As of April this year, the Houston Association of Realtors (HAR) has reported that the Houston real estate market had a robust performance. Home prices are still rising and the single-family rental market remains strong showing a 17.2% year-over-year increase due to consumers postponing homebuying plans.
If you’re thinking of moving to Houston or planning to invest in a commercial property, know that Houston is the most populous city in Texas and the 4th most populous in the U.S. The population growth is driven by both domestic and international migration, which is expected to increase by 1.2 million through 2029. Perhaps, the low-cost living, job market, home affordability, and affordable investment properties are just some of the many reasons why many people choose to move to Houston.
2022 Update: The Houston Commercial Real Estate Market
The commercial real estate industry in Houston is cautiously optimistic. As the world recovers and moves towards post-pandemic, both tenants and landlords are still adapting to the work from home setup. We’ve seen an increase in suburban leasing as more people are moving to the suburbs during and after the pandemic.
The Houston economic recovery is carrying a lot of momentum this year. Do we see gains in the jobs lost during the pandemic… the answer is yes. Although the average number of new jobs prior to COVID is way higher compared to the new jobs as of March 2022, we can say that Houston is on the pace of recovery considering its plunge during the pandemic.
What does this mean to Houston’s Commercial Real Estate Industry?
Houston’s commercial property vacancy has shown some signs of movement, specifically for office space. Working from home has been an ideal setup during the pandemic, but the truth is, for some people, it’s not sustainable for some businesses to run business operations while simultaneously juggling responsibilities at home. Surely, the recovery will take time but as the retail and industrial sectors have remained resilient we’ll surely get there.
Let’s take a look at how the different sectors of Houston’s commercial real estate have performed and their current status.
Key Takeaways in the Q1 2022 – Houston Multifamily Market Report
- Occupancy up quarter over quarter and annually
- Absorption more than doubled in 2021 when compared to 2020
- Average rents rose over the year and over the quarter
- Median and average sales price rose and cap rates compressed
Key Takeaways in the Q1 2022 – Houston Retail Market Report
- Vacancy continues to decrease
- Positive absorption recorded
- Rental rates increased 3.5% annually
- Q1 leasing volume reaches 1.9M SF
Key Takeaways in the Q1 2022 – Houston Industrial Market Report
- Robust leasing activity
- Positive net absorption
- Vacancy drops
- Rental rates increase
- Cap rates continue to compress
Key Takeaways in the Q1 2022 – Houston Office Market Report
- Houston office market records positive net absorption
- Vacancy rates down slightly
- Annual leasing activity down 5%
- Tenants and landlords continue to see longer construction times
Please check the latest Q3-Q4 commercial real estate report as of October 2022 as we have seen some changes and transition in the commercial space since the interest rate increased.
Work with Apogee Properties
Apogee Properties is Houston’s Premier Property Management Company. We work and live in Houston and our property managers are local. We’ve been in business for more than a decade providing comprehensive property management services in the Houston region ranging from a studio condo to a multi-family million dollar estate. Contact us to learn more about our property management services, and what we can do for you and your rental property.
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