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Houston Texas Housing Market Predictions 2022 & 2023

  • Sep 16, 2022
  • Real Estate
Texas housing market predictions 2022

 

From Austin’s diverse energy and picturesque hill country to Houston’s expanding arts scene and proximity to the water, the horse-friendly lifestyle of North Texas, and the metropolitan city of Dallas, the Texas home market is undoubtedly an intriguing place to explore. 

The Houston housing market will continue to flourish in 2022 and 2023 due to a combination of low mortgage rates and a lack of available properties.

 

Real Estate Scenario

With record prices, rising lending rates, and limited inventory, some consumers have opted to rent rather than buy. According to HAR, home sales in Houston fell for the fourth consecutive month in July, while the number of active listings reached a two-year high.

Houston's housing boom during the pandemic was unsustainable, therefore the present slowdown is a result of a market correction. Homebuyers are expected to return to the market as inventory increases and prices level off. Home sales fell in July because of record prices, rising loan rates, and a lack of available properties for prospective buyers in addition to general consumer inflation. There was a 17.1% fall in single-family house sales. Sales have so far fallen 1.3% short of last year's record pace. Houston's housing market delivered mixed results in July. Total real estate sales and pending sales decreased in addition to the dip in single-family home sales. Although there were 30.0% more active listings (the total number of properties offered), the dollar volume fell by 9.0% to $4.1 billion.

High in Population

The high rate of domestic and international migration to Houston is a significant factor that drives its population growth. With populations ranging from 2.3 million to less than 100, Texas is home to almost 1,700 cities. According to PwC and the Urban Land Institute's Emerging Trends in Real Estate 2022 report, Texas boasts four of the top twelve markets with the best house-building prospects.
Currently, people are migrating to Texas from all over the country to live, work, and invest in the Texas real estate market.

Job Growth

According to the Greater Houston Partnership, nonfarm payroll employment has reached the highest level ever, with over 3 million employees in 2022. Since the pandemic in 2020, Houston has added 400,000 new jobs and counting.

Cost of Living

The average cost of living in Houston is relatively high compared to most places worldwide. It is estimated at around $2000 a year, ranking it among the seven most expensive cities in the world. However, Houston keeps attracting more people and business-oriented minds from around the world as it provides a mix of cultural activities with vibrant communities creating an excellent quality of life. Forbes also ranked Houston as one of the best places to do business in the US. The US News and World Report also agree that Houston is the best city in which to live and retire. These statistics are what people look at when moving into a new environment. Houston has checked all of them, making it one of the most migrated cities in the US, thus driving the prices of accommodation and housing to staggeringly high levels.

Price Trends

The typical monthly rent in Houston for a 1-bedroom apartment is $1,309 as of August 28, 2022. Comparing this to last year, there has been a rise of 19%. The average monthly rent in Houston for a studio unit rose by 1% to $1,401 over the previous month. One-bedroom apartments saw a -1% decline in average rent to $1,309, while two-bedroom apartments saw a -3% decline to $1,540. In comparison to previous year, the average rent for a two-bedroom apartment is $1,540. A three-bedroom apartment's average rent is $1,885, down 6% from the previous year. Average monthly rent for a four-bedroom apartment is $2,200, down 7% from the previous year. 

The Houston Metro Area’s Fastest Growing Cities for Rents (Year-Over-Year)

  1. Conroe had the fastest-growing rent, up 18% from this time last year.
  2. Houston's rent increased 14%, moving up one spot to second.
  3. With a 13% increase in rent, spring came in third.
  4. Galveston experienced the highest monthly rental growth rate, up 5.4%.

Some of the cheapest communities in Houston, with asking prices that are lower than the average rent:

  1. Rent in East Little York is about $870 per month.
  2. Greater Eastwood, where the monthly rent is on average $850.
  3. Gulfton has an average rent of $1160 per month.

Best Real Estate Brokers in Houston

Real estate investing can be daunting, especially as a beginner, but when you have the right agent who has your safety in mind and not just money, you are good to go. Here is the list of the best real estate brokers in Houston, Texas: 

  1. Jay Thomas Team
  2. Cindy Boutwell (Boutwell properties)
  3. Jamie McMartin
  4. Steven Kinne (The Kinne Group)
  5. Ruben Villarreal (RE/MAX/Integrity)
  6. Ozzie Ramirez (Ask Ozzie team)
  7. Mark Dimas (MDT rentals)
  8. Elaine Marak (Elaine Marak real estate)

What are the Texas Houston Market Predictions in 2022-2023?

The Texas real estate market has been significantly applauded for being one of the finest investments in the US over the last decade as real estate prices soured dramatically high, driving the interest of many investors all over America. But many people are worried whether this trend may reverse year on year. The real estate market in Houston is predicted to continue its steady growth in 2023, and right now is an excellent time to start investing there. Texas is one of the most appreciable real estate markets in the US, so buying a home now might be a wise decision. However, investors expect the rate of appreciation of homes in Texas to slow down, unlike in 2021; this is also an excellent time to sell your property if you are willing. 

