What’s it going to be like for the Houston housing market next year? Hot or cold? Continue reading to find out what to expect for 2019.
It seems that Houston is climbing back up the list of the top markets to watch in the US housing market 2019. According to the “Emerging Trends in Real Estate Report 2019,” the Houston housing market is performing a lot better than it was last year. Claiming the 37th spot (out of 79) on the “Markets to Watch” list, Houston is doing significantly well compared to its spot on the 2018 list (60 out of 79).
It’s not only the Houston housing market doing well; many Texan cities ranked in the top 20. With Dallas-Fort Worth, Austin, and San Antonio at the top of the list, the Texas real estate market is looking strong for 2019. Still, Houston is a contender for real estate investing.
Related: The 2019 US Housing Market: A Seller’s Market or Buyer’s Market?
What to Know About the Houston Housing Market
Going back to some important real estate market trends for the Houston housing market, the report also scored markets on investment prospects. Houston scored best in the industrial category, which was followed by multifamily, housing, retail, hotels and lastly offices. The report also cited some relevant factors boosting the Houston housing market for 2019:
- Higher than average population growth rate
- In-migration
- Percentage of younger residents
- Labor force participation rates
- Gross metropolitan product per capita
- Business startup activity
- Above average investor demand
Now, we’ve already mentioned multiple great points about the Houston housing market, but let’s circle back to real estate investment. How will Houston investment properties actually perform in the 2019 real estate market? Mashvisor’s investment property calculator has summarized data on the key return on investment metrics for rental properties. If you’re a Houston real estate investor (or want to be), check out these numbers.
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Houston Housing Market 2019- Real Estate Data
First, let’s see how Houston rental properties are performing throughout the city.
Houston: City-Level Data
- Median Property Price: $410,143
- Price per Square Foot: $171
- Average Days on Market: 81
- Price to Rent Ratio: 17.21
- Monthly Traditional Rental Income: $1,986
- Traditional Cash on Cash Return: 1.59%
- Traditional Cap Rate: 1.59%
- Monthly Airbnb Rental Income: $2,139
- Airbnb Cash on Cash Return: 0.54%
- Airbnb Cap Rate: 0.54%
Considering low-cost and luxury properties are on the spectrum of the Houston housing market, the median property price isn’t too high. You can see just how hot Houston real estate is by the low days on market. This is great news for sellers. Buyers and rental property owners can take advantage of the price-to-rent ratio, which tells us that it’s cheaper for Houston residents to rent rather than own a home. The average ROI metrics (cash on cash return and cap rate) aren’t as high as some investors would like, but it’s important to remember that these are average returns. So you can definitely find neighborhoods that perform at higher rates than the city-level, especially when it comes to Airbnb Houston rentals.
To give you some direction on where to start searching for investment properties, here are the best neighborhoods in Houston.
Greater Fifth Ward
- Median Property Price: $300,960
- Price per Square Foot: $180
- Average Days on Market: 247
- Price to Rent Ratio: 21.38
- Monthly Traditional Rental Income: $1,833
- Traditional Cash on Cash Return: 2.47%
- Traditional Cap Rate: 2.47%
- Monthly Airbnb Rental Income: $1,833
- Airbnb Cash on Cash Return: 7.33%
- Airbnb Cap Rate: 7.33%
- Recommended Rental Strategy: Airbnb Rentals
Best feature of this neighborhood is the high returns for Airbnb rentals.
Second Ward
- Median Property Price: $264,900
- Price per Square Foot: $199
- Average Days on Market: 34
- Price to Rent Ratio: 8.22
- Monthly Traditional Rental Income: $2,685
- Traditional Cash on Cash Return: 5.86%
- Traditional Cap Rate: 5.86%
- Monthly Airbnb Rental Income: $2,068
- Airbnb Cash on Cash Return: 2.42%
- Airbnb Cap Rate: 2.42%
- Recommended Rental Strategy: Traditional Rentals
Best feature of this neighborhood is the high monthly traditional rental income.
Related: Real Estate Investing for Beginners: A Guide to Neighborhood Analysis
Astrodome Area
- Median Property Price: $169,398
- Price per Square Foot: $141
- Average Days on Market: 32
- Price to Rent Ratio: 9.23
- Monthly Traditional Rental Income: $1,529
- Traditional Cash on Cash Return: 3.42%
- Traditional Cap Rate: 3.42%
- Monthly Airbnb Rental Income: $1,998
- Airbnb Cash on Cash Return: 4.56%
- Airbnb Cap Rate: 4.56%
- Recommended Rental Strategy: Airbnb Rentals
Best feature of this neighborhood is the low median property price.
Greater Third Ward
- Median Property Price: $240,308
- Price per Square Foot: $152
- Average Days on Market: 153
- Price to Rent Ratio: 11.36
- Monthly Traditional Rental Income: $1,762
- Traditional Cash on Cash Return: 3.75%
- Traditional Cap Rate: 3.75%
- Monthly Airbnb Rental Income: $2,064
- Airbnb Cash on Cash Return: 3.71%
- Airbnb Cap Rate: 3.71%
- Recommended Rental Strategy: Both
Best feature of this neighborhood is the strong performance of both rental strategies.
To start your search for investment properties in the Houston housing market, click here.
Note: Always check regulations on short-term rentals in any market before investing.
Related: Airbnb Regulations 2018 – Invest in These Cities Where Airbnb Is Legal
Final Words on the Houston Housing Market 2019
The Houston real estate market is steadily making its way back to the top. It’s definitely a market you want to enter. Homes sales are increasing in the Houston housing market, and it doesn’t look like they’re slowing down any time soon. Investors are closing deals on houses as fast as they can. There are low zoning barriers to entry, low cost of living, strong job growth, and strong returns.
Do you want to invest in Houston real estate? Make sure you’re landing the best deals on the best investment properties. Sign up for Mashvisor and get instant data analytics on any city and neighborhood of your choosing. Use our Property Finder tool and heatmap tool to find the top performing properties in any market. Mashvisor is the ultimate one-stop shop for any real estate investor.
If you want to make the best out of the investment opportunity in the Houston housing market, start out your 14-day free trial with Mashvisor now.
