HOUSTON – (By Ralph Bivins, Realty News Report) – Some 128,700 new jobs were created in Houston over the last 12 months – one of the largest job gains ever reported by the Texas Workforce Commission.
It was the highest 12-month total recorded since the Labor Department started tracking job growth in this way in 1990, the Houston Chronicle reported.
A gain over 100,000 jobs in a 12-month period is regarded as excellent job growth for Houston. And Houston has been growing at the super-robust over-100,000-pace in recent months.
Patrick Jankowski of the Greater Houston Partnership attributes some of the growth to a post-hurricane rebound. Some restaurants and merchants were closed for a while due to flooding after the Hurricane Harvey, which made landfall on August 25, 2017 and meandered around southeast Texas for days, dumping 50 inches of rain.
While the storm cost a few jobs, it also generated a significant amount of jobs for construction workers involved in storm repairs. The storm also filled thousands of apartment units and hotel rooms.
Although I am not an economist, I see no reason to quibble about the exact impact of the hurricane. Since the end of September 2017, Houston created 128,700 jobs and that is phenomenal. The unemployment rate in September was 4.1 percent, down from 4.8 percent a year earlier.
Other positive trends:
First: Houston residential real estate has been surging in 2018, running over 5 percent ahead of last year in single-family home sales.
Second: Houston ranks No. 2 in the nation in housing starts.
Third: Apartment occupancy is at its highest point in almost three years.
Fourth: Industrial real estate amazes. Construction is booming and it’s being leased quickly. Colliers International reports a 5.7 vacancy rate in the third quarter and 10.3 million SF is under construction.
Fifth: Office leasing is improving, reportedly. Even the Energy Corridor, which was hard-hit in the energy downturn, has mounted a recent comeback, with deals such as the 300,000-SF lease of the never-occupied Enclave Place building. “There have been several sizable leases announced in the last two weeks. And Occidental is purchasing the former ConocoPhillips campus at the northeast corner of I-10 and Eldridge. That is a major indication that the future of The Corridor is very positive,” says Midway’s David Hightower, a leader in the West Houston Association.
It’s too early to give the Houston office market a clean bill of health, however. Some of Houston’s CRE firms say Houston had positive absorption in the third quarter; some say the third quarter yielded negative absorption. The sublease inventory is being gradually reduced, but some of that reduction occurs as space reverts to the landlord. Office building owners will be pressured to reduce rental rates and give more concessions.
Office vacancy remains high, approaching 20 percent, according to most researchers and even higher vacancy/availability rates if sublease space is included. Here’s a sobering stat: Colliers reports there are 83 buildings in Houston with at least 100,000 SF of contiguous space available for lease or sublease.
It’s going to take a while to fill that much office space – even with oil above $70 per barrel.