It’s quite impossible to predict the future especially when it comes to real estate. With the ever changing markets and unstable economy, real estate investors need to think like psychics and understand what the future of real estate holds for them. Houston real estate market has always been looked at as one of the most consistent in the country. Houston continues to attract investors from around the country and around the globe. Foreign investors acknowledge Houston as one of the best places to invest for the unpredictable future. With that said, the Houston real estate market is prepared to have a big year in 2017 and beyond!
What attracts real estate investors to Houston?
Real estate investors are attracted to Huston due to the boost in demand from new residents and families wanting to live in single-family rentals. Rental homes are increasingly becoming a popular housing option for families who want to have their own space while having the flexibility to move whenever they want. Over the past year Houston has become a top market for investing in residential real estate properties. Houston is also attracting millions of Chinese real estate investments. The EB5 visa for investment program is popular especially with wealthy Chinese, who have noticed Houston properties to be both more stable and affordable. With its encouraging job growth and its affordability lower than the national average and demand showing no signs of slowing down, the Houston real estate market shoulcontinue to be a like a magnet attracting those looking to get into the real estate business. Here is a brief summary of the Houston real estate market.
- Current Median Home Price: $208,000
- 1-Year Appreciation Rate: 3.8%
- 3-Year Appreciation Rate: 27.1%
- Unemployment Rate: 4.9%
- 1-Year Job Growth Rate: 0.2%
- Population: 2,239,558
- Median Household Income: $59,354
Houston real estate trends
2017 is looking at a big overall change in the real estate market. While potential homebuyers may be disappointed with the rising interest rates, sellers may be pleased to see things getting back to normal. Here are 3 real estate trends to look for in 2017:
1. Interest rates will continue to rise
When you read that sentence, it might scare you especially if 2017 is your year to finally buy a home. The increase in mortgage rates may price some potential homebuyers out of the market. However, the new rates are considered more moderate than high and will continue as we continue to bounce back from the crisis of 2008.
2. Millennials and baby boomers will take over the market
Millennials and baby boomers have been dominating several industries over the last couple of years and will continue to do so in 2017. This is because
a) They are two of the largest generations in history and
b) Millennials are coming to a stage in their customer life-cycle where big decisions are often made, such as buying a new home. If you are selling your home, it’s likely that your potential buyers will fit within this group of buyers.
3. Low inventory could lead to fast-moving markets
With the number of homes on the market at a low, they will not stay long. Homes move fast, so be sure you do too. Be sure you get the home you want before it is gone. Know exactly what you are looking for so that you can move fast when your dream home goes on the market.
What the future holds for Huston real estate
There are several factors that affect the future of Houston’s real estate market. Factors such as job growth, oil prices, construction costs and global economy help in determining whether real estate investing will successful that year or not. Houston however, is looking very optimistic towards its future and is maintaining a consistent balance with such factors. Let’s take a quick look at the major two factors.
- Job growth: Houston is far from the one-industry town it once was. The latest study from the Greater Houston Partnership reports that Houston created over 120,000 jobs last year in sectors as diverse as health care, education, engineering, construction, and manufacturing. Not to mention the retail and service-industry jobs that have sprung up to support all of this new growth and it has been predicted that Houston is expecting additional job growth each year for the next five years. This is great for investors who plan on investing in Houston real estate since as we all know increase in the employment rate means increase in population which means increase on demand for property.
- Oil prices: the drop of oil prices has a huge impact on home prices in Houston. When the oil prices fall house prices decrease affecting real estate investors greatly. While no signs of recent slowdown yet what the future will bring in regards to the rise and fall of oil prices is unpredictable. Studies showed that there was an 18-month lag between the 2007-2008 financial crisis and a dip in Houston real estate prices. Houston’s single-family home prices fell 2.2% in 2009, and returned to “pre-crisis” levels within 24 months. Homeowners who bought at the peak of the pre-crisis market were able to recoup their investment within 4-5 years. It’s a never ending battle when it comes to oil prices and to say that the future holds a solution to this crisis is not certain.
Despite the oil crisis and its ups and downs, Houston continued to see population growth last year, and is expecting to continue into 2017. Population growth is one key indicator that real estate investors should look towards when determining the health of a market. If a city is growing in population, it’s growing in real estate demand. All in all, Houston real estate is a very attractive market – definitely take the chance and invest in it.