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Interested in investing in the Houston real estate market in 2023? On this page you’ll learn about housing market trends and statistics to help you make that decision.
About Houston
Houston is the largest city in Texas and the fourth-largest city in the United States, trailing only New York City, Los Angeles and Chicago.
It has an area of 655 square miles. This is almost as large as the combined areas of New York City, Washington, D.C., Boston, San Francisco, Minneapolis, Miami and Seattle.
While primarily in Harris County, small portions of the city extend into Fort Bend and Montgomery counties. The city borders other communities such as Sugar Land and The Woodlands.
The Houston area is home to twenty-four companies on the ’22 Fortune 500 list, ranking third behind New York (64) and Chicago (35). The metro area is also the home of more than 5,000 energy-related firms. It has been considered the Energy Capital of the world since oil was first discovered there in 1901.
Houston is the most ethnically diverse large metropolitan area in the U.S., home to over 1 million immigrants.
The Houston real estate market is a good choice for investors because of the variety of investment properties, the city’s strong business infrastructure, and the low cost of residential housing.
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Houston Housing Market Trends
Overview
Housing Market Trends
Population Trends
Employment Trends
Conclusion
Overview
Houston Real Estate Market Trends & Statistics 2023
Houston was ranked 14th out of 80 cities on the overall real estate prospects list, a portion of the “Emerging Trends in Real Estate 2023” report for the United States and Canada.
In this section, you will learn about the top factors making the Houston housing market one of the strongest today, including affordability, cash flow, and equity growth potential. In the tabs you’ll find more information about Houston’s population, employment trends and more.
In 2022, the median home value in Houston was $299,400. This is 12.79% more affordable than the average US home value.
The median home value for neighborhoods in which Realwealth members invest was $155,000, over 54% less than the average US home value.
The Houston housing market is somewhat competitive according to Redfin, scoring 59 out of 100.
Median monthly rent stats and descriptions
The median monthly rent for rental properties in Houston was $1,573 in 2022, which is 20% lower than the average US monthly rent of $1,973. In areas where RealWealth members invest, the average monthly rent for a typical home was $1,275. This means that renting is more cost-effective than buying in Houston. 57% of households in Houston are renter-occupied.
The average rent-to-value ratio for investors in the Houston metro area is 0.53%.
However, choosing the right neighborhood is key to generating cash flow. In neighborhoods where RealWealth members invest, the average RTV ratio is 0.82%.
Median home value appreciation rate 2014-2022
Houston is a prime choice for investors seeking a stable market with both cash flow and equity growth potential.
The average home price in the Houston metro area has risen by 74.05% over the past eight years, from $141,750 in 2014 to $253,566 in 2022. This increase represents a stable rate of appreciation, about 12% lower than the national average.
The average price of a Houston home has grown by 8.24% a year for the last eight years. Between October 2021 and October 2022, home values increased 16% year over year, from $257,929 to $299,400.
Median monthly rent appreciation rate 2014-2022
Houston has experienced rent appreciation that is much slower than the general US market. In the 8-year period from 2014 to 2022, rents grew by 19.5%, which is 52.8% slower than average rent growth in the US. During this period, rents grew at an average rate of 2.58% per year.
But as home prices keep rising, rents in Houston are also rising. According to data from rental platform Zumper, rents in the Greater Houston area increased 9.9% from February 2021 to February 2022.
Population Trends
The Houston-Sugar Land-Baytown Metropolitan Statistical Area had a population of 7,206,841 as of the 2021 census. Between 2010 and 2021, Houston’s population grew by 21.18%, adding 1 million residents over the past decade. This accounted for a quarter of Texas’ total population growth during that period.
During this period, Houston’s population increased by 1.94% annually, making it the fifth fastest growing metropolitan area in the United States. Houston’s 11-year population growth rate is 190.5% higher than the national average.
Employment Trends
Houston has become a hotbed for job seekers and employers alike.
This is due in part to the city’s diverse economy, which has allowed it to weather the storm of the pandemic better than other cities.
From July 2021 to July 2022, Houston added 193,600 new jobs—a 6.26% increase in jobs. This is 63% more than the national average.
Nearly every Houston industry outside of oil and gas and the information sector has surpassed pre-pandemic employment levels.
But despite the high job growth rate, Houston’s unemployment rate is still above average: In September 2022, the metro area had an unemployment rate of 4.2 compared to the national average of 3.5 for that month.
The Houston metro area has 24 companies on the ’22 Fortune 500 list, ranking it third for number of Fortune 500 companies behind New York (64) and Chicago (35) but ahead of Dallas-Fort Worth (23).
Some of the top employers in Houston are Walmart, Memorial Hermann Health Systems, The University of Texas MD Anderson Cancer Center, HEB, United Airlines and Schlumberger.
Conclusion
Good cash flow potential
The Houston metro area offers great opportunities for investors who are looking for a stable and landlord-friendly market.
The rental market in Houston is strong because of the city’s high percentage of renters. In fact, 57% of households in the Houston metropolitan area are occupied by renters.
