Jim Carman

Houston land brokers report a game-changing shift in the commercial real estate market. Developers are shying away from the sky-high prices of two to three years ago, before the Federal Reserve started hiking interest rates. This has thrown commercial land buyers and sellers into a state of disequilibrium. "Developers’ cost of capital is double, triple, or even quadruple what it was at peak pricing," says Christen Vestal, Development Partner at Provident Realty Advisors. The result? A slowdown in buying activity as prices have yet to drop enough to bridge the gap. Stay tuned as we navigate these dynamic times. #CommercialRealEstate #LandDevelopment #MarketShift #HoustonLandBrokers https://lnkd.in/g8JrnuW6

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Apartment demand is picking up in the Dallas-Fort Worth region, with net absorption of about 20,200 units over the past year (translating to 2.3% of inventory, outpacing the U.S. share of 2.1% for the first time since 2022).

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Multifamily construction across the U.S. and Houston has sharply declined due to high borrowing and construction costs, but the Heights neighborhood in Houston is an exception. In 2023, the Heights saw a four-year high in construction starts, with nearly 2,000 new units expected between 2024 and 2025. The Heights, known for its historic Victorian homes, has seen significant demographic improvements and rising property values. The area has become increasingly attractive due to the renovation of historic homes, new upscale developments, and enhanced retail along major streets. In the short term, the influx of new construction is likely to increase the vacancy rate, which stood at 8.5% in the second quarter, and put pressure on rent growth, which has been negative since mid-2023. However, the Heights' central location near Downtown and Uptown, along with its growing retail and culinary scenes, suggests a positive long-term outlook for investors and renters.

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In 2023, construction starts for new multifamily projects in Houston fell to their slowest rate since 2017 due to higher interest rates. Despite this slowdown, around 25,000 units were still in progress, close to the five-year average of 30,000 units. The gap between current construction levels and the average is expected to widen further. The slowdown follows a surge in supply last year, which led to a higher average vacancy rate of 11.1% in early 2023, exceeding the 10-year average of 9.4%. This elevated vacancy has constrained rent increases, with year-over-year rent growth at just 0.2%, the lowest since 2020. Construction activity is strongest in suburban areas north and west of Houston, while urban areas see significant declines. Last year, new, high-end apartments saw strong occupancy, particularly in supply-heavy areas like Bear Creek-Copperfield and Neartown-River Oaks. In contrast, the three-star and lowest-quality apartment segments saw declines in occupancy, with lower-income households facing increased cost-of-living pressures. In the short term, the 25,000 units underway are expected to maintain high vacancy rates. However, if construction slows further, the Houston multifamily market could experience reduced vacancy and increased rent growth by 2025.

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Houston’s residential real estate adapting to economic shifts 2 min read May 2024 — The #Houston #realestate landscape has been impacted by the increase in mortgage rates, which has dampened buyer enthusiasm. According to data from the Greater Houston Partnership (GHP) in their March 2024 monthly update on home sales, the market has experienced its slowest pace since before the #pandemic. Writer Andrea Terán READ MORE: https://lnkd.in/e7-HcFbi

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The Flight To Quality Lands in Westchase Westchase District emerged as the leader for office leasing activity in the first quarter of 2024. According to the Q1 2024 Houston Office Market Report by Colliers, while overall leasing activity in the city experienced a 17.3% drop from the previous quarter, the Westchase submarket stood out, accounting for 14% of the total leasing activity. Danny Rice, president of Colliers Houston, noted the trend, stating, “Houston’s overall office market continues to experience a soft leasing environment with Class A product on the west side winning the majority of the activity. This post-pandemic trend continues as companies evaluate their offices amid evolving return-to-work policies to deliver locations closer to where employees live.” In the first quarter alone, three significant companies relocated their headquarters to Westchase District: Bechtel Corporation, Noble Corporation, and Enstor. Read the full story here: https://lnkd.in/grVzS8yx

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Build-to-rent has been a booming business in Phoenix lately — in fact, according to a new report from RentCafe, the metro saw a 73% increase in single-family rental construction from 2018 to 2023. With 488 build-to-rent units completed in 2023, Houston is the No. 15 metro in the nation for this type of new construction. Houston also ranked fourth in the country for deliveries in the past five years, with 2,402 units added to the market since 2018. #buildtorent #housotnrealestate #texasrealestate

