There's no mystery as to why Houston attracts many residents. It has a lot to offer like many other metropolitan areas — and maybe a little more. The Houston climate is hot for most of the year. That might be a good way to describe its real estate market as well.
The proof is in the pudding when you consider Houston's recent boom. As of 2020, the city's population has grown to 2.3 million people for a total of 7.1 million in the total metro area. That represents total growth of about 10% since 2010.
Let's take a look at how population growth and other market trends will affect the Houston real estate market for 2022.
What Draws People to Houston in Droves?
Individuals and families go where employment opportunities are. In Houston's case, these opportunities exist in the job market. Typically known for the oil and gas industry, Houston now has many science, technology, engineering, and math-related (STEM) jobs. The area also has a 4.1% unemployment rate and about 400,000 new jobs created since 2020.
Residents enjoy a stable job market, the NASA Space Center, three major professional sports franchises, museums, parks, dining, nightlife, etc. There's a lot to do in Houston by day or night.
Houston Real Estate Market Numbers in 2022: Slower, but Still Steady
The Houston real estate market has been hot the past couple of years, but things have cooled slightly. Due to low inventory and rising interest rates, home sales fell 0.9% in May year-over-year. But, the overall year-to-date numbers for 2022 still show a 4.4% gain compared to the first five months of 2021.
Looking at the middle-price tier of Houston homes, values increased 20.8%from June 2021 to June 2022. Homes have been selling quicker, also. The average number of days on market for any single-family dwelling declined from 35 days to 29 days. Median home prices range from $665,000 in the Greater Heights neighborhood to a more affordable number of $225,000 in Sunnyside.
Overall, even though the market is slowing down a bit, it's still on an upward trajectory.
Houston Rental Market for 2022
A lack of available homes has caused higher prices for rental homes. Owners of an average single-family rental unit now ask about $1,742 per month, a 9.8%rise from April 2021. The most affordable places to rent include El Dorado-Oates, with an average rental price of $1,158. More upscale neighborhoods such as The Museum District can get anywhere between $4,175 and $7,233 monthly.
What Does the Rest of 2022 Have in Store?
For the rest of 2022, the Houston real estate market may cool off, but home values should still see double-digit growth, according to Zillow forecasters. With the Federal Reserve trying hard to control inflation, future rate hikes may stop some buyers from getting into the Houston market. Even so, median Sun Belt home values are still projected to jump 11% in 2022.
Buyers think twice about a home purchase in 2022. But sellers may also decide not to list homes with further planned rate hikes. These decisions might mean an increase in inventory in the Houston market. More homes available for purchase and lower demand will slow growth in home values. But, the expected appreciation is still nothing to sneeze at.
Some owners and investors have concerns about falling prices that could reach low levels seen during the 2008-09 financial crisis. However, many economists feel those conditions that hurt the real estate market are not present in 2022. For instance, the number of subprime mortgage loans has decreased greatly in the last 14 years. Today, the market is reacting to higher inflation and interest rates. Even with 30-year conventional mortgage rates staying around the 6% range, home loan rates seem reasonable by anyone's standards.
Getting Involved in Houston Real Estate
Buyers, sellers, and real estate agents alike have a lot to be encouraged about in the Houston real estate market. While 2021 saw high growth in home prices amid lower inventory, the forecast still looks promising for the rest of 2022. Sellers have enjoyed some home value appreciation, while buyers may find properties as more homes go on the market.
With this outlook, it's a great time to be a real estate agent any way you slice it. If you're looking at helping buyers and sellers fulfill their dreams, contact AceableAgent today to learn more about securing your real estate license.