Houston, Texas, is home to die-hard fans of the Astros (2017 World Series champs), the Rockets, and the Texans, and also known as the world capital for space exploration. As the largest city in Texas and the fourth largest in the US (behind New York, Los Angeles, and Chicago), Houston’s population growth has steadily increased over the past few years, thanks to:
- A strong economy: Houston is a hub for the oil and gas industries, and is home to 47 Fortune 1000 and 22 Fortune 500 companies.
- Top-notch healthcare: Texas Medical Center houses the world’s largest children’s hospital (Texas Children’s Hospital) and the world’s largest cancer hospital (MD Anderson Cancer Center).
- State-of-the-art educational opportunities: Top universities include University of Houston, Rice University, Texas Southern University, and more.
From a diverse metro area to numerous employment opportunities, read on to discover six more reasons the Houston market is a smart real estate investment.
1. Houston is one of the fastest-growing cities in the US.
Currently home to 2.3 million residents, Houston ranked in the top 20 fastest-growing cities (with population growth measured from July 1, 2010 to July 1, 2018). In those eight years, 1 million people moved to the Houston area, and employment increased by 17% (that’s 423,166 jobs). Houston is recognized as the economic center for the oil exports industry. Other industries are also booming, expecting to bring a whopping 71,000 jobs to the metro area this year: 9,000 projected jobs for healthcare and another 8,900 for construction.
2. Houston is one of the most diverse metropolitan areas in the country.
As of 2012, Houston surpassed both L.A. and New York as the most ethnically diverse metropolitan areas in the nation. It has become a cultural hub, attracting people of all ethnic backgrounds. Houstonians speak at least 145 languages, and you can find more than 11,000 restaurants, from mom n’ pop BBQ to upscale eateries like Brenner’s on the Bayou in the River Oaks neighborhood. Plus, no established zoning laws (see No. 2) means that you can find restaurants serving Indian, Vietnamese, American, Italian, etc, right next door to each other—a nice fact since Houstonians have been known to eat out more days per week than any other city in the nation.
3. Houston is the only major US city without land-use zoning laws.
While Houston doesn’t have explicit zoning laws, it is regulated by development codes. For real estate investors, this essentially means that anything can be built anywhere. Driving around Houston, you may find schools, restaurants, and a hospital all on the same block.
4. Houston is currently a buyer’s market.
The projected overall inventory growth for 2019 is 2.8%, making it a great time for real estate investors to buy with confidence. The median list price per square foot in the Houston metro area is $123 and in Texas, it’s $129, compared to the national average of $155.
In particular, the market for condos and luxury single-family homes is leading the charge in the Houston market. Condos priced in the $100,000–$250,000 range have experienced a 37% 10-year appreciation rate, while single-family homes priced at $1 million or more have a 31% rate. The average seller in Houston is accepting offers at 2% below the asking price, further indicating that it’s a great time to invest.
5. The majority of residents are renters.
In 2017, after Hurricane Harvey took a toll on much of Houston’s infrastructure, the rental market reached an all-time high, as numerous residents were looking for temporary rental homes. Still, about 57% of today’s population rents rather than owns property. The median monthly traditional rent income is $1,854, with traditional cash on return of 1.6%. There are more than 40 accredited colleges and universities in the Houston metro area, with the majority of students renting.
6. The Greater Houston area is projected to exceed 10 million people by 2040.
The strong economy, excellent educational opportunities, and world-class healthcare attracts people to move to the area each year. Other draws include affordable housing, warm weather, and a friendly business climate. As of 2018, Houston is ranked third in the nation in overall population growth, third in net natural increase, and fourth in international migration. More job and infrastructure growth is expected to bring in more residents to the Houston metro area, with projects to exceed 10 million residents by 2040, according to Metro Next.