2023 News Archive

The land market in the Houston region picked up in 2Q23 from a slower 1Q23. Single-family home sales fell 12.8% in June 2023 compared to last year; down to 8,542 from 9,845 homes. Developers and homebuilders continue to work through land acquired in 2022 to deliver lots and homes as quickly as possible. Homebuyers are getting more comfortable with interest rates after an extended period without any reprieve in sight, but knowing they will refinance when interest rates improve. The good news is home sales are strong and inventory is falling back into a healthy range of available product. While interest rates remain high, the homebuilding impact on the land market continues to be robust as a result of Houstona€™s strong job market and population growth.

Houstona€™s population growth in the past 12 months has motivated retailers to launch and expand local businesses. This increased growth has elevated the Houston retail market to the third strongest market in the nation when it comes to new demand. The Houston retail market availability rate is 5.7% as of 2Q23, which balances out the high demand and low supply within the last year. To keep up with residential growth, more than 4.2 million SF of new retail space is expected to be delivered to the market this year, which is 3 times more than what was delivered in 2022. In 2024, we will determine if the market will be able to absorb that much new inventory without affecting rental rates.

The Houston Industrial market is beginning to see a reasonable slowdown in new construction due to the amount that was delivered to the market in the past couple of years. As of 2Q23, 3.7% of Houstons current inventory is under construction. In comparison to the national benchmark of 3.2%, Houston has seen record growth. New inventory to the market, totaling 786 million SF as of 2Q23, remains 70% available for lease. Starting in 2024, the number of new construction projects will decrease notably because of higher interest rates and increased labor and material costs.