In Houston neighborhoods where members of Realwealth invest, the average rent to value ratio is 0.82%. In other words, if you invest in the right Houston neighborhoods, you will enjoy a high return on investment.
Fast job growth and strong economy
Houston is a city that’s traded on its low cost of living and fast job growth for decades. It’s a place where people come to find their fortune, and where companies come to find their employees.
In recent years, Houston has been bolstered by three major trends: healthcare, renewable energy and technology. A growing educated workforce and attractive cost-of-living are also drawing new residents to the area.
Houston added 193,600 new jobs between July 2021 and July 2022, a 6.26% increase in jobs. This is 63% higher than the national average.
The Houston region is second only to New York City in terms of manufacturing GDP in the United States. It has the world’s largest medical complex, the Texas Medical Center, which provides clinical health care, research, and education at its 58 institutions.
Modest real estate appreciation rates
Houston has a lot to offer in terms of affordability and stability. The market has experienced a steady appreciation rate over the past decade, which means that it is safe to invest in real estate here.
The value of properties in the Houston metro area rose by 74.05% over the course of 8 years, from 2014 to 2022. This represents a stable rate of appreciation of 8.24% annually.
Rapid population growth
The Houston area has grown by nearly 1.1 million residents since 2010.
Based on data from the Texas Demographic Center, it is estimated that the Houston region will add an average of two million residents per decade over the next 40 years.
The Houston metro area’s population growth rate of 21.18% over the last 11 years exceeds the national average by 190.5%.
High quality of life ratings
Houston is a city of diversity. The city of Houston itself is home to 145 languages and has a high quality of life index scoreof 166.42 with a very high purchasing power score (146.6) and a moderate cost of living score (69).
But what really makes Houston unique is its educational opportunities. Houston Independent School District serves 213 square miles with 288 schools, 13,000 educators, and over 210,000 students. It’s also home to many distinguished universities like Rice University, Texas Southern University and Texas A&M University—all within driving distance of downtown Houston!
Newsworthy building developments and projects in Houston
Memorial City Mall transformation
Memorial City Mall has been a staple of west Houston for over 50 years. But soon, it will be much more than a retail destination — it’ll be a town square!
MetroNational is transforming the old Sears department store area of Memorial City Mall into an outdoor shopping center that’s sure to be a hit with locals and visitors alike.
The new Memorial Town Square will feature 190,000 square feet of open-air retail space and 350,000 square feet of office space. The project also includes 250 to 275 apartments and 1,000 parking spaces.
The first phase of construction is expected to begin next year and finish in 2025. The first phase will include about 35 percent food and beverage tenants including sit-down restaurants and fast-casual eateries with plenty of outdoor seating.
1550 on the Green
1550 on the Green, a new apartment complex in Houston, Texas, is expected to open in late 2023. The 375,000-square-foot 28-story Class-A office building was designed by international design firm BIG-Bjarke Ingels Group. Skanksa, a global development and construction firm, owns the structure.
1550 on The Green will feature a canopy of trees, two tenant outdoor roof terraces, and wide views of the surrounding greenery—all within walking distance of La Branch, Lamar, Crawford and Dallas Streets.
1550 on the Green is planned as the centerpiece of Discovery West, a new mixed-use district that will include restaurants, retail space and green space.
Post Oak Logistics Park
In April 2022, real estate developer Jackson-Shaw announced plans to build a 43-acre industrial park at the former site of Houston Sportsplex. The Post Oak Logistics Park will be developed into two buildings totaling 536,992 square feet. Building 1 will be 168,893 square feet with a front-load configuration and 260 feet depth, and Building 2 will be 368,099 square feet with a cross-dock configuration and 360 feet depth. Construction of the new building is expected to be completed in the second quarter of 2023.
Brava in Downtown Houston
Houston’s booming downtown is about to get even more exciting. Hines, Cresset Wealth Advisors and Levy Family Partners are developing Brava, a for-rent residential high-rise community in Houston.
The 46-story luxury tower will be the tallest apartment building in downtown Houston and will offer panoramic views of the Central Business District, Market Square Park, Sesquicentennial Park and Buffalo Bayou.
Brava’s prime location offers much for the urban dweller, with 50 bars and restaurants within a five-minute walk, 40 million square feet of office space and a number of cultural institutions nearby.
Construction began in March 2019 and is scheduled to be completed by the third quarter of 2022.
TMC3
The Texas Medical Center is building a collaborative campus called TMC3 that will connect researchers with businesses to develop new treatments. Construction on Phase One of the project is underway, backed by $1.8 billion in financing from leading life science investment and property development teams.
Phase one will include 950,000 square feet of translational research space, with a 700,000-square-foot facility developed by Boston-based Beacon Capital Partners. In addition, the initial phase will include a 500+-room hotel with over 65,000 SF of conference space and an 18.7-acre public park.
Major Employers in Houston
Houston Housing Market News
One of the best cities to invest in real estate in 2022 - Quicken Loans
No 11 on the list of the 100 best American cities to live, work, invest, and visit - Yahoo Finance
One of 10 housing markets that are most likely to keep their value - MoneyTalkNews
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