By all accounts, Houston is one of the most dynamic markets for residential real estate. For years, the metro has been lauded for its business-friendly environment, affordable cost of living, job availability and lifestyle amenities. Today, Houston’s popularity continues to grow at a steady pace.
According to a recent Census Bureau report, Houston’s population grew by more than 159,000 from July 2014 to July 2015, making it one of the fastest growing metros in Texas during that time. In fact, Houston was named the second-largest growing metro out of 381 metros tracked in the U.S. from 2000 to 2014 by the U.S. Census Bureau.
Through the boom years, oil prices played a significant role in Houston’s success story. Now that the price of oil has decreased, the red-hot population growth the metro experienced between 2010 to 2014 will taper but will by no means dry up and will continue to grow, according to the Houston Chronicle. The newspaper reports that Houston has added 737,000 people since the 2010 Census—a stark contrast to more expensive cities like Chicago where people are leaving in order to live in more affordable areas.
U-Haul Data Helps to Tell the Story According to research from John Burns Real Estate Consulting (JBREC), U-Haul moving truck rental prices are a link to understanding migration trends. The researchers found that people are leaving other big cities around the country for more affordable areas in the South. As such, there are more trucks being rented to move from cities like New York, Chicago, and Boston than there are to move from areas like Houston, Dallas, and Austin—and the rental prices correlate. The lower outbound rates indicate that there are more people moving in than moving out, explains JBREC. Houston is listed as the sixth least expensive place to rent a U-Haul for outbound moves, which translates to the city being the sixth most popular place for migration, according to analysis from JBREC.
So what exactly does the continued population growth in Houston mean for residential real estate demand, affordability and value?
- Demand: Population growth means greater demand for residential real estate. In Houston, developers like Surge Homes are building communities to meet the housing needs of Houstonians and new residents. For proof that Houston’s housing demand is high, check out Surge Homes’ number of home sales .
- Affordability: Houston remains one of the most affordable metros in the nation in which to live, and there are homes at every price point. This means virtually anyone, from first-time home buyers to established professionals can find a single-family home, as well as affordable new condominiums and townhomes to meet their needs.
- Value: When a city’s population grows, real estate prices almost always increase. Just think about high home values in dense cities like New York or Los Angeles. The greater the demand for real estate, the higher the home prices. Because of the increased competition for homes, owners can increase prices and sell to the highest bidder—and that means greater profit. As with any real estate transaction, location helps to drive value.
In summary, Houston’s growth remains impressive despite a temporary lower price of oil. Real estate values will respond to the demand, and those who buy now, instead of renting, will protect themselves from future increases and be in a position to profit in the short- and longer-term.
