2024 News Archive

In 3Q24, Houston's urban land market remained constrained with limited transaction volume. The scarcity of desirable urban infill land combined with high prices and elevated interest rates discouraged potential buyers. This environment allowed well-capitalized investors to close deals on premium urban parcels, while suburban areas saw more viable development, particularly for industrial and single-family projects. Notable transactions in town included purchases for industrial and mixed-use projects on the northwest side and the Uptown area, where prices per foot vary widely based on location, ranging from $200-300 per SF for prime plots within urban zones.

Houstona€™s retail market continued to perform strongly in 3Q24 within the city's commercial real estate landscape, fueled by ongoing population and job growth. Quarterly net deliveries have outpaced demand in five of the last six quarters, indicating a persistent supply-demand imbalance. While vacancy rates have slightly increased by 0.3% in the past few quarters, they remain relatively low overall at 5.1%. Additionally, retailers are still seeking space, although the pace of demand has slowed compared to 2023. This trend should continue in the coming quarter and into 2025.

During the 3Q24, Houston's industrial market maintained a consistent rhythm, showing minor significant changes or developments. Nearly all lease agreements were for properties smaller than 300,000 SF, and only a limited number of large transactions occurred. Furthermore, in the first three quarters of 2024, there were only 9 million SF of construction starts, the lowest amount seen since 2012. With construction costs remaining high, new groundbreakings are projected to decline further throughout the remainder of the year, potentially easing supply pressures in the next few years.