Housing market also a draw as Houston prepares for the Big Game

February 1, 2017 |

For the second time since 2004, pro football fans will invade Houston. Indeed, some are already there.

It’s easy enough to find predictions on who – the Patriots or Falcons – will come home with the Vince Lombardi trophy on Feb. 5. But insights into the city’s housing market are harder to come by. So The Home Story continues its tradition of examining real estate and housing prices in cities hosting the Big Game.

Home Field Advantage

This year’s championship game will take place in NRG Stadium. It is part of NRG Park, an entertainment hub that includes the 70,000-seat stadium as well as a convention center and arena. The historic Houston Astrodome is also on the site.

The venue is a large employer in the area. And that benefits Houston’s local economy and housing market, which have had to contend with global economic forces in recent years. According to Fannie Mae’s most recent Metro Outlook covering Houston, falling oil prices in 2015 and 2016 have had an adverse impact on the city’s job growth.

According to the U.S. Bureau of Labor Statistics, employment in the Houston area grew at a sub-par 0.4 percent in October 2016. This marked the 12th straight month of employment increases below 1.0 percent. Leisure and hospitality led job growth – at 4.4 percent. At the other end of the spectrum, employment in mining and logging fell 8.9 percent.

For Houston’s rental market, these headwinds have translated into higher vacancy rates than the national average, coupled with declining growth in rents.

Clearly, the decline in the oil and gas industry has presented a significant challenge. But Fannie Mae’s multifamily economics team believes the area’s job growth should return as the oil price shock fades and its population continues to grow. The Houston area experienced the largest population growth of any metropolitan area in the U.S. between July 2014 and July 2015.

Holding Steady

As for home purchases, the Federal Housing Finance Agency’s HFA’s house price index indicates that – since the first quarter of 2010 – home prices in the Houston area have not languished as much as they have nationally. And they have recovered more strongly from the housing crisis.

Local home prices have been rising since 2010, the index shows. The index for the third quarter of 2016 shows home prices in Houston at 52.7 percent above their 2007 level, when housing was in a downturn. That’s compared to 6.26 percent nationally. And even though local home prices have made a recovery, according to Zillow, the area’s estimated home price of $176,000 is 8.6 percent below the national average – a competitive advantage.

Houston housing market, rentals in Houston, buying a home in Houston

Zillow’s inventory data show that Houston’s number of homes for sale peaked at nearly 50,000 units in mid-2011. The inventory has fallen off significantly since then. It now is averaging about 25,000 units quarterly.

Houston housing market, rentals in Houston, buying a home in Houston

As football fans visit Houston, they will find a city in transition – one edging away from its energy-based roots. Should they decide to stay and take a look, they will also find ample opportunities for buying or renting an affordably priced  home.

 

comments

COMMENTING POLICY

 

We appreciate and encourage lively discussions on our websites’ content. While we value openness and diverse points of view, all comments should be appropriate for people of all ages and backgrounds. We do not tolerate and will remove any comment that does not meet standards of decency and respect, including, but not limited to, posts that:

  • are indecent, hateful, obscene, defamatory, vulgar, threatening, libelous, profane, harassing, abusive, or otherwise inappropriate
  • contain terms that are offensive to any group based on gender, race, ethnicity, nationality, religion, or sexual orientation
  • promote or endorse a product, service, or vendor
  • are excessively repetitive, constitute “SPAM” or solicitation, or otherwise prevent a constructive dialogue for others
  • are factually erroneous or misleading
  • threaten the privacy rights of another person
  • infringe on intellectual property and proprietary rights of another, or the publication of which would violate the same
  • violate any laws or regulations

We reserve complete discretion to block or remove comments, or disable access privilege to users who do not comply with this policy. The fact that a comment is left on our website does not indicate Fannie Mae’s endorsement or support for the content of the comment.

Fannie Mae does not commit to reviewing all information and materials submitted by users of the website for consideration or publication by Fannie Mae (“User Generated Contents”). Personal information contained in User Generated Contents is subject to Fannie Mae’s Privacy Statement available here. Fannie Mae shall have otherwise no liability or obligation with respect to User Generated Contents and may freely copy, adapt, distribute, publish, or otherwise use User Generated Contents without any duty to account.

More in >

A Window Into Housing In America

Subscribe to our newsletter for each week's top stories. Enter your email address below to stay in the know.