Before getting excited about buying a home in Houston, Texas, there are crucial factors to check. Now that we know when to buy, the next thing we want to know is where. Let’s look at the top 5 best places to buy a house in Texas.

According to data from NeighborhoodScout.com, the value of the real estate in Houston increased by around 87.78% over the previous ten years. It has been appreciating at a 6.5% average annual pace. Concerning real estate appreciation, this figure places it in the top 30% nationally. Houston's appreciation rate was roughly 15.75% over the last year, and it was 3.10 percent in the most recent quarter. It will annualize at a rate of 12.97% if it stays constant. This suggests that throughout the course of the following 12 months, prices will increase further. Consequently, this is a fantastic moment to purchase a home in Houston.

Demand outweighs supply, favoring sellers in discussions over prices. Houston will continue to be a modest seller's market, so keep an eye out for pressure on prices to rise soon. Houston is a must-consider city for long-term investment.

Long-term investment in a rental property would increase your equity while simultaneously generating cash flow through rental revenue. You might find excellent offers in the Houston real estate market if you want to enhance your income flow in 2022.

Top 5 Best places to buy a house in Texas

Real estate investments have their ups and downs, and when it doesn't work out your way, you might begin to wonder what you aren’t doing right. Knowing where to invest is just as crucial as investing because investing in the wrong places could go bad for you money-wise. In terms of investing in real estate in Texas, there are a lot of options, locations, etc., and one may become confused about where to look; we are going to narrow down your search to the five best real estate markets in Texas.

1. Austin

Almost everyone has considered moving to Austin, Texas at some point. And why not?

Sunny skies, breath-taking hill terrain, glistening lakes, world-class live music, an arts scene, and, of course, a thriving economy supported by leading technological companies. More than anything else, though, Austin's distinctive culture and outlook on life make it a remarkable place to call home. House prices in Austin have witnessed explosive growth over the year, increasing by at least 24% since last August. With the current situation in Austin, where there is quite a low supply of houses yet incredibly high demand, buying a home there is a good catch for long-term investors.

2. Houston:

Around every corner in Dallas, Texas, there is something special to do! Explore the city’s museums, attend a concert in the renowned arts district, or stroll through trendy areas filled with local cuisine and shopping. Beautiful lakes, arboretums, parks, and gardens are just a short drive away when you are ready to go out of town. Dallas, Texas is a wonderful place to call home since it has a flourishing job market, interesting neighborhoods, a bustling city life, and peaceful natural getaways close by. The real estate market in Houston has been on the rise lately. However, the buying activity seems to be slowing down a bit, but that is, in fact, a good thing for investors who wish to jump in now as the market might just be taking a break before another sprint.

3. Round Rock:

Being quite a famous city with a low cost of living compared to other parts of Texas, Round rock might be a reasonable consideration for anyone willing to invest now. Also, home prices have increased by 48% over the year, and these figures are still going up. Round Rock is also an excellent place to live, with limitless employment opportunities and a fast-growing population. This can only mean more profit for a fast-thinking investor.

4.  Waco, Texas:

This is a fantastic city with countless job opportunities and a decent cost of living. Home prices in Waco are about 30% lower than most cities in Texas, making it an excellent spot for any investor who wishes to make a high ROI. It is also a perfect place to rent a home with an average rent-to-home ratio of 5%, an above average rent to home income ratio of 21%, and a below-average rental vacancy rate of 4%.

5. New Braunfels:

New Braunfels was introduced in our list as it is a hidden gem. The name might be peculiar as it is a small, not very popular town in Texas. New Braunfels is an escape from the hustle and bustle of life in the city; however, it still provides excellent job opportunities with minimal cost of living. It is a good place to invest, save and retire.

Conclusion

Houston has long been a hub of buyer activity; just ask the numerous overseas investors that chose Houston as their preferred destination for real estate investment. Houston used to seem immune to the highs and lows of housing cycles, but it now appears to be catching up to the national average. Its rate of appreciation, however, has remained marginally higher than the national rate. With an exceptionally diverse economy and a high demand for housing, Houston remains one of the top cities in the country for real estate investing. Houston is one of the country’s top job producers, the home of America’s thriving energy industry, more diversified than New York City, and allows you to stretch your money further than anywhere else in the country.

Before going into real estate, it is better to do a lot of research first and check out the pros and cons of the properties you have in mind. Ask questions from those who have been in the game long before and seek valid recommendations as well.

Hello! I'm Jay Thomas, A REALTOR in Houston, Texas. Chances are you and I share a similar passion, Real Estate! I also have a passion for building businesses, working out, inspiring others, technology, sports, and people. Connect with me on Facebook and Instagram!

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