market trends have already been discussed above***
Houston Real Estate Market After Hurricane Harvey
Hurricane Harvey had some fascinating and somewhat surprising effects on the Houston Real Estate Market. Harvey’s devastating economic impacts have a silver lining for homebuyers in Houston. Houston's real estate market forecasts look promising after the hit the city took from Hurricane Harvey in 2017.
Big weather events hit many areas of the USA hard last year, and the costs of repairing the damage have been astronomical. But Houston has shown its trademark resilience, and 2018 is predicted to see real estate growth of 2.8% in the city, meaning now would be a good time to invest.
Hurricane Harvey tremendously impacted the real estate market in Houston, Texas. Houston had some of the largest swings in real estate value. So what were the economic ramifications of Hurricane Harvey on this delicate market? First, people have renewed interest in houses that were located in areas that did not flood.
This isn’t a particularly surprising statistic. Buyers now have confirmation that these areas can survive a catastrophic event and that they won’t be in any danger of damage. A recent trend, though, has been that homes in areas that were damaged by Hurricane Harvey have started to see a pick-up in sales.
Many houses that were damaged are being quickly sold to real estate investors. They saw an opportunity after Hurricane Harvey to buy damaged homes on the cheap in the Houston Real Estate Market. This has, in turn, led to Houston becoming a valuable “hot spot” for the real estate market in the US.
In October alone, 6,381 homes were sold in the Houston Real Estate Market, an increase of 7.5% over the same period last year. Agents are not only selling houses at a faster rate, but they are also commanding a higher price for their sales. Realtors are selling houses in Houston, Texas for over $7,000 or more than in the previous years.
Perhaps the largest increase, though, has been in rental marketing. People whose houses Hurricane Harvey damaged have been looking to rent since the hurricane struck in late October. The rental market in Houston is approaching an all-time high. Investors are also intrigued by this statistic as it allows them to make money off of houses they may not be residing in at a given time.
This has further contributed to an increase in the housing market in Houston, Texas. The rental statistics for single-family homes and townhomes/condominiums are staggering. Single-family homes saw an increase of 83.6 percent over 365 days while townhomes and condominiums saw an increase of a mind-boggling 92.2 percent.
It is not surprising, then, that investors have flocked to the area with the idea of making a quick buck. As many have learned, the profit that could be acquired in this area is immense. The housing market in Houston is in an exciting new territory.
Although Harvey’s effects were devastating, the hurricane also contributed to the Houston housing market’s new rise after Harvey. Houston's inspiring efforts to come together and recover show the resilience of the people there and the city’s strength. The government’s quick response to the tragedy and their overwhelming desire to help the people exhibits the city’s importance on a national, and continental, scale.
Houston housing market remained in recovery mode in 2018 following devastating floods from Hurricane Harvey. People living in more expensive cities such as New York, Los Angeles, and San Francisco flocked to cheaper living cities such as Houston, Texas.
Many workers were fed up with the costs in these regions and were having difficulty surviving in areas with labor shortages, rising mortgage rates, and higher lumber costs. All these factors contributed to a significant upward trend in the Houston housing market in 2018.
Houston Real Estate Investment Outlook
Investing in Houston real estate can be a worthy investment due to a steady rate of appreciation. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Should you consider Houston real estate investment? Houston is a minimally walkable city in Harris County with a population of approximately 2,112,810 people. It is a diverse city with lots to offer that will cater to the tastes of a variety of potential buyers and tenants.
According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Houston. Other types of housing that are prevalent in Houston include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 45% of Houston's housing units.
Nearly 79,000 single-family detached homes were sold in the first 11 months of 2019, with year-to-date sales running 4.1 percent ahead of last year’s record volume. The total number of homes sold in the entire twelve months of 2018 was 82,229. Residential units, hotels, office buildings, restaurants; the city is seeing continuous development projects that promise to keep the real estate market strong. Many of Houston’s neighborhoods are some of the most attractive places to live in the whole of Texas, and it’s not hard to see why.
With a great balance of urban regions and open spaces in the suburbs, the potential for development is clear to see, and the natural features of the land are some of the most attractive features you could hope for in an investment district. The Texas real estate market has been pretty quiet for a little under a decade now, but the real estate market in Houston has managed to remain relatively consistent while its surrounding areas have dragged their feet.