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The recent U.S. Construction Pipeline Trend Report from Lodging Econometrics (LE) reported that, at the close of the first quarter, the top five markets with the largest hotel construction pipelines were led by Dallas with 185 projects/21,882 rooms. https://ow.ly/lb2s50RssY5

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Steady in-migration, high home prices, and decreasing construction suggest that Houston’s excess supply will be absorbed over the next year, vacancy rates will reverse course, and more substantial rent growth will resume. Read on for more in our Houston Market Commentary. https://lnkd.in/eqguYwuT #MarketCommentary #Houston #Multifamily

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Newmark's 1Q24 #Houston Multifamily Market Update is now available. Dive into the data and uncover trends shaping the city's multifamily landscape. ➡️ Download the report: https://lnkd.in/g2-nxuJq #multifamily #CRE #NewmarkTexas

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The Q1 2024 review of Houston's industrial real estate market reveals a notable increase in vacancy rates, rising to 7.4% year-over-year. Despite this, the market remains favorable for landlords with overall asking rates up by 7.4%, resulting in a record-high average monthly rental rate of $0.79 per sq. ft. Positive net absorption continues, albeit down by 44% compared to the previous year, marking a 14-year streak of positivity. Leasing activity decreased by 15% year-over-year, while construction projects have notably decreased, indicating a cooling down in supply. Investment sales remain active, with notable transactions contributing to the market's resilience. Overall, while challenges persist, Houston's industrial real estate market demonstrates resilience amidst economic fluctuations. https://lnkd.in/gK7xd3P6

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Discover how expert navigation of planning and zoning regulations can make or break your commercial construction ventures. Dive into our latest article with unique insight from Wes Hoblit, Managing Director of Masterplan, and learn from the best in the business. Read more at https://ow.ly/1zSn50Sb7FN #CommercialConstruction #PlanningAndZoning #ConstructionIndustry #ProjectManagement #BuildingSuccess

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The Houston Real Estate Market Weathers Unique Challenges in May 💪 The Houston real estate market faced a unique set of circumstances in May, including severe weather and power outages that may have impacted some home closings. However, the market continued to demonstrate strong activity, with expanding inventory and persistent consumer demand. Despite these challenges, the Greater Houston area saw record-breaking home prices. According to the Houston Association of Realtors’ (HAR) May 2024 Market Update: - Single-family home sales declined slightly by 1.5%, with 8,538 units sold compared to 8,664 last May. - Months’ supply of homes increased from 2.7 to 4.0, the highest since August 2019. - The luxury segment ($1 million+) saw the strongest performance, with a 9.6% increase in sales. - The average home price reached an all-time high of $443,970, up 3.6% year-over-year. - The median price increased 1.5% to $345,000. Despite the unique challenges, the Houston real estate market demonstrated its resilience, with continued strong demand driving record-breaking home prices. The market’s ability to navigate these obstacles is a testament to its strength and the desirability of living in the Greater Houston area. For more information on the Houston Real Estate market; please contact your S&F agent today: 713-489-8171. #HoustonRealEstate #RealEstateMarket #HomeValues #houston #realtor

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The Houston real estate market navigated a unique set of challenges during Q2 but is well-positioned to positively close out the year 📈 #ResidentialRealEstate #HoustonRealEstate #LandDevelopment

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The 13th annual InterFace Multifamily Texas conference will be held October 15th at The Westin Irving Convention Center at Las Colinas. This event will focus on the Dallas, Houston, San Antonio, and Austin apartment markets — which are still performing relatively well from an occupancy and rental rate standpoint — and will attract attendees from across the state (and the nation) who are buying, selling, developing or lending on Class A, B, and C multifamily properties in Texas. As everyone knows, there are no shortage of challenges facing owners, investors and developers right now, and a big focus of discussion will be how and when the stagnant investment and development climate will be reinvigorated and come back to life. There are more questions than answers about today’s market, and this year’s event will offer a wealth of much-needed industry information and insight, as well as high-level networking, so if you are active in the multifamily property sector in Texas — or interested in or gauging opportunities in the region — you need to join us October 15th! Register Here: https://cvent.me/lBxlVZ #InterFaceMultifamilyTX #multifamily #commercialrealestate #texasmultifamily

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What's Hot in Commercial Real Estate #Htxrealtor #houstonrealtor #investmentproperties #luxuryhomeexpert #houstonluxury #luxuryrealestate #houstonrealestate #homesofinstagram #realestateinvesting

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