Rand D. Stephens, managing director of Avison Young in Houston
HOUSTON – (Realty News Report) – The consensus among local real estate pros is 2019 will be a good year for real estate in Houston.
And it’s a plausible narrative. For one thing, job growth has been excellent. Some 114,400 new jobs were created in the 12 months ending in November. The nattering nabobs of negativism say the impressive job growth numbers are flimsy and will be revised downward. But job growth has been over the 100,000-mark for several months in a row. Unemployment is low and last year was a record year for home sales.
Even the office market, which has been the ugliest part of the real estate market, has shown signs of improvement in recent months.
“I expect we’ll have another good year,” said Rand Stephens, principal and managing director of Avison Young in Houston. “We’ll see the office market continue to improve – it’s just a question of how fast.”
Even the Energy Corridor office market perked up in the fourth quarter and was the strongest submarket in the fourth quarter said Charlie Neuhaus of Avison Young. McDermott leased 524,300 SF the Energy Center Five, while Transocean leased 300,000 SF in the never-occupied Enclave Place building. Vacancy, however, is still high, around 20 percent.
Investors interest in Houston property is heating up, said Darrell Betts, principal and leader of Avison Young’s Capital Markets group. The industrial market is strong, but there aren’t many available properties to acquire, Betts said at the recent Avison Young press breakfast. Over the next year or two, Betts said, Houston will be regarded as one of the best cities for real estate investing.
Houston has the ability to rise and fall quickly in the eyes of investors. In 2015, Houston was ranked as the top market for investment in the Urban Land Institute/PWC annual survey. Two years later, Houston ranked No. 60.
Houston’s industrial market remains strong, although Avison Young’s Bob Berry said the market may not be able to keep up the fast pace of absorption that it is sustained in 2018. Berry said the Katy area is an up-and-comer market for industrial development in the years ahead.
