Latest Quarterly Snapshot

Houston's industrial market remained resilient in the 1Q25, balancing a continued influx of new construction with sustained demand driven by long-term fundamentals such as port activity, population growth, and supply chain expansion. Leasing activity totaled approximately 6.4 million SF, a slight decline from the year prior, marking a return to more normalized levels following several years of exceptional performance. Leading demand came from logistics providers, e-commerce users, and energy-related firms. Net absorption for the quarter reached 1.3 million SF, indicating a steady but more deliberate pace of occupancy. While the market has cooled from its recent highs, tenant interest remains solid, particularly in well-positioned submarkets.

The Houston office market is progressing through a gradual recovery in early 2025, as hybrid work models persist, and companies continue to reassess their long-term space requirements. Leasing activity remains moderate, but several submarkets are beginning to stabilize, driven by a sustained demand for Class A space and a continued flight to quality. Furthermore, the overall vacancy rate remained at 19.8%, highlighting the continued challenge of backfilling large blocks of space left vacant in recent years. While absorption is expected to remain flat or slightly positive in the near term, steady population and employment growth in Houston's suburbs, combined with targeted office redevelopment offers encouraging signs of future momentum.

In 4Q24, Houston's land market experienced significant growth in the outer suburbs, with Brookshire leading a 144% surge in home sales, largely due to new master planned developments like the Sunterra community. Other areas such as Porter/New Caney West, Conroe Northeast, Waller, Fulshear/South Brookshire/Simonton, and Hockley also saw increased land sales, driven by affordable home prices and new construction. December 2024 saw a notable 16.3% year-over-year increase in single-family home sales, with 7,162 units sold that month. Active listings grew by 21.6%, reaching 45,714 properties, contributing to a balanced market with a 4.0-months supply of inventory.