Houston real estate in demand.
Well not really, when you bear in mind that Houston has been tipped as the real estate market to watch amid signs that demand is growing, the economy is strengthening and the job market is improving dramatically. It would seem that the energy sector is the key to the ongoing demand for Houston property although there are a number of factors to take into consideration which could have an impact in the medium to longer term.
However, when you bear in mind the region ranked number two amongst 1000 real estate investors, fund managers and other sector professionals in a recent survey, it is worth taking a closer look.
Is energy really the key to Houston?
Houston has and probably will be seen as a major US oil location for many years to come with a historic link buried in the minds of many investors. However, there is certainly more to Houston than just oil and gas which is a godsend really when you bear in mind the falling oil price.
Figures suggest that in excess of 17,000,000 ft.² of office space will come online across Houston over the next few years. The number of cranes on the skyline continues to increase to record levels and both urban and suburban growth in the region is strengthening significantly. There is obviously a danger of bringing too much office space online too quickly and potentially holding back the market as demand tries to catch up with availability. However, there is great confidence across Houston and Texas in general is seen as the place for real estate investment in the foreseeable future.
Converting older properties
One issue which will no doubt come to a head in the short to medium term is the availability of older properties which can be redeveloped to accommodate the changing Houston real estate market. This, together with the 17,000,000 ft.² of office space coming online in the short to medium term, does present something of a challenge for the Houston authorities but it seems to be a challenge that many investors are relishing.
Quote from PropertyForum.com: “Whether you’re a novice investor wondering what to do with your first property or a seasoned property manager with scores of active properties under your belt, it pays to know exactly what it takes to get a freshly-purchased investment property ready to rent. Here’s our take on the issue: nine things that every house needs before its first showing.”
An interesting fact which is coming to the forefront is that while just a few years ago it was difficult to sell Houston real estate to European and Asian investors, this is now beginning to change. Even though the US economy itself is not performing as strongly as many had hoped there is renewed demand for specific US real estate markets – which at this moment in time are dominated by Texas and in particular Houston.
Is it time to look overseas?
As we touched on above, the US economy is not performing as many had hoped, the recovery has stalled somewhat and the authorities may well be forced to reintroduce fiscal policies to stimulate economic growth. This does not seem to be a factor with the likes of Houston which is obviously dominated by the energy industry – although we are starting to see significant diversification into healthcare, technology and green/alternative energy.
Whether or not this is the time to look towards the US, and in particular Houston, is obviously a question which investors will need to consider. However, there is no doubt that domestic US real estate investors see this as a particularly lucrative market in the short to medium term.