Houston has always a hotbed of buyer activity; just ask the multitude of overseas investors who choose Houston as the city of their choice to invest in real estate. There was a time when Houston seemed immune to the highs and lows of housing cycles, but it now seems to have joined the pace of the national average.
But its rate of appreciation continues to be slightly above the national rate. With an extremely diversified economy and a huge demand for housing, Houston remains one of the top markets in the nation for real estate investing. Houston is one of the country’s top job creators, the home of America’s booming energy industry, is more diverse than New York City, and lets you stretch a paycheck farther than anywhere else in the country. Houston is also one of the hottest real estate markets in the nation.
Top Reasons To Invest In The Houston Real Estate Market
Good cash flow from Houston investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Houston real estate investment opportunity would be key to your success.
If you invest wisely in Houston real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Houston and want to purchase property to rent out.
The running costs for owning and managing a Houston rental property should not be high. While hiring a property management company you should expect to give up roughly ten percent of the rent for each property they manage. Remember to factor this loss into your calculations when budgeting for a new rental property.
The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Houston investment property and you should be able to get a good return on your investment over the long term.
The neighborhoods in Houston must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Houston might not be the best place to live in.
A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. Houston's real estate prices are well above average cost compared to national prices.
It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. The inventory is low, but opportunities are there.
When looking for real estate investment opportunities in Houston or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum of 1% profit on your investment.
An example would be: at $120,000 mortgage or investment cost, $1200 per month rental. That would be the ideal equation for example. Even with rent increases, buying a $500,000 investment property in Houston is not going to get you $5000 per month on rent.
The asking price of single-family homes in Houston (on Realtor.com) can start from $29,000 and can go up to $29.5M for a luxury property located in the Westside neighborhood. You can find many new construction houses available for sale in Houston.
Neartown – Montrose has a median listing price of $639,000, making it the most expensive neighborhood in Houston. Alief is the most affordable neighborhood, with a median listing price of around $155,000.
Even as Houston's home prices have reached new heights, the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain.
The homebuyers won’t be able to outbid real estate investors and would end up renting. As with any real estate purchase, act wisely. Evaluate the specifics of the Houston housing market at the time you intend to purchase.
Here are the top 10 Highest Appreciating Houston Neighborhoods Since 2000 (List by Neighborhoodscout.com)
- W 34th St / Mangum Rd
- W Patton St / Enid St
- N Main St / Norhill Blvd
- Fulton St / Collingsworth St
- W 43rd St / T C Jester Blvd
- W 43rd St / Mangum Rd
- Oak Forest Dr / Candlelight Ln
- Judiway St / Piney Woods Dr
- N Shepherd Dr / W 43rd St
- N Post Oak Rd / Westview Dr
Other Texas Real Estate Investment Markets
Apart from Houston, you can also invest in the housing market of Dallas, TX. If you have decided to invest in Dallas, you can either buy a fixer-upper or you may want to buy a Dallas investment property. This market offers a wide range of turnkey investment properties; you just have to find your tenants to rent out the property.
The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates, and high population of young households were pivotal in the ranking process. The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.
The Central, Cielo Vista, and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.
The next one is the San Antonio real estate market. The median home value in San Antonio is $167,600. San Antonio home values have gone up 8.0% over the past year and Zillow predicts they will rise 2.5% within the next year. For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of its outsized military presence.
Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis, and Camp Stanley are located in the immediate vicinity. This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment. San Antonio has a dearth of affordable housing because demand is so much greater than the supply.
This has created a large number of renters who need to pay quite a bit to rent apartments or single-family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two-month inventory.
The Austin housing market is one hot place to invest in Texas. It isn’t the largest in the state of Texas, but there are several reasons to consider buying real estate in this city. The Austin real estate market has gained a lot of steam, with home values almost doubling since 2010. The Austin real estate market isn’t as big as Dallas, San Antonio, or Houston.
One of the long-term strengths of Austin is its diverse economy. The Austin real estate market dipped after the layoffs of the Dot-Com boom. They decided to solve the problem by encouraging medical and biotech employers to relocate to the area, too. As of this writing, there are 85 biotech and pharmaceutical companies in Austin.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Houston.
Consult with one of the investment counselors who can help build you a custom portfolio of Houston turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Houston.
Not just limited to Houston or Texas but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Houston turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Let us know which real estate markets you consider best for real estate investing!
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Houston real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
Market Data, Trends, and Forecasts
Houston After Hurricane Harvey