Market Spotlight: Houston, Texas
Houston, Texas, stands as a renowned example of economic diversity, energized by its robust energy sector, enriched by cultural attractions, and propelled by its rapid population growth.
A city cherished by its residents for its wildcatter, enterprising spirit, and its mesmerizing skyline, Houston encapsulates the essence of entrepreneurial tenacity. Meanwhile, a multitude of people from all over the world are drawn to its multicultural tapestry where residents speak more than 90 languages, expansive culinary scene, captivating museums, and the ceaseless stream of distinctive festivals, events, and attractions.
As the fourth-largest city in the United States and the crown jewel of Texas, Houston’s stature is further amplified by its global economic prominence, and only New York City has more Fortune 500 headquarters.
Economically vibrant, with an average household income of $90,511, Houston maintains an unemployment rate of 3.9%, notably below the national average, and secures the top spot for job creation, a testament to its thriving industries, including Life Sciences and Biotechnology, Aerospace, Medical, Technology, and Oil and Gas. This diversity positions Houston as a magnet for engineers, scientists, and medical professionals alike.
Houston proudly houses the largest medical center on the planet. Esteemed graduates from prestigious institutions converge at the Medical Center, seeking roles in renowned hospitals such as the MD Anderson Cancer Center, or pursuing advanced education at esteemed institutions like Baylor College of Medicine.
A nexus of connectivity, Houston’s Bush Intercontinental Airport functions as a pivotal hub for United Airlines, rendering it an ideal haven for those engaged in or aspiring to embark upon careers in the airline industry.
The surge of youthful talent has nurtured an ecosystem of entrepreneurship across the sprawling expanse of Greater Houston.
In the realm of affordability, Houston shines in stark contrast to major metropolises like New York or San Francisco. Coupling this with substantial salaries, elevated quality of life, and the absence of state income tax, it’s no surprise Houston’s population is slated to scale new heights, projected to hit 2.45 million this year and poised to escalate by an additional 1.2 million by 2029. And, the Houston MSA (Houst – The Woodlands-Sugar Land Metro) is about 7.21 million people.
Reasons we Love Houston
Job Opportunities: Houston has a diverse and robust economy that offers a wide range of job opportunities across various industries. The city’s strong presence in the energy sector, healthcare, technology, aerospace, manufacturing, and other sectors attracts individuals seeking employment and career growth.
Affordability: Houston’s cost of living is lower than in many other major U.S. cities, making it an attractive option for those looking to stretch their budgets while still enjoying a metropolitan lifestyle.
Energy Hub: Houston is often referred to as the “Energy Capital of the World” due to its significant role in the global energy industry. The city is home to numerous energy companies, including major oil, natural gas, and renewable energy players.
Medical Center: Houston’s Texas Medical Center is one of the largest medical complexes globally and attracts medical professionals and researchers. The presence of world-class healthcare facilities contributes to the city’s reputation as a hub for medical innovation and treatment.
Cultural Diversity: Houston is one of the most diverse cities in the United States, with a rich blend of cultures, languages, and cuisines. This diversity creates a vibrant and inclusive atmosphere that appeals to people from various backgrounds.
Diverse Economy: While energy is a major driver of Houston’s economy, the city has diversified over the years. It has a robust healthcare and medical research sector, aeronautics and aerospace industries, manufacturing, technology, and a growing startup ecosystem.
Food Scene: Houston’s culinary scene is celebrated for its diversity, offering an array of international cuisines. The city’s status as a melting pot of cultures has led to a thriving food scene that attracts food enthusiasts from around the world.
Port and Trade: The Port of Houston is one of the busiest ports in the United States and plays a crucial role in international trade. It serves as a gateway for imports and exports, connecting Houston to markets around the world. According to the 2022 study by Martin Associations, the Houston Ship Channel-related businesses contribute 1.54M jobs throughout Texas, generating more than $439B in statewide economic value and nearly $10.6B in state and local tax revenues generated by business activities related to the port.
Arts and Sports: Houston is home to various professional sports teams and has a strong arts community. Sports fans can enjoy watching games from teams like the Astros, Rockets, and Texans, while art lovers can explore galleries, exhibitions, and public art installations.
Cultural and Entertainment Options: The city offers a wide range of cultural attractions, including museums, theaters, music venues, and festivals. From the Museum District to the Theater District, there’s something for everyone to enjoy.
Higher Education: Houston is home to several prestigious universities and research institutions, including Rice University, the University of Houston, and the Texas Medical Center. These institutions contribute to the city’s educational and research landscape.
Quality of Life: Houston offers a mix of urban amenities and green spaces. The city has numerous parks, outdoor recreational areas, and a mild climate that allows residents to enjoy outdoor activities year-round.
Entrepreneurship and Innovation: The city’s growing startup ecosystem and business-friendly environment attract entrepreneurs and innovators looking to establish and grow their businesses.
Current Multifamily Landscape
According to the 23Q2 Colliers Multifamily Houston Report, there are 734,748 units with an average monthly rent per unit of $1280 and an occupancy rate of 89.%. (REEP’s portfolio sits at 93.8%)
Demand for multifamily housing intensified during the second quarter, with Class A properties reporting positive absorption of 4,771 units, a 78.0% leap from the previous quarter. Increased demand was seen across all classes, with the three other classes reporting improved yet negative absorption. The average monthly rent for multifamily units marginally rose 1.1% to $1,280 per month in Q2 2023.
Get Ready to Invest in Houston
Houston has been showing its unstoppable spirit year after year – there’s just no slowing it down. This city’s a real hotspot that’s pulling in folks and investors alike. With its booming population, job market, and landlord-friendly policies, are setting our sights on new multifamily investment opportunities in Houston, and we want you to be part of it! If you haven’t joined the Investor Network yet, now’s the time. Join our Investor Network to get the lowdown on this exciting opportunity!